Illinois Lawyer Blog

Looks like former Motorola CFO Paul Liska is going to be at war against his former employer for some time. Liska is suing Motorola, claiming he was fired for his refusal to accept allegedly misleading financial projections by the Motorola Mobile Phone Division. Motorola, on the other hand, is claiming Liska tried to extort the company.

The two sides were back at it on Wednesday, July 8, appearing before Cook County Judge Allen Goldman. Both Liska and Motorola filed motions, seeking Judge Goldman's help in having certain documents produced.

In addition, a local headhunter, Gregory Crecos, appeared on July 8 as well, objecting to certain requests made upon him by Motorola. Crecos, the founder of Gregory Michaels & Associates, was served with a subpoena by Motorola. Motorola wants Crecos to turn over documents relative to his dealings with Liska, going back to when Liska worked at Sears and other companies. In addition, Motorola is seeking documents relating to Motorola candidates, dating back to 2007. According to remarks Crecos made after Court, Motorola believes Crecos tipped Liska off that Motorola was looking to replace Liska. Crecos denies any impropriety.

All matters were continued to July 31.

The retaliatory discharge case recently filed by Paul Liska against his former employer, Motorola, is getting nasty. According to Wailin Wong's April 16, 2009 article in the Chicago Tribune, Motorola recently filed a motion with the trial judge alleging that Liska destroyed evidence on a Motorola laptop he used after his termination.

In a Memorandum filed with their Motion, Motorola detailed that Liska was informed on January 28, 2009 that he was being replaced. Liska was apparently last in his Motorola office on January 29, 2009. Motorola alleged that when Liska left that day, he took a company laptop and some documents. Motorola subsequently requested that the laptop be returned. When Motorola got it back it was a "blank slate". Motorola then went out and hired a forensic computer firm to analyze the laptop. The forensic experts concluded....[cue dramatic music] that a date destruction program had been run on the computer several times between January 30 and February 12.

Motorola is also asking the trial judge for permission to examine any computers Liska may have acccessed in the past year. Liska had earlier denied he took any Motorola property.

Wow. A recent Chicago Tribune by Wailin Wong detailed how a corporate marriage can go bad. Very bad.

By way of background, in early 2008, Motorola, hired Paul Liska as the new Chief Financial Officer. Motorola's flagship mobile phone unit, which once was on the cutting edge with innovations like the Razr cellphone, had taken on water and needed to get back on track. The plan was to separate the mobile phone division from the other Motorola business groups. The thought was that Liska's background as a corporate dealmaker would prepare Motorola for the eventual separation of the phone unit.

Things apparently came to a boil in January of 2009. An important meeting was scheduled for January 28, 2009. Liska was to make a presentation at that meeting. According to Liska, he was concerned that certain Motorola financial forecasts were flawed and that Motorola had limited credibility with credit ratings agencies. Liska claims he shared those concerns with CEO Greg Brown prior to the presentation. At the January 28, 2009 meeting, Liska included those concerns in his presentation.

The next day, January 29, 2009, Lisak was shut out of a scheduled board meeting. That same day CEO Brown advised Liska that he was being replaced. And now the fur has begun to fly. Liska has filed suit against Motorola for retaliatory discharge, alleging that he was fired for attempting to bring his concerns about the flawed financial forecasts to a Motorola audit committee. Motorola, for its part, claims that Liska misrepresented his presentation to Brown and that his conclusions were misguided. In addition, Motorola claims that Liska had not been keeping abreast of the mobile business operations.

Recently unsealed court documents and filings provide some additional details on a business marriage gone bad. There was, according to Motorola, jealousy. Motorola alleged that Liska was jealous of the compensation package enjoyed by Chief Executive Sanjay Jha. Motorola additionally claims that as a result of that jealousy, Liska developed a "vendetta against Dr. Jha and the Mobile Business Devices business". And, according to Motorola, there was pettiness. Liska failed to prepare for meetings and acted "abrasive and dismissive". [I was under the impression that titans of commerce were supposed to be abrasive and dismissive - you know, like Donald Trump].

Finally, according to Motorola, the parties inevitably grew distant. Liska started talking to a headhunter and working at a private office.

Liska on the other hand, claims he was blindsided. He insists he received praise for his performance and was given additional responsibilties on the job. He denies he ever discussed the need for a new job with the headhunter.

Lastly, and not suprisingly, the parties, apparently argued about money. Lots of money. Motorola claims Liska tried to "fleece" Motorola by demanding a settlement of $37 million. Liska denies doing so. This facet of the case is particularly astonishing to me. They weren't arguing about the keys to the Executive washroom or a primo parking spot. They are arguing about whether someone demanded $37 million dollars. I repeat, $37 million dollars. Hard to imagine any ambiguity when it comes to $37 million dollars.

I suspect there will be further interesting revelations as this one winds it way through the litigation process.

The Illinois Supreme Court recently handed down an important retaliatory discharge decision in Smith v. Waukegan Park District. The facts are pretty straightforward - Greg Smith worked as a seasonal park maintenance employee for the Waukegan Park District. On May 8, 2002, Smith suffered a work-related injury requiring medical treatment and some time away from work.

On June 24, 2002, Smith returned to work. The Park District, in the person of Smith's supervisor, Mike Trigg, insisted on a drug and alchohol test, which Smith refused. Smith felt the testing was "retaliatory harassment" for filing a Workers' Comp claim. Trigg then informed Smith that he was discharged, supposedly for his failure to take the drug and alchohol test. Smith then filed his retaliatory discharge claim. The Park District moved to dismiss the case under the Illinois Tort Immunity Act. The trial court granted the motion. The Appellate Court upheld the dismissal. The plaintiff then appealed to the Illinois Supreme Court.

The Park District had two primary immunity arguments. First, the Park District asserted it was immune from Smith's retaliatory claim under 2-109 of the Illinois Tort Immunity Act. Section 2-109 of the Act provides immunity to local public entities when the entity's employee could not be held liable for the act or omission that caused the alleged injury. The Park District made that argument relying upon Buckner v. Atlantic Plant Maintenance, Inc. In Buckner, the Supreme Court held that even if an employee hatches the plan to fire the employee, the actual discharge is authorized by the employer. The Buckner Court further explained that the motive for a firing in light of a Worker' Comp claim - avoidance of employee medical bills and related expense - go to the employer, and not the employee. Based on those findings the Buckner court held that the tort of retaliatory discharge could only be committed by an employer. The Park District, argued[in a somewhat circular argument]that since Buckner precluded any liability on the part of the supervisor, under 2-109, the District could not be liable.

The Supreme Court in Smith, though, wasted little time in disposing of the Park District's first argument. The Court pointed out that the Smith's supervisor hadn't caused the discharge - the District did. Therefore, 2-109 does not apply in retaliatory discharge cases because the employer, not the employee, causes the harm. As a result, the District was not immune from a retaliatory claim.

The District also argued that it enjoyed immunity under 2-201 of the Tort Immunity Act. Section 2-201 provides that a public employee serving in a position involving the determination of policy or the exercise of discretion is not liable for an injury resulting from his act or ommission in determining policy when exercising that discretion. In shooting the District's second argument down, the Court held the public employees possess no immunized discretion to discharge employees for exercising their Workers' Compensation rights.

The Supreme Court reversed the judgments of the Appellate and trial courts and remanded the case back to the trial court for further proceedings consistent with the Court's opinion.

The United States Court of Appeals for the Seventh Circuit recently weighed in on the "public policy" element Illinois retaliatory discharge plaintiffs must show. In Benders v. Bellows and Bellows, the plaintiff filed a three count complaint in federal court after her termination from the defendant law firm. The third count of her complaint alleged she was terminated in retaliation for threatening to report a dispute about her employement status to the IRS. The trial court granted the defendant's motion for summary judgment and Benders appealed.

The underlying facts involve a romantic relationship gone sour between the plaintiff[the office administrator] and one of the principals at the firm. In December of 2003, some months prior to plaintiff's termination, her status was changed from employee to independent contractor, pursuant to a discussion she had with a name partner at the firm. Benders claimed the change was only termporary and, after a short period of time, she was to regain her employment status. In any event, from that date until her discharge, her checks listed her as an "independent contractor".

In April of 2004, after receiving another paycheck noting her independent contractor status, plaintiff contacted Joel Bellows and reminded him that she wanted to refinance her home and needed her paystub to reflect her status as an employee. Several days later, after being informed that no change would be made, Benders advised the firm she intended to file a complaint with the IRS regarding her employment classification. Shortly thereafter, she was told to leave the firm.

In discussing the retaliatory count, the Court first noted that plaintiff was obligated to prove: 1) that she was discharged; 2) in retaliation for her activities and 3) in violation of a clear public policy. That public policy prong is not satisfied if only private interests are at stake. Defendant argued that Benders status as an employee or independent contractor involved only plaintiff's economic interests, and therefore, she couldn't show any violation of a public policy. The Court however, disagreed. The opinion notes that the federal laws classifying personnel as employee or independent contractors concern more than one employee's bank account. Those laws affect tax revenues collected by the federal government - and tax revenues are indeed a public concern. The trial court's order granting summary judgment on Count III was reversed.

The First Appellate Court recently came down with an interesting decision involving the Illinois Whistleblower Act, 740 ILCS 174/1. In Callahan v. Edgewater Care, the plaintiff, Melissa Callahan, claimed that she was fired from her position as an admissions clerk in a nursing home for reporting activity that she felt was in violation of state law. Specifically, Callahan alleged that she was discharged for reporting to two supervisors that one of the residents was being kept in the facility against his will. After her discharge, plaintiff filed a retaliatory discharge lawsuit. The defendants filed a Motion to Dismiss, arguing that the enactment of the Whistleblower Act preempted her retaliatory case. Defendant's Motion was granted. Ms. Callahan appealed.

The Appellate Court noted that the Whistleblower Act[effective 1/1/04] prohibits an employer from retaliating against an employee for disclosing information to a government or law enforcement authority where the employee believes the information discloses a violation of State of Federal law. The Court went on to note that a violation of the Act may result in 1) reinstatement of the employee; 2) back pay, with interest; and 3) compensatory damages including litigation fees, expert fees and attorney fees. The Defendant argued that the Whistleblower Act had, by implication, preempted existing common law remedies available to employees discharged for their activities. The Court found absolutely no support for defendant's position and reversed the trial judge's decision.

The enactment of the Whistleblower Act will provide some additional relief to employees who report misconduct to superiors. Traditionally, in order to prevail in a retaliatory discharge claim, an employee had to show 1) he was discharged for his activities and 2) that the discharge violated public policy. Certain courts however, were overly strict in exactly what constituted a violation of public policy and otherwise valid claims were dismissed. Now employees have another avenue of recovery available.

The United States Court of Appeals for the Seventh Circuit, located in Chicago, Illinois, recently discussed the proof a plaintiff must offer when prosecuting a retaliatory discharge case. In McCoy v. Maytag, Thomas McCoy brought a retaliatory case against his former employer, Maytag, for firing him after he filed a Workers Compensation Act. The Court, in the course of its opinion, set forth the elements a Illinois plaintiff must prove: 1) that he was the defendant's employee before the injury; 2) that the employee exercised a right granted by the Illinois Workers' Compensation Act and 3) that he was discharged from his employment with a causal connection to his filing the Workers' Compensation claim. The hard part in these cases is the third element - causation. The Court noted that "The element of causation is not met if the employer has a valid basis, which is not pretextual, for discharging the employee." So what does that mean in English? The Court explained that in order to show pretext, "...a plainitff must offer evidence to indicate that the employer did not honestly believe the reasons it gave for its action and is simply lying to cover its tracks." Pretext "...means more than a mistake on the part of the employer; pretext means a lie, a specifically a phony reason for some action." In short, the plaintiff has to show the employer's reason for discharge was a lie. Not an easy thing to prove, as Mr. McCoy found out. The Seventh Circuit upheld the Trial Court's decision to grant summary judgment against plaintiff, ruling that the plaintiff's failure to provide regular updates to justify his absence from work[required under the Collective Bargaining Agreement]was a non-pretextual reason for the termination.