ExecutiveLoyalty.org

Restrictive Covenants - Kansas

2018.08.23  Forfeiture-for-Compensation Fails. In Lawson v. Spirit Aero, a Kansas court rejected an employer's effort to invalidate $50 million in stock awards held by its former CEO. Fatal to the employer's effort was a non-competition provision that the court found to be too narrow to cover the post-employment conduct that the employer found objectionable. This outcome -- evidenced by the excerpt below - reflects the general approach that employers should expect in litigation of this kind, namely: courts will enforce the letter of contractual commitments by executives, but will resolve ambiguities against the employer. Employers should consequently be careful not only to be precise in their agreements, but also to consider state law vagaries - and strategies for securing what law controls.

• In defining the “Business,” instead of using a generic definition that would apply to the aircraft industry as a whole, Spirit references itself in the first person to refer to its actual business. [Quoted from Lawson v. Spirit Aero, page 13 of opinion]