The dispute between book publisher Judith Regan and News Corporation’s Harper Collins publishing house highlights the thorny issues that can crop up when a top executive is fired. Regan is preparing a to file a lawsuit against News Corporation for wrongful termination and libel, according to her attorney, Bert Fields.
The wrongful termination claim is a breach-of–contract matter that will turn on whether she was fired for "cause.” News Corporation alleges that Regan made anti-Semitic remarks in the wake of the O.J. Simpson “If I Did It” book debacle. Apparently, it is those remarks that News Corporation will rely on to support its claim that Regan was fired for "cause." Regan claims she never made the remarks. But if she did, there may still be an issue whether her alleged statements constituted "cause" for firing her under her contract.
Typically, “cause” includes such behavior as dishonesty, theft, sexual harassment and similar conduct. Depending on the contract language, however, the term “cause” can include a range of other conduct that might be more open to interpretation such as “immoral conduct” or conduct that otherwise “injures” the employer. Naturally, an executive would want the contract to include the narrowest possible definition while the employer would want an expansive definition that gives it more leeway to discharge the executive without having to buy-out the contract or pay severance. Whether Regan’s alleged anti-Semitic remarks, if she made them, are sufficient to constitute "cause" will depend on how her contract was drafted. Millions of dollars are at stake.
Check your contract to see how “cause” is defined. You may want to try to narrow the definition in your next contract, if possible.
For more on the dispute, click here.
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