Opinion ID: 1997619
Heading Depth: 2
Heading Rank: 1

Heading: Merrill v. Crothall-American

Text: While at-will employment remains a heavy presumption, this Court recognized the limited application of the Covenant to an at-will employment contract in Merrill v. Crothall-American, Inc., Del.Supr., 606 A.2d 96 (1992). In so holding, this Court stated: It has been said that to constitute a breach of the implied covenant of good faith, the conduct of the employer must constitute `an aspect of fraud, deceit or misrepresentation.' We think this characterization of an employer's duty under the covenant is accurate. The lodestar here is candor. An employer acts in bad faith when it induces another to enter into an employment contract through actions, words, or the withholding of information, which is intentionally deceptive in some material way to the contract. Such conduct constitutes an aspect of fraud, deceit or misrepresentation. Id. at 101 (citations omitted). Merrill produced evidence from which a rational jury could infer that he had been hired by Crothall when Crothall had the intention of replacing him as soon as it found a suitable replacement. Construing the facts in favor of Merrill, the non-movant, it appeared that Crothall allowed Merrill to believe that the job offer was for an indefinite duration when, at the very same time, Crothall was actively pursuing Merrill's replacement. Merrill left his prior employment based on that understanding. Merrill's claim, therefore, survived a summary judgment motion. Thus, Merrill was essentially a case where the Covenant was predicated on fraud in the inducement. [10] In Merrill, this Court carefully limited its holding by noting that [a]n employer has wide latitude in deciding how it conducts its business including its employment undertakings,... id. at 101, and explicitly reserving decision with respect to what constitutes justification for termination of an at-will employment contract, id. at 102. The Court stated further: Nothing said here is to be construed as limiting an employer's freedom to terminate an at-will employment contract for its own legitimate business reasons, or even highly subjective, reasons. Such a contract is still terminable by either party for any reason not motivated by bad faith. Id. at 103.