A little trouble in paradise

[bitob]

https://www.seatrade-cruise.com/legal-regulatory/court-temporarily-blocks-crystalak-employing-lira-using-silversea-info?NL=ST-004&Issue=ST-004_20230217_ST-004_91&sfvc4enews=42&cl=article_4&utm_campaign=STRADE_News_Seatrade Cruise News Weekly Headline_News_NL_02172023_4238&utm_emailname=STRADE_News_Seatrade Cruise News Weekly Headline_News_NL_02172023_4238&utm_medium=email&utm_source=Eloqua&utm_MDMContactID=88ba7018-7586-4c6a-af90-8b315549d5d3&utm_campaigntype=Newsletter&eM=e71d82f101282d234509d44edf5204ef8d7141925d647a0dca872364afb77c72&eventSeriesCode=ES_SEATRDCRSCTNT&eventEditionCode=MTM00SCC&sessionCode=S_STRDCRSNEWS&sp_eh=e71d82f101282d234509d44edf5204ef8d7141925d647a0dca872364afb77c72

[Texas Tillie]

Don't you claim to be a lawyer? I'm not, don't even play one on TV, but am aware that noncompete employment contracts are very difficult to enforce. Looks like Silversea might be a little afraid of the competition from Crystal.

[Txcotn]

Most people know if they sign a noncompete and what it means. 

[WanderingTravels]

This seems to be far (far) more than a non-compete dispute, Travel Weekly says he stole confidential Silversea information.  

Judge grants Silversea an injunction against former sales executive: Travel Weekly

[Keith1010]

Always remember you are innocent until proven guilty, at least this is how it should work in the USA.

 

Let's see what happens.

 

Keith

 

 

 

 

[WanderingTravels]

1 minute ago, Keith1010 said:

Always remember you are innocent until proven guilty, at least this is how it should work in the USA.

 

Let's see what happens.

 

Keith

 

 

 

 

From the Seatrade article: '...... Lira does not dispute that he removed Silversea documents for his own benefit and without permission.'

[Keith1010]

2 minutes ago, WanderingTravels said:

From the Seatrade article: '...... Lira does not dispute that he removed Silversea documents for his own benefit and without permission.'

I read the article.

I prefer not to go with an article though because as we all know what you read in print is not always factual.

 

Let's see how this turns out and that is what I am referring to.

 

Keith

[WanderingTravels]

57 minutes ago, Keith1010 said:

I read the article.

I prefer not to go with an article though because as we all know what you read in print is not always factual.

 

Let's see how this turns out and that is what I am referring to.

 

Keith

I doubt a reputable publication would make up a story like that.  A great thing about our system is transparency, court filings are public record.  

 

47. The confidential and proprietary documents were taken from Silversea without Silversea’s knowledge or permission.[112] Lira admitted that he “took these documents to provide [himself] with a reference point in developing a direct sales channel which is an area [he has] expertise in” and one he was “developing for Crystal.”[113] 47. Lira later shared certain confidential documents he took from Silversea with one of his direct reports at Crystal Cruises, Lee Quittner.[114] Lira discussed the documents with Quittner, loaded the documents onto Quittner’s computer, and “instructed Mr. Quittner to use those documents as an outline of the things that he needed to do while working at Crystal Cruises.”[115

[bitob]

2 hours ago, Texas Tillie said:

Don't you claim to be a lawyer? I'm not, don't even play one on TV, but am aware that noncompete employment contracts are very difficult to enforce. Looks like Silversea might be a little afraid of the competition from Crystal.

I am an attorney

 

But I am just reporting  - not evaluating the case

 

But IMO Silversea has nothing to fear.

Edited February 17, 2023 by bitob

[Keith1010]

9 minutes ago, WanderingTravels said:

I doubt a reputable publication would make up a story like that.  A great thing about our system is transparency, court filings are public record.  

 

47. The confidential and proprietary documents were taken from Silversea without Silversea’s knowledge or permission.[112] Lira admitted that he “took these documents to provide [himself] with a reference point in developing a direct sales channel which is an area [he has] expertise in” and one he was “developing for Crystal.”[113] 47. Lira later shared certain confidential documents he took from Silversea with one of his direct reports at Crystal Cruises, Lee Quittner.[114] Lira discussed the documents with Quittner, loaded the documents onto Quittner’s computer, and “instructed Mr. Quittner to use those documents as an outline of the things that he needed to do while working at Crystal Cruises.”[115

I never said made up but they don't always get their facts straight.

In business and for that matter sometimes when cruising I was interviewed by very reputable newspapers and magazines and they didn't always write what I said.  It was not intentional but often times mistakes occur.

Regardless, like most things I would await the outcome.

 

Keith

[CraigerAZ]

The FTC plans to abolish all current and future noncompetes.  We are in a six month public comment period.  After it, the FTC will make a ruling and I am sure lawsuits against the ruling soon to follow.

[Txcotn]

This is a stupid move on both Crystal's and Lira's parts. IMHO

[BWIVince]

We've hashed this case out before, and we're really going to need to see where this lands because it comes down to Silversea having to prove that their proprietary data was actually stolen -- something that is often exaggerated, misconstrued or just plain false in cases like this.

 

Here's the backstory again for anyone that doesn't remember...

 

NCC's are automatic in sales in the travel industry, which by nature makes them almost uniformly unenforceable across the industry -- something we know when we sign them and the employers know when they're added to the boilerplate of forms we sign when we get hired.

 

The main way for a company to "enforce" an NCC is to claim damages, since they can't actually stop a salesperson from working for a competing supplier, since that's their primary work experience.  Usually this is a delay or harassment tactic, because most of the "sensitive" and "proprietary" information the sales people have are in no way sensitive or proprietary.  

 

Silversea is just going to have to make their case and see if the case sticks...  But I've rarely seen a case like this where there has been enough merit to change things.  

 

Usually these just get settled for something the new company is happy to pay through the employee, and the old company is just glad they got something for their efforts.  Time will tell...

 

Vince

[Txcotn]

Well he admitted to taking SS intellectual property. That’s pretty serious. 

[BWIVince]

14 minutes ago, suzeluvscruz said:

Well he admitted to taking SS intellectual property. That’s pretty serious. 

 

That's what's going to have to get hashed out...  Because if it's just the sales compensation calculators and contacts referenced in the case, that's a tough sell as "intellectual property"...  NOT an impossible one, they may have something uniquely magical (that in his role he would have been responsible for helping develop) and they could win the case, but more often than not that just fits the scenario I outlined above because sales is pretty cut and dry, and similar supplier-to-supplier.  This is where the extra context comes in handy.

 

Vince

Edited February 17, 2023 by BWIVince

[gwesq]

19 hours ago, BWIVince said:

We've hashed this case out before, and we're really going to need to see where this lands because it comes down to Silversea having to prove that their proprietary data was actually stolen -- something that is often exaggerated, misconstrued or just plain false in cases like this.

 

Here's the backstory again for anyone that doesn't remember...

 

NCC's are automatic in sales in the travel industry, which by nature makes them almost uniformly unenforceable across the industry -- something we know when we sign them and the employers know when they're added to the boilerplate of forms we sign when we get hired.

 

The main way for a company to "enforce" an NCC is to claim damages, since they can't actually stop a salesperson from working for a competing supplier, since that's their primary work experience.  Usually this is a delay or harassment tactic, because most of the "sensitive" and "proprietary" information the sales people have are in no way sensitive or proprietary.  

 

Silversea is just going to have to make their case and see if the case sticks...  But I've rarely seen a case like this where there has been enough merit to change things.  

 

Usually these just get settled for something the new company is happy to pay through the employee, and the old company is just glad they got something for their efforts.  Time will tell...

 

Vince

I’ve been involved on both sides of non-competes, and this is a good analysis.  When it comes to sales,  very  very difficult to enforce.  IF they can prove there actually were Trade Secrets, AND SS took all reasonable efforts to protect these TS’s then there is some chance that they can be successful but only for a very limited time.   In my past experience, we were succesful only once in protecting a customer list.  I recall one time in which the other side testified that “all the customers are in the phone book” and the Judge bought that!  That shows how disliked NC agreements are by the Judiciary.

 

I also found that many , if not most, people do not even realize they signed a NC agreement.  We required our new employees to sign a separate acknowledgement of the NC clause. 

[WanderingTravels]

20 hours ago, BWIVince said:

 

That's what's going to have to get hashed out...  Because if it's just the sales compensation calculators and contacts referenced in the case, that's a tough sell as "intellectual property"...  NOT an impossible one, they may have something uniquely magical (that in his role he would have been responsible for helping develop) and they could win the case, but more often than not that just fits the scenario I outlined above because sales is pretty cut and dry, and similar supplier-to-supplier.  This is where the extra context comes in handy.

 

Vince

 

No, this isn’t “ordinary” or basic stuff he took.  The judgment says the proprietary documents included corporate budgets and forecasts, revenue information, booking curves, information related to individual employees and the confidential business plan for Silver Endeavour.  Though Silversea is part of Royal Caribbean Group, which is publicly traded, Royal Caribbean does not publish or make available information about each individual company within the corporation, particularly business plans.  So that is certainly confidential information that is not available in the public domain.  
 

Everyone who works for a big company (or a government agency!) signs a document that says your work product does not belong to you and the information you are exposed to is confidential.  The injunction states Lira signed such a document at Silversea.  
 

I wonder why Crystal is protecting this guy.  He admitted taking the documents and don’t they have bigger concerns to deal with?

[May B]

3 hours ago, gwesq said:

I’ve been involved on both sides of non-competes, and this is a good analysis.  When it comes to sales,  very  very difficult to enforce.  IF they can prove there actually were Trade Secrets, AND SS took all reasonable efforts to protect these TS’s then there is some chance that they can be successful but only for a very limited time.   In my past experience, we were succesful only once in protecting a customer list.  I recall one time in which the other side testified that “all the customers are in the phone book” and the Judge bought that!  That shows how disliked NC agreements are by the Judiciary.

 

I also found that many , if not most, people do not even realize they signed a NC agreement.  We required our new employees to sign a separate acknowledgement of the NC clause. 

I’m shocked to learn that people sign a contract without having read it. 😳

 

Thank you for this informative post. 

 

 

[bitob]

I would bet someone in an executive position would know whether his or her contract contained a non compete clause. That is a material element of the contract.  Claiming to not having known or not having read the contract is just a bogus excuse.

 

But think -- how many us read every term of every contract we sign.  When you go to rent a car eg. all you really want to know is about  are the material terms -- your liability for accident or theft.  Most of these contracts are"contracts of adhesion" -- they are what they are and if you want to rent the car this is the contract you must sign.  You can't make changes or negotiate terms.

 

Same is true when you sign a mortgage agreement  we focus on the material elements -- is there a prepayment penalty?  What are the penalties for default?  Is the interest rate fixed or variable?  Few people read every word of such contracts.

 

Not so unusual.

[Roland4]

29 minutes ago, bitob said:

I would bet someone in an executive position would know whether his or her contract contained a non compete clause. That is a material element of the contract.  Claiming to not having known or not having read the contract is just a bogus excuse.

 

But think -- how many us read every term of every contract we sign.  When you go to rent a car eg. all you really want to know is about  are the material terms -- your liability for accident or theft.  Most of these contracts are"contracts of adhesion" -- they are what they are and if you want to rent the car this is the contract you must sign.  You can't make changes or negotiate terms.

 

Same is true when you sign a mortgage agreement  we focus on the material elements -- is there a prepayment penalty?  What are the penalties for default?  Is the interest rate fixed or variable?  Few people read every word of such contracts.

 

Not so unusual.

Adam and Eve were the first ones not to read "Apple's" terms and conditions!!!😁😁

[BWIVince]

I sense some confusion about the specifics of the travel industry, so I’ll give some background.

 

Sales positions in the travel industry are extremely transient — you can expect your contacts at suppliers to frequently change every 2-4 years at the lower level positions, or 5-8 years on the exec side, if I had to quantify my experience with hotels, venues and cruise lines.  (There are certainly exceptions, but they’re notable, and are usually rising stars that a company is trying to hang on to for more strategic reasons.)

 

Why is that?  
 

For most sales people, you reach a point in the company where you’re essentially excellent at what you do, but you’re doing the same thing for the company that you’ve always done, and you’re one person among others that can do the same thing.  For a few years you crush it because of performance incentives, but after that, the performance incentives tap out based on potential, and you’ve reached the cap on what the company is willing to pay for the same expertise and sales.  You need to advance positions in order to pay more, and you’re swimming in an organization of people using the same tools and methodology, with the same focus.

 

So how does one advance?  While some people are fine with honing their craft and making incrementally more, sales people in travel often tire of this quickly and want to keep advancing.  In order to do that, you realize your value is in taking your expertise to a company in a different situation that is looking for change.  Another company is happy to pay more for your expertise and experience than your current employer because to your current employers it’s the status quo, but to the other company your knowledge is transformational.

 

So where do the NCC’s come into this?  Well, they’re automatic in everyone’s employment agreements at major travel suppliers to try to suppress this, but as mentioned upthread because they’re automatic and required for employment they are virtually unenforceable.  This is where the claims of damages try to add teeth to the agreements, but usually this is just to try to force the case to a settlement, which the new employer usually knows as a term needed to actually acquire the talent.

 

Again, I have no specific knowledge of this case outside of what’s been presented through press articles, but so far to me it smells like every other case I’ve seen.  It may well be an exception and actually not get settled for what Crystal is happy to pay, but I’d be surprised.

 

Vince

 

 

[Keith1010]

So here we are once again.

We have each given our opinions.

 

This topic comes up every few weeks.

 

No minds changed from those posting.

 

And this doesn't change anything.

 

Time won't tel on this.  

 

Each person will decide for themselves whether or not they expect anything more from the new owner.

 

So it goes.

 

Keith