The 1 st U.S. Circuit Court of Appeals upheld an earlier ruling by U.S. District Judge Morris E. Lasker of the U.S. District Court for the District of Massachusetts that Staples’ cutoff of Alan S. Noonan’s options rights was within its discretion. The company made the move because Noonan had been fired for lying on his company travel expense reports.
The 1 st Circuit panel also backed the dismissal of Noonan’s claim the company violated his severance agreement by refusing to provide him with severance benefits.
According to the ruling, Noonan was fired from his salesman job after an internal company investigation turned up the falsified expense documents. One such falsified report cited by the court was an entry for a $1,129 fast food meal, which resulted when Noonan shifted the decimal mark from $11.29.
Six days before he was fired, Noonan sent Staples a $290,714 check so he could exercise his vested right to buy 23,825 shares of stock. Staples returned the check uncashed and later, when it fired him, it informed Noonan he would not be permitted to exercise these options.
Staples also refused to pay Noonan benefits from its severance plan.
Finally, the appellate panel backed Lasker's dismissal of Noonan's libel claim against Staples, ruling that an e-mail sent to 1,500 Staples employees notifying them that Noonan had been fired for falsifying his expense reportswas "substantially true," and Staples did not act with actual malice in sending it out.
The ruling in Noonan v. Staples Inc., 1st Cir., No. 07-2159, 8/21/08 is available here.