Chapter 16 – The Arbitrator Challenge

Once an arbitration is final and an award had been made to one party or the other, both parties typically have an opportunity to appeal the award or results. Our issue of course was more than just the ludicrous assertions of M. Rather, we then had to deal with the punitive behavior of arbitrator C since we dared to challenge his independence and further made claims that he was biased.

Our Table of Contents has been uploaded and is included herein. Motion to Dismiss Emails

The items covered in the Motion are all the things we are investigating in this blog, but lets dig a bit deeper in this post. As we have discussed before we challenged Mr. Crow’s ability to be unbiased based on his prior work history with Marshall, the fact that he had not disclosed it, the fact that she had underplayed it and my attorneys observation that the extent of the disclosure was insufficient.

My attorney Scott Cliff wrote “No. I have absolutely no recollection of her even mentioning having been in the same firm with Bill Crow.” The full content of that email is Exhibit 2.

And so we preserved the item for appeal by noting our concern in the brief.

Mr. C’s response is Exhibit 3 of the attached and note specifically that he is stepping down. Exhibit 4 then is Marshall’s response which basically asks him to reserve his decision until she briefs him on the matter and low and behold she has already done some research on this matter, anticipating our challenge.

And Mr. C then responds again this time suggesting that he will await a decision from the Arbitration Service of Portland to determine if he should step down. Now he already has stepped down, but consistent with other challenges by Marshall he now apparently has withdrawn that recusal. Of particular note though is his recommendation that Marshall bring to the ASP’s attention the other challenges of bias she claims I made in the past. In other words C has accepted Marshall’s representation that there have been other challenges. See this at Exhibit 5.

But now is the real epiphany. On Exhibit 6 you’ll see an email exchange between me and Marshall. Early east cost time I respond that I’ll need to check with counsel and within 17 minutes she responded to me and me alone. My email was sent to Bill Crow, Scott Cliff and Marshall. Her response to me was “And what counsel is he going to check with? This is my point.”Clearly she did not intent to send this to me, as she subsequently confirms. So who did she intend to send this to? Bill Crow? Sandra Ware? Whoever it was there was an ongoing to point to make and she questions that I would not seek the counsel of Scott Cliff, who was on the email string.

The consensus of the 4 people or so that reviewed this email from Marshall was that she intended to send it to arbitrator C. Because she was questioning to whom I would discuss this issue, after I had included Scott Cliff on the email string, it is unreasonable to conclude that it was Sandra Ware. The two likely candidates are Arbitrator C and James Damis (head of the Arbitration Service of Portland).

I outline much of this to James Damis in a letter, which is Exhibit 8. His answer is Exhibit 9, allowing C to proceed with the arbitration. The bias is clear. And the punishment for saying something about it about to be given out. Although we have an extraordinary case against M, stronger than I have ever seen, I am uncomfortable. I struggled with the question of whether to challenge Mr. C’s bias. But the email at exhibit 6 and the withholding of this information by Marshal and C made it necessary. If there was nothing to hide, why try to hide it.

I so wanted the process to have been pure and clean. I have a very deep need to believe in the Bill C’s of the world. When you find that you cannot, it forever eats at your soul. And I have not been at peace since. I don’t think I ever will be again. It’s all happening right before my eyes and measuring how the actors in place carry themselves, this acknowledged bias happens a lot. It’s common place.

And I am so disappointed. And if this award to M ( I mean Marshall since she gets most of it) is C’s punishment for pointing out the bias, then it simply reaffirms the conclusion I already reached. Even when an arbitrator or judge is challenged, they still should perform their duties with the honesty and integrity expected of them.

Challenging an arbitrator is a classic but risky chess move. It was necessary to preserve an appeal and was recommended by counsel. The dishonest and vain see it as an action worthy of punishment.

Read on.

Chapter 15 – Linda Marshall

M first used his girl friend Sandra Ware to assist him with legal matters and during his employment with us even threatened some of our employees with legal action from her…and then an Albany attorney and then a New Jersey attorney and once we were successful and back in Oregon he hired a Portland law firm that left after our discovery and then another attorney who left after the depositions and then he sent a letter to Bill Crow asking for a postponement until he found another attorney…and within a very short time after that letter ended up with Linda Marshall, a former partner with Bill Crow. It’s a crazy world and recall that M could not quite remember how he and Sandra came by this Linda Marshall.

To give credit where credit is due, Linda did step in and handle the case well for Max. Linda is competent and like many, but not by any means all, some attorneys simply cross the line, dwelling in the area of and on the side of dishonestly. Why? Because Max’s claims were for $1 million dollars. And attorneys get away with these lies because our courts are not drawing a line between advocacy and dishonestly. Sanctions are rare. Court room antics are common, even in an arbitration. And sometimes they work. It does not make them truthful. It does not make them right. Again I can distinguish in my mind antics in criminal cases before a jury, but when done in front of an arbitrator or Judge in a bench trial, the attorney deploying these tactics has reached a conclusion about the arbitrator or judge…and it is that the trickery will work on them because they are weak-minded or will work on them because of some other influences in play. It is otherwise dangerous. If I were a judge I would be offended by them.

In Marshall’s opening, where she outlined their case, she spun quite a story, but I was taken aback by example after example of misinformation. Fact after fact was replaced with one partial or total lie after another, some of them blatant and some of them subtle.

One such example was the 120 gig hard drive, the one M claimed crashed, the one he used to store movies, music and in some case porn and the hard drive that he reformatted the day before he turned it over to us. We had never used that hard drive after M returned it to us. We did turn it over to a highly regarded professionally qualified forensic expert who made a forensic copy of the hard drive. A forensic copy of a hard drive is an exact image of the hard drive and that copy may be used again to make yet another forensic copy. A forensic copy is not the same as a mere copy. It requires special software and equipment even to make a forensic image. Along the way one of our attorneys misplaced the 120 gig hard drive. Amazingly enough after the arbitration it was found and returned to us.

In spite of the testimony of many experts on forensic images, all of whom testified that the forensic image made initially was an exact copy of the original 120 gig hard drive, Linda Marshall took a different position. Here’s what she had to say:

8 In one instance, the — the hard — the
9 120 gigabyte hard drive has been apparently lost
10 completely. And Mr. Max’s expert was forced to
11 accept a mirror image that had been prepared by Mr.
12 Rote’s expert on a used drive. Which is somewhat
13 like akin to taking blood and putting it into a used
14 vile.

There is not a fine line between advocacy and a lie to advance the interests of a client and an attorney’s economic gain. This was not a criminal trial. Forensic imaging is objectively verifiable. It is not voodoo science. To suggest otherwise, was and remains just a lie. Now the goal of that lie was to suggest that the evidence on the hard drive had been tainted and by inference that we had planted the movie, music and porn evidence on the hard drive. We had not touched it. But more importantly, we had not reformatted the hard drive, which M admitted to doing. All of the movie and other evidence of the hard drive had been saved, put on the hard drive, before it had been reformatted and while in Max’s possession.

We did not destroy anything, but M did. We were never given credit for being the honest party, the one that did not destroy evidence. By contrast M was not ever tarnished by the fact that M attempted to destroy the 120 gig hard drive use, did not turn over key documents, turned over only emails he chose to turn over, did not turn over company programs causing us to shut down, did not turn over his email files after the 60 gig hard drive was installed (they were on his personal computer), did not turn over his personal hard drives, nor any objective evidence of the source of any document he used to make his absurd claims. Prior attorneys left for a reason.

The case was a loser for them and M could not afford to pay his attorneys for his defense. So that leads us back to asking why then did Linda Marshall have an interest? Why would she take a chance? And the answer is…we will let you answer that.

More on Linda Marshall soon.

After the arbitration we filed a complaint against Linda Marshall and Bill Crow with the Oregon state Bar. We filed a new complaint a few days ago.

Chapter 14 – Time to Provide the Testimony & Transcripts

Going to focus now on providing you the key testimony and uploading the transcripts. I have about 10 documents and after that we will summarize where we are.

At the end of the day, this just seems like another spin, another version of white collar crime. I’ve called it the “lawyer tax”, the “State Bar Employment Fee”,…there are many names. All of this is designed to tag some company ( that has some money) to pay for the legal fees incurred by both sides. M was not going to be liable to us for reimbursement regardless. We were targeted because we could pay for everyone.

It was beside the point that we were not guilty. It was beside the point that M lied about almost everything. This was pretend litigation. It was just all a scam.

Key testimony later. Protect yourself. Don’t arbitrate.

Ok back to it. You all know my testimony by now since I’m writing this blog. But we can supplement my essential testimony with a few things. One of those things is the testimony of an attorney working with us on this M matter. His name is John Weil. He practices downtown.

I’ll pull out some testimony from John in a few but in essence after M filed his complaint with the ODJ, John called Max’s attorney, down in Albany Oregon, to chat about the complaint. Weil conveyed to Egan that M had already been terminated and that he was in possession of a termination letter from us, Max’s employer. James Egan, Max’s attorney claimed that the complaint was tactical, meaning it was designed solely to save M’s job & further that he believed our termination of M had been rescinded. But of course it was not.

Testimony of John Weil:
11 Q. Okay. And then that’s where you go on
12 after that: “I understand that from your statements
13 to me, as well as statements your client made to NW,
14 that the motivation for reporting the billing
15 concern,” in quotes, “to the Oregon DOJ was to
16 prevent NW from terminating your client’s
17 employment.”
18 A. Yes.

and further:
Q. Did you — did Mr. Egan ever refute the
5 statement that Mr. M– well, did you ever get
6 a letter back or any communication from Mr. Egan
7 refuting your representation that there had been a
8 notice of termination provided to Mr. Max?
9 A. I did not.

The bottom line. Max’s attorney admitted that the complaint was filed to try to force us to retract Max’s termination & he had an opportunity to refute that M received the letter of termination before the complaint. He did not refute our position. Case closed.

During the course of the arbitration M testified that it was wrong to write-off time. Here is Max’s testimony:
2 Q. You don’t understand that? Have you seen
3 examples of customers or businesses writing off,
4 taking discounts to expand their market share?
5 A. It’s not my understanding in the telemarketing
6 industry as opposed to write-off hours. I did
7 talk about that before and there would be a
8 specific advantage to doing that over other
9 vendors and it’s not something that’s proper.

Thank you Max. It’s not proper to write-off time in your opinion? Crazy.

And Mr. Crow got that. He asked M a question.
23 Q. Is it your testimony that a telemarketing
24 service must bill for every hour that it works
25 and that it may not write-off hours that it
1 considers unproductive? Is that your testimony?
2 A. I would say yes.

But this only becomes relevant if Mr. Crow rightly concludes that M was not terminated before he filed the complaint, and he was most certainly terminated before the complaint, then all of this testimony is unnecessary. We win the case well before this. But as of this time, during this day and during this testimony, Crow’s recollection was that we had testified that we had fired M for filing the complaint. His statement follows:

8 ARBITRATOR CROW: I’m going to permit you to
9 go ahead with this, Mr. Rote, but I’m concerned
10 that it has little to do with the decisions I’m
11 called on to make. He did make a complaint to
12 the department of justice and your testimony is
13 that as a result of that complaint and perhaps
14 for other reasons you terminated him.
I’m not
15 sure whether the report to the department of
16 justice being in bad faith or reasonable is
17 important to the issues I’m faced with. But go
18 ahead. You can pursue this line of questioning
19 MR. ROTE: We did not terminate him based on
20 his complaint. The termination came three weeks
21 prior to his complaint, four weeks prior.

By this time we had presented the email evidence, the letter evidence, and 3 people had testified on our behalf that M had been terminated three weeks before he filed the complaint and yet we go into this testimony having not yet solidified this critical fact. And remember we had the computer showing the email was sent. M had destroyed his computers.

By this time, my company NDT was needing to preserve as much capital as possible and so I handled this portion of the arbitration without counsel. That saved us $100,000 or more.

Chapter 13 – Bad Behavior & The Fraud Triangle

There are numerous legal defenses that embody a common sense conclusion that the plaintiff or defendant is not entitled to relief because they have committed some sort of wrongdoing or are themselves liable for an offense. One of the things I clamor for is the application of common sense. It just does not seem to have a place in arbitration. And by example if one of your employees intentionally sets your business on fire and you fired him or her on the spot, you might not think you’ll have to actually prove later that you actually fired them that day. If no one heard you talk to that employee, you might be challenged on that in the future. You can write an email as we did and someone like M will challenge that claiming it was never received. You might send a letter via regular and a M will claim it was never received. You might give an employee 30 days notice and he might in that time try to act like a whistle blower because he heard somewhere you can make some money doing that. The legal process allows this to drag on when it should not. Because an arbitrator is being paid by the hour, you will not likely prevail on summary judgment. This may appear to be a jaded conclusion, but I fear it is not.

So in our case we supplied a huge amount of evidence that Mhad already been fired before he filed his false complaint. That evidence was written (email and letter) and we also provided testimony affirming his termination date to be about month before he filed his complaint with the ODJ. But in addition we put on a huge amount of evidence about Max’s behavior leading up to his termination, to show that no employer could afford to have him around very long and still hope to survive it. That showed that his termination on October 2nd was not only supported by the documents or evidence but was no surprise to anyone.

During Max’s employment with us, he had set up a competing company, solicited employees and clients to join him and Paul Bower, withheld documentation on his programs and processes, failed to learn key processes causing the department to fail to timely meet its processing and reporting obligations, refused to provide programs created by him while and employee, destroyed company assets by deleting files and reformatting a hard drive, converted company property to his own personal use, engaged in public file sharing putting confidential personal data at risk, copied movie and music from said file sharing site resulting in copyright and trademark violations, etc., etc. etc.

We had given Mup to 45 days to work with us while he looked for a new job. No good deed goes unpunished. After his termination, before his last day with us, he continued to withhold our programs, removed them from or never put them on the hard drive he turned over, failed to adequately train staff so they could operate after his last day, fabricated a spreadsheet and with his girlfriend filed a complaint with the ODJ (and for which they refused to provide evidence support).

But immediately before Max’s termination date we had a final incident. M refused to file client reports for several days. He wrote me an email wanting a bonus and a raise before proceeding. I refused to embrace this scam. After all, had he properly trained our other two IT staff members then there would have been no failure. Now I can attest to the fact that once a process and programming are in place, files and reports can be easily processed with limited probability of error. I’ve done it. I know. I’ve also in my quest to understand this level of incompetence have learned a bit of Foxpro (which we used at the time) and now SQL. No programmer in his right mind creates processes that are not stored and tested and as a reminder the reporting data came right from our database.

Here are a few email excerpts showcasing that the relationship had to come to an end:

From Timothy C. Rote
Code Page 1252
Created 09/28/03 07:20:22PM
Received 09/28/03 07:22:00PM
Sent 09/28/03 07:22:00PM
Subject RE: Outstanding Dispos
Last Modification Time 09/28/03 07:22:00PM
Message Size 36975

You have my home phone number Max, 503-722-4259, if you need to talk to me, but you know what needs to get done. –
—-Original Message—–

From: MZ []
Sent: Sunday, September 28, 2003 6:49 PM
To: Timothy C. Rote
Subject: RE: Outstanding Dispos
I really think you need to call me about this. —–Original Message—–

From: Timothy C. Rote []
Sent: Sunday, September 28, 2003 9:34 PM
To: MZ
Cc: John Weil
Subject: RE: Outstanding Dispos
You seem to want that. You need to get your job done Max. If you are refusing to continue to do work, let me know. Sandy P. will believe what we tell her and these e-mails seem to be clear support our conclusions. I cannot allow you to think that you can extort money from the company in order to get these dispositions done. You are responsible for your department. I would be careful about any legal strategy you and Sandy have put together Max. If you think you can get more money for your work effort, elsewhere, you should seek other employment and give your notice according to the terms of your contract. Given the profitability of the industry and this company, there will be no raises in the immediate future. You are a salaried employee. You do what you must to get the job done. —–Original Message—–

From: MZ []
Sent: Sunday, September 28, 2003 6:31 PM
To: Timothy C. Rote
Subject: RE: Outstanding Dispos
I have known Sandy for many years, and can prove I have been working on this beyond a doubt. I am sorry it has come to this between us, so I take it I am fired. —–Original Message—–

AND on OCTOBER 2, 2003, M was fired. Enough is enough. You can only turn the other cheek so many times. Even with this evidence and all the other evidence, Bill Crow found in his favor and I just have to say WOW. You can’t run a company and allow any department to hold you hostage. The objective facts refute Max’s claims.

The image I have provided for this post is I think a reflection of an all too human trait, maybe even a condition. For the most part we as individuals and even as society try to be honest and forthright. But as pressure builds we start to descend into a zone of rationalization. And if an opportunity exits or presents itself, all too often we take it. That is not then an indictment on Malone. He is human and he feared for his future employment and perhaps financial survival. He paid for his girlfriend to go to law school and then she instead of practicing wanted to sell used books on ebay. He was the sole provider. I understand his stress and did not relish having to let him go. It was necessary. A competent IT manager would not have pulled what he pulled, realizing that there are lots of IT jobs for programmers who can actually program. He could not program much as it turned out. I conclude this because he claimed he did not generate programs necessary for us to continue on after his departure. He did not teach his employees to use them. It was just a game.

The Fraud Triangle reflects the human condition of a though process leading to action. I always like to ask opposing counsel why they are pursuing a claim they know to be bogus and of course I usually get a blank stare from them. Max’s claim was for more than $1 million. At that level I can imagine that an attorney would look the other way as would many others. That does not make it right.

And what this blog explores is really to warn others that you must deal with threatening employees as sson as you can. You must deal with bias in the litigation as soon as you can and by all means you must complain to all who will hear you. The process is set up to award attorneys. It is also set up to fleece business.

The element of the Fraud triangle, as it applies to Crow, is “pressure.” What pressure did he feel to make this event profitable for Max? Who was putting pressure on him? What did Linda have on him? What economic gain would influence him or cause him to rationalize this decision? The opportunity exists.

Beware of The Fraud Triangle.

Chapter 12 – What Happened to My Email?

Nothing. Unlike M, we preserved all evidence. By we I mean me. The computer used to send the terminating email to him and the actual email. The letter we sent terminating Ma’s employment and the digital file saving a draft of this letter.

M provided none of this. We provided all of this. If you are guilty of something or telling a lie, you don’t preserve evidence as we did. I presume you would do what M did, which is destroy it. That’s what M did even after his attorney told us not to. Even after he was told not to. We did not. He did. And we subjected this evidence to a forensic examination.

We provided my computer for forensic examination, to Steve Williams, a forensic expert we hired to evaluate the email sent to Max. Steve Williams concluded that my email was sent to Max on October 2, 2003 at 11:56 am in the morning. He also concluded a draft of the termination letter was created on October 1, 2003. You can take a look at the forensic report here williams_exit_time_final_report001036.

M also hired a forensic expert. His expert also confirmed that the email terminating M was sent on October 2, 2003.

The email was sent on October 2, 2003 a full three weeks before M filed his false complaint with the ODJ.

But in addition to the email and letter evidence, three people testified on our behalf that M had been terminated weeks before his complaint. Weeks before.

So now we have added email evidence, letter evidence and the testimony of three employees (and yes I was one of those) in contrast to M’s testimony. Sandra Ware did not testify for him. No body did.

And yet Bill Crow set all of this additional evidence aside to find in favor of M. How did Linda Marshall know he would set aside all of this independently confirmed evidence? She knew M was lying. How did she know she would win?

A quote worth remembering…”Most forms of private vice and public evil are kindled and sustained by lies. Acts of adultery and other personal betrayals, financial fraud, government corruption—even murder and genocide—generally require an additional moral defect: a willingness to lie.”

Chapter 11 – What happened to M’s Email?

Recall that the 120 gig hard drive was the original hard drive and in use by M from December 2001 or so to a few days before he claimed it crashed…about May 8, 2003. We also shared with you the fact that the forensic reports confirm that and Outlook email account was active and there were files saved and archived just prior to the alleged crash of the computer. The report also confirmed that the deletion of the archived file and reformatting of that hard drive no doubt resulted in an ability to recover all of the emails. M confirmed that he had reformatted the hard drive.

After the alleged hard drive crash incident, M replaced the 120 gig hard drive with a 60 gig hard drive. And on that hard drive, no email traffic at all was found. In fact, an Outlook email account was created by Mon the day he returned the computer equipment to us.

Much of M’s case centered around an allegation that he received a spreadsheet via mail from an employee, someone he initially refused to name. By initially I mean he refused to name him for 7 years. He also claimed that he did not receive from me his email notice of termination, nor the letter of termination sent first class mail, before he filed a complaint with the Oregon Department of Justice. We of course maintained our email evidence. He of course did not.

But let’s be clear, M testified that he maintained an Outlook email account on the 60 gig hard drive from the time he took it over to the time he turned it over to us. But we did not find any email M, not a single email. In fact he did not set up the Outlook account until 1 am the morning he returned the computer to me.

Lets see what the Forensic report on the email accounts concludes. But remember that M was getting regular advice by Sandra Ware, his girlfriend at the time. I don’t think they ever married.

The Forensic Report was generated by Steve Williams and excerpts from that report follow:

“I was requested to perform a forensic examination of a 60 GB hard drive to ascertain the email usage pattern of M. This 60 GB hard drive is reported to have been used by M as a replacement hard drive for a 120 GB hard drive that is reported to have failed in May of 2003. I used the EnCase forensic software to create a forensic image of the 60 GB hard drive on April 10, 2009, using a hardware write blocker, to prevent any changes of data to the hard drive.

Chapter 10 – What Influenced the Arbitrator?

I have struggled with significantly different thoughts as to how and why Linda Marshall came into the picture. The first is that M needed counsel and he (C) thought it would be innocent enough to refer him to Marshall. Still, I don’t know that it matters but am still needing to answer how Marshall found Max…because it was not the other way around…M would have remembered otherwise and he was asked that question on direct examination. Oh what a tangled web we weave. There is nothing cliché as a bribe here. Just does not make sense. It’s plausible that Judge Jones found this as an opportunity to strike at me, but I have a hard time believing he would care. If he did and does, we have a mentally disturbed Federal Judge.

I am still taken aback by C’s opening every morning with “well Ms. Marshall where did we leave off.” I think the table was tipping in her direction after I fired my attorney and took over.

So I think its reasonable to conclude that regardless of how she found her way into this arbitration, she did dictate to him quite a bit and that commentary either came with a degree of credibility or his compliance out of fear of retribution. And what could that retribution be.

When we called for Mr. C to recuse himself, he did not hesitate. He wanted out. And remember that M was seeking $1 million in damage plus legal fees. Marshall would not let him out. He could have said too bad, I’m out but he did not. The Arbitration Service of Portland stepped in and he reversed his position. I don’t really think you can reverse it. He agreed he had a conflict and that should have been that.

So far we have outlined a portion of our case and it’s already enough to have had this case thrown out in state or federal court. Max’s destruction of his own computers was enough to do that. His admission that he did not mean or intend to claim that we were engaged in any criminal activity was also enough.

What besides our request that C recuse himself influenced this case? Was it a secret affair? With a man? Some prominent person, maybe a Judge? Or are we back to it being financial? Or does he just not like me? Or was it all too confusing so he went and drifted towards a person he had known for 30 years?

I’ve long had an aversion to sucking up to Judges, let alone arbitrators. The good one’s don’t require that. Those more ego than intellect certainly do. Respect the position. Hopefully in the end you can respect the person as well but you won’t know until it is all over. You show as much respect as you can but as some point you have to advocate aggressively and that sometimes means pointing out flawed logic and bias.

One if the best Judges I ever met is the Honorable Robert E. Jones, senior Judge for the United States District Court in Oregon. He was tough. He was fair. He was insightful. He has quite an ego. And I thought he did a mediocre job with one area, with the jury instructions. The jury came back with a small award against us on a case involving a former employee who was terminated for stealing my mail & answering some of it. I kid you not. I was unsophisticated with litigation at the time and I wrote the judge a letter and he recused himself from the case thereafter. I’ve never been able to figure out how to apologize. But he is the one by whom I measure all Judges and can’t help but wonder what he would think of this case. He would have thrown Max’s claims out probably.

But you don’t get sophisticated Judges when you arbitrate. Was Bill C overwhelmed and not up to the task or was there something else? I think so but there is more to this. I just don’t know what it is.

Chapter 9 – The Spreadsheet Evidence

You recall that M sent me an email attaching an excel spreadsheet claiming that we were over-billing clients. He claimed he received the spreadsheet via an email from one of our employees. But he did not turn over that email nor any other with any discussion about the spreadsheet.He destroyed the computer on which M received the email.

We asked all of our employees to produce such spreadsheet if they had it and to do so with no threat of firing. No one claimed to know anything. We looked for it on numerous computers but did not find it. M’s legal team did not request to do a forensics exam on any of the computers. If M had actually received the spreadsheet he would have known which or whose computer to evaluate. A forensics team would have found remnants of the file at the very least. We kept the computers for 7 years. We found nothing.

As I indicated before, we took a close look at the spreadsheet and it reflected nominal changes a number of days over the course of the month. Most entries were a write-off of time of a few hundred dollars. A few of the entries wrote time up, also for a few hundred dollars in month in which four hundred thousand dollars of fees were billed.

I dug deeper though. In looking at the meta data of the spreadsheet it was identified to a call center manager in one of our Oregon locations, meaning the spreadsheet identified him as the author. He denied it. He was also one of the employees who was going to join M and Paul in their company in Delaware. The name of the file could have been easily manipulated if M or someone he hired created the spreadsheet. I don’t think he did, but the programming on the spreadsheet was beyond the skill set of this manager.

Over the years managers we hired would come to us with a variety of experiences and ethical training. On more than one occasion we would have to counsel, admonish and sometimes terminate employees, including managers, that seemed to embrace behavior I considered unacceptable. Writing off time and trying to recover it was one such behavior. One manager even felt we should write-up time if we exceeded our sales performance goals. These are people who came over to us in management positions. Yet there was no conflict in these managers about this behavior and that surprised me.

But we stopped this behavior whenever we found it. For some reason even when threatened with a loss of job a manager would write down time before reports were issued. Eventually we had to take all reporting away from local managers and disallowed all write-downs of any kind. The stimulus to write-down hours came from the local managers interacting with some of our clients on a daily basis. Once I found out who was bringing this pressure to write down time I talked that client and removed the opportunity.

I have always been surprised by this behavior and it has always been nominal amounts of money. I don’t know why a manager would bother. They knew we would catch it within a short time.

In spite of no evidence of the spreadsheet being ours, I have always wondered if it is…if it was. Some of the data was inaccurate. Some was accurate. M had access to enough data to create some of the entries.

I believe M created the spreadsheet. Why? Because he destroyed the email from which he claimed to have received the spreadsheet. He did not request to do a forensic exam on the employees computer from which he claimed to have received the email. He withheld the identity of that person for 5 years, many years after that employee no longer worked for us. We could not find the email or spreadsheet on that person’s computer, but we did retain it.

As Max’s testimony confirmed, he thought that it is inappropriate to write-off time when we so desired, for whatever reason. This speaks to both his lack of sophistication and common sense. It does not explain why Arbitrator C did not process this, even after asking M to repeat his statement on this topic. I know C understood the stupidity of M’s testimony, because as he left for break his head was shaking in amazement.

Under the terms of our contract, we can terminate a management employee for any reason and at any time. Oregon law provides an opportunity for an employee to file a lawsuit for damages if he or she was fired for filing a criminal complaint. M testified that he did not consider the billing evidence he alluded to as criminal. His words. Neither did the ODJ. Neither did James Egan, who recalled that the complaint was filed on a do not call issue. Case closed. Or at least it should have been.

We had no proof that M received the spreadsheet by email. Many of us testified that we did not know anything about it. We did not. He admits he never represented that we were engaged in any criminal activity. I’m gathering that the report to the ODJ was not really his idea in so far as no evidence was provided to the ODJ.

Since M would not provide the email by which he claimed to have received it, I’m guessing he created it. That is more logical than the alternative theory. But if it was ours it was created months before, which raises other questions. As I indicated before, we had our forensic experts look at this document as well and the meta-data of the spreadsheet shows that it was created by one of our former IT department members, someone who worked for M. It also showed that it was modified by a former center manager of ours, the very person M claims sent the email to him. Again M never did provide the email to us, not at any time. M did admit that the email was not sent to me. But there’s more.

The meta-data also showed the spreadsheet was created on October 2, 2003, the day he was terminated. Having access to his personal computers to do forensic exams was therefore important to us. We preserved our computers. He did not. And under the laws covering destroyed evidence we are entitled to what is called an inference, that inference being that M created the spreadsheet. Again he did not request to do a forensic exam on any computer but the computer he turned over and my computer.

But again as long as this discussion is it needs some context. The sum of the adjustments were really nominal and showcases I think that the person who created the spreadsheet and the data knew little about our overall revenue. The adjustments would be equivalent to us going 55.05 mph in a 55 mph zone. Or put another way would have been 10 cents on a $100 item. The context is important. It’s just all so silly.

And yet he prevailed and was awarded 10 months compensation. We had a two-week notice period to terminate unless there was a material breach. That notice for cause was then immediate. We had given M more than 30 days notice to assist him in finding new employment. No good deed goes unpunished.

On his last day, M reformatted a hard drive containing programs necessary to generate reports. No version of those programs were found on our servers or on the computer he returned. No member of our IT department knew where to find them. That was shocking in and of itself. And so a week or so before thanksgiving we shut down for just over a week. And 175 employees were laid off for part of that time.

Arbitrator C what is going on here? I know you went on record that we were not engaged in over-billing. But let’s be reasonable, the spreadsheet was not corroborated by M and he could have done so by providing the email on which he claimed to receive it. He did not.

Chapter 8 – Lets Stop and Identify What the Arbitrator Did Not Consider

So far, many of the items of proof we provided in the arbitration through our 2 experts were either discounted or set aside by Arbitrator Crow. Let’s explore what they are.

First, M started a competing business with Paul Bower a short time after Max joined the company. His damage claim nonetheless presumed he was entitled to 10 years of compensation.

Second, M destroyed evidence on our 120 gig hard drive, including deleting files on our computers & reformatting our hard drive after he had been terminated as well as converting the company hard drive to his personal use for storage of videos and other personal files.

Third, M deleted his business emails from the 120 gig hard drive. We were able to recover some but the reformatting of the hard drive sis as he expected, it made it difficult to reconstruct the emails.

Fourth, M admitted that he destroyed his own computers denying us the opportunity to capture emails and other forensic evidence.

Fifth, he filed a false complaint against the company including alleging over-billing and DNC failures, claiming then they were criminal acts and then retracted that at arbitration.

Even if M had not been terminated, any of the above facts would have been an immediate breach of his contract and a resulting termination. But he had been terminated by email a long time before his final day with us and before his complaint. Our altruistic intent was seen by M as an opportunity to exploit the termination event. His girlfriend was an attorney.

But lets pause and summarize what M admitted to and that which he did not. M admitted to setting up a competing company with Paul Bower. M admitted to reformatting the 120 gig hard drive but did not admit that he did so the day before he turned the hard drive over to me. He did not admit to having personal videos on the hard drive, but the forensics reports confirmed they were saved to the hard drive while it was in his possession. M admitted to archiving his email just before it crashed but not deleting the files and the forensic reports confirmed that the files were not easily recoverable after the reformatting. Max admitted that he destroyed his own computers. M admitted to participating in the filing of the complaint but retracted his claim that our actions were criminal…just that it is inappropriate to write off time.

And we are just getting started on the case we presented. Much more forensic evidence ahead.

Chapter 7 – The 120 Gig Hard Drive

As I indicated in my last post, M put the computer he used (and the 120 gig hard drive in it) in play in December 2001. And that 120 gig hard drive continued to be the primary hard drive he used until May 2003, when he claimed it crashed. What the forensic evidence shows is that in spite of the position M took on the crash of the 120 gig hard drive, it continued to be used by him until I took possession of it on the afternoon of November 13.

M also took a position that the hard drive was placed in a safe within a few days after it crashed and it stayed there until he returned it to me. But the forensic evidence shows it was until continuous use after the alleged crash.

M also testified that at some point he decided to reformat the hard drive. The “at some point” was the day he returned the hard drive to me. And when asked why he destroyed evidence even after he had filed a complaint against us, he claimed he did not was client sensitive data falling into hands outside of the company. Of course under that theory he would also have reformatted the newer 60 gig hard drive & of course he no authority to destroy our data, our programs and our evidence. But he did.

In addition to the hard drive being reformatted, many files were deleted. The actions taken to cover up data…again data we owned, was substantial, measured and strategic.

Mark Cox was one of our experts and his reported that “An analysis of the hard drive was conducted for usage between the dates of May 12, 2003 and November 12, 2003, the time that the hard drive was reported to be unusable. Exhibit 3 is included to indicate the usage during this time frame in which the hard drive was reported to have been in a failed state. From the recovered files present on the hard drive that were created or accessed during this time frame, it is apparent that the hard drive was not in a failed state and was being used, mainly for downloading video files.”

What video files did we find? Here’s a portion. And note the last date the file was accessed as in deleting and the column on the right the date and time the file was created. There were thousands of video, jpeg and mp3 files deleted:

Lost in Space – S2ep12 – A Visit to Hades-[SFCC].r04 11/12/03 10:45:06AM 06/22/03 11:17:31PM
Hitch-Hikers Guide Galaxy2 Ep1.mp3 11/12/03 10:45:03AM 07/23/03 10:09:07PM
Wonder.Woman.1×05.svcd.BTM.r34 11/12/03 10:47:09AM 07/26/03 09:42:34PM
Engineering Disasters 4_HIS!.sfv 10/08/03 10:16:02AM 08/03/03 07:52:20PM

And of course there were titles indicating there was porn. Lots of titles, but here’s one:

Gay_Older_Men_-_Quadraplex_Part_1.avi.lnk 04/01/03 07:29:49AM 04/01/03 07:28:46AM

Sandra Ware, I thought you were engaged to Max.

Lots of Ebay files:

eBayISAPI[3].htm 05/08/03 05:32:38AM 05/08/03 05:32:38AM
max@www.andale[1].txt 03/18/03 08:00:04AM 03/18/03 08:00:04AM

You can find the Forensic Report here examination_of_120_gb_hard_drive_old. The detailed exhibits are not necessary and excel files with 50,000 lines of files deleted are not necessary either, but we will add this later if necessary.

And what about the years of Foxpro files and data files and other highly confidential information? And the problem is that this computer was used to upload and download many of these video files, subjecting a lot of this data to theft.

Sometimes employees working in the programming field lose sight of the fact that they do not as individuals own their programming. The employer does and it is not their right to destroy it. In fact it is a criminal act. We also have a forensics report on what happened to the Foxpro files. M maintained that the Foxpro files could easily be recovered and yes that would be substantially true if the recycle bin was not emptied and the hard drive had not been reformatted. Once the drive was reformatted the Foxpro programs could not be recovered with any integrity. We were able to recover enough however to know that M did not create many of these files. We don’t know who did. We don’t know where most of them came from, but I’m guessing from someone who had better programming skills than M.

And to boot the Foxpro files we needed were not on the 60 gig hard drive he turned over to us, the one he was using on his last day. More on the 60 gig hard drive shortly, but next lets count what Bill Crow set aside to find in M’s favor.