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Reviving a former employee’s claims against a Chester County, Pa., investment company, the Superior Court explained that the employee’s at-will status was irrelevant to whether a contract existed requiring his former employer to provide compensation during the term of his employment. In Sullivan v. Chartwell Investment Partners, Chester County Common Pleas Judge William P. Mahon had granted Chartwell’s preliminary objections to former firm vice president for marketing and client services Mark Sullivan’s lawsuit. Sullivan’s attorney, Karl Prior of Mannion Prior in King of Prussia, said his client believes Chartwell owes him an amount “in the high six figures” for services rendered over the course of his roughly four years with the firm. Among other points, Sullivan had argued that Mahon erred in relying on the at-will employment doctrine to bar Sullivan’s claims related to the compensation and severance agreements he said he reached with Chartwell. “We disagree with the trial court’s reliance upon the at-will employment doctrine in this case,” Judge Mary Jane Bowes wrote. “The trial court concluded that since [Sullivan] was an at-will employee, he could not establish a contractual right to compensation. This conclusion is inaccurate. [Sullivan's] status as an at-will employee is irrelevant to whether a contract existed to provide compensation during the term of his employment.” Bowes was joined by Judge Seamus P. McCaffery and Senior Judge Stephen J. McEwen Jr. According to the opinion, Sullivan filed suit against Chartwell in November 2002, alleging violations of Pennsylvania’s Wage Payment and Collection Law, and asserting claims including breach of contract and fraud. Sullivan was first offered the position in 1998 and was promised a yearly salary of $150,000, plus bonuses based on revenue he generated, according to the opinion. For his work over the course of 2000, for example, he received a year-end bonus of $75,000. In 2001, he was given a 0.4 percent ownership interest in the firm via a “phantom purchase” in which no money was exchanged. In December 2001, a senior executive informed Sullivan that he would not become partner, would not be promoted and should find another job. “[Sullivan] did not resign immediately because [Chartwell] agreed to provide him with an industry-standard severance and compensate him for his 0.4 percent share of the partnership in return for [his] continued marketing and business contacts,” Bowes wrote. In August 2002, Sullivan found a new job, but Chartwell’s managing partner asked him to stay through late September so that Sullivan could introduce his replacement to some key clients, according to the opinion. Chartwell also asked Sullivan to organize and chair a charity golf tournament that would be attended by the firm’s clients and industry contacts. “To entice [Sullivan] to stay for the extra period, [Chartwell] promised to purchase [Sullivan's] ownership interest, valued at approximately $92,000, and provide [him] with a severance package comparable to industry standard, which was one-year base salary plus 401(k) contributions and a commission trailer on [Sullivan's] accounts,” Bowes wrote. After Sullivan left Chartwell, the company allegedly refused to compensate him for his ownership interest or pay him the severance it said it would, according to the opinion. Mahon had held that Sullivan’s claims were insufficient because Sullivan had been an at-will employee. Bowes noted that the at-will employment doctrine prevents a former employee only from initiating an action over the termination of the employment relationship. “Although [Sullivan] could have been terminated at any point, and in fact was terminated, if the evidence so establishes, he would be entitled to receive the agreed-upon compensation earned prior to his termination,” Bowes wrote. “Hence, it was error for the court to sustain [Chartwell's] preliminary objections on this basis.” Prior, Sullivan’s lawyer, said the panel’s decision reaffirms the purely prospective nature of the at-will employment doctrine. “The trial court equated a contract for wages with an employment contract, and they’re not the same thing,” Prior said. Chartwell was represented in the matter by Sean McDevitt of Pepper Hamilton in Berwyn, Pa. McDevitt did not immediately respond to a call seeking comment.

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