Due to significant differences in the strategic vision for a major international bank and investment organization, a top executive resigned his position as CEO. The bank promptly reneged on its contractual obligation to pay him an earned bonus and severance payments. Remarkably, the bank wrote a threatening letter to the executive warning him that any violation of his non-compete would result in legal action by the bank.
Mr. Liebeler filed suit on behalf of the client in the U.S. District Court for the Eastern District of Virginia demanding that the bank comply with its contractual obligation to pay severance. The bank filed a motion to dismiss the action which was denied by the Court. Shortly thereafter, the bank agreed to pay the executive his seven figure bonus and severance payments. We continued to assist the executive in analyzing actions that were permissible under the terms of the non-compete agreement.
Companies must clearly spell out all compensation terms for employees. All ambiguities in offer letters and contracts with employees will be construed in favor of the employee. Review all language carefully and eliminate ambiguities. Insure that employee handbooks do not include language that confer unintended benefits upon employees.
Compensation terms for salaried employees must be carefully scrutinized to insure compliance with Fair Labor Standards Act requirements regarding overtime pay and other conditions.
Executives must negotiate the compensation elements of employment agreements with meticulous care to insure that every element of compensation is clearly stated and that all conditions for performance bonuses are objective and unambiguous.
Don't be afraid
to go out on a
limb. That's where the
H. JACKSON BROWNE