Breach of Contract, Oral Defamation – Published Settlement

February 27, 1998
Wrongful Termination
Breach of Contract
Plaintiff to sell her 5 percent stock interest in the company to defendant. Defendant to pay $380,000 over several years, in addition $20,000 previously paid, plus forgiveness to plaintiff’s $35,000 debt to defendant company.
Case I.D. Confidential.
American Arbitration Association / January 7, 1998.
Deborah Rothman/AAA.
Plaintiff – Jeffrey L. Malek (Malek & Malek, Torrance).
Defendant – Confidential.
Plaintiff-sister and defendant-bother worked in senior management in an insurance brokerage owned by defendant. Plaintiff opened a Northern California branch for the company, and worked at the branch. After more than 10 years of employment under an at-will provision in the company’s handbook, plaintiff, who had earned and average of $150,000 in annual salary and bonuses during her final 3 years of employment, was terminated without notice. she asserted a claim for wrongful termination with the American Arbitration Association pursuant to the company’s ADR policy.
The plaintiff contended that her tenure and relationship to defendant took her employment out of the at-will category, and that she was terminated without notice and without good cause, and as a result, she developed a stomach ailment and found herself without adequate resources to start her own business or pay her expenses. She also contended that defendant slandered her to her former employees, and that after terminating her, he made promises regarding compensation that he had no intention of keeping.

The defendant contended that the plaintiff had quit on numerous occasions and that her strong personality made it difficult for him to work with her. The defendant also contended that he interpreted plaintiff’s words to mean that she was again quitting, so he terminated plaintiff to preclude her from changing her mind. The defendant further contended that her branch had problems attributable to defendant’s inadequate job performance.

The plaintiff sought $500,000 damages for front pay, back pay and lost benefits. At issue, too, was the value of the minority shareholder interest defendant had given plaintiff in the company.
The plaintiff made settlement demand for $500,000 exclusive of the stock. The defendant made an offer of $300,000 for the stock only.
Length, 10 hours (one session).
The settlement was reached approximately four months after the case was filed. Had the matter not settled, it would have been arbitrated under the rules of the American Arbitration Association.
Copyright 1998 Daily Journal Corp. Reprinted with Permission.