By Frank G. Runyeon

Law360 (May 14, 2020, 11:08 PM EDT ) An attorney accused of extorting WilmerHale, Toyota and a staffing agency fired back with counterclaims on Wednesday, slapping the agency with a litany of claims including whistleblower retaliation for allegedly firing him after he reported concerns about COVID-19 in his New York City office.

Andrew Delaney is facing a lawsuit from HC2, known as Hire Counsel, alleging the former at-will employee attempted a $450,000 shakedown of the agency, its customer WilmerHale and the firm's client Toyota, and then revealed sensitive company information in a Florida lawsuit after they failed to pay up. Delaney has argued he was merely seeking compensation for retaliatory termination and never revealed any sensitive information.

Delaney escalated the dispute Wednesday by seeking $20 million in damages on nine counterclaims accusing the agency of fraud, breach of confidentiality, intentional infliction of emotional distress, invasion of privacy, failure to pay sick leave, defamation and abuse of process, as well as whistleblower retaliation stemming from his requests to work from home during the pandemic and the agency's response.

"There is no question that Delaney was terminated in unlawful retaliation for his whistleblower notification about the office conditions and for criticizing HC2's HR department," Delaney said in his answer to the agency's complaint.

"Knowing that Delaney would file a public health and employment lawsuit against it, HC2 and its lawyers cooked up this bogus lawsuit accusing him of extortion and stealing documents," Delaney wrote, adding that HC2 and its counsel knew it was "physically impossible" for him to steal or download any documents due to the way the system for a document review project was set up.

Beyond leaving Delaney in an unsafe office environment during the pandemic, Delaney also claimed HC2 misled him about the nature of the project, which put him in "grave personal danger" in Thailand, where Delaney is also a citizen, given the substance of the work.

The nature of the alleged "very dangerous" project was not explicitly stated, but Delaney claims it "posed a grave threat to Delaney's life, work, and property."

"Mr. Delaney's nonsensical and meritless counterclaims are utterly false," said HC2 counsel Ron Rossi in an email to Law360 on Thursday.

HC2's initial complaint did not identify WilmerHale or Toyota, referring to them as the agency's "law firm customer" and that firm's "corporate client." But Delaney subsequently disclosed the names to Law360 in an interview about the suit, much to HC2's chagrin.

Following HC2's broad gag order request, a judge ordered Delaney not to divulge any confidential, privileged or protected information he learned on the job, tracking with his contractual obligations to HC2.

The legal staffing agency has sought extensive secrecy in the lawsuit against Delaney, most recently asking that the preliminary injunction hearing be sealed and arguing for an even more protective process than submitting documents under seal.

HC2 asked that a central piece of evidence of Delaney's alleged disclosures of Toyota and WilmerHale's information, the currently sealed complaint in the related Florida action that has been voluntarily dismissed, be reviewed by the judge in-camera subject to withdrawal if the judge deemed any part of it subject to disclosure. The judge asked for briefing on that request.

In his answers to HC2's complaint on Wednesday, Delaney expressly denied the agency's claims in 50 of 57 paragraphs — and also denied elements in sections of the remaining paragraphs.

In his counterclaims, Delaney claims HC2 fraudulently induced him to work for them on assurances that the work would not pose risks or a danger to him and that his work and identity would be shielded from third parties on the sensitive project.

Delaney says his personal involvement was leaked and that someone "on the other side" of the case he was working on with WilmerHale for Toyota messaged him as an implied threat — "the clear message was 'we know it is you.'"

"HC2 merely acted as a 'passthrough' or 'veil'" for WilmerHale and Toyota, Delaney said without naming the two entities in his filing, so the law firm and multinational corporation could claim "no relationship with Delaney whenever it suited them, such as in this lawsuit, while not controlling or protecting Delaney's information and privacy at all."

Delaney is seeking $15 million under his libel claim, which he supports with HC2's allegedly false claims that he committed theft and extortion, as well as ethical violations. He seeks an additional $5 million for intentional infliction of emotional distress for "medical problems, severe humiliation, mental anguish, and emotional and physical distress."

Delaney is also pursuing sanctions against both HC2 and its attorneys for filing the case in bad faith for an improper purpose.

Counsel for Delaney and HC2 did not immediately respond to a request for comment.

HC2 is represented by Marc E. Kasowitz, Ronald R. Rossi and Kalitamara L. Moody of Kasowitz Benson Torres LLP.

Delaney is represented by Robert Rotman.

The case is HC2 Inc. v. Delaney, case number 1:20-cv-03178, in the U.S. District Court for the Southern District of New York.

--Editing by Michael Watanabe.

For a reprint of this article, please contact reprints@law360.com.