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Filing suit to protect trade secrets won’t kill your arbitration rights

by on
in Employment Law,HR Management,Human Resources

MicroStrategy put the head of its HR department, Betty Lauricia, on paid leave soon after she filed a discrimination claim with the Equal Employment Opportunity Commission (EEOC). Lauricia had an arbitration agreement with the company.

MicroStrategy counterpunched with its own lawsuit that accused Lauricia and her attorney of stealing and disclosing trade secrets and other confidential information. In all, the company filed three separate lawsuits in four months before asking Lauricia, as her agreement required, to arbitrate her claims.

A lower court refused to compel arbitration, saying the company's "remarkably aggressive" litigation waived its right to arbitration. But the 4th U.S. Circuit Court of Appeals disagreed and required Lauricia to stick to her arbitration deal. Although MicroStrategy was aggressive, the court said, its actions were focused on protecting confidential information, not on canceling out Lauricia's bias claims. (MicroStrategy Inc. v. Lauricia, Nos. 00-2297 & 00-2434, 4th Cir., 2001)

Advice: Courts expect you and your employees to live by your agreements. But certain situations require immediate relief. Your arbitration agreements always should have language that allows you to seek judicial relief for certain misconduct, like breaches of confidentiality.

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