Douglas A. Peabody, the former CEO of Weider Publications Inc., has filed a lawsuit against the publisher claiming breach of contract after he was suspended from his position after 13 months on the job.
Peabody is seeking damages of at least $5 million for lost benefits and $20 million for loss of compensation, according to court documents. The case was filed Nov. 21 in the U.S. District Court in the Southern District of New York.
Peabody began his work as president and CEO of Weider Publications Feb. 1, 2000 and was abruptly suspended in writing from his duties March 20, 2001 after a brief meeting with chairman Eric Weider and vice chairman George Lengvari, the documents said.
The suspension notice instructed Peabody not to report to his office, attend company meetings or communicate with company personnel but offered no explanation for the suspension. The letter stated that Peabody had been suspended with pay until further notice.
Peabody claimed in the court documents that he was denied access to his office and personal property at Weider Publications for several weeks. He said that the lock on his desk for forced open and that personnel files relating to executives were removed.
The suspension resulted in a “significant diminution in the nature or scope of responsibilities, duties or authority.” One week later, Peabody officially terminated his position effective April 26, 2001 and the company “wrongly” removed him from the payroll, according to the documents.
Legal counsel for Peabody declined to comment on the case. But when reached at his home in New York City, Peabody said, “The complaint speaks for itself. [Weider is] in breach of contract and they own me a lot of money and they haven’t paid me.”
Peabody said he is currently self employed.
Pending a hearing on the case, Peabody has asked for the reinstatement of pay and health benefits for himself and his family; a wife and five young children.
An “Employment Agreement” signed by both parties provided that Peabody would be employed in his position for five years. Peabody was to be compensated with cash, annual cash bonuses, stock options of 6% of Weider Publications fully diluted common stock and Internet stock in the firm’s Internet company among other benefits.
One of the benefits permitted Peabody to work from his summer home in Hyannis, MA, between Thursday evenings and Monday mornings during the summer months.
A contentious point argues whether Peabody was prohibited from competing with Weider Publications until Oct. 26, 2001 or until April 26, 2002 as Weider Publications claimed, according to the court documents.
Peabody was also a member of the Woodland Hills, CA-based company’s board of directors.
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