## Facts

- Khalid Shah entered into a written five-year employment contract with Cover-It, Inc., under which Shah would serve as Cover-It’s structural-engineering manager.
- The agreement provided for a salary and benefits, including three weeks of paid vacation after the first year of employment.
- The contract contemplated a “flexible” schedule of 35 hours per week.
- The contract also included a severance schedule stating how much Shah would receive if his employment was terminated, depending on how long he had worked for Cover-It.
- During Shah’s first year, he requested time off for vacation; Cover-It’s principal, Brian Goldwitz, approved the request.
- Shah did not return to work for approximately ten weeks.
- After Shah returned, he worked only a few days per week.
- While at work, Shah spent substantial time using the internet for matters unrelated to his job duties.
- Shah refused to record his hours worked; instead of entering hours on his time sheets, he wrote only “P” for “present.”
- About a month after Shah returned, Goldwitz asked Shah whether he would be finishing certain engineering designs. Shah responded that he would be taking his time and was not sure the designs would be completed.
- Goldwitz terminated Shah’s employment.
- Shah sued Cover-It and Goldwitz to recover severance pay under the contract’s severance schedule.
- The defendants counterclaimed, alleging Shah materially breached the employment contract and therefore could not recover severance.
- After a bench trial, the trial court found for the defendants. Shah appealed, arguing that the trial court had not identified a specific contract term that he breached.

## Issues

1. Whether Shah’s ten-week absence, sporadic attendance, misuse of work time, and refusal to record hours amounted to a material breach of the employment contract.
2. Whether the trial court could find a material breach without identifying a specific numbered or quoted contract provision that Shah violated.
3. Whether Shah’s material breach discharged the defendants’ duty to provide contractual severance benefits.

## Decision

- The Appellate Court of Connecticut affirmed the judgment for the defendants.
- The court held that the trial court’s findings supported the conclusion that Shah materially breached the employment contract.
- The court rejected Shah’s claim that a material-breach finding required the trial court to point to a particular paragraph or clause, where the findings showed a substantial failure to perform the job the contract contemplated.
- Because Shah materially breached first, the defendants were excused from further performance, including any obligation to pay severance under the contract’s severance schedule.

## Legal Principles

- Connecticut determines whether a breach is material using the factors in Restatement (Second) of Contracts § 241, including the extent to which the nonbreaching party is deprived of the expected benefit, the likelihood of cure, and good faith.
- A material breach is a substantial failure to perform that defeats the purpose of the contract and discharges the other party from remaining duties.
- A trial court need not cite a specific contract paragraph to support a material-breach finding if its factual findings show that the breaching party failed to perform core obligations of the agreement.
- On appeal, a trial court’s factual findings supporting material breach are reviewed deferentially and will be upheld absent clear error.

## Conclusion

The Appellate Court of Connecticut affirmed the denial of severance because Shah’s extended absence and subsequent pattern of nonperformance constituted a material breach of his employment contract, relieving Cover-It and Goldwitz of any remaining obligation to pay severance benefits under the contract’s schedule.


Shah v. Cover-It, Inc., 859 A.2d 959 (2004)