I believe that the contract language beginning with "Notwithstanding..." is unconscionable and unenforceable under California law, because it represents a contractual forfeiture, completely within the subjective control of the party for whose benefit it is written.Law
Civil Code §1442 provides: "A condition involving a forfeiture must be strictly interpreted against the party for whose benefit it is created." Forfeiture of contract rights is not favored, and conditions will be construed to avoid a forfeiture if at all possible. See Chase v Blue Cross
(1996) 42 CA4th 1142, 50 CR2d 178.
A finding of unconscionability involves a two-step analysis. To be unenforceable by reason of unconscionability, the clause or clauses at issue must have been both procedurally unconscionable and substantively unconscionable at the time the contract was made. Discover Bank v Superior Court (2005) 36 C4th 148, 16.
Procedural unconscionability exists when the manner in which the contract was negotiated subjected the beleaguered party to oppression and surprise. Discover Bank v Superior Court (2005) 36 C4th 148, 160, 30 CR3d 76; Little v Auto Stiegler, Inc. (2003) 29 C4th 1064, 1071, 130 CR2d 892; Armendariz v Foundation Health Psychcare Servs., Inc. (2000) 24 C4th 83, 114, 99 CR2d 745. Oppression may be found in unequal bargaining power between the parties and an absence of real negotiation or meaningful choice by the weaker party. See Nyulassy v Lockheed Martin Corp. (2004) 120 CA4th 1267, 1281 n11, 16 CR3d 296.
Substantive unconscionability exists when the terms of the contract are so one-sided as to shock the conscience of the court asked to enforce them. See Little v Auto Stiegler, Inc. (2003) 29 C4th 1064, 1071, 130 CR2d 892; Trend Homes, Inc. v Superior Court (2005) 131 CA4th 950, 32 CR3d 411. Substantive unconscionability may take many forms, but can be described generally as "overly harsh" or "unfairly onesided" contract terms. Discover Bank v Superior Court (2005) 36 C4th 148, 160, 30 CR3d 76. The key factor is lack of mutuality. See Abramson v Juniper Networks, Inc. (2004) 115 CA4th 638, 656, 9 CR3d 422.Analysis
The "notwithstanding" clause purports to place the absolute power to determine through one party's subjective opinion, whether or not the other party is in breach of contract. I can think of no provision which could be more one-sided or unfairly harsh. In effect, the contract is not a contract at all. It is a grant of one year's salary, because all the employee must do is claim breach and under the contract, he/she is due the entire salary payment. This is absurd to the extreme, and I do not believe that any court would enforce the contract provision.
Naturally, you don't want to end up paying for a legal defense, but it would be cheapter than paying the contract as written, so , it is at least an option that is available.
I still think that the previous board could be sued for breach of fiduciary, because it agreed to this contract. I don't believe that any rational businessperson would make such a contract -- it's simply ridiculous.
Hope this helps.
And, if you need to contact me again, please put my user id on the title line of your question (“ToCustomerrdquo;), and the system will send me an alert. Thanks!