Case details

Employee: Company breached profit-sharing agreement

SUMMARY

$1976270

Amount

Verdict-Plaintiff

Result type

Not present

Ruling
KEYWORDS
FACTS
In 2007, plaintiff George Sturges Jr., a marketing and sales employee for Kern Oil & Refining Co. in Bakersfield, which was under the umbrella of Casey Co., a private wholesaler of petroleum products, when he was presented with a profit-sharing opportunity involving Kern Fuels Research, LLC, a new division of Casey Co. Sturges was originally hired as a diesel tank loader in 1983, before being promoted to a marketing and sales position in the early-1990s. He claimed that he subsequently developed a diesel fuel additive, which allowed Kern Oil to comply with new fuel emission standards set forth by the California Air Resources Board in the mid-1990s. Sturges also claimed he developed a sales and marketing strategy for the new additive. Thereafter, he was presented with the profit-sharing opportunity, in which the company claimed it advised Sturges that he’d be paid based upon the greater of a minimum annual salary or a percentage of net profits. Sturges accepted the offer and he was later made a vice president of Kern Fuels in 2008. From 2007 to 2008, Casey Co. honored the agreement and provided Sturges with his share of the profit. However, Sturges claimed that in January 2009, he received a letter from Casey Co., which stated his profit-sharing percentage would be cut in half in 2009 and that in the beginning in 2010, he would be paid a salary plus a discretionary bonus. Sturges claimed he initially tried to reconcile the terms of his agreement, but decided to quit the company in June 2009. Sturges sued Casey Co., Kern Fuels, and Kern Oil. He brought causes of action under a variety of legal and equitable theories of recovery, including misappropriation of trade secrets, unfair competition and declaratory relief, establishing that he owned the fuel additive. He also sued for breach of implied contract for continued employment and breach of an oral contract. The defendants’ motion for summary adjudication was granted, dismissing all of plaintiff’s causes of action by which he asserted ownership of the fuel additive and damages related thereto, including his claim for misappropriation of trade secrets. Sturges thereafter dismissed additional claims, and Kern Oil was not pursued as a defendant at trial. Thus, the matter proceeded to trial on the two breach of contract claims against Casey Co. and Kern Fuels only. Sturges claimed that he signed a number of at-will provisions prior to 2007, when he agreed he was an at-will employee, but that in May 2008, he signed an Employee Intellectual Property, Confidential Information & Nondisclosure Agreement, in which there were allegedly hidden at-will provisions. However, he claimed that the provisions did not apply to his profit-sharing. He further claimed that he signed the agreement under duress and that the agreement lacked consideration. Defense counsel argued that Sturges was either an at-will employee as vice president of Kern Fuels, which had good cause to demote him, or, in the alternative, that his reduction in profit-sharing was not a demotion., At trial, Sturges claimed $1,976,270 in past economic damages in regard to the profit-sharing, as well as in excess of $800,000 for future profit-sharing damages. Defense counsel contended that Sturges has since become self-employed, earning a salary higher than what he would have received as vice president of Kern Fuels, including the profit-sharing. Counsel further argued that future profit-sharing estimates were speculative, due to decreasing sales.
COURT
Superior Court of Los Angeles County, Los Angeles, CA

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