Not a misprint: the arbitration award in Chester v. iFreedom Communications Inc., (PDF), in favor of a former chief marketing officer fired without cause, was really $4.1 billion with a b. [Dennis Westlind, World of Work via Ohio Employer's Law; JAMS, Los Angeles]
P.S.: A commenter at an Alabama site: “So much for mandatory binding arbitration always favoring the big company.”
P.P.S.: More on how it happened, including serious lapses by the defendant in responding to the action, from AmLaw Litigation Daily, National Law Journal, and Daniel Schwartz.
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Interesting. The defendants were unhelpful in discovery, so the base amount for the award came from a single month’s sale figure of $535K with the understanding that sales had grown between 10% and 20% per month in 2005. The arbitrator then compounded it forward assuming 10% growth per month for 7 more years (until 2012). This is an amazing growth rate that has the arbitrator assuming approximately $1.9 billion in revenue a month in 2012 or $23 billion a year. For comparison, this is more than Oracle had in revenue last year. Of course, the actual damages were also trebled for punitive damages (for a breach of K?), but I guess that is Cali law.
Comparing this arbiter’s calculations to practical economics, I have a feeling this is going to be a hard judgment to collect outside of fantasy land.
Talk about bet the company litigation.
Under the FAA, one way you can challenge a normally unassailable arbitration award is over miscalculations apparent on the face of the award. Anybody think this might qualify?
Why would it fail to qualify? I’m just waiting for my award of ten quadrillion dollars. And then I’m going to flap my arms and fly to the moon.
Bob
I’m waiting for the trial lawyers to explain to us why arbitration is unfair to employees, and that this particular plaintiff was really entitled to twice as much.
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