Los Angeles Jury Renders $2 Million Verdict Against Long Beach Company for Breaching Employment Contract

Jul 26, 2012, 23:22 ET from Shernoff Bidart Echeverria Bentley LLP

LOS ANGELES, July 26, 2012 /PRNewswire/ -- A Los Angeles jury returned a verdict of $2 million on Thursday (July 26, 2012), against Casey Co. for a breach of contract, in favor of a former employee who developed a unique fuel additive several years ago and was later improperly phased out of millions of dollars in a profit-sharing agreement.

Evidence was presented to the Los Angeles County jury which reflected that the company initially adhered to the profit-sharing agreement and only later, without good cause, unlawfully reneged on the terms of the contract.

Casey Co., which has its principal location in Long Beach, is the parent corporation for Kern Fuels Research, LLC, and Kern Oil & Refining Company, which are both located in Kern County near Bakersfield, California.

The plaintiff, George Sturges Jr., who was an employee with the company since 1983, sued Casey Co. for a breach of contract for continued employment and for changing the terms of his compensation without good cause.

In the mid-1990's, Mr. Sturges developed a formula for a diesel fuel additive, which solved the problem of adhering to strict state emission standards. Sturges was primarily responsible for marketing and selling the diesel fuel additive, resulting in millions of dollars a year in profits for the company. After nearly ten years of these efforts and responsibilities, Casey Co. offered to compensate Sturges with a profit-sharing agreement, and as part of company restructuring, offered him a new position as Vice-President.

Under this new profit-sharing arrangement, George Sturges began selling the additive, generating over $70 million in net profits in 2007 and 2008 for the company.

After two years of honoring the agreement, in early 2009, Casey Co. arbitrarily demoted Mr. Sturges, and reduced his profit-sharing percentage by half.

"George Sturges loyally worked for the company, earning it over $70 million in profits over two years. They had no good faith reason to demote him," according to plaintiff's attorney Ricardo Echeverria.

The jury subsequently found that the parties had formed an implied employment contract where Mr. Sturges could only be demoted for good cause, and that Casey Co. had breached that contract.

Ricardo Echeverria stated, "We were very pleased that the jury held the company accountable to their original promise," explaining "a deal's a deal."

The plaintiff is represented by Ricardo Echeverria and Matthew W. Clark of Shernoff Bidart Echeverria Bentley LLP, and Scott D. Howry and Andrea Selvidge of Young Wooldridge LLP.

The case is George Sturges, Jr. vs. Kern Fuels Research, LLC, et al.; case number BC452827, in the Superior Court of the State of California for the County of Los Angeles.

SOURCE Shernoff Bidart Echeverria Bentley LLP