Bird v. Technicolor, Inc.

California Court of Appeal May 9, 1967 No. Civ. No. 29359Published

Before: Shinn

AI Brief

AI-generated · verify before citing

Holding. The court held that the plaintiff entered into a new employment contract as a consultant, which superseded his prior employment agreement and effectively waived his rights to the stock option contained in the original contract.

Issues

Did the defendant breach the stock option contract by changing the plaintiff's employment status?
Did the trial court err in finding that the plaintiff accepted the defendant's offer of consultancy without a stock option?

Disposition. affirmed

Quotations verified verbatim against the opinion

“The undisputed evidence was that plaintiff was not discharged; when he was threatened with discharge he accepted a new contract of employment in a different capacity and upon different terms. The former contract ceased to exist.”

“The court found one of the conditions of the June 15, 1961, offer of employment was that plaintiff would have no right to exercise a stock option, that plaintiff accepted the offer upon that condition”

“We are obliged to agree with the trial court that Technicolor succeeded in getting rid of its obligations under the option, at a saving to the company of some $40,000 and at the expense of plaintiff’s expected profit.”

SHINN, J.* The action is for damages claimed to have been sustained as a result of the alleged failure to honor an employee’s option to buy 4,000 shares of common stock of defendant Technicolor, Inc., plaintiff’s employer. Several corporations are named as defendants; they will be referred to as Technicolor or defendant. At the close of plaintiff’s evidence the court granted a motion of defendant for judgment under section 631.8, Code of Civil Procedure; findings and conclusions of law were made and filed, judgment was entered and plaintiff appealed.

[838]The following facts were established: On December 19, 1960, plaintiff was and for several years had been serving as defendant’s Director of Public Relations at a salary of $400 per week. On that date, in order to induce plaintiff to remain in the employ of the company for at least 18 months after September 21, 1960, (to March 21, 1962) a new contract which contained the stock option was entered into.

The pertinent provisions of the contract were that plaintiff was given an option until September 20, 1965, to purchase 4,000 shares of Technicolor at $8.79 per share upon conditions stated as follows:

“1. Your employment with one of the Technicolor Companies must continue for a period of at least 18 months from September 21, 1960, unless sooner terminated by death, by disability or with the consent of the Board of Directors of Technicolor, Inc.” Another provision read: “In accordance with the provisions of paragraph I above the acceptance of this option by you will constitute an agreement on your part to remain in the employ of Technicolor until March 21, 1962.”

Plaintiff accepted the offer in writing, returned a copy to the company, and thereby bound himself to remain in the employ of Technicolor until March 21, 1962. Plaintiff rendered his services as agreed until June 15, 1961, when the company decided to dispense with his services as Director of Public Relations and to offer him employment as a consultant. The terms of the offer were stated in an inter-office communication, reading as follows:

June 16,1961

‘‘ Louis Sallet

‘‘ Sydney P. Doráis

“R.L. Kennedy

“Billingsley J. Bird—Change Op Employment Status

Bird v. Technicolor, Inc.

AI Brief

More from California Court of Appeal

Related research

PJF

EEE

AI Brief