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© 2016 Zuckerman Spaeder LLP

Can Government Regulation Make It Impossible to Pay Severance?

When an executive has an employment agreement and his company doesn’t pay, the company might offer a number of excuses based on contract law. One of these contractual defenses is called “impossibility of performance.” Under this defense, when a party enters into a contract and circumstances later change such that the party can’t perform it, the party can be excused from performing.

The Virginia Supreme Court’s recent decision in Hampton Roads Bankshares, Inc. v. Harvard provides a timely example of how this defense actually works in practice. In the Hampton Roads case, the organization established a relationship with government regulators that affected its ability to pay severance. The court held that this change made it impossible for the company to perform an employment agreement, excusing performance. Read More ›

Top Issues in Executive Disputes to Watch in 2016

We’ve counted down our top posts from 2015, from American Apparel to Dr. Robert Schuller. Now, we look at the issues in executive disputes that are likely to draw the most attention in 2016. Read More ›

Suits by Suits’ 2015 Greatest Hits

The turn of the calendar is always a good time to reflect on what has come before and preview what lies ahead. In this post, we count down our most popular posts of 2015 about executive disputes. Later, we’ll look at what to expect in 2016. Read More ›

The Trojan War: After Alcohol-Related Firing, Coach Steve Sarkisian Sues USC

When the 2015 college football season started, Steve Sarkisian was a rising star in the coaching firmament. He had led the University of Washington Huskies and his current team, the University of Southern California Trojans, to winning records and bowl games.

In late August, however, reports surfaced that Sarkisian had behaved inappropriately at a booster event, the Salute to Troy. And by mid-October, USC had terminated Sarkisian “for cause,” with athletic director Pat Haden explaining that Sarkisian’s use of alcohol had impaired his performance of his job.

This week, Sarkisian struck back, filing a 14-count complaint against USC in Los Angeles Superior Court. Read More ›

“Getting It in Writing” Is Not the End: Executives Should Check Agreements Carefully and Follow Up

It’s an obvious best practice to put the terms of an employment agreement in writing. Equally obvious is the notion that the writing should be complete, whether in a single document or with reference to other items, such as employee manuals or company-wide incentive plans.

However, it’s not always obvious which documents make up an employment agreement.

Consider the recent decision issued by the United States District Court for the District of California in the case of Lenk v. Monolithic Power Systems, Inc. Read More ›

The Inbox – Liar, Liar, Pants on Fire

As the United States gears up for next year’s presidential election, it’s always fun to check in with PolitiFact’s Truth-O-Meter on the days following debates or periods of political grandstanding to see who is really telling the truth and whose pants are on fire.

Since we’re all human – yes, politicians are, too – some of us admittedly engage in the occasional white lie or embellishment in the work place. While we don’t have PolitiFact to fact-check our boardroom meetings, one employee recently alleged that his CEO tried to snuff out lies using a portable lie detecting machine. Read More ›

Third Circuit Derails “Executive Fast Track” Case

A contract between an executive and an employer does not always have to be in writing.

Sometimes, employees can enforce oral promises. Agreements can also be implied based on the parties’ conduct, even when no one made a promise, either in writing or orally.

But contracts that aren’t in writing can be much harder to enforce, as the Third Circuit’s recent decision in Steudtner v. Duane Reade, Inc. shows. Read More ›

F-Squared Filing Again Illustrates Corporate Bankruptcy Perils for Executives

When an executive and a company enter into a lucrative severance package, those benefits aren’t necessarily ironclad.

As we covered in this June 2014 post, when a company declares bankruptcy, its trustee can ask the court to allow the company to avoid its executives’ severance rights.

F-Squared Investments Inc. is now seeking to do precisely that. In late October, F-Squared moved to reject its separation agreement with former CEO Howard Present, seeking authority “to avoid the financial burden” of making a $500,000 payment to him and to cease the accrual of his COBRA payments.

Mr. Present and F-Squared have had a troubled couple of years. Read More ›

The Inbox – Some Like It Not

Facebook is as public a forum as they come, yet it’s ironic how intimate some posts can be, as if the user is thinking out loud for everyone to hear.

Posts can be funny, political, or just plain weird, while others allow us to commiserate, empathize, or laugh out loud as we take that ultimate step of “liking” them. Sometimes liking another person’s thoughts can carry a high cost, especially if those thoughts disparage one’s employer.

Triple Play Sports Bar and Grille, the disparaged party in this example, took issue with the Facebook activity of two of its employees. Employee Vincent Spinella, a cook, “liked” this statement of a former employee:

“Maybe someone should do the owners of Triple Play a favor and buy it from them. They can't even do the tax paperwork correctly!!! Now I OWE money...Wtf!!!!”

Bartender Jillian Sanzone added the comment, “I owe too. Such an asshole.”

Triple Play’s management noticed the online behavior and discharged Spinella and Sanzone for violating company policy relating to prohibited internet activity. Read More ›

Boilerplate Terms in Employment Agreements May Trap the Unwary

In many respects, employees with employment agreements seem to have made it to the corporate “Promised Land.”

Through skill and hard work, these employees have distinguished themselves enough to merit individualized attention to the various types of compensation they will receive. However, these agreements may also contain land mines that spring into action when the relationship between the employee and the employer sours. Read More ›