Some of us remember the movie “The Sting”, a 1973 American caper film set in September 1936, involving a complicated plot by two professional grifters (Paul Newman and Robert Redford) to con a mob boss (Robert Shaw). The title phrase refers to the moment when a con artist finishes the “play” and takes the mark’s money. If a con is successful, the mark does not realize he has been “taken” (cheated), at least not until the con men are long gone.
The con men in this analysis is a former employee, his fiancée and attorney and the litany of attorneys that joined the pursuit of my personal property and that of a company I owned. I was the mark. My company was the mark.
The con was an allegation that this former employee was fired because he filed a complaint with the Oregon Department of Justice through an attorney here in Oregon alleging that his employer (my company) was engaged in over billing clients. The ODJ requested evidence. None was provided. The complaint file was open for about 48 hours. The attorney that filed that false complaint on behalf of his client is none other than appeals court Judge James Egan. I think its fair to say that he filed that complaint in good faith, based on information provided to him from the former employee’s New Jersey Attorney. He did not know that the New Jersey attorney was the con man’s fiancée. He soon withdrew from representing the con man.
In order for the litigation con to work, several elements have to be in play. First, there must appear be evidence. Second, there must appear to be a causal connection to the employee’s complaint and his termination. Third, the employee must not cause damage voiding his claim. Fourth, there must be the appearance of damages.
The Truth is supposed to be important in litigation or so I’m told. In order for the truth to not to be important, a judge or arbitrator must be influenced in some way to the detriment of the truth teller. That’s what happened to us. The arbitrator was compromised. Our counsel contributed by being self-serving and at times incompetent.
The litigation should have taken no more than six months. It should have been over before it started, but it took seven years. Yes, seven years for an arbitration from termination of the employee to the end of the hearing.
Our former employee was the IT manager of a company employing 200 people. Each day we generated 100,000 pieces of data. Each day that information needed to be compiled and reported to our many clients. In order to compile this much data we had programs (stored procedures) that had been written by our IT department and outside consultants. The initial programs to compile the data were written in about 40 hours, fine tuned and modified to fit our clients current needs.
On the last day of our IT managers employment, every stored procedure and executable file was gone, removed from his computer, from our servers and our back up files. The program files previously on the servers had been removed at least six months prior, the recycle bin emptied, the back up files overwritten. There were no executables or stored procedures on his computer. His staff was contrary to representations unable to even find a program or executable file on a server or even on their own computers.
And so we went down. A week before thanksgiving we had to shut down and bring in a programmer to rewrite all of our programs. Over 175 employees were laid off for four days. The shut down cost us $100,000. When an employee burns down a barn on the way to pick up his final paycheck, any claim he has ends.
The con requires a lot of support. Some six years into the con, the former employee lost his 5th attorney. The arbitrator, at the request of the former employee, referred him to an attorney he knew. It may be that the arbitrator referred his former partner to the former employee, the defendant in this case. I don’t know why. Perhaps in the mind of the arbitrator it was just a referral, with no significance in his mind. But unfortunately that turned out to not be the case.
And so the con survived.
The con man destroyed the companies owned programs and the company shut down for more than a week at a cost of $100,000 and a loss of pay to 175 employees.
The con man provided one piece of evidence of his claim that we over billed clients, an excel spreadsheet. He claims it was sent to him in an email from another employee, but refused to identify the employee for 5 years. The email was never provided. The computer on which he received his emails he destroyed. No one corroborated the spreadsheet but him. Even if the arbitrator believed the evidence, it should not have mattered. He caused the shutdown of the company on the last day of his employment.
There was more evidence for us. The former IT manager was terminated via email three weeks before his complaint. We had the email. Unlike the former IT manager we did not destroy the computer on which the email was sent. Forensic experts examined the evidence and determined the email was sent on October 2, 2003. The former IT manager’s forensic expert also agreed that the email was sent on October 2, 2003. Case closed.
The excel spreadsheet was created the same day the former employee was terminated. The arbitrator concluded that there was no evidence that we had been engaged in over billing clients. But he did find that the spreadsheet was sufficient to provide a good faith belief by the former employee that we had over billed clients in an amount of $400, a month in which we billed $400,000 (the same as saying that we committed a crime going 55.05 miles per hour in a 55 mph zone). This in spite of the fact that the spreadsheet was not corroborated by anyone else, that the former employee destroyed all possible evidence about its source (such as receiving it by email) and destroyed his emails after his own attorney demanded we place a litigation hold (and not destroy) on his computer and other digital evidence.
The truth is that we should have easily won here. We told the truth. We didn’t destroy evidence. We didn’t over bill. We terminated the employee weeks before his complaint. We provided forensic reports supporting and proving our position. Even the former employee’s forensic expert supported our position. We provided ten witnesses. We provided evidence of the shutdown. We provided evidence and testimony of our damages and the cost to replace the programs. We provided evidence of the sheer volume of data we generate daily, which required programs of stored procedures to produce the daily reports for our clients.
The con men won. I’ve written this story because there is no justification for this result, for the hundreds of thousands of dollars in legal fees and the turmoil it caused in the life of a small business.
Since writing this story I have been sued again, this time for retaliation. The former employee and his attorneys do not want the story to be public or told. I can’t blame them. But of course the story needs to be told.
It is unsettling to believe that you can be so falsely accused, prove that the allegations were false from independent sources and still lose. Those incarcerated for a crime they did not commit probably understand this better than anyone. When it happens to you, when the process of proving your innocence is so profoundly compromised, it takes a piece of your soul.
Read on. This is our story.