332 F.R.D. 482 (S.D.N.Y. 2019), 18 Civ. 7834 (JGK) (GWG), Parneros v. Barnes & Noble, Inc.

Docket Nº:18 Civ. 7834 (JGK) (GWG)
Citation:332 F.R.D. 482, 104 Fed.R.Serv.3d 1600
Opinion Judge:GABRIEL W. GORENSTEIN, UNITED STATES MAGISTRATE JUDGE
Party Name:Demos PARNEROS, Plaintiff, v. BARNES & NOBLE, INC., Defendant.
Attorney:Anne L. Clark, Debra L. Raskin, Vladeck, Raskin & Clark P.C., New York, NY, for Plaintiff. Jay Cohen, Liza May Velazquez, Maria H. Keane, Paul, Weiss, Rifkind, Wharton & Garrison, New York, NY, for Defendant.
Case Date:October 04, 2019
Court:United States District Courts, 2nd Circuit, Southern District of New York

Page 482

332 F.R.D. 482 (S.D.N.Y. 2019)

104 Fed.R.Serv.3d 1600

Demos PARNEROS, Plaintiff,

v.

BARNES & NOBLE, INC., Defendant.

No. 18 Civ. 7834 (JGK) (GWG)

United States District Court, S.D. New York

October 4, 2019

Page 483

[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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Anne L. Clark, Debra L. Raskin, Vladeck, Raskin & Clark P.C., New York, NY, for Plaintiff.

Jay Cohen, Liza May Velazquez, Maria H. Keane, Paul, Weiss, Rifkind, Wharton & Garrison, New York, NY, for Defendant.

OPINION & ORDER

GABRIEL W. GORENSTEIN, UNITED STATES MAGISTRATE JUDGE

Page 488

This case was brought by Demos Parneros, the former Chief Executive Officer of Barnes & Noble, Inc. ("Barnes & Noble"), against Barnes & Noble to seek compensation for his firing, including claims of breach of contract and defamation. Barnes & Noble has asserted counterclaims against Parneros as well. Parneros has now filed a motion seeking to compel Barnes & Noble to produce certain documents that it has withheld on the basis of the attorney-client privilege and the work product doctrine.1 Barnes & Noble opposes this motion. For the following reasons, Parneros’s motion to compel is granted in part and denied in part.

I. BACKGROUND

A. Facts

From November 2016 until July 2, 2018, Parneros worked for Barnes & Noble, a retail bookstore chain, first as its Chief Operating Officer ("COO") and then as its Chief Executive Officer ("CEO"). See Amended Complaint, filed Oct. 12, 2018 (Docket # 16) ("Am. Compl."), ¶¶ 1, 7, 12, 22-23. On May 24, 2018, at a time when Parneros was CEO, Barnes & Noble’s Chief Financial Officer, Allen Lindstrom, informed the company’s General Counsel, Bradley A. Feuer, that a female employee who served as an executive assistant (the "Executive Assistant") had reported to him that Parneros sexually harassed her and made her uncomfortable. See Feuer Decl. ¶ 2. Feuer met with the Executive Assistant, and prepared notes documenting his meeting with her. Id. ¶¶ 3-4.2 Feuer asserts that he prepared the notes "so that [he] could render legal advice to the Company regarding its rights and obligations with respect to the alleged conduct by the CEO." Id. ¶ 4.

Feuer engaged outside counsel, Paul, Weiss, Rifkind, Wharton & Garrison LLP ("Paul, Weiss") on the same day he met with the Executive Assistant. Id. ¶ 6. He also "led" an investigation into the allegations, which Feuer decided he would do himself along with "other senior executives at [his] direction." Id. ¶ 7. The Executive Assistant had specifically stated that she did not want the company’s Human Resources department to be involved, id., because she was concerned that the head of Human Resources had a close relationship with Parneros, see Excerpts of the Videotaped Deposition of [the Executive Assistant], dated June 28, 2019 (annexed as Ex. B to Clark July 3, 2019, Letter), at 238-39.

On the same day, May 24, 2018, Feuer directed Mary Ellen Keating, Barnes & Noble’s Senior Vice President of Corporate Communications and Public Affairs, to meet with the Executive Assistant and Parneros,

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and to provide Feuer with any notes of the meeting because he thought the notes "would enable [Feuer] to provide legal advice to the Company" regarding its exposure to legal claims. Feuer Decl. ¶ 9.

On May 30, 2018, Keating and Leonard Riggio, who was the Founder and Chair of Barnes & Noble, met with the Executive Assistant concerning her allegations. Id. ¶ 11. Feuer asserts that this meeting was "part of the investigation I was directing." Id. ¶ 11. At his deposition, however, Riggio said that the meeting with the Executive Assistant came about because he had personally "decided that [he] wanted to speak with the Executive Assistant." Clark Aug. 15 Letter at 2. He also claimed that it was he who asked Keating to sit in on the meeting with him, which he arranged for the Executive Assistant’s "comfort." Id. The reason he arranged for the meeting, Riggio said, was because he was the chairman of the company and "the buck stops here." Id.

On June 4, 2018, Riggio met with Parneros, with Keating present, to discuss the allegations. Id. ¶ 12.[3]

On June 5, 2018, Keating, Riggio, and the Executive Assistant met twice, and Keating and the Executive Assistant also met alone. Feuer Decl. ¶ 13. That same day, Parneros, Keating, and the Executive Assistant had a meeting, id. ¶ 14 — which we will refer to as the "apology meeting" — at which Parneros apologized for his conduct, see Parneros Reply Decl. ¶ 7. Keating and Parneros also had a separate conversation that day. Feuer Decl. ¶ 14.

Meanwhile, on May 28, 2018, Feuer became aware of allegations that Parneros had engaged in workplace bullying of another executive, Alan Lindstrom. Feuer Decl. ¶ 16; see Excerpts of Videotaped Deposition Testimony of Al Ferrara, dated June 5, 2019 (annexed as Ex. 1 to Clark Reply Decl.) ("Ferrara Dep."), at 282-83.

On June 18, 2018, a meeting was held between Barnes & Noble executives, including Parneros and Feuer, and the executives of a company that was interested in acquiring Barnes & Noble (the "Potential Acquirer"). Feuer Decl. ¶ 17. According to Barnes & Noble, prior to the meeting, the Potential Acquirer had made clear to Barnes & Noble executives, including Parneros, that it was very important for Parneros to "provide a cogent explanation about a downward trend in the Company’s sales at that meeting." Id. Instead, according to Barnes & Noble, Parneros "left the Potential Acquir[e]r’s questions unanswered and engaged in a long, rambling monologue in which he painted [Barnes & Noble] in an unduly negative and harsh light." Id. Feuer prepared notes memorializing Parneros’s behavior at the June 18, 2018, meeting, which Feuer asserts were "solely focused on [Parneros’s] behavior, not on the business aspects of the meeting," and which he "would not have prepared ... had [he] not been concerned about the prospect of litigation" by or against Parneros in the near future. Id. ¶ 19. At Feuer’s direction, two other senior executives who attended the June 18, 2018, meeting also documented their recollections of Parneros’s conduct. Id. ¶ 20. The day after the meeting, the Potential Acquirer withdrew its offer. Id. ¶ 17.

In late June 2018, Feuer received and reviewed drafts of a memorandum prepared by Barnes & Noble’s outside counsel, which was prepared to provide Barnes & Noble’s Board of Directors with legal advice regarding Parneros’s possible termination. Id. ¶ 27. The Board met on June 27, 2018, and voted to terminate Parneros’s employment. See id. ¶ 29. Scott Barshay of Paul, Weiss attended the Board Meeting and rendered legal advice. Id. ¶ 28. Feuer prepared minutes of that board meeting. Id. ¶ 29.

On July 2, 2018, Barnes & Noble fired Parneros, and refused to pay him severance. See Am. Compl. ¶¶ 2, 49. The following day, July 3, 2018, Barnes & Noble issued a press release stating that it had fired Parneros for "violations of the Company’s policies," noting that the "action was taken by the Company’s Board of Directors who were advised by the

Page 490

law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP." Id. ¶ 48; see Press Release: Barnes & Noble Announces CEO Termination, dated July 3, 2018 (annexed as Ex. 7 to Clark Decl.) ("Press Release"). The Press Release further noted that Parneros’s termination was "not due to any disagreement with the Company regarding its financial reporting, policies or practices or any potential fraud relating thereto," and that Parneros would "not receive any severance payment" and was "no longer a member of the Company’s Board of Directors." See Press Release. Feuer and outside counsel for Barnes & Noble had reviewed several drafts of this press release beginning in late June 2018.

See Feuer Decl. ¶ 24. As part of his claim for defamation, Parneros asserts that the language of the press release implied that he had engaged in serious sexual misconduct and that Barnes & Noble understood that the press release would be read in such a manner — yet nonetheless published it knowing that this implication was false. See Am. Compl. ¶¶ 2, 52.

Parneros brought the instant action against Barnes & Noble for breach of his employment contract based on its failure to pay him severance, see id. ¶¶ 84-97; for defamation because Barnes & Noble falsely suggested that Parneros had engaged in serious misconduct, see

id. ¶¶ 88-92; and for breach of the covenant of good faith and fair dealing with respect to his employment contract, id. ¶¶ 93-98. Barnes & Noble has asserted counterclaims against Parneros for breach of the fiduciary duties of loyalty and good faith, see Defendants Answer, Affirmative Defenses, and Counterclaims, filed Oct. 30, 2018...

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7 practice notes
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    ...evidence” such as “affidavits, deposition testimony or other admissible evidence.” Parneros v. Barnes & Noble, Inc., 332 F.R.D. 482, 491 (S.D.N.Y. 2019); accord Bowne of N.Y. City, Inc. v. AmBase Corp., 150 F.R.D. 465, 472 (S.D.N.Y. 1993). The burden cannot be m......
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    ...Cir.1985). [xxiii] Burlington Industries v. Exxon Corp., 65 F.R.D. 26, 41–42 (D. Md. 1974) [xxiv] Parneros v. Barnes & Noble, Inc., 332 F.R.D. 482, 494 (S.D.N.Y. Alex ReeseJulia Kropp function JDS_LoadEvent(f...
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    ...decision with several favorable analyses in a high-profile corporate sexual harassment case. In Parneros v. Barnes & Noble, Inc., 332 F.R.D. 482 (S.D.N.Y. 2019), Barnes & Noble’s General Counsel Bradley Feuer investigated alleged sexual harassment misconduct by then CEO Demos Parner......
  • EFCG, Inc. v. AEC Advisors, LLC, 103020 NYSDC, 19-CV-8076 (RA) (BCM)
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    • Federal Cases United States District Courts 2nd Circuit Southern District of New York
    • October 30, 2020
    ...the privilege . . . bears the burden of establishing its essential elements."); Parneros v. Barnes & Noble, Inc., 332 F.R.D. 482, 492 (S.D.N.Y. 2019) (quoting Allied Irish Banks, P.L.C. v. Bank of Am., N.A., 252 F.R.D. 163, 173 (S.D.N.Y. 2008)) ("The p......
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2 cases
  • McGowan v. JPMorgan Chase Bank, N. A., 042420 NYSDC, 18 Civ. 8680 (PAC) (GWG)
    • United States
    • Federal Cases United States District Courts 2nd Circuit Southern District of New York
    • April 24, 2020
    ...evidence” such as “affidavits, deposition testimony or other admissible evidence.” Parneros v. Barnes & Noble, Inc., 332 F.R.D. 482, 491 (S.D.N.Y. 2019); accord Bowne of N.Y. City, Inc. v. AmBase Corp., 150 F.R.D. 465, 472 (S.D.N.Y. 1993). The burden cannot be m......
  • EFCG, Inc. v. AEC Advisors, LLC, 103020 NYSDC, 19-CV-8076 (RA) (BCM)
    • United States
    • Federal Cases United States District Courts 2nd Circuit Southern District of New York
    • October 30, 2020
    ...the privilege . . . bears the burden of establishing its essential elements."); Parneros v. Barnes & Noble, Inc., 332 F.R.D. 482, 492 (S.D.N.Y. 2019) (quoting Allied Irish Banks, P.L.C. v. Bank of Am., N.A., 252 F.R.D. 163, 173 (S.D.N.Y. 2008)) ("The p......
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