Promising employees too much when they’re hired can lead to big legal headaches. In one recent case, it led to an arbitration decision you’ll have to see to believe.
When Paul Thomas Chester was hired to be the Chief Marketing Officer of iFreedom Communications, he was promised a wealth of compensation and perks, including commissions, stock options and paid travel expenses.
The problem: He claims he was never paid what he was promised.
After complaining to the company and getting nowhere, he took legal action. The two parties ended up in arbitration, in accordance with an agreement Chester had signed.
The arbitrator ruled that iFreedom hired Chester by means of “false representation and fraud,” the Associated Press reports.
The final price tag for the employer: $4.1 billion (no, that’s not a typo), including unpaid wages, interest and punitive damages. Apparently, the company did well while Chester was there, and the commissions owed to him were hefty.
Legal experts say it’s likely the largest amount ever awarded to a single plaintiff in an employment case. However, they expect the award to be reduced when the company appeals in court.
This type of case is common, albeit on a much smaller scale — a manager finds a desirable candidate and bends the truth to get the person to accept an offer. But this case should give supervisors 4.1 billion reasons to only make promises the company can keep.
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