Oxnard attorney David M. Karen said the 9th Circuit Court of Appeals has affirmed a $1.6-million judgment for his client, Forrest L. Fleming, against Fleming's former employer, Parametric Technology Corp. of Waltham, Mass.
A jury had found that Fleming was terminated in bad faith and was therefore entitled to the value of his stock options, even though they were unvested at the time of termination. The Court of Appeals agreed, finding there was substantial evidence to support the verdict.
While stock options are routinely used by start-up companies to lure and reward key employees, the eight-person jury unanimously determined that Fleming was terminated by Parametric Technology senior executives Steve Walske and Dick Harrison to specifically deprive Fleming of his unvested options. U.S. Federal Judge Robert M. Takasugi presided over the three-week trial and had denied the defense motion for new trial.
"While the Ninth Circuit opinion will not be published, the decision still is useful as businesses are learning that they can't use people and throw them away when it is financially convenient for them to do so," Karen said. "Employees whose compensation is deferred with stock options to be realized in the future cannot be uniformly deprived of unvested options by termination. That Microsoft sought to file a [friend of the court] brief in this case, an effort denied by the court, confirms this decision is particularly relevant."