Fired President Is Entitled to Promised Salary and Benefits

April 6, 2004 ( - What may be good for public policy does not necessarily translate to enforceable contract law, meaning a company president fired for sexual harassment is still entitled to salary and benefits promised in an employment contract.

>The U.S. 3 rd Circuit Court of Appeals found that since Gerald Fields, the former president of Thompson Printing Co Inc was clearly promised that his benefits would continue even if he were fired, that the company could not use the courts “to save it from its own failure to include such a forfeiture clause.”   If not, U.S. Circuit Judge Marjorie Rendell in the opinion said that a ruling for the company “would essentially force us to read clauses thought desirable from a policy standpoint into every employment contract. This we cannot do,” according to a repot in The Legal Intelligencer.

With the 3 rd Circuit’s decision, Fields has scored a second victory in his battle to win back the salary and benefits he argued were promised to him by virtue of his employment contract.   Signed in 1990 when Fields was named vice president and chief operations officer of Thompson Publishing, the 10-year contract provided for a starting salary of $131,000 and a promise of 10% annual raises and a doubling of his salary if Thompson died.

The contract contained a clause stating if Fields “quit,” his salary and benefits would cease immediately.   However, it also contained a broad non-forfeiture clause in favor of Fields that said that the contract was “non-terminable” by the company and if Fields were ever terminated, “all of the benefits as contained herein shall continue.”

Thompson Publishing then terminated Fields in August 1997 following sexual harassment claims by three female employees.   The company then refused to pay Fields any further compensation under the contract, which in addition to salary and benefits, included such fringe benefits as a credit card and a new Cadillac or equivalent car every four years.

Fields filed a breach of contract and Employee Retirement Income Security Act (ERISA) suit in U.S. District Court in New Jersey, demanding reinstatement of his salary and benefits.   In that case, the district court ruled in favor of Fields, granting him summary judgment.

Thompson Publishing appealed, arguing that in light of Fields’ alleged acts of sexual harassment, it would violate public policy to enforce the agreement and that Fields had breached the contract by harassing the employees.   The 3rd Circuit disagreed, finding, “Both of these arguments essentially urge us to look past the plain language of a relatively straightforward contract.”

The case is Fields v. Thompson Printing Co. Inc.