Andrew Rubin, Esq.

Men's Warehouse Inc. may have to fight breach of contract claims

Recent media reports are highlighting what may be a very public dispute between Men's Warehouse Inc.'s executive board and the company's founder and public spokesperson, George Zimmer. New Jersey shoppers who have favored this men's wear chain may be shocked to learn that Zimmer was fired from his position as chairman. No specific reasons have been given for his termination up to this point, but general statements have been made alluding to a power struggle between Zimmer and the rest of the board. This in and of itself may not be adequate reason to relieve Zimmer of his position, and may leave Men's Warehouse Inc. in a position to have to defend itself against breach of contract claims from Zimmer.

No information has been reported as to any legal action Zimmer may decide to pursue regarding his termination. In an interview with CNBC, Zimmer stated that he had been concerned about the direction that the company was headed, and feels that this recent action may have been an attempt to silence him. Company representatives cite this failure to support proposed changes in corporate direction as one of the causes of the termination.

The price per share of Men's Warehouse stock dipped when the firing of Zimmer was made public. Since then, it has returned to near-normal at $37.25 per share. Zimmer himself holds 3.5 percent of stock issued, which would be an inducement for the members of the executive board to consider a negotiation of terms with Zimmer. Claims for wrongful termination and breach of contract can be expensive and time consuming, especially in an economy that is already unstable.

When a person is unexpectedly terminated, it is beneficial to know what your rights are under New Jersey employment law. If the position is contractual, a thorough knowledge of contract law and what basis may exist for breach of contract claims would be very helpful in planning how to respond to the termination. Zimmer may be expected to pursue such a claim in response to being fired from the company he founded. As additional information comes to light, the public may be able to see the potential battle lines being drawn in this corporate power struggle.

Source: nj.com, "Men's Wearhouse founder, spokesman fired, says company 'silenced his concerns'," June 19, 2013

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