Below are the facts of the case incorporated in the Final Brief of the Case:
ARBITRATION
IN THE MATTER OF ARBITRATION
BETWEEN:
RICHARD KORTE,
Claimant, AAA Case No.: 32 166 00870 08
v.
CENTRAL FLORIDA
DRYCLEANING, INC.,
Respondent.
_______________________________/
CLAIMANT’S CLOSING BRIEF
Pursuant to the agreement of the parties and the Arbitrator, the Claimant hereby files its closing brief.
ISSUE
A. Did Employer, Central Florida Drycleaning, Inc., (“CFD”) terminate, Claimant, Richard Korte’s employment without just cause?
B. If so, what is the employees’ monetary entitlement pursuant to the deferred compensation agreements entered into by both parties on January 1, 1991, and November 29, 2004 (addendum)?
C. Notwithstanding A and B above, did CFD violate the compensation agreement by not giving Mr. Korte 5% of the value of the company when ownership of the company was transferred?
PRELIMINARY BACKGROUND
From approximately 1970 to June 15, 2005 CFD was owned by Mr. Robert Cothern. Upon Mr. Cothern’s death, his estate underwent probate proceedings, and in September 2006, Robert H. Cothern Real Estate, Inc. and its subsidiary, Central Florida Drycleaning, Inc. became part of the Robert H. Cothern Trust. Mr. Robert Cothern’s attorney was Phillip Nohrr, of Gray Robinson, PA. Mr. Nohrr also served as the personal representative of the probated estate, director and president of CFD, and one of the co-trustees for the Trust. The other co-trustee was Mr. Cothern’s widow, Harriett Cothern. Up until Mr. Cothern’s death, Harriet Cothern never worked in any capacity with her late husband’s business, CFD. She led a life of leisure and entertainment. Sometime in the 1960s Mrs. Cothern worked as a manager for approximately one year at a drycleaner, then managed by her first husband, not the late Mr. Cothern. In 2007 Mrs. Cothern initiated suit to remove the Trustee, Phillip Nohrr, from his duties as trustee and also brought an additional suit for breach of fiduciary duties against the law firm and Mr. Nohrr individually (Case No. 05-2007-CA-067315). In 2008 the Court appointed a second trustee, John Banks, to break the deadlock between Mrs. Cothern and Mr. Nohrr. Since that time, Mrs. Cothern has become President of CFD.
Shortly after Mrs. Cothern became a beneficiary of the Trust, she felt that CFD was not managed properly and that she was being robbed. Mrs. Cothern also called into question the records kept by the company’s long time accounting firm, Berman, Hopkins, Wright, and Laham, CPA’s & Associates, LLP. She was determined to seek professional evaluations of CFD to validate her concerns. She sought out Mr. James Milucky, a Forensic Accounting Specialist. An internal controls evaluation was performed and a report was drafted on February 12, 2006.
On the recommendation of the International Fabric Care Institute, in the middle of 2006, Mrs. Cothern sought out the services of a dry-cleaning expert, Mr. Kenny Slatten, of Kenny Slatten Training Co. Due to Mrs. Cothern’s request, Mr. Nohrr retained Kenny Slatten Training Co. to study and inspect CFD’s operations. Mr. Slatten performed an independent review of the business which concluded that CFD was a well run company and recognized Mr. Korte as being well informed and competent above dry-cleaning industry standards. EXHIBIT S (Admitted into Evidence). Excerpts from this Exhibit include:
1. “In summary, I found CFD a well run company. I am sure that it helps that Mr. Korte is a longtime employee and knows the ins and outs of the dry-cleaning industry as well as the operation that Mr. Cothern had entrusted him with.”
2. “Taking into account the overall drop in dry-cleaning and laundry sales nationwide and 18%, there is little room for complaint here”
3. “I believe that in these troubled times of our industry and the frustration of running a company that is no longer with its owner, Mr. Cothern, that all in all Richard Korte has done a magnificent job. There are a few managers in this industry today capable of that. It is a rare and precious thing to have someone with his immense background and skills to run this company”
4. “I would not change a single thing in the way of management.”
STATEMENT OF THE UNDISPUTED FACTS
Claimant, Richard Korte, was employed by Respondent, CFD for 36 years (Pg. 36L8). Mr. Korte was immediately hired by Mr. Cothern in 1972 based on his credentials and prior experience. (Pg. 36L18-24). Mr. Korte started working at the Vero Beach plant and within six months turned the Vero Beach plant from being unprofitable to being profitable, and was highly complimented and regarded by Mr. Cothern (Pg. 37L1-7). Mr. Korte also has a degree from the International Fabric Care Institute and completed classes in Hazardous Waste Management (Pg. 44L4-8). Mr. Korte continued to have an exemplary career with CFD and in July of 1998, Mr. Cothern promoted Mr. Korte to General Manager/Vice President as Mr. Cothern was getting ready to retire (Pr. 378L1-8). Once promoted, Mr. Korte was responsible for the total operation of the company (Pg. 62L19-20). Mr. Korte made all the financial decisions, was issued a company credit card to use at his discretion (including being permitted to use it to make personal charges (Pg.64L16-19), and was a signor to the bank accounts (Pg. 64L17-23). Other individuals, such as Mr. Fobes, CFD employee, were also given a credit card and permitted to make personal charges to later reimburse the company (Pg. 66L6-15). At the time of Mr. Korte’s promotion, Mr. Korte was moved to headquarters and began learning how to run the company from Mr. Cothern (Pg. 38L17-21). During this time period, Mr. Korte reviewed bids, formatted solicitation bids, and was awarded extensions to the AAFES military contract (Pg. 38L23-25). From the time Mr. Korte started as an employee in 1972, until his termination, Mr. Korte grew CFD from 1 store/location to 14 locations (Pg. 40L18-25). Moreover, when the EPA and DEP began passing strict regulations concerning ground water contamination, Mr. Korte caused all inspections to pass with flying colors (Pg. 45L19-22). Indeed, despite the dry-cleaning business being a highly- regulated industry, while Mr. Korte worked for CFD, Mr. Korte and/or CFD were never cited for anything, including by the EPA (Pg. 48L19-25 & Pg.49L2-5). Additionally, as a 36-year- employee of CFD, Mr. Korte was never written up or reprimanded (Pg. 54L7-10). In fact, “[Mr. Korte] was never disciplined for anything during [his] entire career.” (Pg. 58L5-6). Quite the contrary, after Mr. Korte took over the operations of CFD in 1998, CFD, under Mr. Korte’s management received the Best of Brevard Award as best drycleaner in Brevard County and awards from the International Fabric Care Institute for best stain removers (Pg. 58L9-25). On May 15, 2008, Mr. Korte was called into a board meeting that was controlled by Mrs. Cothern (after Mr. Cothern’s death) where Mr. Korte is then fired. The reason given for this termination was that “they had lost confidence.” (Pg.54L19 ¶ 57L4). Although it was not until after Mr. Cothern’s death that Mrs. Cothern began running the company, prior to Mr. Cothern’s death, Mr. Cothern would not let Mrs. Cothern play any role in running the company, did not allow her to work there, and would not even permit her to come inside (Pg. 57L15-21). In 2005, when Mrs. Cothern was permitted to be part of the operation of the company, she would [harass] Mr. Korte and stated that she would get him out of here. (Pg. 67L3-23). Mr. Korte was replaced by Mrs. Cothern’s grandson, Mr. Jason Lilly (Pg. 68L16-19), and when Mr. Korte was terminated, Mrs. Cothern became president of the company (Pg. 69L2-6). After Mr. Cothern passed away, Mr. Slatten was brought in by the Board of Directors as an expert to evaluate the management of the dry-cleaning business. (Pg. 75L3-18). Mr. Slatten reviewed many financial records and interviewed many employees (Pg. 75L17-25). The report, which has been marked as Exhibit S, was very favorable as it pertained to Mr. Korte’s competence (pg. 76L8-9). Indeed, the independent report by Mrs. Cothern’s own expert stated: “In Summary, I found the Central Florida Drycleaning a well-run company. I am sure that it helps that Mr. Korte is a long-time employee and knows the ins and outs of the dry-cleaning industry, as well as the operation that Mr. Cothern has entrusted to him. It appears from looking back at the history of CFD and the personal desires of its owner, Mr. Cothern, that the company has indeed had the mission he wanted and that continued since his death a year or so ago.” (Pg. 77-78L21-5). After the stellar report by the independent expert, Mrs. Cothern refused to use Mr. Slatten because she was not happy with the report. (Pg. 79L21-22). Around the spring of 2008, AAFES, a client of CFD, complained that they were owed an additional 20% of certain commissions since the contract’s inception sometime in 1995. The amount of the claimed due money was $7,400.00. Mr. Korte looked into the issue, ascertained that the monies were owed, and immediately repaid AAFES. This complaint by AAFES was something that went many, many years back, even before Mr. Korte took over the operations of CFD. Mr. Cothern is the one that instructed Mr. Korte on this payment format with AAFES (Pg. 99L13-19). According to AAFES, the repayment by Mr. Korte resolved the situation. Mr. Korte put the missing accounts into the POS system and the issue was resolved. However, after Mr. Korte was terminated, CFD lost the contract to AAFES because they were out-bided. Ironically, after Mr. Korte’s termination, Mr. Korte was the individual that submitted and was awarded the AAFES contract for his new employer. (Pg. 100-101L17-10).
Mr. Korte’s unpaid deferred compensation is $44,950.17 (Pg. 108L11) & Exhibit AAA. For each year from 1991 through 2006 the deferred compensation amount was approved by either Mr. Cothern or Mr. Nohrr (Pg. 109L17-20). The deferred compensation payments were instituted in 1991 in lieu of a 401K plan (Pg. 110L3-5). In addition to the $44,954.17, Mr. Korte, pursuant to the contract, is also owed $75,000.00 representing 5% of 1.5 million, which is the value of the company when Mr. Cothern passed away and Mrs. Cothern took over the company under new ownership and management (Pg. 112-113L24-20).
Completely dispositive of CFD’s defense is the unequivocal fact that the President of CFD, Mrs. Cothern, who was the Chairperson of the Board of Directors at the time of Mr. Korte’s termination, in direct examination stated under oath: “I did not terminate Mr. Korte for cause” (Pg. 254L22). Also, Mrs. Cothern admits that monies are in fact owed to Mr. Korte. Though she has her math wrong, she admits to owing Mr. Korte $7,600.00 (Pg. 343L5-7). Moreover, in writing, the company stated, “As a result of Mr. Andrews’ evaluation and recommendation to eliminate the plant management position, Mr. Banks and Mrs. Cothern made the decision to terminate both Mr. Korte and Mr. Cook. This decision was made on May 15, 2008” (Pg. 371L2-13). Hence, as will be addressed below, the decision to terminate Mr. Korte is more due to company restructuring and not for cause. Indeed, the issue of Mr. Korte’s contract and deferred compensation was “probably” not even discussed by the decision makers (Pg. 484-485).
SUMMARY OF ARGUMENT / DAMAGES
1. Mr. Korte was terminated without cause and is owed $44,950.17 based on his deferred compensation plan which he has earned since 1991, plus interests.
2. Additionally, Mr. Korte, pursuant to paragraph 5 of the subject agreement, Exhibit A (and paragraph 2 of the addendum, Exhibit B), Mr. Korte is owed $75,000.00 based on the 5% valuation of the company.
ARGUMENT
In order to prevent Mr. Korte from collecting his retirement monies he earned after working 36 years for CFD and had accrued deferred compensation since 1991, CFD is claiming, in bad faith, that Mr. Korte was terminated for cause. Despite the fact that Mr. Korte was a superb employee for 36 years and had never been disciplined or reprimanded in any way shape or form, CFD claims to have terminated Mr. Korte for cause because of three alleged reasons:
1. Because AAFES, a client of CFD, was mischarged;
2. Because Mr. Korte used the company credit cards; and
3. The “kitchen-sink” reasons.
These proffered reasons are false and, in any event, are not sufficient to establish for cause termination under the law. Much of the testimony propounded by the defense focused on reasons why Mr. Korte was terminated but does not focus on “for cause” termination. It is imperative to acknowledge that Plaintiff is not claiming a wrongful termination. Certainly, as delineated by the terms of the contract, with proper notice, CFD could terminate the employment relationship. What this case is about is whether there was a legally “just cause” for the termination that was of such nature and extremity to deprive Mr. Korte of his earned retirement benefits accrued in the form of deferred compensation. As is articulated by the facts outlined above and further explained below, such a cause definitely does not exist.
1. The AAFES issue:
AAFES is a government agency that provides services and goods to military personnel. AAFES and CFD contracted with each other in the early 1980s. Mr. Cothern negotiated the contract and operated the contract through 1998 when Mr. Korte took over. The contract called for CFD to provide dry-cleaning services to AAFES, and in return, AAFES would receive 20% of the revenue. Since the early 1990s, CFD paid to AAFES 20% of the dry-cleaning revenues but failed to pay 20% of alterations and tailoring. In 2005 an AAFES employee complained to CFD of this fact and AAFES, through Mr. Korte, was reimbursed for this underpayment and no further issues resulted. However, in 2008, CFD lost the contact with AAFES. Although CFD presented no evidence, CFD claims that CFD lost the contract because of the prior underpayment. Ironically, Mr. Korte was awarded the 2008 contract, except, he was awarded it while working for another company. It is almost comical that CFD blames Mr. Korte for losing the AAFES contract when in fact, he successfully earned the contract for his new employer after he was maliciously terminated from CFD.
2. The credit card issue:
As a last ditch effort to make some kind of defense to Mr. Korte’s claims, CFD claims he used the company credit card improperly. Despite the fact that Mr. Korte had used the credit card in a similar fashion for decades and was never warned or informed that he was using the card improperly, Mr. Korte was terminated allegedly for its misuse. Apparently, CFD wanted Mr. Korte to be clairvoyant to the obtuse wishes of the new owner, Mrs. Cothern. But not only is CFD trying to impute knowledge of CFD’s alleged policy changes, CFD is also asking this proceeding to believe CFD had the supernatural ability to see into the future. The fact is that this alleged credit card issue did not play any role whatsoever in the termination of Mr. Korte. This fact was specifically testified to by Mrs. Cothern’s direct testimony, (Pg. 327L22-25).
Q: “[As of May 15th, 2008] were there any issues or allegations brought up with the alleged misuse of the company credit card?”
A: No Because I didn’t know about it until I got into the office. Until I got control of the papers in the office.
(Pgs. 327-328L22-6)
3. The “kitchen sink” reasons:
It is not clear whether there are other alleged reasons for the termination, but Mrs. Cothern gave a 50+ page answer and there was extensive cross examination questions which were used as an attempt to say that Mr. Korte was terminated for cause for various other reasons. This list includes the following:
a. An employee at one of the stores brought a baby into the store with her. [Even though Mr. Korte was not at the store, was not the manager of the store & reprimanded the lady for violating company policy, this incident somehow contributed to the alleged termination for cause reason].
b. Although no employees have been seen smoking, it was alleged that the smell of cigarette smoke was present. [Mr. Korte did not permit employees to smoke, and when he found out someone was smoking, they would be disciplined or reprimanded pursuant to company policy].
c. Pictures of some of the stores at different times not being neat enough. [Once Mr. Korte discovered the condition, he took care of it].
d. Some kind of tax return/improper financial reporting. Although Mrs. Cothern attempted to articulate the financials being improperly done, they were done and properly submitted to the IRS through a certified public accounting firm, Berman Hopkins , and no evidence of any wrongdoing on the part of Mr. Korte was presented.
e. Unprofitable company. Through no fault of Mr. Korte, the economy took a nose dive in 2007. In an economic downturn, the dry-cleaning business is substantially affected due to the perception that dry-cleaning is not a necessity. Sure, the profit of CFD decreased during these economic times, but certainly not due to any wrongdoing on the part of Mr. Korte. No evidence exists to support Respondent’s contentions.
Not only did CFD not have cause to terminate Mr. Korte, CFD violated many provisions of the deferred compensation agreement and addendum.
Exhibit A – contract-section 6 violated by CFD.
“Termination of Employment. Either party may terminate the employment of Employee without cause upon thirty (30) days prior written notice and Company may terminate the employment of Employee for good cause upon five (5) days prior written notice.”
Mr. Korte was terminated immediately, he did not receive 30 days notice nor five days notice. To this day, he hasn’t received any written notice.
Exhibit A – contract-section 3 and 2004 Addendum violated by CFD
“Effective as of July 1, 1991, the company agrees to provide deferred compensation benefits on behalf of the employee as provided herein. For each calendar year in which this agreement is in effect, employee shall accrue a deferred compensation benefit equal to 1% of the company’s net operating profits.”
Exhibit B Addendum added in 2004: “Effective as of January 1, 2004, the company agrees to provide deferred compensation benefits on behalf of the Employee as provided herein. For each calendar year for which this agreement is in effect, Employee shall accrue a deferred compensation equal to 2% of the company’s net operating profit.”
CFD did not terminate Mr. Korte for cause, nor for good cause. Section 4 of the deferred compensation agreement states:
“Upon termination of this agreement due to the involuntary termination of the employee’s employment without cause, the employee shall be entitled to [the deferred compensation admitted to in Exhibit AAA], however, if the employee’s employment is terminated voluntarily or involuntarily for good cause, all deferred compensation shall be forfeited by the employee.”
Hence, the contract states that deferred compensation is forfeited only if employee is terminated “for cause” and “for good cause.” The facts are clear that CFD has failed to prove that Mr. Korte was terminated for good cause and/or for cause. As such, because Mr. Korte was not paid his accrued and earned deferred compensation, CFD continues to be in breach.
Exhibit B – contract- paragraph 2 violated by CFD
“Sale of company. In addition to the deferred compensation benefits described above, if the Company is sold during the term of this agreement, the employee shall be entitled to receive an amount equal to five percent of the net sale proceeds.”
CFD did not put in any evidence refuting the notion that the company was considered sold under the terms of the contract. The only evidence that is present in this case is Mr. Korte’s testimony as to the purpose of having the 5% bonus and what the parties intended. Mr. Korte clearly testified that the term “sale” was intended to mean a change of ownership so as to protect Mr. Korte from a new owner who could otherwise deprive Mr. Korte from this earned goodwill monies. Mr. Korte also testified that the value of the company was $1.5 million and that the owed amount pursuant to this clause of the contract was $75,000.00.
Mr. Korte filed for, and obtained unemployment compensation. It was determined that being forced to resign was the equivalent of being terminated. Furthermore, the employer did not have cause to terminate Mr. Korte.
Randolph Cook, a plant manager at CFD was terminated from his position on or about May 23, 2008. In his EEOC file, Mrs. Cothern’s former attorney filed a rebuttal letter with regards to Mr. Cook’s EEOC case. This letter dated September 30, 2008 makes mention of Mr. Korte’s termination from CFD. It states the following:
“Andrews Consulting was retained to perform an evaluation. On April 24, 2008, Andrews evaluated the operation of the two plants of CFD. In Mr. Andrew’s evaluation, one recommendation was to eliminate the plant management position. Mr. Andrews indicated that the production manager should be a working manager. As a result of Mr. Andrews’ evaluation and recommendation to eliminate the plant management position, Mr. Banks (corporate fiduciary) and Mrs. Cothern made the decision to terminate both Mr. Korte and Mr. Cook. This decision was made on May 15, 2008. Because of the chaotic, unproductive and financial mess created after her husband’s death, Mrs. Cothern determined that she would have her grandson take over the production management position and ultimately the business itself. This would also allow her to eventually work less and/or retire.”
This letter is inconsistent with the justification for Mr. Korte’s termination from his position with CFD.
APPLICABLE LAW AND BURDEN OF PROOF
This case does not fall under the employment-at-will doctrine due to the fact that Mr. Korte had to be terminated for just cause as detailed in the employment contract/deferred compensation agreement in order to lose his deferred compensation. In the workplace, just cause is a burden of proof or standard that an employer must meet to justify discharge of an employee. The most thorough analysis of the law for cause is through the application of the well-known “seven steps to just cause” approach first articulated by Arbitrator Carroll Daugherty. Enterprise Wire Co., 46 LA 359 (1966). The Daugherty Test, as applied countless times, is as follows:
- Was the employee forewarned of the consequences of his or her actions?
No. Respondent readily admits this. (Pg. 482L23-24). - Are the employer’s rules reasonably related to business efficiency and performance the employer might reasonably expect from the employee?
No. The employee was not informed that he was violating any policy or procedure of the company. The AAFES underpayment came as a result of Mr. Cothern and thereafter Mr. Korte trying to maximize the profits of CFD for the best interests of CFD. AAFES complained about being underpaid, and CFD benefited from the underpayment. CFD only needed to reimburse AAFES for two years of underpayments. Indeed, the best interests of CFD where always at hand. Once AAFES got paid the underpayment, there were no subsequent issues. In fact, AAFES, after Mr. Korte’s termination, decided to award the contract to Mr. Korte and Mr. Korte’s new employer. Clearly, the loss of CFD of the AAFES contract a year later was a result of CFD not having Mr. Korte as an employee. - Was an effort made before discharge to determine whether the employee was guilty as charged? No. Mr. Korte was never given an opportunity to explain anything. Mrs. Cothern wanted Mr. Korte out, and that’s what she got.
- Was the investigation conducted fairly and objectively? No. There was no investigation.
- Did the employer obtain substantial evidence of the employee’s guilt? No. Although it is admitted that AAFES was underpaid in certain accounts, such underpayment was a result of over 15 years of policies established by Mr. Cothern. The underpayments were a benefit to CFD and other than repaying some of the underpayments, there were no repercussions.
- Were the rules applied fairly and without discrimination? No. Mr. Korte was targeted by Mrs. Cothern. She was upset that Mr. Korte did not heed to her demands before she became a director or officer of the company. Moreover, Mrs. Cothern wanted her grandson to take over the company and had made overt statements to CFD employees that she was going to have Mr. Korte out since 2005.
- Was the degree of discipline reasonably related to the seriousness of the employee’s offense and the employee’s past record? Absolutely not. Everything Mr. Korte did was for the welfare of the company. The same company he had helped found and build for 36 years. Mr. Korte had a perfect employment record and had never been disciplined or counseled. The Respondent’s contention that the AAFES issue was so terrible is simply another “kitchen sink” reason. Yes, there was an issue that was raised by AAFES when the agency realized it was not paid their 20% on certain types of accounts, but this underpayment had actually benefited CFD, and had since 1995. When AAFES addressed this issue, Mr. Korte immediately took steps to rectify the problem and appease AAFES. In fact, Mr. Korte was able to win the AAFES accounts once he was terminated. Obviously, AAFES was still highly esteemed with Mr. Korte’s performance and awarded a contract that had belonged to CFD to CFD’s competitor and Mr. Korte.
This seven part tests all of which required an affirmative defense in order to establish “just cause” has become the standard under which most arbitrators operate. See: Summit County Children Servs. Bd. v. Communication Workers of America, 2006 Ohio 389 (Ohio Ct. App. 2006) (not reported), appeal accepted for review, 849 N.E.2d 1027, 109 Ohio St. 3d 1505, 2006 Ohio 2998 (2006) (table); American Fed’n of State, County & Mun. Employees, Dist. Council 88, AFL-CIO v. City of Reading, 130 Pa. Commw.575, 568 A.2d 1352 (1990); Greater Altoona Career & Tech. Ctr. Educ. Ass’n v. Greater Altoona Career & Tech. Ctr., 46 Pa. D. & C. 4th 115 (2000); see also Conoco, Inc. v Oil, Chem. & Atomic Workers Int’l Union, 26 F. Supp.2d 1310 (N.D. Okla. 1998). Indeed, in Conoco, Inc., the Court stated: “Because “just cause” is not defined, the arbitrator turned to outside [**7] sources for guidance. The arbitrator thus stated, “Just cause is a term which has received considerable attention from both arbitrators and the judiciary. However, perhaps the single most important decision handed down on the question of just [*1314] cause was the 1972 Whirlpool Corp. decision by Arbitrator Carroll Daughtery.” See Whirlpool Corp. v. International Union of Elec., Radio, & Mach. Workers Local 808, 58 Lab. Arb. (BNA) 421 (1972) (Daugherty, Arb.). In explaining the reasons behind his decision to utilize the Whirlpool test, the arbitrator said that the “’Seven Test Method’ has been subscribed to by many arbitrators since 1972 and the present arbitrator has long felt that the Whirlpool ’Seven Test Method’ of determining just cause in discharge cases is objective and appropriate in almost every just cause discharge matter.” The arbitrator proceeded to describe the “Seven Test Method” of determining whether just cause existed for the discipline Botts received, as developed by the Whirlpool case.” (id. 1313).
SUMMARY
Mr. Korte was never afforded an opportunity to discuss any of the matters cited above for his discharge. He was simply invited to a Board of Directors meeting and terminated. He was not forewarned of any consequences of his actions, and he maintains that none of his actions were just cause for termination. No effort was made before discharge to determine whether Mr. Korte was guilty or had an explanation for what had transpired. Furthermore, there was no investigation made, so we cannot assess if it was conducted fairly and/or objectively. Mrs. Cothern simply wanted Mr. Korte out of the picture so she could run the business herself and mold her grandson to take over. Indeed, it is her company and she had a right to this decision, but Mr. Korte also has a right to obtain the compensation he accrued and is owed per the employment agreement. CFD has shown no evidence to justify termination for cause for Mr. Richard Korte. In her own testimony, Harriet Cothern, President of CFD, recognizes that Mr. Korte is owed $7,600.00.
As for the $75,000 which is owed for the sale of the company, we have to discern the intent of offering this 5% to Mr. Korte. The only evidence presented was that the 5% was offered as a protection to Mr. Korte in case ownership of CFD changed hands, which it did. As a result, Mr. Korte is owed an additional $75,000.00 represented by 5% of the value of the company when it changed hands.
As it pertains to the earned deferred compensation, CFD has in no remote way met its burden of proving just cause to terminate Mr. Korte. Indeed, CFD has not presented any evidence of “for cause” termination. CFD has attempted to articulate things that they were unhappy with, but certainly not nearly enough to establish “for cause” termination under the law.
In conclusion, Mrs. Cothern appears to have many issues with many individuals and many firms including Mr. Nohrr from Gray Robinson, P.A.; Mr. Slatten, who was a neutral expert; Ms. Mateney, who allegedly hated Mrs. Cothern and compiled the financials fraudulently; and Berman Hopkins, a certified public accounting firm which has allegedly filed and paid on “overpaid” taxes. Mr. Korte, with a 36 year stellar work record, is now caught in the middle of Mrs. Cothern’s vindictiveness and caused to suffer by withholding his retirement monies in the form of earned deferred compensation accrued since 1991.
WHEREFORE, for the reasons stated above we respectfully request that the Arbitrator enforce the deferred compensation agreement and award Mr. Korte $44,950.17, award Mr. Korte an additional $75,000.00 representing 5% of the value of the company at the time of change in ownership, entitlement to attorney’s fees, and costs, and reserve jurisdiction to address the amount of attorney’s fees, costs and interests.
Respectfully Submitted,
Maurice Arcadier
More Information: Unpaid wages, arbitration, employee, employer, florida
Attorney: Maurice Arcadier
Status: Judgment Awarded
Date Filed: December 3, 2008
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