A New Jersey man has recently filed a class-action lawsuit against United Technologies in a New Jersey court. The litigation has apparently arisen out of a contract dispute. United Technologies is a company based in Connecticut that makes global aerospace services and products.
According to the man, the company had a program called Employee Scholars where employees would get stock options if they completed an advanced degree while working for the company. In order for the options to vest, the employees had to work for the company for a certain period of time following the completion of their degrees. At first, the man claims the options vested one year after graduation, this was eventually changed to three years.
In 2009, the company started to layoff many of its employees, including those in the Employee Scholar program. At the time the employees were laid off, they were told they had to forfeit all of their stock options. The man in this case was laid off two and a half years after his graduation and claims to have accumulated $13,000 worth of stock options. Following his termination, this stock was taken away.
On March 22, the man filed a class action suit against the company claiming, among other things, breach of fiduciary duties and breach of contract. The class is seeking both punitive and financial damages.
Contract disputes, such as this one, can be costly and time consuming for businesses. Often, they can become very complex. In any case, New Jersey businesses should know they have options in defending against contract disputes. For example, when defending against a breach of contract suit from an employee a business will often want to dispute the existence of a valid contract. If a valid contract does exist, then companies can attack specific terms of the contract to show that the employee did not perform or that no breach occurred.
Source: The Star-Ledger, “Lawsuit: Company cheated laid-off employees out of stock,” Jason Grant, March 23, 2013