Mark Tritton, the former chief executive officer of Bed Bath & Beyond, reportedly sued the Union-based home goods retailer, claiming the company has failed to honor his $6.765 million severance agreement.
Filed March 31 in a New York State court in Manhattan, the complaint says that Bed Bath & Beyond stopped making required bi-monthly payments in January because the company’s chief legal officer said it needed to preserve cash, Reuters reported. The lawsuit also noted that the retailer “conceded Tritton was (and is) entitled” to those payments under the terms of the agreement dated four days after he was let go as CEO.
Additionally, Tritton accused Bed Bath & Beyond of “bad faith” for proposing a buyout of his severance at a discount, but only if performance improves, even as it has resumed paying severance to some other former employees, according to the report.
A spokesperson for Bed Bath & Beyond declined to comment on the lawsuit to NJBIZ.
Tritton, a former Target executive, joined Bed Bath & Beyond in 2019 to help the company out of a prolonged sales slump. During that period, the retailer took several steps aimed at propping up the business, including scaling back its big blue coupon program, closing underperforming stores and replacing national brands with its own store label products.
As of April 10, New Jersey will become the first state in the nation to enact a law guaranteeing severance pay in the wake of mass layoffs.
Recently, Bed Bath & Beyond revealed it will terminate 1,300 jobs in the Garden State—just days before those changes to the WARN Act are set to go into effect. Read more here.
However, after back-to-back quarters of disappointing financial results in 2022, Bed Bath & Beyond announced in June 2022 it was replacing Tritton and several other executives in an effort to reorganize leadership. Following his ouster, Sue Gove was named interim CEO and then took on the role permanently in October.
In August, the company – which also owns Harmon and Buybuy Baby – laid out a turnaround plan that included laying off 20% of its corporate and supply chain workforce, closing 150 stores and discontinuing some of its private brands in favor of national ones.
Despite efforts to improve its footing, Bed Bath & Beyond continues to teeter on the edge of bankruptcy.
The cash-strapped company has taken other steps to improve operations, which include working with suppliers to increase inventory levels and paying off outstanding interest payments, according to Gove.
Bed Bath & Beyond also shrunk its brick-and-mortar footprint, starting with closing its entire chain of Harmon stores and its business operations in Canada. The retailer recently posted another round of store closures in the U.S., saying it ultimately plans to keep 480 units in business—360 of its namesake brand and 120 Buybuy Baby stores.
Tritton’s lawsuit came a day after Bed Bath & Beyond announced plans to sell up to $300 million of stock and use the capital for strategic initiatives in 2023, such as investing in merchandise inventory, increasing store footprint and realigning cost structure.
However, if that proposed share sale doesn’t pay off, the retailer says that its next move may be bankruptcy.