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Keywords

contractlawsuitbreach of contracttrialgood faith
contractlawsuitbreach of contracttrialgood faith

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Hammond v. T.J. Litle & Co., Inc., 82 F.3d 1166, 20 Employee Benefits Cas. 1213

Facts

In 1986, Scott P. Hammond was offered a position as Vice President of Finance and Administration at T.J. Litle & Company, which included a compensation package with stock options. After a series of negotiations regarding the vesting schedule and repurchase rights, Hammond's employment was terminated in January 1988. He subsequently filed a lawsuit alleging breach of contract and the implied covenant of good faith and fair dealing, claiming entitlement to shares of stock that he believed were due to him under the terms of his employment.

In 1986, Scott P. Hammond was offered a position as Vice President of Finance and Administration at T.J. Litle & Company, which included a compensation package with stock options. After a series of negotiations regarding the vesting schedule and repurchase rights, Hammond's employment was terminated in January 1988. He subsequently filed a lawsuit alleging breach of contract and the implied covenant of good faith and fair dealing, claiming entitlement to shares of stock that he believed were due to him under the terms of his employment.

Issue

The main legal issues were whether Hammond was entitled to shares of stock upon termination and whether the Company had grounds to terminate him for cause.

The main legal issues were whether Hammond was entitled to shares of stock upon termination and whether the Company had grounds to terminate him for cause.

Rule

The court applied principles regarding the enforcement of employment contracts, the implied covenant of good faith and fair dealing, and the standards for determining whether an employee was terminated for cause.

The court applied principles regarding the enforcement of employment contracts, the implied covenant of good faith and fair dealing, and the standards for determining whether an employee was terminated for cause.

Analysis

The court analyzed the evidence presented during the trial, including the circumstances surrounding Hammond's termination and the agreements made regarding stock options. It concluded that the Company had not effectively terminated Hammond for cause, as the reasons given for his termination were not communicated to him at the time and were not supported by the evidence. The jury's finding that Hammond was entitled to 48 shares was upheld based on the contractual agreements and the implied terms of good faith.

The court analyzed the evidence presented during the trial, including the circumstances surrounding Hammond's termination and the agreements made regarding stock options. It concluded that the Company had not effectively terminated Hammond for cause, as the reasons given for his termination were not communicated to him at the time and were not supported by the evidence. The jury's finding that Hammond was entitled to 48 shares was upheld based on the contractual agreements and the implied terms of good faith.

Conclusion

The court affirmed the jury's award of 48 shares to Hammond and ruled that the Company had not established that it had terminated him for cause, thus upholding his rights under the employment contract.

The court affirmed the jury's award of 48 shares to Hammond and ruled that the Company had not established that it had terminated him for cause, thus upholding his rights under the employment contract.

Who won?

Scott P. Hammond prevailed in the case because the court found that the Company failed to terminate him for cause and that he was entitled to the shares awarded by the jury.

Scott P. Hammond prevailed in the case because the court found that the Company failed to terminate him for cause and that he was entitled to the shares awarded by the jury.

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