Piszel v. United States, No. 15-5100 (Fed. Cir. 2016)Annotate this Case
Freddie Mac is a privately-owned, publicly-chartered financial services corporation, 12 U.S.C. 1452, created to provide stability in the secondary residential mortgage market. Piszel began working as the CFO of Freddie Mac in 2006. Piszel with a signing bonus of $5 million in Freddie Mac restricted stock units that would vest over four years, an annual salary of $650,000, and performance-based incentive compensation of $3 million a year in restricted stock. If terminated without cause, Piszel would receive a lump-sum cash payment of double his annual salary and certain restricted stock units would continue to vest. In 2008, facing Freddie Mac's potential collapse, Congress passed the Housing and Economic Recovery Act,12 U.S.C. 4511, establishing the FHFA as Freddie Mac's new primary regulator, with authority to disaffirm any contract, after which damages for the breach would be limited to “actual direct compensatory damages.” The Act contained a limit on “golden parachutes.” Piszel alleges that he was terminated without cause and Freddie Mac “refused to provide him with any of the benefits to which he was contractually entitled.” The Claims Court dismissed his allegations of an unconstitutional taking. The Federal Circuit affirmed, noting that Piszel’s breach of contract claim remains intact despite the legislation, particularly in light of Piszel’s assertion that his contract called for “deferred compensation,” rather than a golden parachute.