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Keywords

contractlawsuitbreach of contractappealsummary judgmentcorporation

contractbreach of contractappealsummary judgment

Related Cases

Lucente v. International Business Machines Corp., 310 F.3d 243, 29 Employee Benefits Cas. 2414

Facts

Edward E. Lucente worked for IBM for about thirty years, retiring in February 1991 as President of IBM's Asia Pacific Division. Upon retirement, he was awarded stock options and restricted stock under IBM's incentive compensation plans, which included forfeiture provisions for employees who went to work for competitors. After retiring, Lucente accepted a position at Northern Telecom, which IBM initially deemed non-competitive. However, when Lucente later accepted a job at Digital Equipment Corporation, IBM canceled his stock options and restricted stock, leading to the lawsuit.

Edward E. Lucente worked for IBM for about thirty years, retiring in February 1991 as President of IBM's Asia Pacific Division.

Issue

The main legal issues were whether Lucente was involuntarily terminated by IBM, whether the forfeiture provisions of the incentive compensation plans were enforceable, and whether IBM's counterclaim for breach of contract was valid.

Rule

The court applied the employee choice doctrine, which states that an employer can enforce non-competition provisions only if the employee voluntarily left the company. Additionally, the court examined the reasonableness of the forfeiture provisions in the context of New York law.

The court applied the employee choice doctrine, which states that an employer can enforce non-competition provisions only if the employee voluntarily left the company.

Analysis

The court found that the district court had improperly resolved factual disputes in favor of Lucente, particularly regarding whether he was involuntarily terminated. The evidence suggested that Lucente had a choice to remain at IBM but opted to leave for a more lucrative position at Northern Telecom. The court also noted that the forfeiture provisions in IBM's plans were reasonable and enforceable under New York law.

The court found that the district court had improperly resolved factual disputes in favor of Lucente, particularly regarding whether he was involuntarily terminated.

Conclusion

The Court of Appeals reversed the district court's grant of summary judgment to Lucente, concluding that there were genuine issues of material fact that needed to be resolved by a jury. The case was remanded for further proceedings.

The Court of Appeals reversed the district court's grant of summary judgment to Lucente, concluding that there were genuine issues of material fact that needed to be resolved by a jury.

Who won?

IBM prevailed in the appeal, as the Court of Appeals found that the district court had erred in granting summary judgment to Lucente and that factual issues remained to be resolved.

IBM prevailed in the appeal, as the Court of Appeals found that the district court had erred in granting summary judgment to Lucente.

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