Chapter 67 – Schwabe Williamson

I have long wondered what inferences I can draw on the Schwabe law firm overall based on the arbitrators opinion. On the one hand if the arbitrator became confused and was manipulated into confusion, an award for someone claiming retaliation is predictable given the progressive nature of the Portland community. You see it is just not about the fact that the award to M required the arbitrator to set aside virtually all of our evidence, which included the witness testimony of 10 people and a thousand pages of forensic data and reports, but it also required him to actually ignore that 175 employees were laid off a week before thanksgiving as a result of M’s destruction of our software. We provided so much evidence that the other side was lying, almost compulsively.

The arbitrator was at that time a partner at Schwabe Williamson and Wyatt. My companies use to be clients of that firm. It’s a good firm and represents a lot of businesses. And so I have often wondered was this act of ignoring our evidence something that was just a mistake, something out of anger, cognitive issues….or was there some benefit for Schwabe? Did the arbitrator actually garner some benefit for Schwabe? It would be nice to not have to evaluate this question. But the relationship between the arbitrator and Marshall remained undisclosed and Marshall sought Judge Jones intervention twice. Moreover, at the time the post hearing brief was filed the arbitrator quickly identified facts not in evidence. This showed at that moment a great amount of acuity.

And remember, we had overwhelming, iron clad evidence to defend against the claims made by Marshall. In fact the claims should have been dismissed early on by the arbitrator and were not. And we were therefore forced to pay for forensic experts, more legal fees, etc. Moreover we offered M an opportunity for a walk away settlement multiple times; so any suggestion that we were a bully in this litigation is misplaced. Plus the respondent, M, Marshall’s client, attempted on multiple occasions to extort a settlement, threatening exposure of knowing false claims against my company.

I’ve never asked Schwabe’s managing partner if he is concerned about his partners arbitrating or acting as a protem Judge, but I should. And the reason I should is because as I have pointed out many times, the arbitrator’s arbitration award shows an abundant contempt for business overall. That contempt may have been for me, taken out on my company. Schwabe represents a lot of businesses, including Columbia Sportswear.

Consider the following:

(1) We produced eight forensic reports and more than a thousand pages of forensic data. Each of the reports showed that our former employee M was terminated before his complaint or that he had struck out at us and stopped his claims on his last day.

(2) We retained our computers showing that M was fired before he filed his complaint.

(3) M destroyed all of his computers and forensics evidence after his attorney told us place a litigation hold.

(4) M’s own forensic expert agreed that the forensic data confirmed that M had been fired before he filed his complaint.

(5) Ten (10) witnesses testified, 9 for us and 1 for M (he testified for himself).

(6) M never turned over the email from which he claimed to have received his excel spreadsheet evidence.

(7) No one was able to corroborate his evidence. No one testified that the document was ours and it was not.

(8) The document did not show fraud. There was nothing for us to want to hide or care about.

(9) The Oregon Department of Justice thought the complaint by M was so weak that the complaint file was open for only a few days. M refused to provide evidence.

The claim by M was that he was fired because he reported a crime to the ODJ. But the forensics report and witnesses confirmed that he had been terminated weeks before he filed his complaint. See our summary judgment motion memorandum.

And his complaint was that we had over billed clients in an amount that was by comparison claiming that we were going 55.25 miles per hour in a 55 mile per hour zone. Seriously.

The arbitrator was given the chance to allow us out of the case four times. M had not filed his claims timely, but he allowed it. Our evidence proved that he was fired before and it was irrefutable. But he allowed the arbitration to move forward. Our evidence proved that M had destroyed our software costing us more than $100,000 and this happened on his final day, eliminating his claims, but still the arbitrator allowed it. And finally, M destroyed his computers and one of our hard drives and his claims should have been dismissed because that behavior was so egregious, but they were not dismissed.

The arbitrator’s opinion noted that I at times was harsh to M. Yes, anyone trying to destroy a business that employs hundreds can only be treated warmly for so long and eventually you have to be demanding. If those demands were too harsh for the arbitrator, then I have but this to say…too bad. It’s not what the arbitration is about. It’s suppose to be about the facts. It’s not suppose to be an attack on small or medium size business.

Now a note of compassion. Having met with the arbitrator I know that there was considerable distance in his mind from the days in which he was a partner with Marshall. In fact he was far closer to my former attorney than to Marshall, which may have accounted for his comfort in referring the case to her.

But I also have to expect that an attorney skilled in intellectual property law should have understood easily that we could not process 100,000 bits of data daily without the programming to do so. Our evidence showed that the programs were destroyed and or missing immediately after M’s termination. Our evidence also showed that it took nearly a week to rewrite the programs, coding, that allowed us to generate the reports nightly. B contrast M claimed that there was no executable file, no stored procedures and that he would simply write the code nightly to generate reports. We found the programs on a hard drive the former employee M had reformatted. Three database experts testified, all confirming that the daily reports could not be done without the benefit of code written, tested and stored for use when needed. On this point alone I am most critical.

When an employee on his last day burns down the business, when there is video evidence of him doing so and witnesses corroborating that evidence, what else is necessary? The employee said he didn’t do it. The 10 witnesses, the video and the smoldering barn told a different story. In spite of my respect for the arbitrator, I cannot respect the decision. And I cannot respect Schwabe turning a blind eye. I don;t know what duty they had, if any.

I am equally critical of my former attorneys, one from the Markowitz firm and one a sole practitioner, for not filing a motion for summary judgment on M destroying our software and shutting us down. There is of course something more than mildly compelling about 175 employees being laid off while we repair the damage caused by M.

A partner from Schwabe should have known this case was meritless as to M’s claims 5 years earlier. It is hard to reconcile the acuity necessary to notice small facts not in evidence and miss the big facts that were.



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