• by David Goetzl  @dgoetzl, November 4, 2011

The job market may be tough and layoffs have many jittery, but when your last name is Dolan and you work for Cablevision, maybe you feel a little more confident. So much so, that while holding down a top corporate role, you feel emboldened enough to sue your employer for $11 million.

In April, Tom Dolan -- son of the founder and brother of the CEO -- filed a lawsuit against the company looking to claim the $11 million he feels entitled to dating back to his one-year run in 2004-05 as CEO of the Rainbow Media unit. Dolan, now working in the chairman’s office as an executive vice president, has already been paid for his Rainbow role at least $5 million, according to court papers filed by his lawyers. He may have received a package worth $15.7 million back in 2005.

An independent committee of the Cablevision board of directors is working to resolve the matter, according to an Oct. 28 government filing.

Cablevision declined all comment. A call to the law firm representing Tom Dolan was not returned.

Tom Dolan is one of founder Chuck Dolan's three sons working at the Long Island-based cable giant. His younger brother Jim Dolan is CEO. Tom, nearing 60, also sits on the board of directors -- along with eight other family members. The family-controlled and publicly traded company had $7.2 billion in revenues last year.

At Rainbow the last decade, Tom oversaw three networks -- AMC, IFC and WE -- and the messy Voom venture.

The dispute prompting the April lawsuit in New York State Supreme Court is complicated, but effectively boils down to what kind of compensation structure was in place for Tom Dolan during his Rainbow tenure. And further, what compensation he may have been owed as he took a voluntary leave of absence as concerns surfaced about his possible company misconduct.

Both Tom Dolan and Cablevision acknowledge there was no formal contract between them. But, both sides say they worked on a “term sheet” laying out a pay package.

In court papers, Tom indicates he felt an agreement was reached, allowing “term sheet” provisions to function as his de facto contract. 

Cablevision, in its court papers, says the “term sheet” amounted to nothing more than a draft, leaving it with no “binding obligations.”

A year into Tom Dolan’s tenure at Rainbow, both sides agree questions arose about his failure to comply with Cablevision’s “electronic data retention policy.” The SEC was involved as Cablevision detailed the matter in a letter to it in June 2005. (The SEC was not able to provide a copy of the document.)

Neither Tom Dolan’s side nor Cablevision offers any specifics in court papers about what Tom’s alleged malpractice with "data retrention" may have been.

As the issue percolated, Tom took a voluntary leave of absence.

Cablevision and the SEC took no formal action against his employment, but Cablevision suggests his misconduct gave it justification for withholding compensation.

After he was not allowed to rejoin the company, Tom Dolan's lawyers say in court papers, his side proposed a severance agreement calling for him to receive $26.7 million. Since then, Cablevision has paid him at least $5 million as part of a package worth more, Dolan’s lawyers say.

But Tom Dolan alleges in court he’s still owed the additional $11 million. Cablevision denies this.

Negotiations on a settlement have failed. An August document filed by Cablevision indicates there is a framework for a settlement. Cablevision declined comment.

In 2008, after more than three years away, Tom rejoined Cablevision as executive vice president, strategy and development, in the chairman’s office. His father 85-year-old Chuck has been the chairman since 1985.

There is an intriguing backdrop to the legal dispute. The concerns about Tom Dolan’s misdoings with “data retention” were raised in 2005 after a nasty boardroom battle that pitted him and father Chuck against Jim Dolan. At issue was the Voom satellite TV venture that included a suite of HD channels and was launched in 2003.

Jim and other board members wanted to abandon the money-bleeding business. Chuck and Tom objected. Jim won a victory with an agreement to sell part of the assets to EchoStar (Dish Network).

But, Chuck and Tom were committed enough to try and form their own Voom business. They had a window in 2005 to execute a deal, but failed en route to Cablevision winding down the Voom gamble.

Neither Tom Dolan’s side nor Cablevision say his employment status was affected by the stand-off. But, Dolan’s lawyers still raised the prospect in court papers, saying: “Cablevision did not purport to terminate Mr. Dolan’s employment, either as a consequence of the intra-company rift and/or the company’s ultimate decision to abandon Voom.”

Tom Dolan began work at Cablevision in 1987 as a system manager at a Long Island cable system and was elevated to general manager four years later. Starting in 1994, he was the company’s Chief Information Officer for more than a decade before taking over Rainbow.

Besides Cablevision, he currently serves on the board of directors at two companies recently spun off from the company: AMC Networks (the former Rainbow unit) and Madison Square Garden, Inc.

In court papers, Tom Dolan’s lawyers say he has served Cablevision with “quiet distinction” for nearly 25 years. Cablevision denies this.