New York Appellate Division, First Department, Affirms Dismissal of Breach of Employment Contract Claim Against Hedge Fund Manager Stanfield Capital Partners

On December 22, 2009, the New York State Supreme Court, Appellate Division, First Department, affirmed the decision of a New York County trial court dismissing Richard Johnson’s complaint against his former employer, New York-based hedge fund manager Stanfield Capital Partners, LLC.  Johnson had sued Stanfield for allegedly breaching their employment agreement by failing to pay him millions in additional bonus compensation.  In support of his claims, Johnson represented that he had entered into an “oral” agreement with a member of the firm for an annual formulaic bonus arrangement.  Noting the existence of an “integrated” written employment agreement that called for only discretionary bonuses, the Appellate Division held that the parol evidence rule precluded Johnson from introducing evidence contradicting those terms.  We detail the background of the action, the court’s legal analysis and various additional arguments made by Stanfield (including a Statute of Frauds argument) on which the court did not have occasion to rule (because it found Stanfield’s parol evidence argument sufficient for dismissal).

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