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Court reinstates termination suit against employer

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A federal appeals court has reinstated litigation filed by a former sales and marketing director of a resort management company who was terminated three months into a one-year contract.

H. Lee Farthing alleged that San Juan-based Coco Beach Resort Management L.L.C. breached his employment agreement by unilaterally terminating his contract in June 2016, according to Friday’s ruling by the 1st U.S. Circuit Court of Appeals in Boston in H. Lee Farthing v. Coco Beach Resort Management L.L.C., John Doe Inc.

Mr. Farthing is seeking $294,000 in anticipated commissions on real estate sales plus an unpaid base salary, according to the ruling.

The U.S. District Court in San Juan granted Coco Beach’s motion for summary judgment, holding the employment agreement was void as against public policy because Puerto Rico law requires a person working as a real estate broker to have a license. 

It is undisputed that Mr. Farthing does not have this license, and that the employment agreement did not require him to have one, according to the ruling.

“Summary judgment was entered in error because issues of law and issues of material fact remain in dispute,” said the unanimous ruling by the three-judge appeals court panel.

“It is disputed whether Coco Beach was aware that Farthing did not have a broker’s license at any relevant time, including when the agreement was signed, and it is disputed whether at least some of the work Farthing performed and was intended to perform was permissible without a broker’s license,” said the ruling.

“It was error to hold on summary judgment that Farthing has no viable claim against Coco Beach for breach of contract,” said the decision, in remanding the case for further proceedings.