A judge recently ruled that an agreement between the former CEO and president of Mechanics Bank must be honored based on its original intent. The ruling settles a lawsuit that the former employer filed against the bank over an employment pension dispute. The bank, which operates multiple branches throughout California, had requested that the suit be dismissed last year for lack of merit.
In his ruling, the judge determined that the bank and the former CEO had arrived at an agreement that purportedly offered the man a payout in exchange for his termination from his position in 2012. The agreement paid the CEO approximately $3.8 million. The plaintiff stated in his lawsuit that he was told that the deal would not affect his access to the retirement benefits the bank would owe him when he reached retirement age.
However, according to the lawsuit filed under the Employee Retirement Income Security Act, the bank later claimed that the payment was in lieu of any future retirement monies owed to the man. However, the judge ruled that the bank was denied the request to dismiss based on its fraudulent attempt to deny the former CEO his rightful retirement benefits of approximately $8,500 a month. It was further determined that the bank's position changed around the same time it was entertaining an offer from another company to buy a majority interest into the company.
The bank was ordered to pay the man approximately $1.3 million more in additional retirement funds in order to fulfill the previous agreement. The judge also determined that a claim by the bank that it offered a payment of $1 million in exchange for any future retirement benefits was not supported by any evidence. Any California employee who believes that his or her employer has acted in bad faith regarding any employment matters may seek the guidance of an employment law attorney in order to more effectively safeguard his or her rights under the current laws.
Source: bna.com, "Mechanics Bank Loses Former CEO's $1.3M ERISA Lawsuit", Carmen Castro-Pagan, July 18, 2017