Bank Held to Have Terminated Executive Without Cause – 2012

Many employees are required to sign arbitration agreements as a condition of their employment. In this case, an executive of a newly formed bank was among the senior managers who were provided with a written employment agreement. The agreement provided, as many executive agreements do, for the payment of severance pay and vesting of stock rights upon termination without good cause, but nothing if the company terminates the executive with good cause. Good cause should always be defined in these agreements, as it was here. But guess what – companies and the individual decision-makers find it awfully tempting to find some basis for a termination based on “good cause” to save the company money, to stroke their own ego, or to make themselves look good in the eyes of the company.

The agreement also required that any disputes be resolved by binding arbitration. Quest Law Firm pursued the matter through arbitration and obtained about $1.6 million in unpaid severance, interest, benefits, and the vesting of valuable stock grants.