A latest twist in apparent dueling lawsuits in the legal tech arena has emerged. Just last week, we reported on a lawsuit filed by legal tech executive Silvia Diaz-Roa in a U.S. District Court in Manhattan. As per Diaz-Roa’s claim, her former employer owed her over $1 million in stock and, further, she had been a victim of sexual harassment at the company.
However, as recent developments suggest, a week prior to Diaz-Roa filing her lawsuit, it turns out her former company had sued her in a federal court in Texas. The company sought a declaratory judgment that it had terminated her employment for cause, thus also effectively terminating her stock option.
Silvia Diaz-Roa filed the lawsuit against Texas law firm Hermes Law and ClaimDeck, a litigation management system spun out of Hermes Law. Other defendants named in the lawsuit are Dwayne Hermes and Andrea Hermes, two key figures at both the aforementioned law firm and the software company.
Diaz-Roa alleges that upon her attempts to exercise stock options amounting to over a million dollars, her employers terminated her to deprive her of the due compensation. Additional claims include instances of sexual harassment where she was coerced by superiors to flirt and engage in romantic relationships with clients.
The news took another dramatic turn when we received an email from Stefanie Shah, an attorney representing the defendants, who said that the defendants strongly deny all allegations. According to Shah, Diaz-Roa’s lawsuit in New York could very well be a response to the declaratory judgment action her clients had filed a week prior in Texas.
The Texas lawsuit by ClaimDeck and Hermes Law admits to granting Diaz-Roa a stock option in 2020. However, they assert that the agreed terms of the option stated that the option would be forfeited in case of an employment termination for cause. The companies go on to say that Diaz-Roa never tried to exercise her option until after her employment was terminated.Full text of the Texas complaint.
In addition, the defendants assert a multitude of reasons for Diaz-Roa’s termination including actions resulting in harm to the companies’ reputations, increasing disregard for coworkers and management, and a lack of skills critical for her position.
Both opposing lawsuits agree on Diaz-Roa’s employment history at Hermes beginning in 2017. She started working there while simultaneously pursuing a graduate degree at Yale, for which Hermes and ClaimDeck allegedly covered the tuition amounting to approximately $170,000. However, after finishing her degree, instead of returning to the firm’s Dallas office as planned, Diaz-Roa chose to relocate to New York, allegedly a violation of company policies.
The Texas lawsuit from ClaimDeck and Hermes lists a number of incidents which, according to them, left no choice but to terminate Diaz-Roa for cause. They argue that such termination automatically resulted in the forfeiture of Diaz-Roa’s option to purchase the company’s stock back to the company. The companies seek declaratory judgments stating that Diaz-Roa was indeed terminated for cause, her stock options were terminated, and she does not own any stake in the legal tech firm.
Each side is expressing surety in the eventuality of courts ruling in their favour. The interconnected legal proceedings in New York and Texas are expected to keep the legal realm abuzz in the coming period. “We expect that the New York and Texas courts will rule in favor of our clients,” claimed attorney Shah in a recent email.