In a case involving an employment dispute between a company and a minority shareholder, the Appellate Division held that a minority shareholder who was an at-will employee of the company was properly terminated and she had no reasonable expectation of continuing employment. Metro Commercial Management v. Van Istendal, – N.J. Super. – (App. Div. 2018).
Defendant, Nancy Istendal, was employed by plaintiff, Metro Commercial Management, for more than twenty years before she was terminated. She was a minority shareholder in the plaintiff company and the shareholder agreement contained a stipulation that they were employees-at-will and could be terminated by Metro at any time for any reason.
Metro filed an action to compel her to sell her shares in accordance with an appraisal and she counterclaimed alleging minority shareholder oppression under N.J.S.A. 14A:12-7(1)(c). The trial court dismissed her complaint and the Appellate Division affirmed.
Defendant argued that it was error for the trial court to conclude that she was legitimately terminated because she had a reasonable expectation of continued employment as a minority shareholder. The court noted that termination of a minority shareholder’s employment may constitute oppression under the statute, but the shareholder’s agreement clearly stated that shareholders were employees-at-will and, therefore, the defendant was properly terminated.