The employer sought judicial interpretation of an indemnity clause in an employment contract providing for two years’ salary, bonuses, and benefits if the company decided to terminate the employee within four years of signing.
The court held that the indemnity obligation was triggered when the decision to terminate was made, not when the termination was communicated.
Because the employer decided to terminate within the four‑year period but delayed communicating the decision until after the period expired, the contractual indemnity applied.
Relying on appellate authority, the court further held that where a termination clause stipulates compensation and is silent on mitigation, the employee has no duty to mitigate.
The employee was therefore entitled to the contractual lump sum, subject only to credit for salary continuation payments already made.
