Delaware Business Lawyer Blog

When a company wants to prevent someone from misappropriating its trade secrets and confidential information, it can file a lawsuit in the Delaware Court of Chancery to obtain a preliminary injunction. A preliminary injunction is considered to be an extraordinary remedy that is granted sparingly. In order to convince the Court to issue a preliminary injunction, you have to show:
(1) a reasonable probability of success on the merits at a final hearing;
(2) an imminent threat of irreparable injury; and
(3) a balancing of the equities tips in its favor.

“Irreparable injury” exists where the injury can’t be adequately compensated by money damages and that to refuse the injunction would be a denial of justice.

A “balancing of the equities” means that the Court decides whether the imposition of a preliminary injunction will result in less harm to the defendants than the harm the plaintiff will suffer if the Court denies the request for an injunction, taking into account the parties' respective probabilities of success on the merits.

When 2 or more owners of a Delaware limited liability company disagree on the direction their business should take, it makes a world of difference if they have an operating agreement. If the agreement was prepared properly, it contains a method for resolving disputes. If there is no operating agreement, one of the owners might file a lawsuit in the Delaware Court of Chancery seeking the Court’s help in dissolving the LLC.

The standard for judicial dissolution is whether it’s reasonably practicable for the LLC to continue to operate. The Court will dissolve a Delaware LLC management has become so dysfunctional or its business purpose so thwarted that it is no longer practicable to operate the business, such as a voting deadlock or where the defined purpose of the entity has become impossible to fulfill.

Delaware law doesn’t really specify what a court must consider in evaluating the "reasonably practicable" standard. Nevertheless, the courts which have considered the issue usually look at the following factors:
(1) the members' vote is deadlocked at the Board level;
(2) the operating agreement gives no means of navigating around the deadlock; and
(3) due to the financial condition of the company, there is effectively no business to operate.

In Delaware, if there isn’t a written employment contract and the duration of employment is indefinite, the employee is considered an “at-will employee,” which means the employer can fire the employee at any time without cause and regardless of the motive. That’s the general rule, and if you think about it for a minute, it’s actually fair. After all, if an employee can quit at any time and for any reason, why can’t an employer terminate the employee at any time and for any reason? But as with most general rules, there are exceptions. And the exception that’s recognized in Delaware is based on the concept that in every contract of employment, written or oral, there’s an implied covenant of good faith and fair dealing.

The Delaware courts that have looked at this issue have decided that an employee can claim a breach of implied covenant of good faith and fair dealing in any one of the following 4 situations:
(1) if the termination violates public policy;
(2) if there’s been misrepresentation by the employer and the employee relied on it;
(3) if the employer used its position to deprive the employee of compensation that has already been earned but not yet paid; and
(4) if the employer falsified its records to create fictitious grounds for the employee’s termination.

In a future article, we’ll take a closer look at these exceptions.

If you believe you were fired improperly, contact a Delaware litigation attorney to discuss your rights.

In Delaware, a person will be declared the owner of another’s property if he is in possession of that property for 20 years, and if his possession is determined by a judge to consist of the following 5 elements:
(1) actual possession
(2) continuous;
(3) open and notorious;
(4) hostile; and
(5) exclusive

Each of these 5 elements has been the subject of litigation, and the Court has had to look at these items based on the facts of each particular case because what might be open and notorious, for example, in one case might not be in another.

In the above example, actual possession could be found to exist when the neighbor actually used the land on his side of the fence as his own property and as a typical property owner would. Mowing the grass, gardening, storing fire wood, etc. are the kind of uses that establish actual ownership.

The same person does not have to use the property in question for 20 years in order for adverse possession to be continuous for 20 years. Instead, the Court allows tacking on between successive owners. What this means is that if the neighbor sells his property to another person who continues to use the property on his side of the fence in the same way that the previous owner did, the chain is not broken.

In my next article about adverse possession, I’ll address the other elements and I’ll give some real life examples.

Bedsores in nursing homes are preventable. If they should occur, they should be detected and treated without delay. When the staff at a nursing home fails to do this, there’s a risk that a life-threatening infection called “sepsis” can enter the bloodstream. That’s exactly what happened to a 79 year old woman at a nursing home in California who died from untreated bedsores.

I previously wrote an article about bedsores and said that any nursing home that allows a patient to develop bedsores and fails to treat that patient should be held accountable. Well, a California jury agrees, and just last month awarded $30 million to the family of this poor woman who was also suffering from dementia. The incredible thing is that she was only in the nursing home for 7 months! In this short time, she developed bedsores which went untreated. This led to sepsis, which in a nutshell, causes inflammation to extend beyond the site of an infection, To fight the inflammation, the body forms blood clots which prevent oxygen from getting to the body’s vital organs. Lack of oxygen causes organ failure and death.

Sepsis is the 10th leading cause of death in the U.S. It is more common in the elderly, and in this population it’s very dangerous. That’s one of the reasons why there are Federal Regulations that apply to nursing homes when it comes to preventing, documenting and treating bedsores.