In my last few posts, I’ve been discussing issues in the noncompete lawsuit filed by 50 Eggs, a Miami restaurant group, against one of its former executive chefs. This case not only has a lot of interesting legal issues, but it shows some of the out-of-court risks accompanying this type of lawsuit. In particular, 50 Eggs and its founder, John Kunkel, have opened themselves up to some bad PR.
This lawsuit has received a good amount of press coverage locally. The initial stories focused on 50 Eggs’ accusations against Chef Bee. Now, Chef Bee’s attorneys have fired back with a PR campaign of their own, including apparently circulating their colorful motion to dismiss (linked below) to the press. They take aim at both 50 Eggs and Kunkel, including the following passage, which has appeared in the Miami Herald and other local publications:
“To Kunkel” is acquiring a hire – liar – fire cache in the Miami restaurant business, as that appears to be 50 Eggs’ pattern with its executive chefs: to hire them, accuse them of lying, and then fire them (or cause them to quit) . . . None of the original chefs or original equity partners in the 50 Eggs organization has survived; thus, if it is true that “the executive chef is designated as the ‘face’ of the restaurant” . . . , 50 Eggs has de-faced all of its restaurants. Now, Chef Bee too has been Kunkeled.
This is just one example of how the defendant is now using PR to build public support and attack 50 Eggs/Kunkel.
While there are certainly circumstances when a lawsuit is necessary to protect critical proprietary information, there are many others where the decision to file a lawsuit is a closer call. In these situations, it is worth considering whether there are out-of-court risks that tilt the scale one way or another.
PR issues can be one such consideration. Trade-secrets and noncompete lawsuits can attract media attention, particularly if one party seeks it out. Even if 50 Eggs’ claims are successful (and it faces significant legal hurdles, including an unsigned noncompete), it has suffered some damage to its reputation. At a minimum, companies considering whether to file a noncompete or trade-secrets lawsuit should consider whether the opposing party has ammunition to use in a PR fight.