In January Keisuke Suzuki lost a lawsuit seeking $2.1 million in damages for unfair termination and denial of an options deal tied to Japanese approval of Abiomed’s Impella heart pump.
The Danvers, Mass.-based company hired Suzuki in 2010 to help it pursue Japanese regulatory approval for its flagship Impella device. Their agreement included a provision that would give Suzuki 45,000 ABMD shares pegged to Japanese regulatory milestones.
Suzuki claimed that Abiomed was resistant to his suggestions and recommendations for winning approval from the Japanese regulators, unnecessarily prolonging the process. The company allegedly gave him falsely negative performance reviews, sought to demote him and ultimately fired him without the 28-day notice required by his contract. The suit also alleged that Abiomed denied a bonus of 20,000 ABMD shares he was allegedly due based on Japanese approval of Impella.
Abiomed denied all of Suzuki’s claims and alleged instead that it took another 15 months after Suzuki’s firing to win Japanese approval for Impella, winning summary judgment Jan. 4 from Judge Denise Casper of the U.S. District Court for Massachusetts.
“Given that Suzuki was not due compensation for a milestone that was not achieved at the time of his termination and was not achieved until 15 months later after considerable additional effort by Abiomed, such that it cannot be reasonably concluded that he was ‘on the brink’ of reaching this milestone, Abiomed’s termination of Suzuki does not amount to bad faith or violation of the implied covenant of good faith and fair dealing,” Casper ruled.
Suzuki, in a May 10 appeal brief filed with the U.S. Court of Appeals for the First Circuit, argued that the lower court judge erred in ruling that he was an employee at will, due to a 28-day-notice termination clause in his contract. Casper was also wrong to requiring Suzuki to show that he was “on the brink” of obtaining approval in Japan and winning 100% of the share bonus when he was fired , he argued.
“The district court also erred in considering Abiomed’s efforts to obtain regulatory approval after it terminated Suzuki. In focusing on what happened after the termination, the district court improperly conflated the issues of liability and damages. Whether Abiomed violated the implied covenant is determined by Abiomed’s actions, motive, and intent at the time of termination, not what happened afterwards,” according to the brief. “Finally, the district court erred in granting summary judgment where there is ample evidence that Abiomed attempted to ‘unfairly leverage’ the terms of Suzuki’s contract and sought to deprive him of the ‘fruits of his labor.'”
Suzuki argued that a reasonable jury could find that the company, regretting the equity incentive deal after its share prices began to soar and expecting to win Japanese approval for Impella, demanded that he sign a new contract that would have “drastically reduced” his equity incentives. When he refused, the brief alleged, Abiomed fired him “to avoid having to award him 20,000 shares of Abiomed’s stock that would be triggered when Japan approval issued.”