Shields Legal successfully shut down a multi-billion-dollar competitor’s attempted use of pre-suit deposition procedure to intimidate our healthcare provider client into terminating a dozen new employees.

Our client, a healthcare provider, hired sales, administrative, and services team members. Some hires came from competitors, and some came from other healthcare verticals. The client received a written demand from a multi-billion-dollar competitor seeking to take a pre-suit deposition of a dozen of these new hires, alleging that the new hires were violating non-solicitation restrictions contained in previous employment agreements. The client reached out to Shields Legal for direction on how to protect the company and its new hires.

Introduction

Even before post-employment restrictions were a regular news item, they posed regular and material problems for any growing company. Shields Legal’s healthcare provider client had built a strong sense of community within the company and was concerned about the impact of new employees losing their jobs. The client hired Shields Legal to safeguard the company and its new employees against the well-funded competitor’s demand, which threatened not only the future growth of the company, but the livelihood of the company’s new employees.

Problem

A pre-suit deposition is a sparingly used procedural tool intended to provide a potential plaintiff the opportunity to explore their allegations prior to filing suit. It is a tricky procedure to employ, because the potential plaintiff must demonstrate that they have identified enough “smoke” to find the fire, but not too much such that the deposition is unlikely to yield any information pertinent to a suit. It is an expensive endeavor, as is any deposition, but particularly so at the beginning of a suit. The competitor had ample resources and was willing to take a shot at bullying a growing provider in an effort to eliminate competition in the marketplace. Approximately one dozen of our healthcare provider client’s employees had been petitioned for a deposition, a costly and expensive proposition for both the client and its employees. Our client could have made the decision to terminate the new employees in order to facilitate a resolution with the competitor. This is likely the goal the competitor sought to accomplish. But with Shields Legal in their corner, our client elected to stand their ground, stand up for their new employees, and take a stand against the bigger competitor.

Solution

Shields Legal used the Texas Citizens’ Participation Act (“TCPA”) to protect our client and foil the competitor’s plan. We arranged for separate counsel to represent the employees, and together we filed a joint motion under the TCPA seeking to protect the first amendment rights of the healthcare provider client and their employees. The motion stopped all proceedings, and the parties conducted limited discovery.

A deposition of the multi-billion-dollar competitor revealed that it already had all information necessary for it to bring a suit and that the dozen requested pre-suit employee depositions would have added nothing but expense to the process.

The Texas judge agreed. The judge dismissed the petition in full and awarded one of the largest sanctions and attorneys’ fees awards in the history of the TCPA, over $300,000. The attorneys’ fees incurred by both the healthcare provider and their employees were paid in full, and a favorable resolution of all claims threatened by the competitor was reached without our client having to terminate any of the new employees.

Conclusion

Shields Legal believes that through our team’s tenacity, resourcefulness, and diligence, we can achieve desirable outcomes to our clients’ business and legal problems. Here, our healthcare provider client trusted our team’s strategy and collaborated with us to protect their business and their employees in the face of a competitor’s overwhelming resources.