Cicvara v. Duracell
A company may cancel a worker's stock options, if the former worker is discharged for cause. In November 2000, the defendant, Gillette Co., allegedly hired the plaintiff, Predrag Cicvara, as a quality assurance manager for its Duracell division. In June 2009, Cicvara traveled to China, Thailand and Indonesia, to audit factories that a supplier, Practical Lighting, owned. Cicvara went to dinner with Practical Lighting's chairman, Andrew Yau, and its general manager, Bel Liu. Liu did not feel well and excused herself. Cicvara offered to bring dessert to her hotel room. Allegedly, Cicvara removed his shorts, sat on the bed in his underwear, and attempted to massage Liu's back and feet. Cicvara allegedly said, "[W]hen you do that with your legs one could rape you," when Liu protested. Chairman Andrew Yau informed Gillette that Cicvara was no longer welcome at Practical Lighting. Cicvara allegedly admitted that he touched Liu and made the comment about rape. Gillette discharged Cicvara on the grounds of "gross misconduct." Cicvara attempted to exercise stock options and was informed that they had been forfeited. The stock option plan provided that if an employee was discharged for cause, the employee's stock options would be canceled. Cicvara sued, alleging that Gillette breached its contract, because it failed to pay stock options. The District Court found that the defendant's decision that Cicvara engaged in "gross misconduct" was not arbitrary or capricious. "On the basis of the evidence presented," wrote the District Court, "no rational trier of fact could find that Gillette failed to exercise its discretion reasonably and in good faith." Cicvara appealed. The 2nd Circuit reviewed de novo. Cicvara, wrote the 2nd Circuit, allegedly "stripped down to his underwear, massaged Ms. Liu's body, disregarded her protests, and then proceeded to tell her 'one could rape you' at a time when the Company's relationship with Ms. Liu's organization was already strained." The facts spoke for themselves. The District Court did not abuse its discretion. The 2nd Circuit affirmed the judgment of the District Court, Hall, J.