Fired Exec Not Entitled to Severance, Stock Plan Benefits

June 26, 2009 ( - A federal appellate court has upheld a lower court decision supporting a Tulsa, Oklahoma, convenience store chain's decision to fire its real estate director for publicly blasting his replacement.

The 8 th U.S. Circuit Court of Appeals ruled that plaintiff Brian Pendleton’s suit against the QuikTrip Corporation alleging he was discharged in 2004 so the company did not have to pay him severance and stock plan benefits was not supported by the evidence.

Circuit Judge Diana E. Murphy, writing for the court, said the lower court was correct in rejecting Pendleton’s claim of a violation of the Employee Retirement Income Security Act (ERISA) because he was not entitled to those benefits. The lower court judge was also on target in rebuffing the employer’s request that Pendleton be forced to pay QuikTrip’s attorney fees, according to Murphy.

The court opinion said   Pendleton told his direct supervisor, Jeff Thoene, that he intended to leave QuikTrip to pursue a career in private real estate development. Thoene informed his boss, James Marchesano, about Pendleton’s plan to leave, prompting a call from Marchesano to Pendleton asking him to reconsider.

Although Pendleton indicated that he did not want to stay at QuikTrip permanently, he agreed to put off his departure to help with his replacement’s transition. Pendleton learned in July 2004 that his replacement would be QuikTrip employee Rodney Loyd, a discovery that prompted Pendleton to call a staff meeting at which he made publicly disparaging remarks about Loyd.

Pendleton said that the selection of Loyd demonstrated that QuikTrip “promote[s] operations people into positions where they don’t know what they’re doing” and accused management of developing inbreeds and referred to Loyd as a “twinkie bar” whose “only real estate experience was probably buying a house, but not doing a sophisticated, complicated deal.”

The court document said Pendleton was discharged for cause after word of the meeting reached his supervisors and that the written notice said it as for “gross misconduct” and “insubordination.”

“The severance plan clearly states that ’employees terminated for cause will not receive severance.’ Pendleton was terminated for cause, and he was therefore fully excluded from severance benefits,” Murphy wrote. “Pendleton’s proffered extrinsic evidence does not raise genuine issues of material fact as to his entitlement to benefits when he does not qualify for benefits under the clear and unambiguous language of the plan.”

The ruling is available here .