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Jack Falfas Back To Work Order--Damages Remanded to Court


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The saga of the departure of Jack Falfas as the COO of Cedar Fair continues. The Court of Appeals for the sixth district has reversed the lower courts order and ordered Jack Falfas back to work. The Court reaffirmed the award and order of the binding arbitration panel which ordered Falfas reinstated to his Cedar Fair position.

The Appeals Court also remanded to trial court the duty of setting the issue of the exact economic loss of wages, insurance, legal costs, reasonable costs, etc., suffered by Mr. Falfas as a result of his inappropriate termination. That action will then establish the damages which Cedar Fair must pay Mr. Falfas:

http://www.supremecourt.ohio.gov/rod/docs/pdf/6/2013/2013-ohio-1590.pdf

Be looking for Cedar Fair to attempt to settle this dispute with Mr. Falfas, perhaps by offering a substantial cash settlement (in lieu of Mr. Falfas returning to work as COO).

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Or for Cedar Fair to appeal to the United States Supreme Court....

If I'm correctly reading the court document that Mr. Wykoff linked, this decision came from a state appeals court, which means the next appeal would be to the Ohio Supreme Court, not the U.S. Supreme Court.

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  • 2 weeks later...

From the First Quarter Conference Call, quoting CEO Matt Ouimet:

"Lastly, before I turn the call over to Brian, on behalf of the board
of directors, I would like to thank Dick Kinzel for his years of service
both as management and as a board member. Dick will retire from the
board this June.

In anticipation of Dick’s retirement, the board
conducted a comprehensive national search and is recommended that the
unit-holders elect Scott Olivet, the Chief Executive Officer of Renegade
brands, to fill Dick’s seat. Mr. Olivet previously served as the Chief
Executive Officer of Oakley and is a former partner of Bain &
Company and brings additional public company experience to our board."

http://seekingalpha.com/article/1415391-cedar-fair-s-ceo-discusses-q1-2013-results-earnings-call-transcript?page=1

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Seems like Mr. Olivet is a busy guy. From his LinkedIn page:

Chairman of the Board at Collective Brands, Inc.
Director at Skullcandy Inc.
Director at Pacific Council on International Policy

Trustee at Pomona College
Chief Executive Officer at Renegade Brands, LLC
Executive Chairman at RED Digital Cinema
Director at Collective Brands
Director at Red Digital Cinema

He's also had jobs with Nike and The Gap in addition to heading the luxury sunglasses company.

An MBA from Stanford is also quite impressive.

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  • 3 weeks later...

Refresher course on these events:

Off to the Ohio Supreme Court races.

Some confusion exists within the story. To clarify the Sandusky Register story, the original ruling of the Binding Arbitration Panel included the back to work order for Jack. Cedar Fair appealed that finding, arguing it was beyond the authority of the arbitration panel to issue back to work orders (among other issues).

The order Cedar Fair now attempts to overturn in the Ohio Supreme Court is the considered ruling of the appellate judge finding the back to work order proper, and affirming the Jack-back-to-work arbitration panel ruling.

Binding Arbitration tends to mean just that. Binding. Lacking a fraudulent finding, gross and grievous error, or a serious misapplication of the law by the Arbitration Panel one wonders what is left to appeal.

Perhaps this is an attempt to bring the parties once again to the bargaining table and attempt a monetary settlement.

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It's things like this that make me glad I'm not a high-level business exec. How do you tell someone that they have to step down or change positions because a court ruled that their predecessor was wrongfully terminated and must be given his old job back? Too bad Kinzel isn't the one having to sort out the mess he created.

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  • 3 weeks later...
  • 3 months later...

Ohio Supreme Court agrees to review Jack Falfas arbitration ruling reinstating Falfas to the position of COO:

http://www.morningjournal.com/general-news/20130925/ohio-supreme-court-to-consider-case-of-former-cedar-fair-executive

See order of Court here:

http://www.sconet.state.oh.us/pdf_viewer/pdf_viewer.aspx?pdf=196457.pdf

It appears from the Morning Journal report Cedar Fair seeks the Ohio Supreme Court to overturn a binding arbitration ruling principally on the grounds the outcome was not agreeable. The binding arbitration agreement may well be found to be the controlling instrument--not state law in general.

Had Cedar Fair intended to restrict an arbitration panel from ordering back-to-work findings they could have simply written the binding arbitration agreement to bar (or forbid) such awards. Other equitable solutions were possible, such as, for example, monetary awards and damage schedules containing loss caps.

If the court finds this was a contract of adhesion [when one party offers up a contract for acceptance by a second party in which they must accept the terms and sign the contract without benefit of term negotiation] disputes as to intent of contract always fall to the accepting party. The legal principal being that those drafting and offering such contracts of adhesion should carefully consider the terms of said contracts.

Put another way, the drafting party has the upper hand and must act with extreme care. Cases of contract confusion are by default found to be in the favor of the signing party.

At least that is my uneducated understanding of the legal principals.

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I feel sorry for all the people involved in this. It's a shame that Kinzel isn't one of the ones having to deal with the mess he created. In some ways I can also understand why CF keeps appealing this - what are they going to do with the person who took over for Falfas? You can't fire someone simply because the court says you have to reinstate their predecessor in that position, but it's also tough to relocate that person within the company due to the nature of said position.

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I feel sorry for all the people involved in this. It's a shame that Kinzel isn't one of the ones having to deal with the mess he created. In some ways I can also understand why CF keeps appealing this - what are they going to do with the person who took over for Falfas? You can't fire someone simply because the court says you have to reinstate their predecessor in that position, but it's also tough to relocate that person within the company due to the nature of said position.

That's what I've been wondering throughout this whole mess. If they end up having to give Falfas his old position back, what happens to the person who replaced him? Is that person under a contract saying that he has a right to that position for X years unless terminated for cause? If so, that person might very well sue Cedar Fair himself if they try to remove him from his position, and that could drag this out even longer.

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The big deal is millions and millions of dollars. For Cedar Fair. Or Jack Falfas. For the incumbent. And for learned counsel.

If you truly believe one person runs Cedar Fair, you are sadly mistaken.

This is a big deal. A very big deal. And the "gentleman" who caused all this has departed, with as much loot as he could carry. Actually, more. Earned or otherwise.

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