Former executive sues Domino's, alleging it reneged on stock option promises
James Vitek, right, in 2009 during his time as Domino's Director of E-Commerce. He is now suing the company. He is pictured with Chris McGlothian, who was then Domino's chief information officer.
AnnArbor.com file photo
A former high-level employee at Ann Arbor-based Domino’s Pizza is suing the company, claiming it didn't live up to its stock option promises.
Jim Vitek, former Domino’s director of e-commerce, has filed a lawsuit against the pizza company where he worked for 15 years, claiming he was cheated out of his stock options and other benefits when he was terminated in July 2011.
Whether or not there was cause for Vitek’s termination is at the heart of the dispute. Vitek claims he was fired when he and other executives at Domino’s were asked to renegotiate their salaries. Domino's says he was insubordinate when he refused to sign a confidentiality and non-compete agreement.
In the lawsuit, Vitek says he helped create and develop Domino’s main computing system, PULSE, including the Pizza Tracker feature, which allows customers to keep tabs on their order until it's delivered. He was also developing new technologies on his own time, though, his lawsuit claims.
The new contract included a non-compete clause, which made any inventions employees developed property of Domino’s. This could apply retroactively, which would have put one of Vitek’s pending patents, a new smartphone application, in jeopardy of becoming Domino’s property.
Vitek’s invention is described as a new app platform that would allow multiple content contributors to share advertising revenue. He is currently working full-time on the AppKey project. Domino’s, being a single advertising entity, would have no way of using it, the lawsuit claims.
The suit claims the application has “nothing to do with Domino’s business”. It also claims that employees had been allowed to invent things on the side before executives were asked to renegotiate.
Vitek wanted no part of the contract, so his employment with Domino’s was terminated. AnnArbor.com attempted to contact Vitek. He chose to have his attorney, David Blanchard, comment on his behalf.
“We are here because Domino’s forced Vitek to choose between giving up all rights in his inventions and ideas, even those developed on his own time, or give up his job," Blanchard said. “True to his principles, Vitek chose to protect his ideas and lost his job. That stung. But it was a choice he walked into openly. The part Jim did not expect was that Dominos would then manufacture excuses to take the stock and benefits that had vested in him over his 15 years of service to the company.”
Blanchard said that around the time of Vitek’s firing, about $33,000 worth of stock options disappeared from his financial portfolio. But he said Vitek probably lost much more.
When contacted, Domino’s said it does not comment on pending litigation. The company is being represented by Daniel Bretz and Connie M. Cessante of the Clark Hill law firm, which has an office in Detroit.
“We prefer to make our case in court,” said Tim McIntyre, vice president of communications, in an email.
In its response to the suit, Domino’s filed a motion to either dismiss the case or move it down to district court. Domino's says the stock options when they were issued to Vitek in 2003 were worth $17,320, and the value should remain there because Vitek was fired.
A disputed amount has to be $25,000 or more to be part of a civil case in circuit court.
“Domino’s maintains the facts will show that Vitek was terminated for cause and, therefore, entitled to no damages for loss of stock options,” attorneys for Domino’s wrote in the response to the suit.
In the motion, Domino’s lawyers said Vitek was terminated on July 19, 2011, after he “insubordinately” refused a directive — to sign the confidentiality and non-compete agreement. This refusal equals cause for termination, the motion argues.
The lawsuit asks for unspecified monetary relief and damages.
The case is scheduled for a hearing in Judge David Swartz’s courtroom in the Washtenaw County Trial Court on Oct. 3.
Comments
Jim
Mon, Sep 17, 2012 : 2:09 p.m.
According to Wikipedia, Domino's was sold to Bain in 1998 and became publicly traded in 2004. So it's unclear if Bain is a majority owner or not. Probably not.
Brad
Sun, Sep 16, 2012 : 12:51 p.m.
Even though the founder is gone his spirit lives on at Domino's.
pegret
Thu, Sep 20, 2012 : 1:16 p.m.
Absolutely, Brad.
Basic Bob
Sun, Sep 16, 2012 : 3:35 a.m.
When you sign away your rights, you can always disclose the things that you developed prior to being an employee of the company that it does not apply to. Since he was an employee at the time he developed the idea, it is their idea. If he attempts to patent it away from them, he is stealing. His free pizza app didn't make him more than the money he lost by refusing to sign. Bad decision on his part. Domino's can countersue that he stole their idea, and they might win.
Dcam
Sun, Sep 16, 2012 : 11:41 a.m.
Sometimes you can note exceptions prior to signing, but in most instances you can't - Hobson's choice regarding employment. As to stealing, that's a pretty broad view - unless it's an idea that's directly associated with the job for which compensation is paid and it's developed on company time and equipment, it's a pretty broad claim for the company to claim ownership of it. It goes to ridiculous lengths at times. The University of Missouri claimed 75% ownership of a student's app which was developed on his personal computer and on his own time and not associated with his coursework. The university claimed that by his being a student he derived the benefits of association, and therefore the university was entitled to share the intellectual property resulting. Companies can claim intellectual property rights long after an employee is an ex-employee for inventions - claiming that the employment gave rise to the ideas, therefore belong to the company. To be inventive and able to enjoy the so-called fruits of the effort, one must be willing to battle giants. Most times, it's just not worth the trouble. If the companies rewarded inventiveness, there wouldn't be a problem, but they don't reward and often punish. Dull thinking is the business model today, and dullards are the prime candidates for the corner offices.
Michigan Reader
Sun, Sep 16, 2012 : 12:50 a.m.
Domino's would end up spending far more to fight this lawsuit than it would cost to settle. So, I'll bet they'll settle IF they can't get it thrown out on a technicality. Have to think of the bottom line.
Tom Todd
Sat, Sep 15, 2012 : 9:30 p.m.
insane in the "bain"
Mike H.
Sat, Sep 15, 2012 : 8:42 p.m.
The line under the picture misspelled Chris McGlothlin's name.
clownfish
Sat, Sep 15, 2012 : 6:20 p.m.
hmmm, who owns Dominoes and would make them treat people like this? Bain Capital!
ManA2
Sun, Sep 16, 2012 : 1:15 p.m.
Actually, they don't. http://finance.yahoo.com/q/mh?s=DPZ+Major+Holders
leaguebus
Sun, Sep 16, 2012 : 5:10 a.m.
Bain still owns Dominos.
ManA2
Sun, Sep 16, 2012 : 3:58 a.m.
They haven't owned Domino's for a few years.
rinmem10
Sat, Sep 15, 2012 : 6:38 p.m.
I thought this was some sort of political commentary, turns out Bain Capital really does own Domino's. My apologies for doubting.
15crown00
Sat, Sep 15, 2012 : 3:05 p.m.
it appears that Domino's put the scres to this guy
quetzalcoatl
Sat, Sep 15, 2012 : 2:09 p.m.
Sounds to me Vitek might have been more discreet around the Domino's water cooler when it came to talking up his new app platform. It's better not to talk about Quit Money until you actually have it.
Angry Moderate
Sat, Sep 15, 2012 : 8:01 p.m.
Pointless. Domino's would have found out about his secret invention if it ever became profitable, and sued him for restitution.
Dcam
Sat, Sep 15, 2012 : 1:41 p.m.
The Domino contract regarding right, title and property interest in all inventions of employees whether or not a part of the job is not unique - many go even further. Ford's contracts require not only rights to future inventions but also to sign over rights to existing inventions. And those kinds of contracts are why innovation is in the drink in Michigan - there is little incentive to invent that which one can't own, except at the University of Michigan, where all expenses are paid, facilities are provided, a generous salary and ownership.
Suzanne
Sat, Sep 15, 2012 : 1:01 p.m.
Domino's seems to think they can dictate anything they want...the "no-changes pizza" and now this, although I'm sure there has been much more. I'm done with Domino's! How you treat your employees is just as important as how you treat your customers and Domino's is doing neither well!
Brad
Sat, Sep 15, 2012 : 12:51 p.m.
It's "insubordinate" to not sign a bad contract? Only a lawyer could come up with that.
Scott
Sat, Sep 15, 2012 : 12:34 p.m.
An executive getting shafted in America, now that's a first. They must not have given him his daily pill to group speak and morph into a Stepford exec.
Goober
Sat, Sep 15, 2012 : 12:30 p.m.
Sounds like a one sided proposition to me. If everything that is written is true, I will no longer buy their products.
actionjackson
Sat, Sep 15, 2012 : 2 p.m.
Never have liked their pizza. Anthony's for occasional gourmet pie. Always liked Faz's also.
A2comments
Sat, Sep 15, 2012 : 11:31 a.m.
Contracts need to be bilateral for a court to uphold them. If he was giving up patents, what was Dominos giving in consideration?
Basic Bob
Sun, Sep 16, 2012 : 3:37 a.m.
Salary, benefits, and stock options. Duh.
craigjjs
Sat, Sep 15, 2012 : 12:58 p.m.
Unless there is an employment contract, the consideration for requiring a proprietary rights contract would be continued employment. Based on the limited information, I think Dominos went too far in claiming this was a termination for cause and taking the vested stock. I hope Mr. Vitek is successful.
Craig Lounsbury
Sat, Sep 15, 2012 : 10:43 a.m.
I'm no lawyer but as the story reads, from the single perspective we see, I vote for Mr. Vitek. I hereby order Domino's to reinstate his stock options in full and provide him a life time supply of Jets Pizza.