Termination of Minority Shareholder’s At-Will Employment does not Constitute Oppression

November 26, 2018

In Metro Commercial Management Services, Inc. v. Van Istendal, Docket No. A-0275-17T4 (N.J. Super. Ct. App. Div. Nov. 19, 2018), the court held that a company’s termination of the employment of a minority shareholder, who was also an at-will employee of the company, did not constitute minority shareholder oppression under New Jersey law.  In Metro, the parties’ shareholders agreement contained a provision expressly stating that the defendant was an at-will employee who could be terminated at any time, for any reason.  The court noted that, for purposes of N.J.S.A. 14A:12-7(1)(c), “oppression” is defined as “frustrating a shareholder’s reasonable expectations.”  The court held that the underlying facts – and in particular, the fact that the defendant expressly recognized in writing that she could be terminated at any time for any reason – pointed to the conclusion that the defendant did not have a reasonable expectation of continued employment.  Accordingly, there was no oppression for purposes of N.J.S.A. 14A:12-7(1)(c).