Vermont Court limits executive search and recruitment expert’s opinions regarding Plaintiff’s job qualifications and associated compensation range

Vermont Court limits executive search and recruitment expert’s opinions regarding Plaintiff’s job qualifications and associated compensation range

This case involved a claim of malicious prosecution brought by Plaintiffs Robert Wolfe and Crossfield, Inc. against Defendants Enochian BioSciences Denmark ApS, Enochian BioSciences, Inc., Rene Sindlev, and Luisa Puche. Wolfe was a citizen of Vermont and the CEO and sole shareholder of Crossfield. Enochian BioSciences was a publicly traded Delaware corporation and the parent company of Enochian Denmark, which was located in Denmark. Sindlev was the Chairman of Enochian BioSciences and Puche was its CFO. 

Enochian Denmark had hired Wolfe as a consultant and CFO in 2017. His employment agreement contained confidentiality provisions barring disclosure of Enochian’s confidential information during or after his employment. In December 2018, Sindlev informed Wolfe he would be terminated as CFO. The Enochian Board of Directors then voted to terminate him later that month. 

After Wolfe’s termination, a dispute arose over payments he sought related to his employment. In February 2019, Wolfe filed a lawsuit in Denmark against Enochian seeking these payments. Prior to filing, Wolfe’s attorney had emailed Enochian a draft complaint containing allegedly confidential information about payments Enochian had made for security services for its scientific advisor Serhat Gumrukcu. 

Enochian then filed a lawsuit against Wolfe in Vermont state court in February 2019, alleging he had disclosed Enochian’s confidential information and seeking injunctive relief to bar further disclosures. Enochian was initially granted a temporary restraining order but in December 2019, after a hearing, the Court dissolved the TRO and held Enochian had failed to satisfy the requirements for a preliminary injunction. In April 2020, Enochian moved to dismiss its Vermont lawsuit with prejudice. The Court conditionally granted the motion in November 2020 and awarded Wolfe his costs but not attorney’s fees.

In April 2022, Wolfe withdrew his Danish lawsuit and brought his claim before an arbitrator. The Danish Court still found Wolfe to be the unsuccessful party and ordered him to pay costs to Enochian, which he had not done.

In the current federal case, Wolfe and Crossfield brought a malicious prosecution claim against Enochian, Sindlev, and Puche. They alleged the Vermont lawsuit was improperly initiated to gain leverage in the Danish case and harm them professionally and financially. 

Enochian filed two motions: (1) a motion demanding the exclusion of speculative expert opinions of Wolfe’s executive recruitment expert witness Jeffrey Ketchum, and (2) a motion for summary judgment. 

Vermont Court limits executive search and recruitment expert’s opinions regarding Plaintiff’s job qualifications and associated compensation range

Executive Search and Recruitment Expert Witness

Jeffrey R. Ketchum has over 27 years of experience in executive search and leadership consulting. He has personally completed 200 engagements focused on executive recruiting, management appraisal and assessment, executive compensation, and succession planning for organizations ranging from two million dollars to sixty million dollars in revenue across various industries. 

Ketchum graduated from Cornell University’s Advanced Program for Executive Search and Leadership Consulting, an MBA-level certificate program designed for senior consultants with over 10 years of experience. He also holds the Certified Researcher/Associate certification from the Association of Executive Search and Leadership Consultants, the only comprehensive external certification for researchers in executive search. 

Through his executive search firm Lordstone Corporation and its subsidiaries, Ketchum has experience performing executive job search analysis, interviewing, media research, and assessing executive skills, performance, and compensation for recruiting purposes. He previously worked for Management Recruiters International where he conducted over 60 executive/professional searches.

Ketchum has also received training in behavioral analysis for deception detection, business brokerage, executive assessment using the Topgrading methodology, and coaching. He is a member of professional associations like the Turnaround Management Association and has published extensively on business management topics.

Ketchum’s qualifications include his advanced education, certifications, decades of experience in executive recruiting and consulting, training in relevant methodologies, publications, and memberships that demonstrate his expertise. The Defendant pressed for exclusion of speculative expert opinions provided by Jeffrey R. Ketchum in the instant case.

Discussions by the Court

Jeffrey R. Ketchum was the Plaintiffs’ expert witness in this case. He has extensive professional experience in executive recruitment and continuing education in the field. Based on his qualifications, the Court found Ketchum was an expert on executive salaries, job searches, and recruitment. 

The Defendants filed a motion to exclude Ketchum’s expert opinions as unreliable, arguing his opinions were not based on a discernible methodology but were reverse engineered to reach a desired conclusion. The Defendants claimed that Rule 702 of the Federal Rules of Evidence warranted exclusion of speculative expert opinions of the kind.

Regarding Ketchum’s opinion on the career opportunities Wolfe would be qualified for and the associated compensation range, the Court found the factual support established Ketchum’s opinion that Wolfe was qualified for a Chief Financial Officer role was grounded in reliable evidence and admissible. However, it excluded Ketchum’s opinion on Wolfe’s probable compensation range of $240,000-$500,000. Ketchum failed to explain why he believed Wolfe’s compensation should fall in this range. His opinion relied solely on Wolfe’s prior Enochian salary and the compensation of Wolfe’s successor, without comparing their qualifications or services as CFO. Ketchum did not evaluate Wolfe’s prior compensation history or the market rates for CFO positions. The Court found his compensation range opinion was wholly conclusory and appeared designed to maximize the range without considering Wolfe’s history of lower earnings.

The Court also excluded Ketchum’s opinion that Wolfe’s job search efforts were reasonable. It concluded that this opinion invaded the province of the jury as an inadmissible legal conclusion, citing United States V. Bilzerian. Ketchum’s assumptions about the reasonableness of Wolfe’s networking efforts were based on unverified data. For example, Ketchum did not independently verify the substance of thousands of emails on a spreadsheet from Wolfe but nonetheless found the spreadsheet reliable. Ketchum also failed to explain how the emails he did review demonstrated Wolfe used networking to find work. Further, Ketchum’s reliance on Wolfe’s job applications to jobs posted on a job board contradicted his own statements that job boards are often unproductive for executive searches. Due to these flaws in Ketchum’s reasoning, the Court found his opinion regarding the reasonableness of Wolfe’s job search efforts was unreliable and excluded it.

The Court also excluded Ketchum’s opinion that media coverage following Wolfe’s termination would have substantially impeded his job search. Ketchum failed to provide an admissible causation opinion, as he could not identify any specific employers that had rejected Wolfe due to the media coverage. His report also failed to cite any media articles that discussed the Vermont lawsuit itself. By ignoring unfavorable evidence from his own media research that conflicted with the desired outcome, Ketchum appeared to have reverse engineered his conclusion. The Court found his media research opinion was neither reliable nor relevant.

Held

In sum, Ketchum’s expert opinions were limited since the Court denied the motion to exclude Ketchum’s opinions regarding Wolfe’s job qualifications and the use of networking in executive searches. However, it granted the motion regarding Ketchum’s opinions on probable compensation, reasonableness of the job search, and the impact of media coverage. It found these opinions were conclusory, speculative, and relied on inadequate methodology under Rule 702.

The Court also denied Enochian’s motion for summary judgment in its entirety. It found there were genuine disputes of material fact regarding each element of Wolfe’s malicious prosecution claim: whether Enochian lacked probable cause, acted with malice, the Vermont case was terminated in Wolfe’s favor, and Wolfe suffered damages. The Court held a jury must resolve these factual disputes, therefore summary judgment was inappropriate.The court has not yet made a final decision on the case, and there are still unresolved issues that need to be addressed before a final ruling can be issued.

Key Takeaways

This case demonstrates the importance of methodology and factual support in determining the admissibility of expert witness opinions under Rule 702. Even though Jeffrey Ketchum was qualified as an expert based on his extensive professional experience in executive recruiting, portions of his opinions were excluded due to inadequate methodology. Specifically, the Court found his opinions regarding the Plaintiff’s probable compensation range and the reasonableness of his job search efforts were conclusory because they relied on limited data points without sufficient explanation of his reasoning which warranted exclusion of speculative expert opinions. This shows experts must thoroughly explain their methodology and have reliable factual support for their conclusions, rather than relying solely on experience or selectively choosing data. 

Furthermore, the Court excluded opinions that invaded the province of the jury, like reasonableness, or were unhelpful generalizations. This reinforces the fact that experts cannot offer legal conclusions or merely restate common sense. Experts must utilize their specialized knowledge to offer opinions tethered to the facts of the case. Overall, this case demonstrates the importance of methodology and factual support in admitting expert opinions, as well as avoiding legal conclusions or unhelpful generalizations. Thorough explanation of the expert’s reasoning in applying specialized knowledge to the case facts is key under Rule 702.


Comments

Leave a Reply

Your email address will not be published. Required fields are marked *