Executive Employment Agreement Good Reason
The executive may, quite rightly, terminate its employment under this agreement, in which case the executive is entitled to severance pay, as stated in the notice benefits section. For the purposes of this agreement, “good reason” means the occurrence of one of the following events, without the written consent of the executive: (i) a substantial decrease in the title, authority, status, duties or responsibilities of the executive; (ii) any reduction in the executive`s basic salary; (iii) a substantial breach of this agreement by the company; or (iv) the company requires management to locate its office in a location more than fifty miles outside its current office. Enter the precious term “good reason”: the idea that there may be one or more specified reasons – all of which are carefully defined in the executive`s employment contract – that allow the executive to leave on its own and recover its severance pay regardless. Barney`s employment contract provided for higher payments if she resigned for “good reason” after a “change of control.” After his resignation, Barney applied for severance pay under his employment contract. Zimmer refused to pay severance pay, arguing that Barney`s resignation was not one of the “good reasons” for his agreement. Barney filed a complaint claiming that she had no choice but to resign in the face of these incidents. It stated that together they constituted intolerable conditions, and it wanted to continue to free itself from the potential securities fraud committed by other executives. Second, the fear or expectation of a downgrade or dismissal of an executive is not enough. In one case dating back to 1998, it was found that an officer could not initiate a dismissal solely on the basis of receipt of a draft organization chart indicating a reduced reporting relationship. The expression of the CEO`s disappointment or the invitation to take certain actions that the employee considers “under a false pretext” may not be enough. In a 1998 case, Collins v. Ralston Purina Co., found that the former employee had certainly anticipated his reassignment by a host company to a less attractive position in another region, but that, following the announcement of a change of control, he had voluntarily renounced the company`s employment before the purchaser was effectively reassigned and was therefore not entitled to payments under his withholding agreement.
Similarly, when a company offered the worker a job in the same place where it moved and advised that it would have the right to amend the control pay if it refused the offer, the worker was not entitled to payment if he resigned and accepted another position before the date of the move (Televantos v. Lyondell Chemical Company, 3d Cir 2002). The Tribunal found that this was a simple case of interpretation of the contract and application. Given that the agreement clearly required Barney to “notify the company in writing that it intends to terminate its employment for a good reason” and did not do so, it was not entitled to revoke the dismissal on the basis of termination.