| Issue: |
When John, a, regional account director with another company, learned that there was a position available with your company, he interviewed with several officers and employees. During the interview process, John was told that the company needed someone to handle a newly landed account on a “long-term basis.” He was also told that, if hired, he would play a “critical role in growing the agency,” that the company was looking for a “long-term fix, not a Band-Aid” and that company employees were treated like family.
John was offered the position by phone and he orally accepted. He subsequently received a letter confirming the terms of his employment. The letter stated that John’s employment was “at-will” and that the company had the right to terminate John “at any time.” John read and signed the letter.
When he was terminated two years later, he sued for breach of an implied employment contract. According to John, he was never told during the interview process that his employment would be at-will. Instead, John argued that even though the employment letter stated that his employment was at-will, it was ambiguous with respect to whether “cause” was required for termination. John argued that because the letter defined the term “at-will” to mean that the employer had the right terminate John’s employment “at any time,” the employer impliedly gave up the right to terminate John without cause. Will John’s lawsuit succeed?
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Answer: |
No. In a case with very similar facts, the California Supreme Court ruled that the phrase “at any time” in the employment letter was not ambiguous simply because it did not expressly state whether cause was required for termination.
Although the lower appeals court had sided with the terminated employee, the state supreme court found that the letter plainly stated that the employee’s employment was “at-will.” The term “at-will,” the high court noted, when used in an employment contract, normally conveys that employment may be ended by either party, at any time, with or without cause. Moreover, the court continued, for the parties to specifically state that the employee's employment was “at-will” would make no sense if their true intention was that the employee’s employment could be terminated only for cause.
Thus, the court concluded, even though the employer’s letter defined “at-will” as meaning “at any time,” without specifying it also meant “without cause” or “for any or no reason,” the letter’s meaning was clear. As a result, the employee could not proceed with his lawsuit for breach of an implied contract.
Source: Dore v Arnold Worldwide, Inc (CalSCt 2006) 153 LC ¶60,241.
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