EMPLOYMENT AT WILL
Skagerberg (illustrative of employment at-will at its height)
– At-will is the default rule
– Permanent (indefinite term) employment simply means “at-will”
o There can be an exception to this such as additional consideration
Overcoming the at will presumption
(good faith and fair dealing)
Wrongful discharge in violation of PP
(good faith and fair dealing)
Main v. Skaggs SR (MO) à permanent employment means at-will (this is all MO recognizes)
– Ct is concerned with the idea that employer might create an open-ended obligation that might last forever – so ct here doesn’t want to allow at-will default to be changed even by K
– If it is an indefinite period of time, it is an at-will employment. If you stipulate a definite period of time, then the employer needs just cause
– The presumption of employment at will can be seen as the cts’ attempt to fill the gap: unless the parties state otherwise, the employer can discharge for good, bad or no reason at all.
Chiodo à fixed term = just cause
– In a fixed term, just cause should be based on a willful and substantial breach.
– In an indefinite term, you are hired to work, but if there is a lack of funds, that may be a just cause
– There is a difference in a justifiable cause in a fixed term K and an indefinite term K. In a fixed term, I think just cause should be based on a willful and substantial breach. In an indefinite term, you are hired to work, but if there is lack of funds, that may be a just cause.
Hetes à In this case, presumption is easily overcome, but this is rare
– Ct takes an off-hand comment, you will keep your job if you do good work, to change the K (Mich)
– In light of the Main case, MO ct would have seen this as an employment at will because they say that if there is an indefinite period it is at-will employment
– This is the total opposite end of the spectrum from Skagerberg. The 2 are at extreme ends, and today, the cts are somewhere in the middle.
Ohanian à this was a lifetime oral K, stat of frauds doesn’t apply bc can be fired w/i a year.
– Ct says that Stat of Frauds only bars Ks that are incapable of being completed in one year, but here the ct says that this is a just cause K, therefore the employer would have been able to terminate employee within one year, and thus falls outside the stat of frauds. There is a problem with putting just cause in the K bc an employer will look lazy if he asks for it.
Grouse – an employment K which is terminable at will can give rise to an action for damages if anticipatorily repudiated (promissory estoppel)
– This was an indefinite term K; therefore, it is presumed to be at-will
– The ct says promissory estoppel
o There was a promise that could be reasonably expected to induce some sort of action
o Actual reliance
– P turned down a job offer because he relied on an oral promise.
– the doctrine of promissory estoppel entitles Grause to recover
– promissory estoppel – implies a K in law where none exists in fact à a promise which the promisor should reasonably expect to induce action or forbearance is binding if injustice can be avoided only by enforcement of the promise. Promissory estoppel may exist even after the job has begun à So the day before P starts a job, they can’t fire him, and even if he works for one day at an at-will employment, there can be promissory estoppel.
– P turned down a job by relying on the oral promise. It is reasonable for P to quit his job on reliance of an at-will employment
– Promisory estoppel creates an implied in fact K.
t the objective (just cause) end
Issue – Can certain terms in a company’s employment manual contractually bind the company? Did Def retain the right to fire with or without cause or can P only be terminated for cause?
Should the legal effect of the dissemination of a personnel policy manual by a co with a substantial number of employees be determined solely and strictly by traditional K doctrine?
Absent a clear and prominent disclaimer, an implied promise contained in an employment Manual that an employee will be fired only for cause may be enforceable against an employer even when the employment is for an indefinite term and would otherwise be terminable at will. – RULE
– Ct will not allow a co offer attractive inducements and benefits to the workforce and then withdraw them when it chooses, no matter how sincere its belief that they are not enforceable (but the P got the manual after he already started working – not really inducement to take the job)
– Job security provisions contained in a personnel policy manual widely distributed among a large workforce are supported by consideration and may therefore be enforced as a binding commitment of the employer
– The manual is an offer that seeks the formation of a unilateral K – the employees’ bargained-for action needed to make the offer binding being their continued work when they have no obligation to continue à continued action in exchange for the employer’s promise
o But for the employer’s policy manual, the employee would have quit.