Sullivan & Cromwell’s labor and employment practice was established over 50 years ago. S&C is virtually alone among our peer firms in providing a full range of services to our clients in this field.

Ted Rogers, the coordinator of the Group, was highlighted by The Best Lawyers in America as the 2012 Lawyer of the Year for New York City Labor Law-Management. Chambers USA ranked him in 2011 as one of nine top-ranked employment lawyers in New York and called him a “market-leading practitioner,” whom commentators note “is second-to-none,” “accessible,” and “has a broad range of legal expertise . . . and is always helpful . . . .” Also in 2011, Human Resource Executive named Mr. Rogers – for the fourth consecutive year – one of “the nation’s most powerful employment attorneys.” The publication has noted his specialty in employment and labor litigation and counseling, including class-action, whistleblower, labor, discrimination and raiding cases. He also is consistently recognized by Practical Law Company’s PLC Which Lawyer? as one of the leading lawyers in New York in the Labor and Employee Benefits category. 

Rick Fessel, the other leader of the Group, also is highly experienced and recognized for his expertise in the field, including by The Best Lawyers in America and New York Super Lawyers.

S&C’s labor and employment litigators work closely with members of our Executive Compensation and Benefits practice to assist clients in connection with the full spectrum of employment issues that confront today’s businesses.

S&C’s labor and employment lawyers have extensive experience:

• Advising clients with respect to both routine and complex discrimination issues and, when necessary, defending employers in discrimination litigation in state and federal courts and before arbitration panels. 
• Advising clients on difficult senior executive transition and retention issues, including advice on separation negotiations and litigation concerning such matters as disputes over “good reason” contract provisions. 
• Advising and litigating restrictive covenant cases involving non-compete, non-solicit and trade secret claims, cases involving forfeiture of stock awards for breaching such agreements, and all manner of other employment-related claims. 
• Providing expert advice on a broad spectrum of employment matters, including workforce restructuring, compliance with complex domestic and foreign statutes, independent contractor and Fair Labor Standards Act classification and related wage and hour issues, investigations of employee complaints, resolution of particular employee situations, creation of employment agreements and severance arrangements and international issues. 

The Firm also has deep experience in traditional labor law, providing specialized labor counsel in connection with mergers and acquisitions, assisting non-unionized clients in addressing issues under the National Labor Relations Act, responding to labor disputes that may or may not directly involve clients, and providing representation to employers with unionized workforces, including negotiation and administration of labor contracts and representation of clients in labor arbitrations.

Recent Labor and Employment Litigation Highlights

• Obtaining in July 2012 a decision issued by the Southern District of New York affirming an order of the U.S. Bankruptcy Court that dismissed two separate suits against the purchaser of a bankrupt company brought by former executives of the bankrupt company seeking over $20 million in claimed contractual guarantees. The Court ruled that neither plaintiff had standing to seek relief because the terms of the underlying asset purchase agreement (“APA”) between the two companies expressly disclaimed any third-party beneficiary rights. The Court further ruled that, alternatively, even if plaintiffs had standing under the APA, their claims failed under the plain terms of the APA, because the guaranteed bonus agreements were not assumed by the purchasing company. The decision was affirmed on the standing ground, and affirmed that no third-party beneficiary clauses, also called “negating clauses,” are decisive in cutting off the rights of third parties to claim benefits under a contract.
• Represented the private equity investment vehicle of a Middle Eastern country in an AAA arbitration brought in 2010 by the entity’s former co-chief investment officers. The claimants sought approximately $700 million in alleged damages. Claimants asserted numerous claims against the company, including that they had been fraudulently induced to join the company with promises as to the amount of funds that would be available for investment, that their employment contracts entitled them to substantial carried interest payments and that the company had fraudulently induced them to remain employed by promising payouts even greater than those allegedly due to them under their contracts. After an 11-day hearing extending over three months and extensive post-hearing briefing and argument, in March 2012 the arbitrator denied the claimants’ claims in their entirety. In a lengthy opinion, the arbitrator rejected all of the claimants’ liability theories; with respect to their damages theories, she agreed with the company that a resignation provision in the empoyment agreements operated as a liquidated damages clause, that claimants’ expert’s model was flawed and that the damages claims were in any event impermissibly speculative.  
• Representing a New York-based professional services firm in litigation related to the termination of a former partner. The partner claimed that the firm had tortiously interfered with his new employment contract by publicly circulating allegedly false statements about his termination, which resulted from sexual harassment claims. In January 2011, the Appellate Division, First Department of the New York State Supreme Court upheld a lower court’s dismissal of his claims on the grounds of res judicata and failure to state a claim. In an earlier round of litigation, the Appellate Division, First Department also upheld another lower court’s dismissal, albeit on different grounds.
• Representing several companies in ongoing defense of claims in state and federal court of discrimination and retaliation claims, including Sarbanes Oxley Act claims. In one case, S&C successfully represented a major United Kingdom-based banking firm in defending against whistleblower claims under the Sarbanes Oxley Act. The Department of Labor dismissed the claim, based on our arguments.
• Obtaining in August 2010 the removal of an ex parte temporary restraining order issued against officers of a producer of nail polish products, in a noncompetition clause dispute with one of the world’s largest fragrance and beauty products companies.
• Representing an executive officer of a national apparel company in a dispute with the officer’s former employer in connection with restrictive covenants.
• Representing a REIT in defending against claims brought by a hedge fund relating to the REIT’s hiring of the hedge fund’s CFO.
• Advising a prominent West Coast-headquartered law firm on employment issues in connection with one of its former partners.
• Acting as co-lead counsel defending a major financial services firm in a nation-wide putative class action in federal court alleging sex discrimination on behalf of all professional women employed by the firm.
• Representing former partners of a national accounting firm who left to form a significant forensic investigation business, in a suit brought by their former employer to enjoin them from proceeding with their business. We defended expedited proceedings in state court, and brought the case to a successful and swift resolution for the client.  
• Representing a major investment bank in the successful defense of several NASD arbitrations challenging important terms of the bank’s stock award program applicable to tens of thousands of employees. In one, a unanimous panel of NASD arbitrators granted a motion to dismiss at the conclusion of the claimant’s case. In another, after a contentious five-day arbitration hearing in Houston, a unanimous panel of NASD arbitrators found in favor of S&C’s client, dismissing all claims in their entirety and awarding the client $160,000 in legal fees. Most recently, after a two-day hearing in Atlanta, a unanimous panel of NASD arbitrators dismissed all claims against the client by a former employee who had been terminated. These arbitrations were just three of a series of cases being handled by S&C that were filed by former employees of the client’s private wealth management group challenging the forfeiture of conditional equity awards after the employees resigned or were terminated and proceeded to engage in competitive activities in violation of their equity award agreements. 
• Winning a dismissal on behalf of an UK-based financial firm of a breach of contract lawsuit in federal court filed by a former employee based in Singapore, and continuing to defend the firm against a SOX whistleblower charge filed by the same employee. 
• Winning a FINRA arbitration on behalf of a UK-based banking firm commenced by a salesperson who claimed that she had been orally promised that the firm would match the compensation offers she received from other firms when she was transferred internally between departments. S&C continues to represent the firm in a related federal gender discrimination lawsuit filed by the same employee. 

Other Notable or Precedent-setting Litigation Experience

• Representing a major financial institution in defense of claims by executives of a recently purchased subsidiary to millions of dollars in severance. The matter settled on favorable terms on the eve of trial. 
• Winning an appellate decision on behalf of a prominent financial firm affirming the dismissal of an action raising claims under New York’s wage law that challenged the structure of the firm’s compensation system. The decision established an important precedent applicable generally to equity awards issued by financial firms and other corporations as part of compensation. 
• Overturning the district court’s grant of class certification in In re Initial Public Offering Securities Litigation. In a decision obtained by the Firm’s Litigation Department that also represents a big win for the employment defense bar, the U.S. Court of Appeals for the Second Circuit rejected a lenient standard for class-action certification that had been established as a result of the employment discrimination class action Caridad v. Metro-North Commuter Railroad. The Second Circuit’s opinion also set the stage for a favorable settlement that was recently approved. The Firm represented Goldman Sachs and acted as liaison counsel for 55 underwriting firms throughout the litigation. 
• Winning an appellate decision on behalf of a prominent financial firm overturning an arbitration decision that had awarded defamation damages to a former employee related to an NASD Form U-5 filing. The decision established an important precedent in affirming the holding in Rosenberg v. MetLife, Inc. that Forms U-5 enjoy an “absolute privilege” against claims for defamation damages and that arbitration panels are bound by Rosenberg’s holding. 
• Representing Microsoft Corporation in the damages phase (after a finding of liability when Microsoft was represented by other counsel) of the landmark case concerning the entitlement of temporary workers and independent counsel to participate in employee benefit plans, such as health insurance, stock purchase plans and similar benefits, including acting as lead counsel in mediation of settlement terms and resolution of the matter. The case was completed in 2007. 
• Procuring on behalf of a major professional sports league the dismissal of age discrimination and retaliation charges filed with the EEOC by a former employee. S&C continues to represent the sports league on employment matters.