Lord British Hangs on to $28 Million NCsoft Judgment - U.S. Fifth Circuit
U.S. Fifth Circuit - The FindLaw 5th Circuit Court of Appeals Opinion Summaries Blog

Lord British Hangs on to $28 Million NCsoft Judgment

Ultima creator Richard Garriott, better-known to the online gaming community as his alter ego Lord British, has 28 million reasons to be happy this week.

On Friday, the Fifth Circuit Court of Appeals upheld a $32 million jury award - $28 million in damages, plus $4 million in attorneys fees and interest - in Garriott's Korean employment law dispute with NCsoft Corporation, a Korean company that develops and publishes massively multiplayer online (MMO) games.

In 2001, Richard Garriott sold a computer game development company to NCsoft Corporation. In return, Garriott received compensation that included a stock options contract with a 10-year period to exercise the options. NCsoft also employed Garriott as its executive producer of online games.

Seven years later, NCsoft decided to terminate Garriott's employment.

Garriott did not want to leave, but he bowed out gracefully after being informed that termination was a final, unappealable decision. Garriott even signed an NCsoft-drafted press release announcing his departure to pursue the always-popular "other interests."

He refused, however, to sign the NCsoft-prepared resignation letter.

That was probably a good decision.

NCsoft informed Garriott in December 2008 that he had to exercise his stock options in the company within 90 days because he had "voluntarily resigned." Garriott had planned hold onto his stock options until the company released a new MMO game called Aion, but he scrambled to liquidate assets to meet the new deadline.

Garriott then sued NCsoft in May 2009 for breach of contract, fraud and negligent misrepresentation, reports Edge.

At trial, Garriott offered expert testimony that he would have received an additional $46.3 million had he been allowed to retain his options, and that his damages would have been $28.2 million if exercised at the same time as his brother, who had identical NCsoft stock options.

The jury returned a verdict that NCsoft terminated Garriott's employment, and breached the options contract by classifying his discharge as a voluntary resignation and forcing him to exercise his options.

The court awarded Garriott $32 million total.

NCsoft appealed, arguing in part that the Fifth Circuit Court of Appeals should award a new trial because the district court had improperly instructed the jury on the specifics of Korean employment law, reports Austin-American Statesman.

Specifically, NCsoft claimed that, under Korean employment law, a resignation is deemed voluntary unless the court finds that the employer used coercion or intimidation. The Fifth Circuit disagreed, finding that coercion or intimidation are sufficient, but not necessary, conditions for an involuntary resignation under Korean law.

While Richard Garriott emerged victorious from his Korean employment law dispute, that doesn't mean your client will be as lucky as the great Lord British. If you have a client whose business agreements are governed by foreign law, advise your client to have a lawyer review any termination documents or statements against the relevant law before signing.

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