In the past, many disgruntled ex-employees have reached some settlement with their employers which usually includes a clause saying they will never testify against the company in court. This practice is widely imposed in the boating industry which seems to be constantly full of patent, product liability, and anti-trust suits. Many top level ex-employees have signed agreements stating they will not testify against their employer.

A January 13, 1998 Supreme Court ruling prevents companies from allowing ex-employees to testify, even if they have signed legal agreements preventing them from testifying. A disgruntled ex-employee who knows the skeletons in a company's closet can wreck havoc in court.The recent tobacco cases have certainly proven that.

We can't help but point to David Jones who jumped from Brunswick to be president of OMC. Lawsuits followed his recruitment by OMC saying he had signed agreements not to work for direct competitors for several years. A settlement was rapidly reached that was not made public. It is our belief the settlement prohibited him from testifying in cases against Brunswick companies in return for allowing him to assume his new job. There may have been other elements involved in the settlement, but it seems highly likely that future testimony was a part of it.

This court ruling seemingly makes that portion of the Jones/Brunswick/OMC agreement null-and-void. Will we see David Jones on the stand in some of the Brunswick anti-trust and product liability suits??

Thought to ponder - if this court decision had occurred earlier, would Brunswick have been able to block his departure to OMC? Or would he have even gone in the first place? He had to know that future testimony was his bargaining chip.

Wall Street Journal Article Summary

This decision could significantly swing the balance of power in corporate legislation, because companies will not be able to muzzle former disgruntled employees. These disgrunted employees are often the key witnesses in many suits. GM had fought to keep Ronald E. Elwell from assisting plaintiffs. Mr. Elwell spent 15 of his 30 years at GM studying cars involved in product liability cases. He had agreed as part of an employee dispute not to help plaintiffs without GM's consent. The agreement was upheld by a Michigan court, but the Supreme Court said GM could not stop plaintiffs in other states from using him as a witness.

"The court clearly told companies they can't buy the silence of people with important evidence to give." said Jeffrey White, an official with the Association of Trial Lawyers of America.

Corporate lawyers say the decision may hurt workers, because without this as a bargaining chip in resolutions, workers may not have much to offer in labor disputes.

"Elwell knows where the skeletons are," said Clarence Ditlwo, executive director of the Center for Auto Safety , which supports plaintiffs in litigation against the industry . "He can say that GM knew about the hazards and that they did nothing about them."

Despite the high court's ruling, people who violate the agreements and testify can be sanctioned by the court that approved the agreement. The ruling simply prevents companies from restricting the rights of plaintiffs in other cases from getting relevant testimony, It does not prevent the testifying employee from being held in contempt for doing so.

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