Employees forced to resign to pursue another opportunity or to retire may still be entitled to compensation entitlements
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Craig Boyer worked for Callidus Capital Corporation from 2009 until he left the distressed business lender in September 2016.
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Boyer was the company’s vice president of underwriting and portfolio management both while Callidus was privately held and after its initial public offering in 2014.
In the summer of 2015, Boyer told Calladus he intended to retire at the end of 2016. His evidence at a summary judgment motion was that he was tired, suffering from increasing health problems and no longer comfortable with the direction Callidus was taking.
By all accounts, Boyer was a hard-working, high-performing executive, making a substantial salary of $220,000 a year and bonuses up to three times his salary that were paid on a deferred basis.
Boyer alleged that by the summer of 2016 the company’s management engaged in abusive conduct such as unrelenting criticism and verbal abuse, including allegations that he could not be trusted.
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By the end of July 2016, all of Boyer’s accounts were transferred to other portfolio managers.
In August 2016, while on a two-week vacation, Callidus announced Boyer’s retirement via a press release.
Boyer claimed he was constructively dismissed and sued for wrongful dismissal and other damages.
In court, Boyer’s constructive dismissal claim was unsuccessful.
The court found Boyer was complicit in the removal of his responsibilities and cooperated with Callidus in the transferring of his accounts to other portfolio managers to prepare for his retirement. It also did not find that any of the alleged misconduct amounted to a constructive dismissal.
Even with his constructive dismissal claim denied, Boyer was still awarded substantial damages following his retirement.
The first award was for unused vacation. Boyer gave evidence that he was unable to take his vacation annually and that in his eight years of employment only ever took six weeks of vacation. The court awarded Boyer damages for 22 weeks salary for unused and accumulated vacation time in the amount of $93,076.92.
The second award was for unpaid bonuses in the amount of $525,000 plus interest. Boyer claimed he remained unpaid for earned bonus amounts for 2014 and 2015. Callidus argued Boyer had to be actively employed at the time the bonuses were paid. The court did not find that this ‘active employment’ term made up any part of Boyer’s employment agreement or any policy that he had agreed to.
The biggest payout related to Boyer’s stock options.
On his retirement Boyer had 126,962 stock options, which Callidus refused to vest claiming they expired when he left. Boyer claimed the value of these options in his claim. Boyer’s evidence was that he asked his supervisor about the vesting of stock options on retirement and that his supervisor confirmed his stock options would vest. The court noted the company stock plan was silent to what happened to options on retirement.
The court awarded Boyer damages in the amount of $1,213,856.98 for the value of his lost stock options.
This case is brimming with lessons for both employers and employees.
For employees, sometimes you are forced to resign while leaving entitlements on the table to pursue another opportunity or to retire. You may still be entitled to sizeable payouts when it comes to unpaid bonuses, vacation pay, stock options and restricted share units. Resignations do not always rule out compensation entitlements. Think twice before leaving a (big) crumb on the table.
Employers are still operating with contracts and policies that fail to clearly inform employees of what will happen to their benefits and entitlements when they leave an organization. If documents are silent with respect to what will happen to benefits when an employee retires, resigns or is terminated, this could leave the door open for employee claims that could amount to massive awards. If your compensation policies and contracts leave any room for debate, it’s time for a spring clean up.
Have a workplace question? Maybe I can help! email me at sunira@worklylaw.com and your question may be featured in a future column.
The content of this article is general information only and is not legal advice.
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