FOR CAUSE FORFEITURE TERM OF DEFERRED COMPENSATION AGREEMENT NOT ELIMINATED BY A SUBSEQUENT FORM EXTENDING THE DUE DATE OF THE DEFERRED COMPENSATION (FIRST DEPT).
The First Department determined defendant-employees’ motions for summary judgment were properly denied. Defendants were subject to deferred compensation agreements (DCA’s) which called for the “for cause” forfeiture of the deferred compensation. Here it was alleged the defendants violated a non-solicitation, non-competition clause and therefore forfeited the deferred compensation. The defendants argued a subsequent document, an “election form” which extended the date on which the deferred compensation was due and payable, and which did not include a “for cause” forfeiture provision, should control. The courts disagreed:
… [T]he Election Forms, by their express language, provide that any deferral of payment of deferred compensation is to be made “in accordance with the terms of the Deferred Compensation Agreement . . . .” The DCAs, as noted, clearly provide in paragraph 4 that deferred compensation is forfeited if the employee is terminated for cause, including violation of non-solicitation or noncompetition covenants. There is no mention in the Election Forms of any intent to override this provision.
Additionally, paragraph 5 of the DCAs specifically provides that their terms “may not be altered, modified, or amended except by written instrument signed by the parties hereto.” At a minimum, it is commercially reasonable to view the Election Forms, on their face, to be informal human resources administrative forms. In any case, they are not “written instrument[s] signed by the parties [to the DCAs],” as they lack any signature of plaintiffs, as required by paragraph 5 in order to amend the DCAs. Perella Weinberg Partners LLC v Kramer,2017 NY Slip Op 06341, First Dept 8-29-17
CONTRACT LAW (FOR CAUSE FORFEITURE TERM OF DEFERRED COMPENSATION AGREEMENT NOT ELIMINATED BY A SUBSEQUENT FORM EXTENDING THE DUE DATE OF THE DEFERRED COMPENSATION (FIRST DEPT))/EMPLOYMENT LAW (CONTRACT LAW, FOR CAUSE FORFEITURE TERM OF DEFERRED COMPENSATION AGREEMENT NOT ELIMINATED BY A SUBSEQUENT FORM EXTENDING THE DUE DATE OF THE DEFERRED COMPENSATION (FIRST DEPT))/DEFERRED COMPENSATION AGREEMENT (FOR CAUSE FORFEITURE TERM OF DEFERRED COMPENSATION AGREEMENT NOT ELIMINATED BY A SUBSEQUENT FORM EXTENDING THE DUE DATE OF THE DEFERRED COMPENSATION (FIRST DEPT))