Lawyers for the former head of a large insurer say arbitrators have concluded that he was dismissed without cause.
A 3-member panel assigned by the American Arbitration Association, New York, has ruled unanimously that Massachusetts Mutual Insurance Company, Springfield, Mass., failed to follow the process spelled out in the contract of Robert O’Connell when it fired him from his posts as chairman, president and chief executive officer in June 2005, according to O’Connell’s press representatives.
O’Connell’s lawyers, Michael Keating and Dean Richlin of Foley Hoag L.L.P., Boston, believe the arbitration ruling requires MassMutual to pay O’Connell a $50 million award and also to cover the cost of the arbitration expenses and of O’Connell’s legal bills, O’Connell’s representatives say.
O’Connell’s lawyers allege that the MassMutual board relied on a biased presentation of stale evidence when it decided to fire O’Connell, and that the board failed to give O’Connell a chance to respond to the allegations.
MassMutual says the arbitration panel agreed that the company had the right to dismiss O’Connell, and it says it will appeal the panel’s conclusion that the termination was not “for cause.”
The MassMutual board believes O’Connell subverted MassMutual’s governance system to hide self-dealing activities, the company says.
“Therefore, we have decided to appeal based on the public policy and ethical standards implications that our board feels the panel failed to address when it made its decision,” MassMutual says.
MassMutual believes the case will have no material effect on its financial results, even if the company ends up losing the appeals, the company says.