Various types of employment laws are in place to protect employees from the many different forms of discrimination that can occur in the workplace. Ty Hyderally chose the field of NJ employment law with the intent of protecting both the worker and the employee. He frequently speaks at various meetings and worksites to educate employees and employers of their rights and responsibilities concerning employment law. Sometimes actions are misinterpreted and what seemed like retaliatory actions were not actually improper conduct. It can be a fine line in many cases which divides an action from one which was committed in retaliation. Such is the case with Harkness v C-Bass Diamond LLC, in which it was decided that the actions taken toward a former general counsel were not meant to me retaliatory in any way.
Harkness worked at Fieldstone Investment Corporation which was a company in the process of making an IPO although they had not yet registered with the SEC. Harkness learned that one of the company’s CEOs Michael J. Sonnenfeld had shared information that was considered non-public to a possible outside investor. She conducted appropriate interviews and then reported the incident to the audit committee chairman as she felt this could be in direct violation of Regulation FD.
Soon after these transactions occurred Sonnenfeld and Harkness’ relationship began to deteriorate. Harkness alleged that Sonnenfeld became critical of her legal advices and treated her in a hostile manner. The company also began to exclude her from various management actions and meetings and before they terminated her employment they significantly reduced her job-related responsibilities.
The presiding judge found initially that her reports of violations of Regulation FD were not supported reasonably by conduct which would be deemed in violation to the relevant law. This was because at the time of the alleged infraction, Fieldstone was not yet a public company. Ms. Harkness did not investigate nor research if Regulation FD was applicable at the time or not before proceeding to the audit committee chairman. She, as general counsel, had the appropriate resources available so that she could have clarified the threshold question but she did not choose to utilize these tools according to the judge.
She argued that she could not verify whether or not the company was in compliance with all the legalities since she had been excluded from the management meetings and related events. However the courts did not see this as a “protected” conduct. The judge did agree with Harkness that the company is at a greater risk of overlooking its legal obligations when it tries to restrict the flow of any pertinent information to the general counsel; and that in these situations the risk is great that some legal obligation will fail to be taken care of properly. However, Judge Blake also concluded that this in itself was in no way a violation of any of the federal securities law. Since Harkness could not cite any specific type of illegal conduct the claims she made failed. It is important to be familiar with such cases and what types of actions constitute discrimination or retaliation. Ty Hyderally is an expert lawyer who can help businesses and professionals make these kinds of determinations.