Opinion ID: 448870
Heading Depth: 2
Heading Rank: 2

Heading: State Law Requirement of Cause

Text: 13 Notwithstanding the above discussion as to the possible interpretations of Clause 4 and our conclusion that its meaning could not properly be determined as a matter of law, it is possible that the factual questions as to Clause 4 will not, ultimately, have to be decided by the jury, for as a general rule under New York law, [a] contract of employment for a definite term may not lawfully be terminated by the employer, prior to the expiration date in the absence of just cause, Alpern v. Hurwitz, 644 F.2d 943, 945 (2d Cir.1981) (applying New York law); accord Levine v. Zerfuss Offset Plate Service Co., 492 F.Supp. 946, 948 (S.D.N.Y.1980); Crane v. Perfect Film & Chemical Corp., 38 A.D.2d 288, 291, 329 N.Y.S.2d 32, 34 (1st Dep't 1972); Carter v. Bradlee, 245 A.D. 49, 50, 280 N.Y.S. 368, 370 (1st Dep't 1935), aff'd, 269 N.Y. 664, 200 N.E. 48 (1936) (per curiam); Vogel v. Pathe Exchange, Inc., 234 A.D. 313, 318, 254 N.Y.S. 881, 886 (2d Dep't 1932) (contract for a stated term may be terminated by employer only for a cause sufficient in law which would justify an employer in discharging an employee). This rule applies even where the employment contract, by its terms, purports to reserve to the employer the right to terminate the contract at will. 14 In Carter v. Bradlee, for example, the Appellate Division construed an employment contract that stated that [t]his Agreement is made for two years from November 1st, 1925, but it is understood and agreed that we retain the right to terminate the Agreement and to discharge you at any time, should we feel called upon to do so for any reason. 245 A.D. at 50, 280 N.Y.S. at 370 (emphasis added). Despite the apparently unequivocal reservation by the employer of the right to terminate the contract at will, the Carter court held that the employer was entitled to discharge the employee prior to the expiration of the contract term only for a  'reasonable' ground ... that ... must be attended with good faith. Id. The court rejected the contention that the contract should be read as entitling the employer to terminate it at will, reasoning that an interpretation that would place one of the parties at the mercy of the other was to be avoided. Id. 15 If this general principle is applicable to the present case, it will make the Camp's reliance on Clause 4 irrelevant, for if the termination was with just cause Clause 4 need not have been invoked, while if the termination was without just cause Clause 4 could not lawfully be invoked. 16 Two exceptions, however, have been carved from the general principle. First, where the employment depended upon a close, confidential relationship, such as between an attorney and client or an individual and his personal servant, the employment contract was considered terminable at will by either party, notwithstanding any stated term. See, e.g., Martin v. Camp, 219 N.Y. 170, 114 N.E. 46 (1916) (attorney-client); Brill v. Brenner, 62 Misc.2d 102, 308 N.Y.S.2d 218 (N.Y.C.Civ.Ct.1970) (personal servant). Second, where the contract provided unequivocally that the employer could terminate the contract without cause but was thereupon obligated to pay a penalty to the employee, termination without cause was held not to constitute a breach if the penalty was paid. See Olsen v. Arabian American Oil Co., 194 F.2d 477, 478 (2d Cir.), cert. denied, 344 U.S. 817, 73 S.Ct. 12, 97 L.Ed. 636 (1952); Reiss v. Arabian American Oil Co., 279 A.D. 805, 109 N.Y.S.2d 625, 626 (2d Dep't 1952). 17 The first exception plainly does not apply to the present case. The employment relationship between a camp and its assistant director does not involve the special closeness or confidentiality that characterize relationships such as those between individuals and their personal servants or clients and their attorneys. 18 The applicability of the second exception is unanswerable from the present record. First, it is not clear how strictly the New York courts adhere to the proposition that a provision for termination without cause must be unequivocal, or, in this context, how those courts would regard Clause 4. Second, as Clause 4 is framed, it is not clear whether the employee was expected to work during the two-week period following the giving of notice. If he was expected to render services during that period, we doubt that New York law would consider the employer's payment a penalty. Thus, there are questions of both law and fact to be determined in connection with the applicability here of the general New York principle that an employment contract for a stated term may not be terminated without just cause. 19 Finally, if the general principle is applicable here, there will remain questions of fact for the jury as to whether or not the Camp terminated Rothenberg for cause. Although Rothenberg's affidavit stated that the Camp officials had always informed him that his services were being performed in a satisfactory manner, Loren's affidavit stated that Rothenberg's services had clearly proven unsatisfactory; the Camp's answer to the complaint alleged that Rothenberg had made false and unauthorized representations to the parents of campers that caused those campers to decide not to return to the Camp for the following season, and that these were the reason for Lincoln's decision to terminate Rothenberg's employment. Plainly there are issues of fact to be tried.