Attorneys in the breach of contract and defamation suit brought against Barnes & Noble by recently fired CEO Demos Parneros held their first conference before judge John G. Koeltl in New York on Tuesday, with Koeltl signing off on a discovery schedule, and encouraging the two sides to engage in settlement talks.
In the brief opening conference, Koeltl asked attorneys for each side if they’d be willing to at least confer about a settlement with the help of a magistrate judge. And while neither side sounded optimistic about a deal (Parneros' attorney Anne L. Clark told the court that settlement discussions had been broached at one point but “didn’t get far”) neither side offered “an unequivocal no,” Koeltl observed, prompting him to say he would refer the parties to U.S. Magistrate judge Gabriel Gorenstein for a settlement conference. The signed scheduling order gives the parties until December 3 to notify the court "if such a referral would be useful for purposes of a settlement.”
Koeltl also suggested the two sides consider waiving the jury waiver clause in Parneros’s employment contract, and proceed with a jury. The litigation is currently proceeding as a non-jury case.
Barnes & Noble abruptly fired Parneros on July 3 for (at the time) undisclosed violations of company policy. However, in his bombshell lawsuit, filed on August 28, Parneros confirmed that he was fired for alleged sexual harassment, but insisted that his firing was in fact brought about by Barnes & Noble founder Len Riggio, who Parneros claims was irate over the collapse of a proposed deal to sell the company in June.
In yet another twist, Barnes & Noble on October 30 counter-sued Parneros, accusing the ex-CEO of sabotaging the sale of the company, in addition to sexual harassment, and bullying.
In today's 20-minute hearing, Clark portrayed Parneros as a respected, once heavily recruited executive who is now "unhirable" after being wrongly dismissed for alleged sexual harassment. Clark reiterated Parneros's claim that he did not sexually harass anyone, and said that an incident with an executive assistant cited as the basis for his firing had been “resolved” in-house prior to his dismissal. Parneros, Clark said, also denies being abusive toward other members of the Barnes & Noble’s executive team.
Barnes & Noble attorney Jay Cohen told the court that his client had “a different view of the facts,” and said he was confident the bookseller would prevail. Cohen said that the alleged victims of Parneros’ sexual harassment, and bullying, would testify in court. And, Cohen stressed, the CEO was fired by the Barnes & Noble board for cause, after a thorough investigation.
In one potential wrinkle, Clark informed the court that Parneros was planning to file a motion to dismiss Barnes & Noble's October 30 counterclaim, which seeks damages, as well as to potentially claw back payments already made to Parneros in light of the CEO’s alleged “disloyal” conduct and breach of fiduciary duties. Clark told the court that Barnes & Noble's counterclaim did not meet the proper legal standard to qualify for relief.
It is unclear, however, when or whether that motion will actually materialize. Koeltl seemed to discourage it, at least at this stage of the proceedings, suggesting that the fate of any motion to dismiss the counterclaim would necessarily turn on the facts being litigated in Parneros’s suit.
Under Koeltl’s order, all discovery in the case is to be completed by June 14, 2019, with the case to be fully briefed for trial by October 23, 2019.
