Opinion ID: 2019301
Heading Depth: 1
Heading Rank: 4

Heading: The Consequences of the Majority's Ruling on Employment Law

Text: For over a century, this Court has strictly and steadfastly adhered to the approach that a general hiring or employment for an indefinite period, where no specific time is fixed for the duration of the employment, is presumptively at-will ( see, e.g. , Murphy v American Home Prods. Corp. , 58 N.Y.2d 293, 301; Sabetay v Sterling Drug , 69 N.Y.2d 329, 333; see also , Arledge v Stratmar Sys. , 948 F.2d 845, 848 [the resoluteness with which the New York Court of Appeals has reaffirmed the `at will' rule indicates that exceptions to the rule are discouraged]). The majority's ruling that the stated language defines an employment contract of definite duration avoids the at-will presumption and eliminates important elements of proof that we have always required under substantially similar facts. Underpinnings of At-Will Employment In Martin v New York Life Ins. Co. (148 N.Y. 117), this Court examined the nature of a general hiring ( id. , at 120) which, by definition, said nothing    as to its duration (2 Story, Contracts § 1290 [5th ed 1874]; see also , Watson v Gugino , 204 N.Y. 535, 540 [a general contract of hiring has no time specified]; Schouler, Domestic Relations § 458 [4th ed 1889] [engagement without mentioning the time nor the frequency of payment    is a general hiring]). In that case, we adopted a rule of interpretation and proof for claimed employment relationships: `With us, the rule is inflexible, that a general or indefinite hiring is prima facie a hiring at will; and if the servant seeks to make it out a yearly hiring, the burden is upon him to establish it by proof. A hiring at so much a day, week, month or year, no time being specified, is an indefinite hiring, and no presumption attaches that it was for a day even, but only at the rate fixed for whatever time the party may serve.    [I]n all such cases the contract may be put an end to by either party at any time, unless the time is fixed, and a recovery had, at the rate fixed for the services actually rendered' (148 NY, at 121, quoting Wood, Master and Servant § 136 [2d ed 1886]). Previous courts were divided as to how such contracts should be interpreted. Some authorities had construed general hirings to endure for a year in accordance with the approach taken by the English courts ( see , 1 Blackstone; Commentaries, at 425 [1765]) unless the frequency of payments was stated ( see , 2 Story, Contracts, § 1291 [5th ed 1874] [Where wages are payable at a stipulated period, as per week, or month, or half-year, such circumstance, standing alone, indicates that the hiring is for such period]; Schouler, Domestic Relations § 458 [4th ed 1889] [if a contract for hiring is at so much per month, it will readily be presumed that the hiring was by the month, even if nothing was said about the term of service]). In one treatise, it was stated that the English rule of a one-year presumption applied to a general hiring but a hiring for an indefinite time is only at will (2 Story, Contracts § 1290 [5th ed 1874]). Both types of employment were presumptively at-will under the rule espoused by commentator Horace G. Wood ( see , Wood, Master and Servant § 136 [2d ed 1886]). In New York, the latter rule was deliberately adopted, all the judges concurring, to settle the differences of opinion which had prevailed in the lower courts ( Watson v Gugino , 204 N.Y. 535, 541-542, supra ). We have noted that the original purposes of the employment at-will doctrine were to afford employees the freedom to contract to suit their needs and to allow employers to exercise their best judgment with regard to employment matters ( Sabetay v Sterling Drug , 69 N.Y.2d 329, 333, supra ). In fact, the core of the at-will doctrine is the unfettered right held by the parties to terminate the employment relationship at any time for any reason not otherwise prohibited by law or public policy ( see , Sabetay v Sterling Drug , 69 NY2d, at 337). General or indefinite terms of employment are not even presumed to endure for a reasonable time ( Haines v City of New York , 41 N.Y.2d 769, 772). [3] In accordance with the above-noted rule, any presumption of an at-will relationship may be rebutted with proof that the unfettered right to terminate the employment has been limited by express agreement ( Sabetay v Sterling Drug , supra , 69 NY2d, at 334; see also , O'Connor v Eastman Kodak Co. , 65 N.Y.2d 724; Matter of Hanchard v Facilities Dev. Corp. , 85 N.Y.2d 638; Parker v Borock , 5 N.Y.2d 156). However, as detailed below, the burden of establishing the existence of these contractual limitations is heavy (1 Proskauer, Rose, Goetz and Mendelsohn, New York Employment Law § 2.04 [2] [a]). Particularly relevant here is the principle that the elements and burden of proof required to overcome the at-will presumption are substantially different from that required to succeed in a claim based upon a contract for a definite duration. Overcoming the At-Will Presumption Since employment contracts with a definite duration are not presumptively at-will, traditional rules of contract interpretation apply. Typically, a court will not inquire into the adequacy of consideration supporting the parties' agreement since even the `slightest consideration is sufficient to support the most onerous obligation' ( Mencher v Weiss , 306 N.Y. 1, 8; see also , Weiner v McGraw-Hill, Inc. , supra , 57 NY2d, at 464; 1 Proskauer, Rose, Goetz and Mendelsohn, New York Employment Law § 2.03 [2] [New York courts have rarely refused to uphold an employment contract for lack of consideration]; Bakaly and Grossman, Modern Law of Employment Contracts § 3.2 [2d ed] [adequacy of consideration is rarely an issue in employment contracts]). Accordingly, an employee's mere promise to work could potentially support a promise of work for a definite term of years. However, a promise of employment which might last anywhere from a day to a decade is insufficient, standing alone, to indicate an actual intention to be potentially and absolutely bound to obligations far in excess of an ordinary employment at-will relationship. While `the manifestation of a party's intention rather than the actual or real intention is ordinarily controlling' ( Mencher v Weiss , supra , 306 NY, at 7 [citation omitted]), promises of employment of indefinite duration  such as that measured by the physical or professional life of either party  are simply too unusual to be taken at face value. Such assumptions are of greying vintage ( Heaman v Rowell Co. , 261 N.Y. 229, 231 [Alleged contracts of life employment are    so unusual as to have been, with rare exceptions, condemned by the courts as unreasonable and unauthorized]). In Arentz v Morse Dry Dock & Repair Co. (249 N.Y. 439, supra ), we noted that, [s]tanding alone and by themselves, the words permanent employment do not guarantee a job for life when used in contracts between employers and employees ( id. , at 444). We distinguished the matter from cases where such intent was demonstrated from the circumstances    and from the consideration which has been furnished ( id. , at 444). As an example, we cited Rague v New York Evening Journal Publ. Co. (164 App Div 126), a case in which the Court held in favor of a plaintiff who sued to enforce an oral agreement under which defendant promised to pay him for as long as he abstained from selling a rival newspaper ( id. , at 126). The Court expressly observed that the contract was not without consideration, as the plaintiff abandoned a valuable business ( id. , at 126). Another case we cited approvingly was Pierce v Tennessee Coal, Iron & R. R. Co. (173 US 1), where the plaintiff had been employed as a machinist in the defendant's coal mine when he was seriously hurt under conditions which plaintiff claimed rendered defendant liable to him in damages. The contract at issue required plaintiff to receive certain wages and benefits so long as his disability to do full work continued; and that, in consideration of these promises of the defendant, the plaintiff agreed to do such work as he could, and to release the defendant from all liability upon his claim for damages for his personal injuries ( id. , at 9). At trial, plaintiff proved that he was permanently disabled by his injuries; that he was always ready and willing to do such work for defendant as he was able; and that defendant, without reasonable ground therefor, discontinued payments to plaintiff and disregarded the contract. Where such facts were proved to the satisfaction of the jury, the Supreme Court held that defendant committed an absolute breach of the contract, at a time when the plaintiff was entitled to require performance ( id. , at 16). Clearly, more was involved in that case than the mere allegation that wages were promised so long as plaintiff was disabled, an indefinite period. As one court has stated the rule: Under circumstances where an employee has given consideration of benefit to the employer, additional to the services of employment, a contract for permanent employment is valid and enforceable and not against public policy and continues to operate as long as the employer remains in business and has work for the employee, and the employee is willing and able to do his work satisfactorily and does not give cause for his discharge ( Forrer v Sears, Roebuck & Co. , 36 Wis 2d 388, 394, 153 NW2d 587, 590). In a later case, this Court explicitly held that a contract for employment for life    based on an adequate consideration, will ordinarily be sustained ( Heaman v Rowell Co. , 261 N.Y. 229, 231, supra ) and other as long as-type employment relationships recognized by this Court as binding have all involved continuing performance and consideration given by the employee independent of a mere promise to work for the employer ( see, e.g. , Cammack v Slattery & Bro. , 241 N.Y. 39, 42 [employer held to promise to continue paying royalties for indefinite period when it continued to sell radiators which embodied ideas and conformed to plans developed by the plaintiff]; Ehrenworth v Stuhmer & Co. , 229 N.Y. 210, 215 [agreement to sell defendant's bread as long as the parties were in business was supported by consideration given on both sides]; Schwarz v Regensburg & Sons , 227 N.Y. 568 [payments for life upheld upon promise not to compete with defendants in business]; cf. , Rubin v Dairymen's League Co-op. Assn. , 284 N.Y. 32, 38 [Court upheld lower court's finding of fact that agreement was `unilateral as to time and could be terminated by either party at any time']). More recently, in Weiner v McGraw-Hill, Inc. (57 N.Y.2d 458, supra ), we concluded that a jury question had been raised as to whether plaintiff was entitled to employment indefinitely in light of a claimed promise by defendant not to discharge [him] without just and sufficient cause and an opportunity for rehabilitation ( id. , at 466). In that case, we concluded that plaintiff had alleged, inter alia , sufficient facts to support the conclusion that he had detrimentally relied upon defendant's assurance that he would not be discharged without cause. We have characterized such factors to be significant in a claim of breach of an employment contract for an indefinite duration ( Sabetay v Sterling Drug , supra , 69 NY2d, at 334) and the absence of such pleading and proof may be fatal to such a claim ( see, e.g. , O'Connor v Eastman Kodak Co. , 65 N.Y.2d 724, supra ; Matter of De Petris v Union Settlement Assn. , 86 N.Y.2d 406). Although each of these cases raised different issues relating to pleading and proof based upon the facts presented, it is clear that an employee must show consideration independent of a mere promise to work for an employer to overcome the presumption of at-will employment. In this case, though analogous to those requiring such additional proof, the majority finds that the employment is for a definite duration as a matter of law and, thus, a traditional contract analysis would apply. Thus, the majority's ruling relieves plaintiff from having to prove elements we have recognized as necessary for recovery upon similar facts. No one claims that Tyson must train under Rooney despite the strain in their personal relationship. In contemplation of such circumstances, it may well be that Tyson and/or his guardian never intended that Rooney be paid even in the absence of an ongoing, actual training relationship. It is also possible that sufficient proof exists in the record to sustain the plaintiff's claim regarding the parties' intention. However, that question and that proof are not before us. While the District Court concluded that the nature of the proof offered at trial cannot sustain a finding that the employment relationship was anything other than one at-will ( Rooney v Tyson , 956 F Supp 213, 216, supra ), no opinion is expressed here on the issue which must be resolved in the Federal courts. For this case, the Second Circuit has asked this Court to determine whether an oral promise that employment will endure as long as defendant's professional boxing career, standing alone, establishes an employment agreement of definite duration, which effectively reduces to an irrelevancy the requirement of additional circumstances and/or consideration that would be required to rebut an at-will presumption. Rather than analyze this case in accordance with our precedents in which the present circumstances neatly fit, the majority carves out a category of employment contracts from the at-will rebuttable presumption. [4] Consideration of the Statute of Frauds The majority's reliance upon oral promises of job security is also troubling in light of other concerns we have articulated in this area. An employment contract of a definite duration beyond a year may avoid application of the at-will presumption but must be in writing to be enforceable at all ( see , General Obligations Law § 5-701 [a] [1]). Though, in some circumstances, oral contracts may bind parties as tightly as those that are written, it is clear that a writing subscribed by the party to be charged with long-term obligations is the most reliable indicator of actual intent ( see , Burns v McCormick , 233 N.Y. 230, 234 [Cardozo, J.] [The peril of perjury and error is latent in the spoken promise]). Indeed, in Arentz v Morse Dry Dock & Repair Co. (249 N.Y. 439, supra ), we opined that [a]n agreement to employ the plaintiff    for life is so unusual that we would expect to find it contained in some writing ( id. , at 441). [5] Here, the potentially long-term obligations recognized by the majority as a matter of law would not be barred by the Statute of Frauds because Tyson concedes that his professional career might have ended within a year. Thus, the majority's decision manages to sidestep the level of proof we have recognized as necessary under both the at-will presumption and the Statute of Frauds. Of course, such concerns do not inform the previously reached conclusion herein that the contractual language at issue is for employment of indefinite duration, the sole issue submitted for our determination by the Second Circuit. Contrary to the majority's characterization of the dissent, the oral nature of the contract at issue is not the basis of the difference in conclusions reached on definiteness.