iGATE and the CEO: A Breach of Agreement
(6 pages of text)
Case (Pub Mat)
In May 2013, iGATE Corporation ended its employment contract with Phaneesh Murthy, then chief executive officer, amid allegations of sexual harassment. iGATE maintained that Murthy had violated company policy; thus, it dismissed Murthy “with cause,” effectively ending all of the company’s severance obligations under the agreement. Murthy responded by suing iGATE, claiming breach of contract and defamation. In March 2014, iGATE countersued Murthy for damages the company suffered due to Murthy’s behaviour. Could iGATE justify its termination of Murthy’s contract? What were the implications of ending a senior executive’s agreement for cause?
This case can be used in graduate and post-graduate management programs in courses on human resource management, employment law, contract management, compensation management, and corporate governance. It gives students an opportunity to do the following:
- Understand some typical provisions of an executive compensation agreement and the implications of those provisions when involving senior executives with a significant stake in the organization.
- Appreciate the importance of aligning executive compensation with business strategies to distribute risks and rewards and create a long-term focus for senior executives.
- Examine the challenges of drafting employment agreements to avoid ambiguity and disputes.
Information, Media & Telecommunications
United States, Large, 2014
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