Take caution when dismissing a C-suite exec

he did not. The judge found the evidence of the owners to be less than credible, finding that good corporate policy would suggest that they should have been regularly reviewing financial documentation.

The judge recognized that prospective employers of senior-level employees such as Hale do a lot of background research if an applicant has been terminated from a previous role. No one at Innova provided Hale with a reference letter. He applied for up to 100 jobs, had a dozen interviews and met with 15 recruiters. He had no income for 30 months.

Presumably, the judge recognized that senior executives undergo extensive vetting during an interview process and the lack of a reference letter coupled with a dismissal for alleged cause would dash an executive’s chances of re-employment at the same level.

(I should note that there is an obligation on employees in an interview to be honest as to the circumstances of their departure. If they are not, that can be cause for discharge whenever discovered.)

The judge found that there was no cause for Hale’s termination and awarded him 18 months’ notice plus benefits. Innova’s counterclaim was entirely dismissed.

This case, while subject to appeal, is a boon for executives.

Here are some tips executives should consider if faced with a termination:

Record your mitigation efforts: Even though your job may be one in a million and inherently difficult to replace, a strong record of your search efforts can go a long way toward increasing your damages at trial;

Claim every possible loss: Work with competent counsel to determine your damages on bonuses, commissions, deferred compensation, insurance plans and perquisites. If you don’t claim it, a judge can’t award it to you;

Get legal advice on your employment agreement: Whether it’s before you start employment or during, if you’re a key executive in your organization, step back and negotiate a contract before limiting your rights on termination. If you are an asset to your organization, you have more power than you think.

There is a valuable lesson in this case for employers, too. Employers should never allege cause unless they are prepared to suffer the consequences. Undoubtedly Hale’s 18-month windfall was awarded not only because of his length of unemployment but by the allegations Innova levied in response to his claim.

Going to trial can sometimes be a roll of the dice, but for senior executives the payout is usually well worth the gamble.