Companies often use written Employment Agreements to set out the duties/responsibilities of, and the compensation/benefits to, some or all of their employees. The most obvious reasons for doing so are to ensure clarity and limit the chance that either might misunderstand the other’s expectations. While using such documents is all well and good, what happens when an employee takes on responsibilities that go beyond the scope of what is covered by a written agreement? As one Massachusetts company recently learned, the answer to this question can be unpredictable and expensive.

In 1988, Ronald Nardone began working for LVI Services, and he eventually rose to become corporate vice-president of business development. At various times from 1997-2005 LVI was searching for investors, and Nardone became part of the “roadshow presentation” team that sought such investments. In that regard, LVI’s one-time President, Burton Fried, testified:

I asked [Nardone] if he wanted to appear and give the presentation on behalf of the business development aspect of the business and he said yes. … I didn’t require him, he just accepted the invitation.

After one of the roadshows in 2005, Nardone learned that a large investment was going to be made, and all of … Keep reading