Harrison v. NetCentric Corp., 433 Mass. 465, 744 N.E.2d 622 (2001).

The Massachusetts Supreme Judicial Court found in favor of a party supported by NELF, holding that the law of the state of incorporation governs internal corporate affairs.  NetCentric is a company incorporated under Delaware law with headquarters in Massachusetts.  Plaintiff Kevin Harrison, a minority shareholder and former NetCentric employee, sued to recover the value of non-vested stock options.  Harrison had signed a stock restriction agreement that detailed how and when his stock would vest.  He claimed that the agreement violated his rights as a minority shareholder/employee under Massachusetts law.  NetCentric moved for summary judgment, arguing that under Delaware law the agreement was fully enforceable.  Harrison argued that Massachusetts law (which favors employees in similar circumstances) should govern since the corporation was headquartered in Massachusetts.  The Court explicitly held that Massachusetts adheres to the rule that the state of incorporation dictates the choice of law regarding the internal affairs of a corporation.  Consistent with NELF’s policy arguments, the Court explained that this rule best preserves the expectations of the parties and achieves uniform and predictable treatment.