John Schroyer
New York marijuana attorney Lauren Rudick, who has made a name for herself in cannabis business circles over most of the past decade, filed suit recently against her former law firm and alleged she was owed hundreds of thousands under an employment contract she says went unfulfilled.
Rudick, who launched her own law firm in January, asserted in a new lawsuit that her former employer, Hiller PC, failed to deliver on a profit-sharing agreement she said the firm’s namesake partner offered her in 2015 as the national marijuana industry began to truly gain traction, Law360 reported.
Managing principal Michael Hiller, in recognition of Rudick’s quickly-growing cannabis clientele, made her a nonequity partner, a promotion that came with a $235,000 salary and a 50% profit share of the firm’s marijuana revenues.
In 2018, Rudick’s suit asserts, she entered in a similar agreement in writing that stipulated she’d have a profit-sharing agreement within 60 days, but the deal was never implemented, according to the lawsuit. In the years that followed, Rudick did accrue between $11,000 and $44,000 a year from a level of profit-sharing, but suspected she was “being short-changed,” Law360 reported.
Then in 2021, Hiller informed Rudick that her salary was shrinking to $165,000 but that she’d be compensated 25% of the firm’s gross revenue, which he said would work out to between $303,000 and $500,000 a year based on how the firm’s cannabis wing performed.
But, Rudick said, she later found out that the updated profit sharing agreement excluded several significant revenue streams, which she never agreed to.
Rudick’s suit charges that she was repeatedly denied access to the firm’s financial records to as to verify for herself that she was being paid what she was owed, and she only ever made the bare minimum of $303,000 per year she was promised by Hiller after 2021.
The situation led to Rudick’s departure from the firm, Law360 reported, which the lawsuit says is tantamount to a “constructive discharge.”
Rudick is suing for breach of contract, unjust enrichment, breach of state labor law, and other claims.
