Executive employment agreements often draw a sharp line between termination for cause and termination without cause. That line can be worth millions of dollars. A recent dispute involving Orthofix Medical shows what happens when a company’s for cause decision does not hold up.
What Happened at Orthofix
Roughly three years ago, Orthofix fired its CEO, CFO, and chief legal officer, citing inappropriate and offensive conduct. The executives challenged the terminations through arbitration and settlement negotiations.
In October 2026, MedTech Dive reported that Orthofix paid the executives about $24 million through arbitration awards and settlements. Former CEO Keith Valentine received $14.8 million, an amount equal to the severance and equity-based rights he would have received if he had been terminated without cause.
The outcome was mixed. The arbitrator rejected the former CEO’s defamation claims and found that his conduct met the legal definition of acts of moral turpitude. Yet the payment still matched a without cause termination. The two findings answered different legal questions. One addressed whether the company’s public statements were defamatory. The other addressed what the employment agreement required.
Why This Executive Employment Law News Matters
This executive employment law news highlights how much depends on contract language. A company may have real concerns about an executive’s behavior and still fail to meet the definition of cause written into the agreement.
How Agreements Define Cause
Most executive contracts list specific grounds for a for cause termination. Common examples include:
- The executive committed a felony or a crime involving dishonesty.
- The executive engaged in fraud, embezzlement, or willful misconduct.
- The executive materially breached the agreement or a company policy.
- The executive failed to cure a performance problem after written notice.
Many agreements also require notice and an opportunity to cure. Skipping those steps can turn a for cause termination into a without cause termination under the contract, even when the underlying concerns were serious.
What Is at Stake
The classification often controls severance, accelerated vesting of stock awards, and bonus eligibility. It can also affect restrictive covenants, since some agreements tie non-compete obligations to how the employment ended.
These provisions deserve careful review before signing a contract, because they are difficult to renegotiate once a dispute begins.
Disputes Often End in Arbitration
Many executive agreements send disputes to private arbitration instead of court. The process can move faster, but the record stays less public and appeal rights are narrow.
Arbitration still involves document requests and sworn testimony, much like what happens at a deposition in a court case. Some terminations also raise separate concerns, such as retaliation for reporting misconduct, which can become grounds for employment litigation.
When a stated reason masks bias based on age, sex, or race, an executive may have discrimination claims under federal or state law alongside the contract claims.
Protecting Your Position
Executive employment law news like the Orthofix dispute shows that a board’s confidence in its decision does not settle the contract question. Employment Law Association covers employment agreements, severance terms, and termination disputes for readers at every level of an organization, including senior leadership. A release signed too early can waive claims that would otherwise remain available.
Executives terminated for cause, or pressed to sign a separation agreement on a short deadline, should read every term before responding and consider hiring an employment attorney to review the release and the definition of cause.