Profile
After serving in the Navy JAG for three years, Eric C. Kastner came to the Silicon Valley in 1976. Eric is the managing partner and one of the two founding partners of Kastner | Kim LLP. Prior to opening Kastner | Kim LLP, Eric was managing partner and founder of Kastner | Banchero LLP from 2004 until 2008. Eric was also a partner at Newton, Kastner & Remmel from 1984 to 2004 and Boornazian, Jensen & Garthe from 1981 to 1984. He began his private practice career as an associate at Brobeck, Phleger & Harrison from 1976 to 1981 after three years as Senior Defense Counsel at the Naval Legal Service Office, Fifth Naval District from1973 to 1976.
For the last twenty five years, he has represented company founders, CEO's, CFO's, other senior executives, and principals in venture capital firms in California and throughout the United States in all employment matters. He has negotiated and concluded hundreds of sophisticated employment agreements, compensation packages, stock option grants, and severance, change-of-control, and other transition-related agreements with management and their inside and outside counsel. Eric also advises management teams of acquired companies during mergers and acquisitions.
Eric is also a successful litigator, having pursued and vindicated the rights of his clients in many trials and arbitration proceedings. He has prosecuted and defended claims for wrongful termination, employment discrimination, sexual harassment, and ERISA violations, and he has represented clients before State and Federal administrative agencies in disputes over independent-contractor status, wage and hour claims, and Cal-OSHA citations. His litigation practice includes general commercial cases, with an emphasis in trade-secret and intellectual-property matters, competition cases, and fraud, breach of contract, and other disputes involving letters of intent, contests for corporate control, and promised financing. Mr. Kastner and his partner Thomas T. Kim have negotiated and concluded hundreds of complex employment agreements, change of control agreements, stock option grants, and separation packages with management and their inside and outside counsel. They frequently advise management teams of acquired companies during mergers and acquisitions. As a litigator, Mr. Kastner has prosecuted and defended claims involving trade secrets and IP ownership, wrongful termination, employment discrimination, sexual harassment and ERISA violations.
About Eric Kastner
Admitted: 1972, California
Professional Webpage: www.kastnerkim.com
Honors and Awards:
- Selected as one of the top labor lawyers in Northern California by San Jose Magazine from 1999 until the magazine closed in 2008., Top Lawyers in Northern California, San Jose Magazine
Bar/Professional Activity:
- Member, Litigation Counsel of America
Pro bono/Community Service:
- Mr. Kastner is a sponsor of the V-WEE Celebrity Golf Tournament to support the 8 student Wawona Elementary School in Yosemite National Park., 2010
Scholarly Lectures and Writings:
- Mr. Kastner prepared and presented a slide show illustrating significant legal rulings in the last 40 years which have expanded the rights of the employee and have increased the use of lawyers who specialize in Employment Law. He also cited various business transactions which now benefit from the advice of an employment lawyer., Writer - Presenter, Employment Law Through the Ages, King Hall Alumni Association and Law Students Association, UC Davis School Of Law, 2011
- Mr. Kastner created and presented the effects of Change of Control agreements on an Executive. He described the Tiatanic defense, the Cisco defense and the Yugo effect. He discussed the ramificaitons of single and double trigger agreements. He illustarted how various companies have tried to hide behind the language of their Executive Separation Agreements and have narrowed the language of such agreements over the years to prevents triggering payouts to executives who have had their duties or compensation reduced as a result of a change in control. He examined some responses by the court and by various arbitrators to the employers attempts to limit payouts to executives in the event of a change of control. He also discussed some of his successful representations of executives in their ulitmately successful attempts to gain their rightful compensation under their employment and change of control agreements., Writer - Presenter, Change of Control - From Rags to Riches and Back Again, Litigation Counsel of America, Litigation Attorneys From All States Of US, 2011
- Mr. Kastner created and presented a special slide show discussing the relative advantages and disadvantages of Alternative Dispute Resolution to a symposium of litigators in Watercolor, Florida. In his presentation, Mr. Kastner discussed the history of arbitrations and revealed some of the flaws inherent in the arbitration process. , Presenter, Arbitration: Truth or the Big Lie, Litigation Counsel of America, Lawyers, 2011
Verdicts and Settlements:
- Eric Kastner Defeats TRO, Request for Accelerated Discovery, & Preliminary Injunction in Trade Secret Case Cite as 4 Litigation Commentary & Rev. 58 (March/April 2011) Mr. Kastner has worked in Silicon Valley since 1976. In 1984, he started a new practice, which led to his representing executives in Silicon Valley, California, and throughout the United States. This unique practice has led to his involvement in many trade secret/proprietary information disputes. Most of these disputes are resolved after a few letters are exchanged, some with fairly harsh language. In YCMNet Advisors, Inc. v. John H. Seo, Lexington Investment Counsel, LLC, Contra Costa County Superior Court No. C-10-03101, the matter similarly started with the gnashing of teeth, accusations and counter accusations after Mr. Kastner’s clients left their former employer. As often is the case, the former employer had its former employees’ computers forensically analyzed. The computer forensic expert purportedly found a “great number” of customer files deleted under what the expert felt were suspicious circumstances. Plaintiff concluded without any direct evidentiary support that the deletions were related to certain customers leaving the employer to join the former employees at their new business (both the employer and the employee were investment advisors to high wealth individuals). The first several months prior to the litigation, the employer was represented by a prominent San Francisco law firm. After it was discovered by Mr. Kastner that this firm had represented a departing employee in another similar trade secret lawsuit, the plaintiff’s firm transferred the matter to a prominent Walnut Creek firm in Contra Costa County where the employer’s and employees’ businesses were located. On November 2, 2010, Mr. Kastner received notice that the employer would be seeking a temporary restraining order (“TRO”) and leave for accelerated discovery the next day based on a memorandum of points and authority and supporting declarations also served on Mr. Kastner. Mr. Kastner and his office immediately began preparing a written response, including declarations from a number of customers who had left to do business with his clients. Also prepared in the 24 hours notice was a memorandum of points and authorities explaining why a TRO and accelerated discovery were unneeded and a motion to strike the plaintiff’s expert’s declaration on the grounds that it was prepared by an attorney with a conflict of interest and therefore “fruits of the poisonous tree.” The court denied the TRO and also denied accelerated discovery (the courts in the Bay Area and throughout California recognize that these types of trade secret/proprietary information disputes can become extremely expensive because of accelerated discovery and, in Mr. Kastner’s opinion, are reluctant to grant such a request pro forma without a clear basis of good cause). However, to make certain that the matter was fully heard, the court set a hearing on a preliminary injunction three weeks later. In the interim period, Mr. Kastner’s office prepared additional declarations, added to the memorandum of points and authorities explaining why no injunction should issue and filed other evidentiary objections and a further motion to strike. At the preliminary injunction hearing, the court again denied the plaintiff’s motions. The court was “not convinced” that defendant employees had misappropriated “anything” and plaintiff had failed to show that there was a threat of unlawful solicitation or other wrongful conduct that was imminent as opposed to a mere possibility. The court also held that irreparable injury was not sufficiently established and given the likelihood of plaintiff prevailing on the merits and interim harm, the court felt an injunction was not an appropriate remedy. At the hearing, Mr. Kastner hand served plaintiff with discovery, including interrogatories, requests for documents, and deposition notices (California has a statutory hold on plaintiffs from conducting discovery for a limited period to allow defendants to initiate their discovery first as was done in this case). Following the end of the statutory hold, plaintiff served discovery, including the notice of 82 depositions in addition to requests for related document requests! The mountain of expensive discovery, along with the court’s twice denial of any type of injunctive relief ultimately led to a negotiated confidential settlement requiring the complaint to be dismissed with prejudice and permitting Mr. Kastner’s clients to continue their new business with their customers. The point of this saga is that if these types of trade secret/proprietary information cases and the concomitant barrage of discovery can be stopped or derailed at the start. There is a very high percentage for a favorable resolution by the preliminary injunction stage, saving your client significant attorneys’ fees and costs and allowing them to go back to building their new business. , 2010
- Eric Kastner Obtains Claimant Verdict In Arbitration Finding CEO/Founder Did Not Breach His Employment Agreement Cite as 4 Litigation Commentary & Rev. 17 (January/February 2011) On December 20, 2010, after a 7-day arbitration before Judicial Arbitration and Mediation Services (“JAMS”) in San Jose, the arbitrator held there were no grounds to terminate the founder and former CEO of a pre-IPO company for cause. The arbitrator held the claimant was entitled to his full severance, including medical benefits (approximately $300,000) accelerated vesting of approximately 527,000 shares of common stock, and attorneys’ fees and costs. The claimant was a prominent physician for nearly 40 years and also managing partner of a “fund of funds” investing in various opportunities in Silicon Valley. Claimant had solely conceived and patented a non-surgical procedure using a revolutionary medical device to treat a gynecological condition. Typical of many start-ups, after about two years of self and angel funding an A round funding was closed raising approximately $14 million from two venture capitalists. Unlike most start-ups, during the A round the negotiations over claimant’s terms of employment and severance (including accelerated stock should he be terminated) was particularly contentious. Although Mr. Kastner was not involved in these employment negotiations based on his 35 years of experience in Silicon Valley, he believes that the ultimate terms of the employment agreement with claimant was in the ballpark of similar agreements. On the other hand, it was clear that the venture capitalists thought the claimant had demanded and received too much in his employment agreement. Thus, from the start of the dispute, it appeared to Mr. Kastner that this case was really an attempt to claw back the concessions made by the venture capitalists during the employment negotiations. The termination was based on: (i) 3 or 4 statements of a sexual nature by the claimant to a young female employee, which were admittedly inappropriate (jokes made in poor taste); (ii) a purported incident of an unwanted touching (not sexual in nature) which was vehemently disputed by claimant; (iii) a few top of the shoulder massages by the claimant; (iv) a conversation initiated by the employee seeking personal medical advice (claimant was an Ob/Gyn) which included discussion of the employee’s personal sexual matters; and (v) alleged staring at her breasts (denied by claimant) although the woman admittedly asked claimant about her breast size. The investigation was done by a young attorney who coincidentally (or not) then became a partner of the law firm which defended the company at the arbitration. Based on the adverse findings of the investigation which Mr. Kastner felt was inadequate and not in conformance with guidance from California’s courts, the company offered the claimant an opportunity to either sign a new employment agreement which “clawed back” the severance and accelerated stock the company gave up in the employment negotiations or he would be terminated. When the claimant refused to sign, he was terminated for cause and the arbitration was initiated. The arbitration proceeded as most employment-related arbitrations do. Nine depositions were taken over several months followed by a motion for summary judgment (which was denied) and five expert depositions. The arbitration was held over seven days was at JAMS in San Jose. As in most employment-related arbitrations, the respondent employer had seven witnesses and two rebuttal experts while only the claimant and his two experts testified on his behalf. Although there were a number of theories offered by the claimant, the prime theory and the one the arbitrator ultimately decided was that there was no material harm or injury to the company caused by claimant’s actions and comments as required by the definition of “cause” in the employment agreement. During the investigation, the woman, who did not report the purported misconduct to the company (the allegations were raised by another employee who seemed to have her own personal agenda against the claimant) stated that the acts and statements by claimant were a 1 or 2 on a scale of 10 and that she would not have reported them to a Human Resource Department had there been one. The one exception was the purported non-sexual touching which was more disturbing to her. By the time of her deposition, the employee had changed her position, feeling the entire matter which was much more serious. Interestingly, the young woman refused to appear at the arbitration leaving a contrast between her minimizing statements given during the investigation and her maximizing testimony at deposition. However, the woman never filed a lawsuit against the company and there was no evidence of any non-speculative damage to the company other than the cost of the investigation. The claimant was awarded his full severance including medical benefits and acceleration of 50% of his unvested stock, plus attorneys’ fees and costs. Since 1984, Mr. Kastner has represented executives throughout the United States in all matters from negotiation of their employment agreements, change of control agreements, and stock options agreements, and finally in litigation, if that becomes necessary. This case demonstrates how the precise exact words of an employment agreement can be absolutely crucial when a dispute breaks out. Carefully crafting the terms of an employment agreement whether it is a pre-IPO company or a public company can be critical to your client’s ultimate right to receive the benefits and rewards he or she expected and earned. Mr. Kastner represents both employees and employers. Regardless of his client, he seeks to draft employment-related agreements which are mutually fair, clear, and within the general standards of the community in which the employer and employee are to work. , 2010