Did Jennifer Lawson violate the NDA agreement between her and Greene's Jewellery Wholesale as per New Hampshire State Laws?
Was Jennifer Lawson wrongfully terminated from her position as a junior executive secretary by Greene's Jewellery Wholesale, LLC?
Yes. Jennifer Lawson entered into a binding agreement with Greene's Jewellery Wholesale, LLC which barred her from disclosing information regarding its Ever-Gold product.
Yes. Ms. Lawson was neither served with the 60-day notice of the elimination of her position nor was she offered work in a different department within the company as required by New Hampshire state laws.
Facts and Laws
Greene's Jewellery Wholesale, LLC and Jennifer Lawson signed a nondisclosure agreement (NDA) before her assumption of duty as junior executive secretary. The agreement barred Ms Lawson from disclosing information regarding the process used to make its Ever-Gold jewellery. Upon the termination of her employment, Ms Lawson sought employment at Howell Jewellery World, Greene's competitors, where she promised to disclose the secret of creating Greene's Ever-Gold. Greene's Jewellery Wholesale sued Ms Lawson upon learning about this breach of the NDA.
Greene's Jewellery Wholesale, LLC employed Ms Lawson, who sought time off duty due to pregnancy issues. She had been a performing employee in her three years at the company. However, her employer responded to her request with the decision that they were downsizing, and that her position would cease to exist in the new company structure. She had thus been technically dismissed from her role without prior notice or a soft landing.
Upon learning about her termination, Ms Lawson contacted Howell Jewellery World and notified them of her possession of confidential information regarding Greene's product. Before her appointment at Howell, Ms Lawson committed to revealing the confidential information, which she ultimately did. Upon learning about this act, Greene's Jewellery Wholesale, LLC sued Ms Lawson for breach of NDA, while Ms Lawson responded with a countersuit regarding wrongful termination.
Greene's NDA breach is likely to go in its favor because there was a binding agreement barring Ms Lawson from sharing confidential information relating to the process of creating Ever-Gold. This suit may only fail if, under New Hampshire Law: RSA 275:70 and RSA 350-B:1, the NDA is deemed unenforceable. On its part, Ms Lawson's countersuit would succeed because, based on New Hampshire State law RSA 275-F:3, the termination did not follow standard procedure. Further, the fact that New Hampshire is a unionized state would mean that such termination follows Union rules. The court may rule against Ms Lawson if there is proof that the appointment was not subject to N.H. Rev. Stat. Ann. 275-F: 1-12, the New Hampshire Worker Adjustment and Retraining Notification Act (WARN), which requires employers to serve their employees with a 60-day notice of their intended termination of duties.
Further, the intention of the downsizing would need to be provided. Possible admissible reasons would include a scheduled plant shutdown or bankruptcy. However, Greene's decision was driven by Ms Lawson's pregnancy, which is against the Federal EEOC laws.
Under New Hampshire State Laws RSA 275-F:6, Greene's would be required to offer proof that the termination of Ms Lawson's duties meets the requirements listed. However, the facts of the case do not provide sufficient proof. Under WARN, 29 U.S.C 2101 et seq., termination only becomes valid after the expiry of a 60-day notice, or a Union strike. Again, the facts of the case do not provide that Ms Lawson participated in any strike, or was served with proper notice before her termination.
Based on the court decision in ACAS Acquisitions PRECITECH Inc. v. Stephen C. Hobert 155 N.H. 381; 923 A.2d 1076; 2007 N.H. LEXIS 6, Ms Lawson is likely to be found to have violated the NDA contract entered with Greene's. She would thus be held liable for the loss of revenue and damages suffered by Greene's. It is clear that Ms Lawson approached Howell for employment, with the promise to disclose confidential information that the NDA barred her from sharing.
Based on the court decision in Billewicz v. Ransmeier, a new law is considered unenforceable if it violates New Hampshire State Laws. The facts of this case do not provide the date of the NDA. Ms Lawson would, therefore, provide that the agreement was not in accordance with 161 N.H. 145, 152 (2010), passed IN 2012. Greene's would, however, defend itself that Ms Lawson was bound by the duty of common law which required her to protect any confidential information in her possession.
Facts to Be Determined
There are multiple facts that need to be determined before a conclusion is made regarding Greene's suit and Ms Lawson's countersuit as listed below.
- Did Greene's claim of "downsizing" and decision to terminate Ms Lawson's employment violate RSA 275-F, which requires that, before a company states its decision to downsize, it must table financial proof that shows that it would close if it did not layoff immediately?
- Were there prior violations of the company policies and related disciplinary actions preceding the decision by Greene's to terminate their contract with Ms Lawson?
- Are there facts that show that Ms Lawson, through acts of omission or commission, contributes to her termination? Were there previous disciplinary actions taken against Ms Lawson by Greene's regarding her conduct? Were there any indications that Ms Lawson was incompetent or in gross violation of company ruled and provisions, including insubordination?
- Did Ms Lawson have any prior knowledge that her position would be scrapped off before that decision was affected by the company? How much time was given between her knowledge and the decision?
- If the notice was given to Ms Lawson before her loss of a job, was the time of the notice in accordance with New Hampshire State laws and the Federal laws? Was an entire department of personnel affected by the decision, or is it just Ms Lawson that lost her job? Was Ms Lawson treated unjustly?
- Were employees at Greene's protected by the Union? If so, what was the Union's reaction towards Ms Lawson's termination?
Determining such facts as the timeline of events between Ms Lawson's signing of the NDA and her joining of Howell would help to determine if there was a breach of the NDA and whether the suit should be ruled in favour of Greene's. As regards the wrongful termination countersuit, determining the number of employees affected by the company's "downsizing" decision, and whether there was sufficient notification would help to determine if Ms Lawson was targeted and whether the countersuit should be ruled in her favour.
The result of this suit and the countersuit is not likely to influence how the public perceives Greene's. While current employees are likely to worry about the security of their employment, the impact of such anxiety is not determinable at the moment. In case Ms Lawson's countersuit is upheld, there is the likelihood of multiple other suits from former employees affected by the company decision. Such a scenario would dent the image of the company and affect sales. If Greene's suit prevails, Howell must be compelled to offer an apology and admission that their products are of inferior quality. In future, it would be important that a clear termination guideline is followed, which takes into consideration relevant laws.
Chunyu, L., & Tran, A. L. (2018). Labor Restructuring and Acquisitions: Evidence from State Adoption of the Worker Adjustment and Retraining Notification Act. Available at SSRN 3333114. Retrieved from http://www.fmaconferences.org/Glasgow/Papers/WARN_paper_FMA_20181203.pdf
FindLaw's Supreme Court of New Hampshire case and opinions. (2019). ACAS ACQUISITIONS PRECITECH INC v. HOBERT. Retrieved 3 September 2019, from https://caselaw.findlaw.com/nh-supreme-court/1228998.html
FindLaw's Supreme Court of New Hampshire case and opinions. (2019). BILLEWICZ v. RANSMEIER. Retrieved 3 September 2019, from https://caselaw.findlaw.com/nh-supreme-court/1546496.html
Serfling, M. (2016). Firing costs and capital structure decisions. The Journal of Finance, 71(5), 2239-2286. Retrieved from https://repository.arizona.edu/bitstream/handle/10150/555889/azu_etd_13770_sip1_m.pdf?sequence=1
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