Video game developer NCsoft decided to fire Richard Garriott in 2008, but after some negotiations, it agreed to let him resign instead. The company issued a press release saying that he was leaving “to pursue other interests.”
Sounds like a nice gesture…right?
The problem was that Garriott’s employment agreement said that if he voluntarily resigned, he had to exercise his stock options within 90 days…whereas if he were involuntarily let go, he’d have a much longer time in which to do so.
The company insisted that Garriott exercise his options within 90 days. As a result, he claimed, he was forced to sell at the bottom of the market.
Garriott sued, arguing that regardless of his resignation letter and regardless of what was in the press release, his departure was anything but voluntary.
A federal appeals court in New Orleans ruled that he was entitled to $28 million because NCsoft mishandled the termination and shouldn’t have forced him to sell the options so quickly.