In surprise upset, Asher wins lawsuit

In surprise upset, Asher wins lawsuit

November 21, 2017 3:11 AM
by

In a jury verdict that surprised both sides of the long running lawsuit between Joe Asher of William Hill and his former partners at Cantor Gaming (now known as CG Technology), the jury decided against Cantor and awarded Asher a nominal amount for an unpaid partnership percentage.

The basis of the nearly seven-year long lawsuit was simple: Asher, according to Judge Mark Denton’s Findings of Fact and Conclusions of Law, was both a partner and employee in Cantor’s Nevada gaming business and had agreements with Cantor that while he could quit anytime he would not compete with Cantor for four years and would not take confidential information nor customer information with him should he so leave.

Further, according to the Findings of Fact, Asher left Cantor and started his own race and sport business using relationships and contacts developed at Cantor and started competing with Cantor prior to the end of Asher’s non-compete period.

What makes the jury’s decision so surprising to those following the lawsuit, is that in the first phase of the long running trial Judge Denton’s Findings of Facts could be easily read to conclude that Asher’s contract was valid and enforceable, and Asher did compete with Cantor. Though the Findings made a number of determinations it was also left for the second phase of the trial, the jury portion, to decide if there was a breach of contract and if so what it was worth.

So what happened? Why did the jury rule for Asher? Not being able to poll the jury we may never know for certain, but in talking with parties familiar with the case and its history, the consensus was Asher’s defense was seemingly built around three basic propositions: 1. his business was not really in competition with Cantor; 2. if Cantor was really concerned about Asher competing why did they wait until he sold his business to William Hill to sue him; 3. Cantor was so big and non-compliant with various regulations Asher should not be held to his contract.

Based on the jury’s verdict, they must have bought into one or more of those positions.

While the battle between Asher and Cantor is interesting to itself, the gaming industry and their employment lawyers will certainly be tearing apart the transcripts of this case, particularly as the case results may beg question(s) about the enforceability of their own employment agreements with certain of their own key executives.

Though there are existing cases over breaches of non-compete clauses currently in the court pipelines, there are likely to be more cases come up in the next couple of years as there are new casinos slated to open in Las Vegas over the next few years and of course they will need talented executives to run them.

For those thinking their company employment agreements are fine, consider this: most gaming executive employment agreements include prohibitions on competing for a period of time and to not take confidential company information nor exploit company relationships with customers and vendors, among other relationships.

While some gaming operators may take the Asher case as one of oddity and Asher and Cantor were not really competing with each other, they should note the following from Judge Denton’s Finding of Facts:

“Asher informed the (Nevada Gaming Control) Board that Brandywine (Asher’s race and sportsbook company that he ultimately sold to William Hill) intended to expand into areas of ‘account wagering and rapid bet live’… Thus, Asher had intended to exploit the same race and sports wagering ideas Cantor had long planned and pursued…”

As the court seems to have found Asher intended to directly compete and the jury seemingly found that point, among others supporting Cantor’s positions, meaningless in coming to their verdict, perhaps the public standards around what constitutes an enforceable employment contract and an enforceable partner agreement have changed, and thereby the legal expectations around those agreements should be re-thought.

In speaking with a few gaming executives, former regulators and practicing gaming attorneys to get their respective thoughts on the outcome, all were surprised at the jury finding for Asher. Surprisingly, the majority expressed negative sentiments toward both parties. As one gaming executive very familiar with both sides put it, “Kind of like watching a fight between two people you equally dislike. You sort of want to see them both lose, but wow, how did Asher win this one?”

While not yet declared at the time of this writing, it is likely Cantor will appeal and the case will likely go on for bit longer. I for one am looking forward to reading the full transcripts of the trial and learning how this case unfolded to further assess potential impacts on the gaming industry, if any.