Missouri Disputes Littler's Claim for Financial Incentives for Opening Kansas City Back Office
The Am Law 100 law firm and the state are in court over how many jobs Littler was obligated to create in Kansas City. At stake is $14 million in economic incentives for Littler.
January 24, 2020 at 06:59 PM
4 minute read
The original version of this story was published on The American Lawyer
The state of Missouri is pushing back on Littler Mendelson's claims that the law firm is owed at least $1.5 million in financial incentives for opening a back-office operations center in Kansas City.
The Am Law 100 law firm and the state are at odds over how many jobs the firm was obligated to create in order to receive a total of $14 million in financial incentives from the Missouri Works Program. The San Francisco-founded firm has already received some of the $14 million but claims the state is withholding a portion of the incentives.
A state official said Littler was obligated to create 476 jobs through the August 2015 opening of its global services center.
Maggie Kost, the director of strategy and performance for Missouri's Department of Economic Development, said their incentive programs are structured "to ensure that companies keep their commitments or they can't receive benefits. Because of these protections, the state isn't out a dime for the jobs that weren't created by the company."
But Littler has maintained that it was only obligated to create 275 jobs. The other 201 jobs the state is referencing were part of an agreement that was never signed, Littler alleged in a Dec. 31 lawsuit filed in Cole County, Missouri.
In the lawsuit, Littler is seeking a court order that allows it to receive all of the $14 million in incentives for creating at least 275 jobs.
"Littler faces immediate and irreparable harm from DED's breach of contract," the firm's complaint said, referring to the Department of Economic Development, "and Littler seeks an affirmative injunction compelling DED to authorize the discretionary tax credits for year 3 and a declaratory judgment finding that Littler has fully complied with its contractual obligations."
The 53,000-square-foot space Littler created at the Kansas City Crown Center houses the law firm's back-office functions, including human resources, administrative management and operations, and attorney recruiting and development. The Aug. 12, 2015, press release heralding the center's opening said the building can house 275 employees, with room to grow.
In its 2015 announcement, Robert Domingues, Littler's chief operating officer, said one of the reasons why the law firm, which has over 60 offices in the U.S. and across the world, chose Kansas City was because of the cost. "We chose Kansas City because of the quality and diversity of its labor force, location in the central time zone and cost benefits," Domingues said at the time.
Real estate costs are usually law firms' second-largest expense, after compensation, leading firms to lean on economic incentives like tax breaks whenever they can, said one law firm management consultant. A commitment by a state or municipality that doesn't hold up could have a significant impact on a law firm's finances, the consultant said.
The consultant added it's unclear whether Littler's decision to place its global services center in Kansas City was solely contingent on its economic agreement with Missouri. But it's possible that the incentives may have made the difference, the person added.
While economic incentives could influence the location of a law firm's back-office functions, they're usually not factors when law firms consider city locations of attorney offices, the consultant said.
The state hasn't filed a response to the firm's complaint as of Friday.
Littler is being represented by James Martin, a St. Louis partner at the high-stakes litigation firm Dowd Bennett. Martin served as the U.S. attorney for the Eastern District of Missouri for about a year during the George W. Bush administration.
A Littler spokeswoman declined to comment.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllLitigators of the Week: After a 74-Day Trial, Shook Fends Off Claims From Artist’s Heirs Against UMB Bank
An ‘Indiana Jones Moment’: Mayer Brown’s John Nadolenco and Kelly Kramer on the 10-Year Legal Saga of the Bahia Emerald
‘It's Your Funeral’: Avoiding Doing Damage to Your Client’s Case With Uncivil Behavior
Trending Stories
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250