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Suite Suite Home About This Blog About Attorney Joseph Y. Ahmad Ahmad, Zavitsanos & Mensing LLC ← Older posts Paxton and Succession – What if you are the coup target? Posted on September 25, 2023 by Joe Ahmad Though politics, in the more formal political party sense of the word, had a leading role in the impeachment trial of Texas Attorney General Ken Paxton , there were definite similarities between that attempted takeover and what happens in the hit HBO show Succession and in boardrooms across America. As with the characters in the show, people are always maneuvering to get into the C suite. And once there, they often aspire to being CEO or chair of the board. Many times, that involves dethroning an existing CEO or board chair. And two things that mattered in both the attempts to unseat Paxton and in the show Succession are politics and the rules of engagement. Both party politics and workplace politics can matter a lot. Inevitably, you must win over the decision makers who will vote on your future. Unless your dad hands you the keys to the company like Rupert Murdoch just did , it is not good enough just to have good performance. It usually must be a demonstratively great performance. More importantly, it must be shown to benefit those who decide your future. In Succession, workplace politics and family politics were the backbone of all four seasons as Logan Roy’s children jockeyed for their won exalted spot at the table. In the Paxton case, politics in front of the public, and more importantly behind the scenes, played dual roles. In C-suites, it can be just as cutthroat as on HBO or in Austin. The other key issue is the rules of engagement. Frequently the rules are found in company bylaws or employment contracts. Unfortunately, with respect to employment agreements, very few people study them with an eye towards their own future and rise in the company. If you do not have a lot of leverage from your employment agreement, or company bylaws, you are too easy at target for people to remove rather than promote if they think they will benefit personally. The rules in Succession were on paper but they were bent and mangled and eventually cleverly superseded in the show. The rules of engagement for Paxton were clear but what went on between Senators was where the real decisions were made. The rules of engagement in the C suite need to be as specific, unambiguous and non-discretionary as possible. If discretion is allowed as an element of the decision to terminate someone, an ability to cure is essential. Written notice of the details of the cause for termination and an opportunity and ability to cure it are key. Requiring a vote of a board or others as opposed to investing discretion with a single person is important as well. It is easier for someone opposed to you to plan your overthrow if only a few have to okay it, rather than a larger group. Change of control agreements can be extremely helpful as well. Often the people that gang up on you are people you do not know well or at all. You may have a great relationship with your existing board. But what happens when new owners and a new board take control? Inevitably the existing management will be partially if not completely removed. It is smart to have a payment agreement in place if there is a change of control over your report, responsibilities, pay or location. And of course, the payout should be as significant as possible. The higher the cost, obviously the less likely an improper removal will gain traction. Posted in Depositions , Legal , Litigation | Tagged Joe Ahmad , litigation | Comments Off on Paxton and Succession – What if you are the coup target? FTC Non-Compete Rule Change Could Boost Wages and Innovation Posted on May 9, 2023 by Joe Ahmad In April, the Federal Trade Commission (FTC) closed comments on a proposed rule change that would drastically limit employers’ uses and abuses of non-compete agreements in employee contracts. When the FTC announced the proposed rule change its press release suggested exploitation will go down and wages will go up if the change goes through: The Federal Trade Commission proposed a new rule that would ban employers from imposing noncompetes on their workers, a widespread and often exploitative practice that suppresses wages, hampers innovation, and blocks entrepreneurs from starting new businesses. By stopping this practice, the agency estimates that the new proposed rule could increase wages by nearly $300 billion per year and expand career opportunities for about 30 million Americans. It is no surprise that labor and consumers have overwhelmingly favored the changes and business interests have opposed them. In a story on the divide NBC News noted that what it called lobbying crossfire” by the dueling interest groups wasin addition to the more than 26,000 comments from the public the FTC gathered over the past several months.” This showdown in Washington was inspired by business’ expansion of the uses of non-competes over the last few years that many would argue has been an over- use or abuse. The original purpose of a non-compete was to protect legitimate business interests like the privacy of confidential business information and trade secrets. But some businesses have used non-competes as handcuffs to prevent even lower-level employees from leaving. A non-compete can unfairly lock someone into a job though there is no real threat to the business if they leave. The businesses have lawyers to enforce their claims but it is a small percentage of employees who have the finances to access lawyers for an expensive legal fight over the non-compete. Another concern is that many studies show the most innovative businesses created by executive types come from those who worked at other companies and saw a new, potentially better way to do things. In this way non-competes can stifle competition and innovation. In a New York Times op-ed, Lina Khan makes the argument that in addition to suppressing wages, non-competes suppress creativity in the marketplace: Start-ups are historically a key driver of job creation and innovation but several studies have found that noncompetes reduce entrepreneurship and start-up formation. How can a new business break into the market if all of the qualified workers are locked in? Or if the would-be founder is bound by a noncompete? I expect the FTC will carefully consider the concerns of businesses as it addresses the rule change. But it will balance that with the data showing the suppression of wages and the costs to innovation non-competes have created. Posted in Non-Competes , Uncategorized | Tagged Joe Ahmad , noncompetes | Comments Off on FTC Non-Compete Rule Change Could Boost Wages and Innovation Can CEO’s learn something from Dolphins owner Stephen Ross’s problems with the NFL? Posted on August 11, 2022 by Joe Ahmad Earlier this week, multibillionaire and longtime Miami Dolphins owner Stephen Ross was found to have violated the league’s tampering rules in a scheme described as unprecedented in scope and severity” by commissioner Roger Goodell. It’s hard for someone like me not to think about executive employment when I hear the details. Writes Greg Cote in the Miami Herald : Ross not only cheated, he cheated badly, unsuccessfully, with no guile whatsoever, but as clumsily ham-handed as an amateur thief smiling at the security camera. He wanted to win something awful, and did something awful to get there, and got caught. A six-month NFL investigation found Ross as well as Dolphins vice chairman (and future owner-in-waiting) Beal both violated integrity of the game” rules by tampering between 2019 and ‘22 to lure QB Tom Brady while he still was under contract with the Patriots and later the Buccaneers. And also tampered to lure coach Sean Payton while he still was under contract with the Saints. Ross was fined $1.5 million and Beal $500,000. Ross was suspended from all team involvement until October and both...