The full details of the lawsuit from Michael Waltrip Racing against Mike Coughlan and Williams F1 are available online.
Here is the filing that has led to the stories in the news in recent days:
- Comment
-
Subscribe
Subscribed
Already have a WordPress.com account? Log in now.
joeblogsf1 
A very interesting read. Seems as though if you are the kind of individual who thinks nothing of betraying an employer or breaking a basic code of conduct once, then you’ll do it again and again. Some people should be kept so far away from F1, purely as a matter of principle….read: Briatore/Symonds/Stephney as well. When they pop up from time to time, it just perpetuates the myth that F1 is a business totally devoid of morals. Maybe News Corp is a suitable owner?!
Considering that in the USA employers can fire you for no reason I dont see how Waltrip can sue Mike for quitting!!
dJOS,
I believe there is a thing called a contract.
Having read the claims by MWR I can only view this as a vexatious and opportunistic attempt to get a ‘pay day’ out of the big bad F1 team.
To suggest that MWR and WGPE are not competitors in motor racing is disingenuous. Whilst they may not compete in the same direct arena they do compete in terms of engineering skills in design and development.
Whilst there may have been a contract in place until 2012 all contracts can be broken upon receipt of notice as laid out in the contract. Usually in these circumstances the employee wishing to leave is placed on gardening leave or some sort of financial settlement is agreed.
What we don’t know is if Williams offered to pay the severance to MWR and this was rejected. I can’t believe Williams or indeed Mike Coughlan would be so naive not to have realised that compensation would have been sought?
I suspect this to be settled out of court.
Leaving the actual argument aside, I had to laugh at the following, specifically, # 11 & 12, MWR, which is a world-famous and renowned racing team. Whereas, Williams, is just an integrated Formula One team. I’ll lay odds that Williams is a good deal more well known that MWR, the former itself previously World Champion in addition to producing other World Champions. But MWR? I think not!
But you know how Americans are with their assorted ‘World’ Series. Geography, was never their strong point!
RichT,
I bet that in Busted Flush, Illinois, Michael Waltrip is a bigger name than Frank Williams.
Interesting reading. I get the fact that Coughland did act in bad faith, and I guess it was not nice of Williams to contact someone elsewhere employed. But isn’t that what headhunters worldwide consider as their bussiness? Should they worry about that, if Waltrip wins this case.
Those references to AT&T sound a bit like a threat to Williams, altough their purpose might be just to estabilsh why Williams can be sued in NC.
Well, well.
Ah lawyer-speak, or as the rest of the world calls it utter nonsense.
Im not sure what is funnier, the inclusion of AT&T or the pathetic attempt to prove that Williams do business in North Carolina.
D,
I am not a lawyer. Are you?
Without seeing the actual contract and the terms it contains, it’s almost impossible to make any sensible judgement on the claims.
We could do with a comment from Mr Dowe on this!
…..and Mike is a citizen of England?
it’s a broken contract, plain and simple from what i can see. what is they say about a zebra and its stripes???
Amaazingly no reference to Mike’s great ability to use a photocopy machine is mentioned in his resume 😉 Joking !
joesaward,
I don’t doubt it, but that’s about the only place, and certainly not east of Nantucket nor west of Hawaii!
Mrs. Buffy Waltrip/the future ex Mrs. Waltrip is seeking a $13 million divorce settlement, appears Michael Waltrip is trying to generate funds in this manner.
I am sure that many of your readers have had experience with contracts between businesses entities and a business and a private individual. Over the years I have probably read, signed up to, negotiated or debated dozens of such agreements and one thing all have in common are termination clauses that give either party the right to terminate. Typically conditions apply but often is a Terminate for Convenience clause. This latter is particularly common in employment contracts, whereby each party looks to protect itself again hiring (or being hired by) a lemon by allowing the right to terminate giving sufficient notice.
Therefore it surprises me that Coughlan is under any legal challenge and wasn’t perfectly within his rights to resign.
Most of my dealings has been in contracts governed under UK or Australian law, and to a lesser degree US but my experience is that this is a common clause there also. Of course it is possible that Waltrip wrote up a great contract that protected themselves whilst giving minimal get out to Coughlan and that he agreed to it. It would be understandable given the costs involved of repatriating someone and his family (I assume) from overseas.
On the point made by other commenters about the claims being over-egged; certainly some of them sound like a stretch and give the whole thing an oportunistic feel. Probably they are in there to create as damming a picture as possible, knowing that several will be highly subjective and difficult to substantiate. If so, that is a risky strategy as going too far overboard risks having the whole thing viewed as a nonsense and your perfectly valid claims get dismissed with the invalid ones. To me, this absolutely does read like a strategy that is seeking a settlement.
If I were a betting man I would expect that Williams will settle this as the real size of the claim seems quite a lot lower than I would expect the legal fees to cost in contesting it. Realistically I cannot believe that Waltrip would be awarded any more than the cost of replacing Coughlan (but again that is based on my experience of UK HR & contracts, which may not be representative). However this now being in the public domain presents Williams with the quandry of being perceived as having done wrong if they do choose to settle.
Im not American either Joe, doesnt mean I cant find humour in it.
I’ll say this for Michael Waltrip:he has managed to have a long career and a working relationship with major sponsors like NAPA auto parts despite having minimal talents. Ralf Schumacher was closer to Michael in talent than Mikey
was to Darrell.
Let’s not only slight Americans for poor geographic knowledge. My high school French teacher said she was asked in France if it was possible to drive across America without getting attacked by Indian tribes. And my sister says in 1984 when she and her husband were in Brazil, people were convinced that since Orlando,Florida had Walt Disney World, that it was the nation’s capital.
That’s a fantastic piece of work of which 80% looks to be fiction and 20% sour grapes but in Dumbf&ck Indiana or wherever it’s probably legitimate grounds for a case.
Seems clear to me the employment contract was between MWR and Coughlin so that should be the suit. Not too sure why Williams are involved as the blame, if any, lies with Coughlin (again! what is it with this guy?) and absolutely no idea why AT&T keep getting mentioned. That bit is bizarre. By including Williams and AT&T they are angling for some financial compensation most likely otherwise it makes no sense.
The employment contract between MWR and Coughlin will be the key. Every employment contract I’ve ever seen had termination clauses for both parties. If Coughlin gave due notice to leave then MWR have nothing I’d have thought.
MWR are just pissed off because Coughlin was less than 6mths into the deal and just out of the learning/induction phase and probably not yet useful. MWR invested time and money in him only to see him walk out the door before he gave anything in return. But once again if he gave notice as defined in his contract then MWR are screwed. Bad form from Coughlin but bad luck for MWR.
@Hayden, although not explicity stated, the inference in the claim is that Williams aided Coughlan with legal advice with regards to his contract. I would imagine that they have evidence of this to have included it in the claim.
If so that was a spectacularly ill-advised move on the part of Williams who should have left no evidential trace of their knowledge of the contents of Coughlan’s contract and left that matter purely between the contracted bodies.
I have no knowledge of Coughlan, other than a private view that he got off scott free, with his ban, and i have had papers and plans of mine fall into competing hands, so my personal take is not pleasant to hear on such subjects.
If he did, however, flip the finger at MWR, then this looks nothing unusual. Just flipping the finger back. Bringing AT&T and the websites into it, is merely stating for the clerk that Williams do operate in the US, have a presence there in one form or another, without which i’m not sure you could even describe the overall circumstances. They are not claiming tort (harm) directly arising from that presence, merely establishing that there is a geographical link to the NC courthouse. Local jurisdiction is incredibly important in the US,
They are also saying (by implication) in 49., that they think they could have been approached. Interesting argument. You can’t infer from that “we’d have sold him to you, but you shoplifted anyhow”, but to be honest, if they can substantiate any grounds that Coughlan was “for sale”, it looks a little rude on Williams’s part, or at least not ear to ground.
Think of that one another way. What are the other reasons for Couhglan wanting to leave? (6 months into a 3 year contract) Why so soon? This would make interesting reading, if emails are disclosed. MWR will surely argue, that a man who intends to re-establish his reputation, would not blow off a deal to recouperate him, without inducement.
53. seems disingenuous. It enumerates how MWR and Williams are chalk and cheese. Which diminishes claims as to competitive interference.
54. is poorly drafted, the grammar implies they suffer unspecified ongoing punitive damages, which is cart before horse.
backing up a bit, how do headhunters deal with 51.?
the most fun is 75.:
“Coughlan gave the assistance noted above to Coughlan in an effort to
accomplish Coughlan’s breach . . .”
🙂
Well, today i learned you have to have a claim for $75K to join third parties in NC law.
That and that i will never make sense of folksy American legal swagger, nor their myriad codes.
I hope they hired Lane Smith to represent:
http://www.imdb.com/name/nm0809031/
– j
Shake n Bake,
with you all the way,
but then what does Waltrip mean by ‘ “loyalty” clause’ in 21., presumably to be disclosed?
Was that there because, err, actually i don’t want to insinuate as to their views of eachother, but very interested what is any legal effect this may have.
– j
In front of the right Judge this case will be dismissed before it gets in front of a Jury. IE one who is well versed in US employment law. You basically use a series of motions to dismiss each claim.
You can’t make employees into indentured servant with a contract. And if you do, then it is voided. He will have been an at will employee, free to leave at anytime, with the required notice. The courts take an even dimmer view when a visa is involved because they can’t be used as something hanging over someone’s head. Adding the costs of the visa in the complaint gets dangerously close to doing that!
So what could they enforce? Well a non-compete clause can be enforced, but as they don’t compete with each other in the same market (two different series), then that won’t work.
This starts to look like a good old fashioned shake down for money. Drag ATT in to get a pay day without the pain of going to court. I would hope that Williams and sponsors have the balls to stick it back to them and seek full costs and damages for a frivolous law suit without merit. Generally a countersuit will get this sorted in a hurry.
Actually ATT were likely only tossed in to get jurisdiction over Williams and ATT may just file with the Judge as frivolous, no grounds to involve them etc and then it gets tossed. So the whole thing is a house of cards with little chance of success unless Williams or Sponsors decides it is cheaper to settle than fight.
I don’t know the law, but I think pretty much anyone would agree with 53 h of the suit, which reads: “There were and are plenty of other individuals who Williams could have hired to fill the position Choughlan was hired to fill”…
Why Williams felt they needed this guy is beyond me. Did they try to lure other people and failed, or did they have their sights set on Coughlan from the get go?
Either way, Williams doesn’t come out looking too good IMO.
Scoop. Williams plan new updates for Germany
http://www.photoshop.com/users/cyberspacesomewhere/assets/37424725560941f09e353092b16ef2c7
An amazing document, pity about the spelling and the grammar.
It seems that Mike was the one essential person in MWR, the sun shone out of his bottom, he provided all knowledge in the company did all the work and they cannot do without him. therefore they must have shut up shop when he left.
We see the typical American misconception that the USA contains the entire world, that NASCAR and this one team is known worldwide, indeed we know very little of NASCAR at all in the UK. By it’s very name it restricts itself to North America. I suppose it goes with the same mentality that has a world Series of rounders (Baseball) with how many countries in the world???
The first part of the document goes to great and repetitive length to establish that MWR and Williams are not in competition, but then much later claims that they are!
(Presumably being in competition would be seen as some sort of excuse for breaking a contract, weird American law)
They want a jury trial in fact they prey for one! Are they short of a good laugh in Carolina, then or what? (one of my old neighbours was a young couple from South Carolina, they asked how we celebrated the 4th of July and could not understand why we didn’t)
Well of course the whole thing depends on what Mikes contract with MWR said. How about a copy Joe?
Andy Davies and Shake and Bake (a Talledega Nights reference?) are right…
Without the contract, seeing the suit is pretty meaningless, and I imagine it will either be dismissed or a small settlement will be paid.
Being in Charlotte, NC- right in NASCAR country- I can say from reading the papers that I am amazed MW has had such a long career, at least as a driver. Much worse than Ralf behind the wheel. I actually think of him more as NASCAR’s Jarno Trulli, an inexplicably employed driver (each w/ one big win). OTOH, MW has more stuff going on than just driving and part of his employment has been due to owning a team, so Jarno may amaze me even more.
More on topic, MWR seems to be a pretty lousy team with a significant sanction having been levied against them in 2007, so I don’t consider them too highly any any regard. Anyway, my bet is that Williams will shell out a little “go away” money.
Can’t believe a guy with Coughlan’s F1 background didn’t have an “out” clause in his contract with regard to going back to work in F1 again.
North Carolina is NOT the end all be all for anyone with international racing experience.
Is it????
1. That’s a lot of legal mumbo jumbo. Sounds like Mikey wrote it himself.
2. Some of the grounds on which the suit is based are humorous (world renowned racing team? – second tier at best). Just shows how big the Waltrip heads are. That includes DW!
3. A fishing expedition at best – I guess suing just for breach would not be sufficient.
4. An excuse for poor performance- in an attempt to keep sponsors and Toyota?
Let’s see what happens.
I don’t agree that you can just up and leave a contract and get another job. That’s what a contract is. I have never seen a employee contract in my life that has a clause where the employee can say “Bye…off to the new job”. The employee could retire, pay a penalty for early disolution. or not work until the contract period is over.
The guy should be sued and I bet MWR will win damages against Coughlin at the very least.
Now, no legal expert I, but doesn’t several parts of this shoot itself in the foot?
For example;-
Part of point 30:
“…[Williams] races cars in the United States…”
Point 53c:
“MWR and Williams compete in different racing series and in different locations.”
So, MWR can sue them because they race in the US, and not in the US. Isn’t this two sides of the same coin?
And, DO Williams race cars in the United States? No USGP this year, and has any F1 team technically entered the USGP next year?
As many people above state, sounds like sour grapes to me – but what do I know.
Fascinating, they really are annoyed with him, aren’t they? Can’t totally blame them, but as everyone else has said, without knowing what his contract (The Agreement) said about his notice period, we can’t judge it any further than that.
I found it really interesting that if Williams and MWR had been competitors, it would have been fine for Williams to do this! It’s only because they’re NOT, that they can sue them…how strange.
And yes, paragraph 75 is fascinating, surely the first “Coughlan” should be “Williams”?!
Leaving aside the suit, for a moment, I reckon this is just a hate bomb.
Coughlan has ruffled feathers. I think that much is obvious. Else why the suit? Or is it they failed to negotiate an ex gratia from Williams . . .who knows.
Asked above, is it vexatious? Well, at least in E&W you would have to show a pattern of actions, and it would be rare indeed between supposedly grown up companies. Frivolous and without merit, more likely. But do you 100% believe a man found with his pants down fondling commercial secrets has suddenly become completely upstanding in his dealings with employers? I’d have been running some serious audits, on hearing him leave the door flapping in the wind . . . I’m assuming an awful lot, but if you gave a guy a break, and he stiffed you (that “loyalty” clause having no legal effect, but maybe there as to personal word?) what would you do? You sure don’t want a defamation / libel case in London.
One thing guaranteed, Williams diligence has to be done.
I seem to recall that Coughlan was hired pre – flotation?
In fact the premise of this suit is that Williams went begging, and further did dirty deeds.
Really?
Even moreso on the begging thing, i’d reckon.
Does not mean their employees fudged his contractual status.
Gah, enough already. Someone get this back to transatlantic jokes and jibes please, much nicer fare!
– j
Having read most of the filing (I skipped a few bits near the end), any suggestion from those who are not party to the contract (or haven’t read it), can’t really say either way as to whether it was breached or not.
Simply put, we don’t know what out clauses there were or other limitations (e.g. cannot seek work until final 6 months or similar). If there were no out clauses which covered a simple ‘I want another job’ as opposed to ‘we can’t work together anymore’ then it’s quite possible that a breach occured. Whether Williams colluded, in the sense suggested by MWR, is another matter as it’s likely that Coughlan told Williams that there wouldn’t be any problems with his MWR contract. If that can be proven, then I think that portion would be quickly dismissed.
As for the claims of MWR being ‘world renowned’, I think that’s acceptable. Andrea Moda were world renowned in their time…just not for anything good. The ‘integrated’ in relation to Williams appears to be a reference to everything being in-house from the wording I can see.
Rudi, sponsors usually don’t look favourably upon teams sending off law suits even if they are legitimate.
The key here is the termination clause in Coughlan’s contract. Without seeing it it is impossible to judge if there is sufficient grounds for accusation of breach of contract or not. I suppose there is, given than lawyers have now been engaged in this episode.
But then again, I suppose too that Coughlan (and to a certain extent Williams) got legal advise before making his/their move – This is, I beleive, an established professional and an established racing team.
However, given Coughlan’s past history, it comes to no surprise I guess that he is in the middle of a controvery again…
Let’s all be sure to have a Very Strong Opinion about who’s wrong when all of us are in the dark about crucial facts, such as the terms of the contract that was allegedly violated. (Is the internet great or what?)
Whoever is in the right, I still have to argue that one of Williams’ major sponsors, the Global Staffing and Recruitment company, Randstad, will surely be annoyed that the team they sponsor can’t seem to follow correct procedure in the hiring of a new employee…
The grammar and spelling issues several of you have pointed out are not insignificant points in my opinion. Wherever I have worked, when we are preparing a commerical letter or contract, they are reviewed and reviewed and reviewed, then they go to the commercial team to review, then they go to the legal team to review, then often to the MD/CEO depending on content.
So to have such existant in this document ‘suggests’ poor preparation and an element of unprofessionalism which I would personally extend beyond the format and presentation and apply to the content itself.
Perhaps Joe will be able to give us an indepth story on this in the next magazine – I find it fascinating.
Shake and Bake (yes, a Talledega Nights reference 🙂 )
You’re forgetting one key thing.
This is a US based team of a US based sport suing a FOREIGNER leaving to go to a FOREIGN team participating in a FOREIGN sport?
Who needs to see details to know the outcome here?
Personally, I am not impressed by Michael Waltrip Racing based on their performance as previously mentioned. Perhaps, that is why they hired Coughlan even with the know ethics challenges he possess. That is one fact. The other, mentioned several times, is that no one making a comment has actually seen his contract.
Since he does have lots of engineering experience, it is an easy argument to make that a back marker (like so many in F1) could sorely use something. Hiring a Director of Design for a team is a big deal. Also, already mentioned, is the fact that no one walks in the door, in a completely different area of motor sport without requiring a learning curve.
Based on what we know about Mike Coughlan such as being a good engineer, the difficulties he created for McLaren and his willingness to walk out to peddle his information elsewhere makes him not such a positive character.
Maybe some believe that rampant drug use by cyclist is ok because “everyone does it”. Well, there’s nothing that can be said. Good engineers, and there are plenty of them, work within the rules to succeed. If there are loopholes (see Brawn double diffuser)then thats a problem with the rules. If they obtain other firms classified information, well I know what that is also. Then he made another deal to squeal on others to save himself. If you want him, you should have him, by all means.
He made a deal. I’ll bet his deal with McLaren had a morals clause in it which seems meaningless to Coughlan. He made a deal with MWR and broke it (so far no evidence to prove otherwise).
I am a lawyer. The suit is a hybrid, charging Coughlan with breach of an agreement and Williams with interference. My initial impression is, how could Mike Coughlan leaving Waltrip for Williams cause any harm to Waltrip (aside from his moving and immigration expenses)? Couglan will not be paid for the remaining sums of his agreement, and Waltrip moves on. If the car is not fast enough, that cannot be tied solely to Coughlan’s departure.
The lawsuit also alleges that Williams was aware of the term of the contract (“on information and belief” which is lawyer-speak for “I am pretty damned sure of it but can’t prove it yet”). Their employment agreement with Coughlan likely includes some representations and warranties about the MW contract.
Paragraphs 30 and 31 spend some time on jurisdictional issues. That is the flaw here. Coughlan is not in the US, probably has no holdings here, and cannot be haled into court very easily. Although he and Williams can be served with process overseas, whether the federal courts of North Carolina have jurisdiction over them is an entirely different matter. Williams will be difficult because it transacts no business in NC; Coughlan less so, because he was employed there. If he ignores the suit after being properly served, default can be taken. Collecting on a default against him would be hard.
It’s also important to remember that these are allegations, but they are verified, meaning that someone attested under oath that what is alleged in the lawsuit is true.
As long as Coughlan keeps away from US soil then there is nothing they can do against him. There is no extradition for civil claims or ability to enforce a judgement beyond their jurisdiction (even if the US believes that their laws apply everywhere, they don’t any more than any other country’s applies in the US). Proving that Williams acted deliberately would require proving that they had detailed knowledge of the contract which would be incredibly hard to establish so I doubt if they are worrying either. Just another speculative US legal action where only the lawyers could possibly come out ahead….
@russdog: I think you will find I, at least, was quite careful to say just that, and NOT have a Very Strong Opinion. So not “let’s all”, please. 🙂
Scott Bloom,
do you have in any parts there, a idea of warranty as to facts in contract, for employment, which can bind?
That would make a hybrid here.
IANAL, but i have done these cases, here, from both sides, as a litigator/negotiator. We have “tribunals”. They’re both lynch mobs and convolute procedure, not genuine courts, IMO. . .
What i mean is, hopefully in plain speak, can someone attest to what they intend to bring to a company, and that transcend the day to day employment performance? Is there some kind of pseudo-equity component?
So, Coughlan says, somehow, “hire me, and i will make your motor win races, i bring this [specific knowledge], all-right do we have a deal?” and they hang things on the back of that and they can take that back to specific representations?
Totally agree with you this is very hedged. Still think it’s a hate bomb. Also still think Williams are dumb hiring this guy, but whatever.
– john
Adam,
totally off topic, but as indentured servant, is how a whole bunch of Irish landed in New Holland. Sure, a bunch of them ended up providing subjects for the acetate cassette auto – conflagrations of experimental bowry cinema. But a very interesting place to look for stories. Slavery seems very equal opportunity, ask the music publishers . . . indenture is financial. Money has no color.
. .
Hope allowed, Joe. If i was struggling for a F1 link, i think it could be found, if you took away the money. California code is a bit better on bringing implied IP, from one company to another. But it’s still very very fuzzy, and the safest rule does seem to be to give up your soul, go lick wounds long enough, then try to come back, but that being too long a holiday (gardening leave) for anything discussed here. – j