Homebuilder Agrees to Pay $4 Million to Former Executives in Breach of Contract Dispute
Friday, March 27th, 2009 | Breach of Contract | No Comments
Standard Pacific Corp. (“SPC”) has agreed to pay a total of $3.95 million to two former executives to resolve a breach of contract dispute. According to the former executives, SPC breached their employment agreement when it allegedly violated the terms of a December 1, 2006 change-in-control agreement. The settlement agreements call for lump sum payments to be made to the former chief financial officer and former executive vice-president in the amount of $2.4 million and $1.55 million, respectively. The lump sum payments represent more than half of the maximum amount each executive could have received under their 2008 bonus arrangements and the December 2006 change-in-control agreement. Additionally, each executive will receive a reimbursement of up to 24 months of COBRA/Cal-COBRA payments and 90 days to exercise any vested stock options.
The settlement agreements are significant because they demonstrate the willingness of some employers to readily resolve employment-related disputes to avoid litigation. However, due to the complex nature of such disputes, executives who believe that the terms or conditions of their employment have been compromised by their employer should seek experienced counsel capable of handling such disputes.
The Employment Law Group® law firm has successfully represented and advised senior executives in employment-related contract disputes including breach of stock option agreements, compensation agreements, and severance. For more information about The Employment Law Group® law firm’s Executive Counsel Practice, click here.
New FINRA Rules Limit Motions to Dismiss in Arbitration
Thursday, February 12th, 2009 | New Rules and Procedures | No Comments
The Securities and Exchange Commission (“SEC”) has approved new rules to the Financial Industry Regulatory Authority (“FINRA”) Code of Arbitration Procedure, which severely limits a party’s right to file a motion to dismiss during arbitration. The new rules address investors concerns about abusive filings of dispositive motions by limiting the circumstances under which a FINRA arbitration panel can grant a pre-hearing motion to dismiss. In particular, the new rules prohibit a pre-hearing dismissal unless the arbitration panel finds: (1) that the parties have settled their dispute in writing; (2) that the moving party was not involved with the account, security or conduct at issue; or (3) the claim was not filed within six years of the events at issue. In addition to narrowing the grounds on which an arbitration panel can grant a motion to dismiss, the new rules also permits the following:
- The prohibition of a party’s ability to re-file a denied motion to dismiss without an explicit order from the panel;
- The issuance of sanctions for bad faith motions to dismiss; and
- The authority to award costs and attorneys’ fees to the opposing party if it is determined that the moving party’s motion to dismiss was frivolous.
The new rules should apply equally to employment arbitration to ensure that like investors, employees will have the opportunity to argue their case in employment arbitration.
President Caps Executive Pay at $500K
Thursday, February 5th, 2009 | Executive Compensation, Severance Agreements | No Comments
Yesterday, President Obama announced that senior executives of companies receiving the most funds from the Troubled Assets Relief Program (TARP) will have their pay capped at $500,000. The decision to limit executive compensation follows a report that financial institutions that received money from the economic bailout paid as much as $18 billion in bonuses in the last year despite the economic crisis. In addition to limiting executive compensation, the plan to protect taxpayers’ interests also includes:
- Decreasing severance pay for top executives who leave TARP funded institutions;
- Increasing the number of senior executives subject to the golden parachute rule;
- Restricting the liquidation of stock incentives until government funds are repaid; and
- Requiring corporate boards to modify their policies on executive perks.
To learn more about The Employment Law Group® law firm’s Executive Counsel Practice, go to http://www.employmentlawgroup.net/PracticeAreas/Executive-Compensation.asp.
Defamatory Statements Must be Considered as a Whole, Not Piecemeal
Wednesday, January 28th, 2009 | Defamation | No Comments
In Hyland v. Raytheon Technical Services Company decided January 16, 2009, the Virginia Supreme Court held that the whole alleged defamatory statement must be analyzed by the court to determine as a matter of law if it contains statements of provable false facts or just opinions. Common law based on the First Amendment to the U.S. Constitution and the Virginia Constitution protects statements of pure opinion, but false factual statements may be actionable as defamation. Furthermore, opinion statements that imply provably false facts may also be actionable as defamation. The judge sends alleged defamatory statements containing provably false factual statements to a jury to decide if they are actually defamatory.
Defamation is a false statement made to one or more third-parties that causes harm to a private person or their reputation. The plaintiff must show that the speaker knew the falsity of the facts, lacked a reasonable basis for believing the facts were true, or was negligent in obtaining the facts.
In this case, the employee appealed the Virginia circuit court’s decision not to send the allegedly defamatory statement to a jury. The circuit court concluded that the plaintiff admitted to the factual statements. However, the court excluded the defendant’s opinion statements. The Virginia Supreme Court held that the circuit court improperly failed to consider the allegedly defamatory statements as a whole. The court observed that the circuit court’s error denied the employee the right to submit evidence to prove the falsity of the statements and to have a jury decide if the statements as a whole were defamatory.
For information on The Employment Law Group® law firm’s Executive Compensation practice, click here. To view the decision, Hyland v. Raytheon Technical Svcs. Co., Et al., No. 080157 (Va. Jan. 16, 2009), click here.
CEO Compensation Trends in 2008
Wednesday, January 7th, 2009 | Executive Compensation | No Comments
In a report released on December 24, 2008, the Conference Board announced that CEO compensation is increasingly in the form of stock rather than cash and stock options. However, two-thirds of industries studied saw an increase in median CEO cash compensation comprised of salary, bonus, and non-equity incentive compensation. The greatest increase in median CEO cash compensation was in the insurance industry. Food and tobacco industry executives enjoyed the largest increase in median total compensation comprised of cash compensation plus present value of options, value of stock awards, change in pension value and earnings on non-qualified deferred compensation, and all other compensation. The effect on executive compensation of the current recession that started in December 2007 is not reflected in the report, since it is based on proxy filings covering fiscal year 2007.
For information on The Employment Law Group® law firm’s Executive Compensation practice, click here. To view the Conference Board press release, click here.
The Employment Law Group® Law Firm Will Speak At Seminar About Severance Agreements
Monday, December 15th, 2008 | Severance Agreements | No Comments
Scott Oswald, a Principal at The Employment Law Group® law firm will speak about severance agreements at an event sponsored by the D.C. Bar Labor and Employment Law Section on January 29, 2009. The seminar will provide an overview of severance negotiations and employment contract litigation, including practical tips for executive and non-executive employees. For more information about this event, click here.
Saint-Gobain Claims Ex-Employees Stole Trade Secrets
Friday, November 14th, 2008 | Noncompete Litigation | No Comments
Saint-Gobain Ceramics & Plastics, Inc. (“Saint-Gobain”) is suing two former employees and their new employer for allegedly stealing trade secrets and proprietary information related to the design and manufacturing process of high temperature gas tubes that are used to detect radiation.
Saint-Gobain is seeking an injunctive relief, lost profits, punitive damages, and attorneys’ fees and costs. For information about The Employment Law Group® law firm’s Non-Compete Litigation Practice, click here.
District Court Orders Former IBM Executive to Cease Employment with Apple
Friday, November 14th, 2008 | Noncompete Litigation | No Comments
On November 7, 2008, a federal judge granted IBM’s motion for a preliminary injunction against Mark Papermaster and ordered the former senior executive to immediately cease employment with Apple Inc. (“Apple”). In the complaint, IBM alleged that Papermaster breached the terms of his noncompetition agreement by accepting an executive position with Apple, a competitor of IBM and that his continued employment with Apple would cause IBM irreparable harm because Papermaster had access to IBM’s trade secrets and other confidential information.
This case highlights the importance of closely evaluating the terms of a noncompetition agreement before accepting a new job and being prepared to defend against a former employer’s attempt to enforce a noncompetition agreement. The Employment Law Group® law firm has successfully represented executives and managerial employees in litigation concerning the enforceability of noncompetition agreements. For more information about the firm’s Non-Compete Litigation Practice, click here.
Congress Enacts Bailout Bill to Include Cap on Executive Pay
Friday, October 3rd, 2008 | Federal Legislation | No Comments
Today, Congress approved H.R. 1424 (“Emergency Economic Stabilization Act”) which authorizes the Federal Government to purchase and insure certain types of assets to stabilize the economy and protect taxpayers’ interests. The bailout bill also includes a provision limiting executive compensation. In particular, the bill prohibits financial institutions from making golden parachute payments to senior executives and prohibits companies from paying certain financial incentives to senior executive officers. To read the bailout bill, go to http://thomas.loc.gov/. For information about The Employment Law Group® law firm’s executive counsel practice, click here.