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U.S. Master™ Wage-Hour Guide, 2009 Edition 
Presents a first approach to the broad and complex controls under the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and other statutes regulating employee wages and hours.
A California court has issued a $4.1 billion judgment against a company in an employment dispute with its former chief marketing officer. The Los Angeles County Superior Court on May 28 granted what is thought to be a record compensatory and punitive damages award in confirming a final JAMS arbitration ruling that the company obtained the executive's services by means of false representations and fraud.
An arbitrator found that Paul Thomas Chester, upon being hired in June 2004 as chief marketing officer at iFreedom Communications International Holding Ltd, was promised certain commissions and overrides on gross revenues. The company also promised Chester the right to receive company stock, among additional benefits, in a compensation package that was intended to reflect Chester's experience in building marketing organizations, according to attorneys for the plaintiff.
When his compensation was not forthcoming, Chester raised the issue with the company. "By then, the employers had obtained the benefits of Mr. Chester's knowledge and expertise, and they quickly terminated him without cause," said Scot D. Bernstein, an attorney for Chester. "Due to the lack of cooperation from his former employers, he was forced to file suit." The defendants, in turn, moved to compel arbitration pursuant to an arbitration clause in the employment agreement.
The arbitrator found in Chester's favor. In addition to all unpaid salary, commissions, travel expense reimbursements, and compensation for unissued company stock and unreturned intellectual property, the arbitrator awarded statutory penalties, interest, attorneys' fees, and punitive damages equal to three times the compensatory damages award.
"It was the combination of the defendants' representations to their investors regarding sales revenue and their admissions regarding revenue growth rates that gave rise to the override commission figure that drove this large award," said Bernstein. "Employers should be aware that, if they make promises, they have to keep them."
The judgment was affirmed against all named defendants: iFreedom, its U.S. affiliate, and founder Timothy Ringgenberg. "Significantly, the arbitrator held all defendants jointly and severally liable," said Steve A. Buchwalter, another of Chester's attorneys. "Mr. Ringgenberg won't be able to hide behind corporate entities that were his alter egos."
For more information on this and other topics, consult CCH Employment Practices Guide or CCH Labor Relations.
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