Not Every Vice Presidents Are Officials and Titled to Corporate Indemnification

Not Every Vice Presidents Are Officials and Titled to Corporate Indemnification

Not Every Vice Presidents Are Officials and Titled to Corporate Indemnification

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Aleynikov v. Goldman Sachs Grp., Corporation.

Addressing this is from the term “officer” inside a company’s bylaws, the U.S. Court of Appeals for that Third Circuit vacated an area court’s summary judgment that the computer programmer (who had been additionally a v . p .) was an “officer” titled to indemnification since the term was ambiguous and remanded the situation for trial. Aleynikov v. Goldman Sachs Grp., Corporation., Situation No. 13-4237 (3d Cir., Sept. 3 2014) (Fisher, J.) (Fuentes, J., dissenting partly).

The pc programmer labored for any non-corporate subsidiary, the officials which are titled to indemnification underneath the parent corporation’s bylaws, which define “officer” to incorporate actual officials and “any person serving inside a similar capacity or because the manager of these entity.” The non-corporate subsidiary used the word “vice president” to speak that the individual was more senior than an “analyst” or “associate” but less senior than the usual “managing director.” Roughly one-third from the non-corporate subsidiary’s employees were “vice presidents,” such as the computer programmer.

On his last day’s employment using the non-corporate subsidiary, the programmer stole his employer’s source code. He’s since faced both federal- and condition-level prosecutions for his conduct. Also, he sued his former employer’s parent for indemnity underneath the parent’s bylaws. On summary judgment, the district court found the bylaws unambiguous which the programmer was titled to indemnification while he would be a v . p .. Goldman Sachs appealed.

The 3d Circuit vacated, locating the term “officer” within the bylaws ambiguous. A legal court wasn’t convinced through the district court’s facile analysis, which hinged around the concept of a phrase “vice president,” that was not area of the bylaws. It had been interested in this is of “officer.” After talking to several dictionaries (and lamenting the lack of any proof of an “industry-specific common meaning” from the term), a legal court chosen an ordinary concept of “officer” as “someone holding a situation of trust, authority, or command,” which produced a tautology when put on the bylaws, which may consider a police officer to become might anybody serving inside a similar capacity or like a manager of the entity. Essentially, the word was “circuitous, repetitive, and more importantly, fairly or reasonably susceptible in excess of one meaning.” That left a legal court in an enormous amount of extrinsic evidence, which “raise[d] genuine problems with material fact,” which would need to be resolved with a jury. (Dissenting partly, Judge Fuentes might have resolved the ambiguity from the parent corporation.)

Because the 3d Circuit noted, the bylaws “are a unilaterally-drafted agreement,” departing parents corporation in complete control of its contents. More careful drafting through the parent corporation might have prevented the ambiguity result (and approaching trial).

 

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