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Wednesday, February 24, 2016
Tuesday, February 23, 2016
Firing My Attorney & California Bar Dealings
Firing My Attorney
Shortly after Bifoss assured me that his utterly disastrous
negotiation was just fine, I ended my agreement with Jaffe. He then reminded Layton that he continued to
have a claim on any recovery I might obtain from HomeFirst. That lien would make it impractical to get
another attorney to represent me on a contingency basis. I saw no reason to trust another attorney
either. Nothing would come from legal
action.
As I headed into my whistleblowing adventures, I thought I
had power and was rightly exercising it.
Even after CEO Jenny and the Board members decided to terminate me, I
thought that I would be vindicated. I
fantasized how Board members would share a wink and nod with me to say it would
all work out fine in the end. That was
how it went six years earlier when a different floundering CEO wanted to fire
me, but not this time. When I assumed
that I would be fairly compensated for what happened, I could treat as silent
partners those who had witnessed the same events without speaking up. Now that I would get nothing and HomeFirst
would suffer not at all, those who failed to help became guilty by their
association with Jenny and the acts of retaliation.
When I have described to friends my experience with Jaffe,
they have been sympathetic. One
suggested early on that I complain to the California State Bar, but I supposed
him biased because he had recently been disbarred as a result of his
involvement in an unfortunate incident.
Six months after I parted from Jaffe, another friend, who was a
practicing bankruptcy attorney, also said I should consider complaining to the
Bar.
The California State Bar advises that complaints must be
limited to violations of its Rules of Professional Conduct. The Bar is not interested in hearing the
gripes of a dissatisfied client who feels that his attorney should have
negotiated a richer settlement with fewer restrictions on his freedom of
speech. I found a few Bar rules that I
could contend Jaffe violated, and I sent off my complaint a year after I was
fired. They replied that Jaffe might
have been negligent, but the Bar does not discipline attorneys for errors in
judgment or mistakes. They suggested
that I might try mandatory fee arbitration.
Another mediator with more fees; I passed. Case closed.
The next step was a complaint to the State of California
concerning HomeFirst’s violation of the California Whistleblower Protection Act.
Monday, February 22, 2016
Settlement Agreement Failure
Jaffe anticipated that the session with the mediator would
be a waste of expensive time because little new would be presented. Emotions would rise; as the only one with
skin in the game, I was a risk, especially because I thought that the unclean
hands critique of the emails was nonsense.
From Jaffe’s standpoint, it would be safer to negotiate separately with
Layton.
On Wednesday morning after the briefs were submitted, Jaffe
offered $75,000, and Layton countered with $24,000, which was $1,000 less than
the low end of the bracket Jaffe had proposed.
I gave him permission to counter with $55,000. While he was working with Layton, I
researched the “unclean hands” defense.
I wrote Bifoss that she had misread the law and my situation; she
replied, “It is illegal for you to access someone else’s computer files without
their knowledge,” referring to the federal Computer Fraud and Abuse Act and the
California Computer Crimes Act. That
afternoon, Jaffe informed me that he had settled for $45,000, and two hours
later he received a draft settlement agreement from Layton. Although he had agreed for less than I
authorized, I thought maybe it could still work out if the other terms of the
settlement agreement were reasonable. If
they simply read, “here is the money, now go away,” maybe I could live with
that.
On Thursday with more internet research under my belt, I
told Jaffe and Bifoss that their understanding of the “unclean hands” was
incorrect because my roles of CFO and Compliance Officer legally justified my
viewing company emails based on my suspicion of wrongdoing. Given the clear proof of retaliation that the
emails provided, we should demand $65,000.
Jaffe said that he stood by Bifoss’ understanding of the law and,
anyway, the $45,000 constituted an “enforceable bilateral agreement,” meaning I
had to shut up and accept the deal whether I liked it or not. That evening, Jaffe sent me a copy of the agreement
he had negotiated with Layton.
The document provided that HomeFirst would pay me $45,000 in
settlement of all claims I might have against them, and I would not disclose at
any time after my employment anything of a secret, confidential, or private
nature connected with the business of HomeFirst, make any disparaging comments
about HomeFirst, its officers, directors or employees[1],
encourage anyone else to make disparaging comments, or disclose the nature or
existence of the settlement agreement.
Since I would receive $27,000 after Jaffe’s fees and I had
to pay $3,000 to the mediator even though no meeting had occurred, the
agreement meant that I would net about two months’ compensation. That was far from the $100,000 that I had
fantasized in March, and the gag order was a nightmare.
I had begrudgingly accepted that a settlement would require
that I not disclose the terms of the agreement, but I had not considered that I
would never to be able to talk about any of my experience at HomeFirst ever, to
anyone. For two years I had been told to
shut up. I successfully resisted that
pressure. I could not stomach agreeing
now to be silent forever.
The non-disclosure provisions that are increasingly common
in employment and separation agreements, aim to squelch whistleblowing with
language like, “Employee shall not disclose, and represents that Employee has
not disclosed, any confidential company information to any third party”[2]. Some agreements require employees to report
violations internally first as the Chair had ordered me, to forego monetary
rewards like those from qui tam suits, and to maintain silence on the terms of
severance agreements.
My employment by HomeFirst had not bound me in a
confidentiality agreement, but now they wanted even broader protection that
extended to any information of a private nature, whatever that was, and to
comments that they might consider disparaging.
They treated it as a simple business transaction, and they offered an
insultingly small payment, but I wanted them to feel a penalty for having done
wrong.
Although I was principled, I still had doubts. Since Jaffe’s $5,000 and the mediator’s
$3,000 were sunk costs, I was thinking about walking away from $32,000, and for
what? Was I so naïve as to expect not to
be restricted in what I could say?
Really, who was I going to talk to about HomeFirst anyway? And if I did tell anyone, how would they find
out? Would they require annual
depositions to see if I had talked? Take
the money and do what you want, some suggested or, at least, wondered.
On Friday, I told Jaffe and Layton that I would not sign the
agreement as written. They may have been
negotiating but not on terms acceptable to me.
Copying Layton earned me a wrist slap from Bifoss and a warning that I
had risked a waiver of attorney-client privilege by doing so. I was so done.
On Sunday evening, I sent Jaffe an amended settlement
agreement without the onerous restrictions on my future communications. Jaffe replied, HomeFirst would not agree to
changes in the nondisclosure language.
Batting emails back and forth, I said that I had told him months earlier
about having the CEO’s emails without getting a rise from him and I had set
$90,000 as a minimum goal in negotiations.
I posed a hypothetical case to clarify the email question: a CFO gathers
email proof that his CEO is stealing and provides it to the police; he is
fired; are you telling me that his retention of the emails was illegal? Jaffe never replied. He was so done, too.
I called Bifoss on Monday.
When I complained about the “unclean hands” issue, she assured me that
they were my attorneys and understood such things; not very good attorneys, I
said, if they make a mistake like that.
She assured me that the $45,000 was a good result and I would not do
better in court. The restrictions on
communications were entirely normal, she said, and not the result of Jaffe’s
letting Layton write the settlement agreement.
The same terms were included in every settlement agreement Jaffe
negotiated, she promised. I lamented
that I had not learned much earlier, say on June 4, that they would consider
two months compensation plus a gag order to be a good result.
My ace negotiator had let me down.
[1] To
avoid the legal challenge of determining damages from disparagement, the
agreement called for the return of the settlement amount in the event of
disparagement. To ensure the
enforceability of the clause, which it described as “material,” it called for
me to acknowledge that it was “reasonable”.
[2] Moberly,
Richard, Jordan A. Thomas and Jason Zuckerman.
“De Facto Gag Clauses: The Legality of Employment Agreements That
Undermine Dodd-Frank’s Whistleblower Provisions.” ABA Journal of Labor & Employment Law 30
(2014) 87-120
Sunday, February 21, 2016
Legal Mediation - The Briefs
Legal Mediation – The Briefs
The goal of mediation was to find some middle ground on
which I, HomeFirst, and the insurance company that would pay all of its costs could
meet in agreement. Successful mediation could
avoid trial expenses that I would have to pay for. In the mediation, each side’s brief would
place a stake in the ground describing its case, and then we would arrive at
the settlement agreement.
The mediation session allows little opportunity for the
presentation of evidence or witnesses that challenge statements in the opposing
brief. If the stakes are set too far
apart, no meeting may be possible. If one
stake is placed near the center and the other, far afield – even if its logic
might be found faulty in a longer evaluation – then the indicated median will
favor the most outrageous party. In such
a situation, I still had my negotiator to rely upon.
My Brief
Jaffe’s assistant Bifoss sent me the draft brief at 10 pm on
the night before it was due to the mediator.
Although she and Jaffe had had months to prepare the document, it was
imperfect at best. Bifoss based my lost
wages on the wrong compensation and a period of loss that was too short. I corrected the amount, corrected a
misspelling of my name, and added reference to California’s protection of
whistleblowers who report “reasonably suspected,” rather than actual,
violations.
The brief described in a bloodless, professional tone
HomeFirst’s failure to act to correct the violations I had identified, and it
listed some of the government agencies to whom I had reported them. These constituted protected conduct under
California’s whistleblower protection act, California Labor Code 1102.5. Except in what it failed to do, nothing was
surprising here.
Because my communications with Bifoss and Jaffe had been so
spotty and Bifoss had sent the draft to me so late, I did not make a big deal
of the three HomeFirst violations she left out.
I went easy on the brief’s impotent description of how CEO Jenny Niklaus
had pushed for my retirement and had trimmed my responsibilities. I did not point out how the brief understated
the concern I expressed to Board members that the scope and intentionality of
the violations were unprecedented at the company. It stated that I had contacted the California
Department of Industrial Relations for more information but ignored the
complaint I filed. It said that I had complained
to the U.S. Department of Labor instead of the California Economic Employment
Development Department. There were
simply too many problems to make sure that all of the possible corrections
would be implemented properly.
The brief was slapdash, but it was done. Jaffe had discounted the importance of
everything save his ability to negotiate successfully with the other side, so
it might still go all right.
HomeFirst Brief
In the narrative proposed by HomeFirst’s attorney Layton,
the problem was the way I interacted with the company’s internal and external
stakeholders. I had been inappropriate
when I challenged the Chair’s August 2013 order not to report violations
externally; my warning the Board in January 2014 that a forecast would likely
prove a waste of time was unprofessional.
I raised compliance problems, one after another, she said, without
providing solutions as I was expected to do.
In Layton’s telling, when I admitted in March 2014 that I
had reported two violations externally, I raised for the first time a disturbingly
long list of compliance violations. One
of the complaints was unfounded, she said, and what I called bid collusion was
just healthy nonprofit collaboration. My
insinuations were offensive, and my attitude was loathsome: I insisted that I
alone was right.
I intended, Layton said, only to find obstacles and cast
aspersions on Jenny. I had unfairly and
disingenuously filed one complaint on the same day that she asked reasonable
questions about the matter. My email to
the Audit Chair about Jenny’s violation of HomeFirst’s whistleblowing policy
was just self-serving. My May 28, 2014
meeting with Jenny was the last straw. I
twice called her a liar and said she was a piece of work. Jenny would no longer meet alone with
me. I had to be fired.
Evidence was clear and convincing that my termination would
have happened regardless of any whistleblowing.
And, anyway, she said, I could not prove that my termination was connected
to my whistleblowing. I was fired, she
said, because I misbehaved, and then I cried whistleblower. My executive position made my whistleblower
claim less authentic than another employee’s because I was expected to work
with Jenny and the Board to resolve the violations.
The brief was impassioned and infuriating. The facts she claimed were incomplete or flat
out wrong; and important facts were not included. I had begun reporting violations to
management in October 2013, not March 2014, and I always recommended
corrections. Layton claimed that I was
personally responsible for fixing the problems even though Jenny had isolated
me from correcting operations. She held
me up as obviously reprehensible for saying what was true: I had challenged
Suzanne because her order was illegal; Jenny had lied; the forecast was
a waste of time; HomeFirst had violated agreements and laws.
Layton’s brief assembled a long litany of my offenses with
dates and references to different people who, it implied, could be called to
testify if necessary. To undermine the
case she built would require discovery and depositions that Jaffe wanted to
avoid through mediation; to refute her lies seemed impossible in a one-day
mediation setting. We would be stuck in
endless he-said-she-said bickering.
Resolution during mediation would depend on the persons involved: a nonprofit
nobly serving the homeless versus this irresponsible and impolite jerk.
Personal attacks against the whistleblower are common[i],
and HomeFirst’s brief continued them. Layton’s
brief went after my character, and it relied on the assumption of shared
beliefs: of course, one should not challenge one’s superior; of course, one
should not undermine one’s employer’s position.
Challenging the truthfulness of legal opponents is helpful,
but it can be easier just to destroy them personally through shaming[ii]. The witnesses may then destroy themselves. The unrelenting brief made me doubt
myself. Maybe I was wrong in my analyses
of the situations, in my disclosures, in my refusal to accept what Jenny and the
Board said they would do, and in my general jerkiness. Maybe they were right to fire me for my
attitude.
Still, the briefs were just posturing and positioning. Jaffe decided not to use the emails that
connected my termination to my whistleblowing, so neither side wrote anything
that the other did not already know.
Neither attorney could expect to deliver a knockout punch in its brief
even though Layton seemed to land a stronger barrage of blows.
Everything would come down to negotiation, which Jaffe had
done for more than 40 years.
Friday, February 19, 2016
Pig in a Poke – My Whistleblower Attorney, Part 2
Pig in a Poke – My Whistleblower Attorney
Few wrongful termination cases like mine are decided incourt,
but one San Francisco plaintiff attorney warned that 75% of wrongful termination cases that do not settle outside of
court are decided in favor of the company.
Success was far from certain even though I was confident of proving my
complaint. I figured that HomeFirst’s nonprofit
status might argue for a low settlement amount.
A New Jersey plaintiff attorney listed 60 settlements he had achieved
with an average settlement amount of $300,000.
Another site contended that the average settlement is $150,000 rather
than the sometimes reported $1 million figure and encouraged plaintiffs to be
reasonable and not to expect a windfall.
In reply to Jaffe’s email I suggested $200,000 for a demand
figure. The figure less Jaffe’s fees
would roughly equal the amount that HomeFirst directors had kicked around in
March and also roughly equal to one year’s compensation. The amount equaled about five months’
compensation from June through November plus 2.8 times compensation for my
guess of “non-economic losses.” It made
good sense to me based on solid internet research.
I set a target, and now Jaffe’s task was to get there
through negotiation. I heard nothing
until a week later when I sent a follow-up email asking what the next step
was. “Send a demand letter,” Bailey Bifoss,
Jaffe’s associate and a graduate of Golden Gate University where Layton taught,
replied. I asked, when might that be;
probably today, she replied. Her short email
to Layton suggested $200,000 and asked for Layton’s response as soon as
possible. After I followed-up with Jaffe
a week later, Layton apologized and promised to reply by the end of the week.
Bifoss warned me that litigation is expensive and involves
discoveries, depositions, interrogatories, and responses, all of which are
time-consuming and stressful. In
addition, cutbacks in State funding meant that a court date might be 15 months
or more after the preliminaries are completed, pushing resolution out beyond two
years. Jaffe preferred pre-litigation
mediation, she said, because it costs only about $6,000 for the day and can be
scheduled within a couple of months. The
mediation, which is chaired by a professional mediator in private practice or with
an organization like JAMS, a dispute resolution organization, requires each
side to put all of their cards on the table with the intent to come to an
agreement. To ensure that the day is not
wasted, the parties might first bracket their agreeable settlement ranges, she
said. How well mediation works depends
on the willingness of the sides to negotiate, and so far Layton had not
presented a very conciliatory face.
After another week of silence, I followed up with Bifoss. Layton responded to Bifoss’ call by proposing
an “early mediation.” Bifoss recommended
that we propose a settlement range of $25,000 to $195,000 to make sure that
Layton was serious about the mediation.
I said that $25,000 was too low and that $50,000 would be better and would
be in line with a goal minimum of $90,000.
Jaffe weighed in, stressing the importance of using $25,000 in order to
get the negotiations moving, based on his extensive experience. He would insist that all decision makers be
present: CEO Jenny Niklaus, the insurance company representative, and
Layton. Layton came back saying that she
was not a bracket person and the insurance company representative could not be
physically present. My team had frittered
away its negotiating position, but that was no matter because we had a case.
Jaffe scheduled a mediator from the list that Layton
provided: a retired judge Santa Clara County judge who seemed to be qualified
enough. The mediation meeting would be just
before Thanksgiving, two months away. My
additional investment in the project would be half of the $6,000 mediator’s
fee.
Two weeks prior to the scheduled meeting, after hearing
nothing from Jaffe in the interim, I emailed Bifoss asking whether we needed to
discuss preparation for the mediation meeting.
She said that she would send me a draft brief on the following Monday,
November 17, the day before it was due to the mediator. Then I answered, no, I had not had a
conversation with Jaffe about “dollar amount expectations.” Bifoss also wanted to chat about information
I had obtained from Jenny’s emails. I
explained again that I had access to the emails because of my rights as CFO and
duties as Compliance Officer to investigate potential wrongdoing.
On Monday, Jaffe and Bifoss called to discuss the
emails. Jaffe said that they should not
be mentioned during the mediation because they could create a big problem for
us due to the “unclean hands” and “after-acquired evidence” defenses. If HomeFirst could show that I committed some
termination-worthy misconduct in obtaining the emails, they could have complete
or partial defense against my claim. I had my doubts. I figured: regardless of the legal merits of
my claim that I had obtained the emails legitimately, contest by Layton would
mean additional costs and risks for Jaffe that he had to weigh against his 40%
of any possible additional settlement result.
In conclusion, Jaffe said that he hoped to be able to get between
$50,000 and $65,000 without spending the day in mediation. That would save us all a lot of
inconvenience.
I had my pig, and I was riding into battle.
Friday, February 12, 2016
Pig in a Poke -- My Whistleblower Attorney, Part 1
Pig in a Poke – My Whistleblower Attorney
Jenny’s emails beginning in March 2014 made clear
that I would be fired, and I began considering the need for an attorney. Although I had worked with company attorneys
for many years, I had never hired one for myself. I googled whistleblower attorneys and found
some candidates on superlawyer.com and other sites.
One firm boasted of winning $500,000 for a client, which
seemed a small amount to brag about. I
settled on one, Stephen Jaffe, who asked potential clients to complete an
“intake form” laying out facts. That
struck me as an appealingly efficient way to proceed, and his downtown San
Francisco office was outside the circle that I expected might be influenced by
HomeFirst’s reputation for doing good work.
Jaffe’s office shared the floor with two other attorney’s offices and
the floor required security approval to reach.
That struck me as positive: to avoid hit men sent by defeated defense
attorneys (rather than disappointed plaintiffs).
When I met with him on June 4, the day after I was fired,
Jaffe was accompanied by two interns from Golden Gate University, which I took
as evidence of his reputation in the community.
He had apparently read at least some of the intake form and asked
reasonable questions about my situation.
All in all he seemed as plausible as any I might meet via the internet. I signed what he described as his standard contingency fee agreement with its 40% contingency.
I handed Jaffe a flash drive with 575 files, including about
350 emails, which, I explained, I had collected while fulfilling my
responsibilities as CFO and Compliance Officer.
I felt good, and Jaffe said I had “a case.” Of course.
My limited research on attorneys was balanced by my optimism: the emails
provided clear evidence of the connection between my whistleblowing and my
termination. I needed a water carrier
more than a genius litigator.
Two weeks after our meeting, I had heard nothing more from
Jaffe. In response to my email he said
he would re-contact their attorney, whose name I had provided. The absence of movement and his use of the
peculiar term “re-contact” made me uncomfortable. Four more weeks passed with no progress. I suggested that HomeFirst would kick the case
to their insurance carrier, which would use an attorney, Rona Layton, with whom
I had worked on the case of another difficult HomeFirst employee. My doubts rose, but I was locked into a
$5,000 retainer.
In mid-July Jaffe sent a letter to the insurance company attorney
offering to negotiate in good faith as long as they contacted him by July 24
and threatening to file a lawsuit otherwise.
After I followed up two weeks later, Jaffe emailed Layton, “unless we
are engaged in good faith negotiations towards a settlement, I plan to file a
civil complaint the week of August 11th.”
On August 8, Layton replied that I was fired because of my
“inability or refusal to act in a professional, courteous manner” and that I
“decided that a whistleblower claim would be more lucrative than just
retiring.” She wrote that my “plan to
make the Board and the CEO look bad, and to cast [my]self as the one person who
was doing the right thing, is transparent and disingenuous.” She closed saying, “Nevertheless, protracted
litigation is generally not in anyone’s best interest, and so if Mr. Veuve
would like to make a reasonable settlement proposal, I would encourage my
client to consider it.”
Jaffe sent Layton’s letter to me without comment. When I asked what the next steps were, Jaffe
replied, “We have to formulate a demand figure.
Please think about a number for which you would settle. Remember, a settlement is – by definition – a
compromise; not a 100% recovery of all your losses. When you tell me that number, I will
recommend where we should start with a demand.”
I worried that Jaffe was pointing toward a relatively low,
easy to negotiate figure even though our contingency fee agreement seemed to recommend
a large settlement in which he would share.
The email suggested that his calculus was more complicated than I had
imagined and that more was involved than the quality of my case and the money
HomeFirst would be willing to pay.
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