As you may remember in my last column, Archie Comics Publications’ co-CEO Nancy Silberkleit was scheduled to battle sexual harassment allegations in court on August 16. The charge was that she yelled “PENIS!” at employees. After digging through her affidavit and the lack of evidence in the ACP anonymous emails, it seemed like the claims could more or less be a smear campaign to kick Silberkleit out of the operation.
The important thing to take away from that article to understand this one is that ACP is seeking an injunction against Silberkleit to remove her from the offices and eliminate her contact with employees.
Why is that important, you ask? Because attorneys on both sides are now fighting over the legal interpretation of the injunction and how that affects Silberkleit’s association with ACP, not so much the sexual harassment claims.
When I first read the attorneys’ letters (filed August 22 by the defense and August 23 by the plaintiff), I was stumped by the fact that “sexual harassment” seemed to disappear from both side’s arguments. Isn’t that what they were fighting over in the first place? Won’t that ultimately determine whether or not the injunction is granted by the judge?
But in reality, the definition of the injunction is everything—it will make or break the role Silberkleit plays in Archie Comics’ future. The injunction is less about whether or not she’s guilty of sexual harassment and more about whether or not she’ll remain a player in the company’s decisions.
It’s also much rarer for a court to grant an injunction over say, money damages, because the court would much rather see the defendant pay up than to tell them they can’t do something. Think about it, our entire country is built on the belief that we have the right to life, liberty and the pursuit of happiness. Telling someone they can’t do something is like slapping our founding fathers across the face.
At the conclusion of the oral argument on August 16, the Court asked the plaintiff to submit additional documents for review, including the Corporate By-Laws, ACP’s Certificate of Incorporation and Michael Silberkleit’s Will and Trust Agreement.
The plaintiff submitted all these documents (except the Trust Agreement, which doesn’t exist because it was already detailed in Michael’s Will), in addition to ACP’s Shareholders’ Agreement, Voting Agreement and an amendment to the Voting Agreement.
But Silberkleit’s attorneys quickly objected to the Court’s directive for these documents, writing in a letter to the judge that the Court was asking for documents that weren’t referenced to in the original complaint, namely–sexual harassment allegations. Also, the plaintiff had “inappropriately” filed documents that were not requested, and therefore should not be referenced at all.
They go on to say that ACP’s call for an injunction that would prohibit Silberkleit from performing her job functions has “no contractual or statutory basis.” Most importantly, they argue that the court doesn’t even have the power to interfere in Silberkleit’s work responsibilities (a precedent set in -Goldman v. Cohen).
To give a little context, In Goldman, an employer sought to lock out a labor union by seeking an injunction that would prevent union members from working pursuant to a contract. The court decided that it does not have the power to prevent someone from working due to a contract violation.
Also, they wrote that the Goldman reference was out of context because the injunction they seek does not prevent her from her contractual responsibilities, but rather, changes the location “where she does so to remedy a situation of her own design (i.e. sexual harassment allegations).”
Wait, so she can continue working for ACP, but she can’t go to the office or contact any employees or vendors? That still sounds like an underhanded way to prevent her from working. How is it possible for Silberkleit to fulfill her role as co-CEO without any company contact?
But ACP’s attorneys cite an important quote from Goldman in their counter letter, which further supports their case:
“It is not every breach of a contract which a court of equity will enjoin. Only in so far as it is shown that the particular breach has been threatened and that the remedy at law is inadequate and the damages irreparable, will a court of equity intervene.”
So, ACP’s attorneys are trying to say that sexual harassment counts as an appropriate reason for a court to intervene in Silberkleit’s contractual obligations, hence, the harassment could result in her being removed from the office, employees and vendors, but not her work.
The defense’s short response—filed August 26—completely ignores Goldman and says they “are not seeking to provide any additional bases for [their] client’s position and nor should [ACP’s attorneys].” In other words, the plaintiff schooled the defense on legal precedents.
However, they write that regardless of the plaintiff’s excuses, documents that were not requested by the Court were wrongly submitted, and bottom line, should not be considered. Touché, defense team.
As you can probably tell, this is going to be a very long, drawn out case if they haven’t even gotten to the proof of the sexual harassment accusations, but it’s extremely important for the attorneys to pick apart every single word of the complaint.
Which side will win now? The judge will base her decisions on court precedents from cases like Goldman, and with my limited knowledge of the law—especially cases in New York—it’s hard to predict what will happen next.
The judge will first have to grant or deny the defense’s motion to dismiss the documents the plaintiff submitted. After that, they will continue oral arguments and the judge will decide if it is possible for Silberkleit to continue her contractual responsibilities with no access to the office, employees or vendors.
An interesting development indeed.