For Long suffering shareholders, pass this on to management.
King & Spalding Fired Atty Who Questioned Ethics, Suit Says
By Vin Gurrieri
Law360, New York (May 8, 2017, 4:30 PM EDT) -- A former King & Spalding associate filed suit in New York federal court Monday, claiming that the firm wrongfully fired him and prevented retirement plan contributions from vesting because he complained internally about unethical conduct by two partners in a case they worked on involving ZTE Corp.
Plaintiff David A. Joffe, a Harvard educated lawyer who was an associate in the firm’s commercial litigation group, claims the firm froze his pay, removed him from a partnership track, denied him bonuses over a two-year period and eventually fired him in December all because he had raised ethical concerns about alleged false statements and representations two partners had made their representation of ZTE in a case over whether the company illegally disclosed confidential information.
By taking those adverse measures, Joffe claims the firm violated the precedent established by the New York Court of Appeals in a 1992 case called Wieder v. Skala, in which the appellate court said there was an implied restriction on a law firm's ability to terminate an individual who voiced ethical concerns.
Joffe further alleged that King & Spalding violated the Employee Retirement Income Security Act when it fired him in early December, just weeks before about $20,000 in profit-sharing contributions made by the firm to his retirement account were set to vest.
“As evidenced by the temporal proximity between the date of plaintiff’s termination and the date K&S’ contributions were scheduled to vest, K&S terminated plaintiff with the specific intent of depriving him of benefits to which he was entitled under the K&S plan,” Joffe’s complaint said. “As a direct and proximate result of K&S’ wrongful termination carried out in order to prevent plaintiff’s attainment of a right under the K&S plan, plaintiff has been damaged.”
Joffe had joined King & Spalding in January 2012, after a stint as an associate at Davis Polk & Wardwell LLP. Up until 2014, Joffe says in his complaint that he received the standard “lock-step” bonus and annual compensation increases that are afforded to King & Spalding associates based on their years of practice.
In 2014, the firm had been tapped by telecommunications giant ZTE Corp. to defend it against allegations brought by Vringo Inc. that ZTE breached a non-disclosure agreement that came out of settlement talks in 2013 over Vringo’s international patent infringement litigation.
Joffe was one of the attorneys assigned to the case along with King & Spalding partners Robert F. Perry and Paul A. Straus.
During the ZTE case, Joffe claims that Straus made an untrue statement to U.S. District Judge Lewis A. Kaplan at a July 7, 2014, hearing regarding Vringo’s request for a temporary restraining order that ZTE had not disclosed confidential information in any context other than in a filing in a Chinese court
Joffe, who claims that Straus tried later to double-down on that assertion during subsequent stages of the case, eventually expressed concerns to both Perry and Straus over whether King & Spalding could ethically continue to represent ZTE, concerns that the former associate says were echoed by Judge Kaplan.
In July 2015, the judge issued an order requesting that Perry and Straus show cause why they shouldn’t be sanctioned — an order that Joffe’s complaint notes he was excluded from.
King & Spalding subsequently withdrew from representing ZTE and the show cause order was still pending when ZTE and Vringo settled the case later that year.
Joffe said in Monday’s complaint that he felt Judge Kaplan’s order “triggered his ethical duty” to report unethical behavior, which prompted him to go to King & Spalding’s general counsel and the outside counsel it had hired to represent the firm in the ZTE case describing the conduct that led to Judge Kaplan’s order.
Shortly after, King & Spalding allegedly “took a number of retaliatory actions” against Joffe, including being told during his 2015 annual performance review that he had been removed from the firm’s partnership track and that his pay would be frozen.
Joffe claims that King & Spalding partner David Tetrick, the partner at the firm who conducted his performance review, attributed the pay freeze and partnership-track removal to Joffe having submitted late timesheets as well as having not completed a personal business-development plan. The firm also allegedly told Joffe that he would receive no bonus for his work in 2015, according to the complaint.
“This decision confirmed for Mr. Joffe that his supervisors were penalizing him for the actual or narrowly averted ethical breaches in the ZTE matter that he had reported … and caused him to question whether the firm’s management intended to satisfy its ethical duty to report attorney misconduct and ensure that all lawyers at the firm conduct themselves in accordance with the ethical standards of the profession,” Joffe’s complaint said.
After numerous unsuccessful attempts to discuss the his ethical concerns with Tetrick and other firm superiors, Joffe alleged that he was told during his October 2016 performance review that his career had “stagnated” even though he was on pace to exceed the firm’s 2,100 billable-hour target for associates.
Joffe used the opportunity to raise his concerns with Tetrick about the ZTE case, but was allegedly told to “place a ‘ring’ around” it and not disclose any non-public information about the case to anyone, including internally at the firm, the complaint said.
At a meeting two months later, Joffe was fired without notice, making him ineligible to get a bonus for his work in 2016 even though he had accrued more than 2,200 billable hours, enough to meet the firm’s bonus target for associates, according to the complaint.
The firm then allegedly clawed back its contributions to his retirement account, which had been scheduled to vest on Jan. 1, 2017.
King & Spalding issued a statement to Law360 Monday saying that contrary to Joffe’s allegations, his termination “had nothing to do” with the ZTE litigation.
“He was terminated because he repeatedly refused to comply with directives and expectations that apply to all firm associates,” the firm’s statement said.
The firm also denied that its lawyers knowingly made any false statements to the court in the ZTE case, noting that Joffe “was involved in all aspects” of the litigation and was present during the July 2014 hearing.
“If Mr. Joffe had any reason to believe that those statements were not true at the time they were made, he had an obligation to immediately so advise the partner or the court. He did neither,” the firm said.
Counsel for Joffe declined comment.
Joffe was represented by Andrew M. Moskowitz of Javerbaum Wurgaft Hicks Kahn Wikstrom & Sinins PC.
Counsel information for King & Spalding was not yet available.
The case is David A. Joffe v. King & Spalding LLP, case number 1:17-cv-03392, in the U.S. District Court for the Southern District of New York.
