In a previous newsletter, I discussed my case on behalf of a property owner against a commercial tenant who left the premises ten months before the end of its lease term. The tenant claimed that by saying it was “surrendering” the property, it was relieved of all responsibility for the last ten months’ rent of the lease, during which time the property owner had been successful in promptly re-renting the property to another tenant, albeit at a lower rent. We felt strongly about our position that the owner’s re-entering and re-leasing the property in order to “mitigate damages” did not result in a loss of its rights for the portion of the rent it lost due to the tenant’s premature abandonment. We obtained a pretrial summary judgment against the tenant in the full amount of the rent due, and then obtained orders charging the tenant and its owner-guarantor for our attorneys’ fees which, along with pretrial interest were almost as much as the rent itself. Finally, the tenant saw the light and agreed to settle the case. The final settlement was for over $500,000, almost double the rent due of $267,000.

     Another case I reported on earlier was on behalf of a foreign student who we believe was treated unfairly by his private school. I urged the school to join with us in a mediation in order to save both sides the ordeal and expense of litigation. The mediation led to a settlement which has now been concluded. The student has recently been accepted to one of his preferred early-decision colleges. Instead of a long and costly litigation focusing on the past, this young student can now proceed with his future academic pursuits. 

     As you know, I represent European and other international clients on a regular basis. Recently, I represented a European organization involved in the distribution of a U.S. manufacturer’s products. Although my client exceeded the sales goals set for it in its European territory, the U.S. company terminated their agreement because my client did not do things exactly as the U.S. company wished. This was done despite the fact that my client was achieving excellent results exceeding 100% of its designated goals. We notified the U.S. company that we planned to bring legal action against it for the amounts owed to my client under its contract and for deceitful business practices pursuant to our unique Massachusetts statute, Chapter 93A. That statute carries penalties of up to treble the damages owed plus attorneys’ fees. We have now reached agreement on the important issues and I expect we will be able to close on the settlement shortly. 

     I was recently asked to review a non-competition agreement and related documents requested of one of my clients by his employer. This was in the context of his employer’s initial public offering (IPO) in China. A Chinese company had acquired my client’s long-time employer a few years ago.  

     The Chinese company had prepared a non-competition agreement very much different from the ones I normally see coming from U.S. employers. A companion document required him to confirm that he “would not abandon” the company “due to. . . voluntary resignation.” Any U.S. lawyers looking at this language would scratch their heads in disbelief, as I did, knowing that in the U.S. no one can be pressed into involuntary employment thanks to our post-Civil War amendments to the Constitution.

     The recent Massachusetts statute regulating the use of non-competition agreements is a striking departure from the earlier case law on enforcing “non-competes”. For instance, under the new statute, non-competes can normally be enforced for only one year except in cases of the employee’s breach of fiduciary responsibility to the prior company. Previously, the length of time for a non-compete was a matter of judicial discretion and could generally be enforced for up to two years after termination of employment, whether the termination was voluntary or involuntary, as in the case of an employer’s discretionary decision to reduce the workforce or simply to hire someone else. Secondly, if the employee is terminated without cause (in other words without wrongdoing or fault), the non-compete cannot be enforced. Caveat: The new statute does not change or limit the employer’s right to enforce an agreement that the employee will not solicit the former employer’s customers or other employees.

     Third, if an employee leaves voluntarily, the non-compete cannot be enforced by the former employer unless the employer is ready to pay the employee 50% of his or her former base salary during the non-compete period. These are major advances for employees and should be considered carefully by employers whether they have earlier-existing non-compete agreements with employees or wish to enter into such agreements with new employees. Finally, if a presently-employed person is asked to sign a non-compete (as opposed to an employee being newly hired), the employer needs to pay the existing employee fair and reasonable compensation for signing the non-compete. What that compensation should consist of is not defined, and this provision, like other aspects of the new law will certainly end up being the subject of litigation over the coming years. This is a necessarily brief summary of the main elements of the new law and needless to say, any specific case would need to be examined carefully by counsel. In the end, we were able to resolve the non-compete language in a manner favorable to my client and his fellow employees.  

     A recent phenomenon that I’ve seen in my practice are the problems arising from the ever-increasing use of assisted living facilities by senior citizens. I’ve had several clients in the past few years who have bought into apartments in assisted living facilities and then encountered problems with the disappointing level of care and the extremely expensive “a la carte” charges – unanticipated at the time they enrolled – that occurred when one spouse needed special assistance and the other spouse did not. This led in one case to the spouse needing special care having to be moved into an assisted living apartment while the other spouse lived in the non-assisted part of the facility – in one case, different buildings in the same community. There are many different types of assisted living facilities, some with a “buy-in” investment (which in some cases dissipates over several years so as to preclude any re-sale value to the occupants or their families). Many elderly people are not aware – and often, due to health problems are unable - to understand the complicated rules, regulations and contract provisions that these privately-owned facilities (many of them national in scope), present, and are thus vulnerable to the changes, additional costs and financial losses that result. The key fact to bear in mind is that these companies are “for-profit” and don’t necessarily go out of their way to financially protect their residents or applicants. Nowhere is the Latin phrase caveat emptor – buyer beware – any more needed to be kept in mind than in considering these assisted living facilities. There have been recent articles on these problems in the New York Times and on the web and I have seen the problems first-hand in my clients’ situations at a time in their lives when they are most vulnerable to these challenges.  

     I continue to be involved in international activities. Recently, I attended the annual National Day of Liberation Celebration of South Korea as a guest of that nation’s Consul General in Boston, Honorable Kim Yonghyon. A photo from that event is enclosed. I also continue to be involved in international activities through ij International Jurists and Friends of Switzerland.

       As always, we continue to practice in a wide range of legal areas, including corporate, business and commercial law, trials and appeals, real estate issues, employment, discrimination, divorce, and university law. If you have any questions about our areas of practice or about any legal matters where we can be of assistance to you or someone you know, please do not hesitate to call on me. 

     In closing, we would like to send our thoughts and prayers to you, your family and your colleagues for continued good health and success in all matters and under all circumstances during these uncertain times. 

     I look forward to hearing from you. 

     Kindest personal regards,

     Marc Redlich