Opinion ID: 2099936
Heading Depth: 1
Heading Rank: 4

Heading: Existence of Employment Contract

Text: Ms. Rinck contends that her termination amounted to a breach of her employment contract. This court has held: [t]here is a presumption that a hiring not accompanied by an expression of a specific term of duration creates an employment relationship terminable at will by either party at any time. This presumption can be rebutted by evidence that the parties intended the employment to be for a fixed period, or subject to specific preconditions before termination. Nickens v. Labor Agency of Metro. Washington, 600 A.2d 813, 816 (D.C.1991) (citations omitted). In certain situations, promises of job security can rebut the presumption of at-will employment, but only where the parties have state[d] clearly their intention to make such an agreement. Littell v. Evening Star Newspaper Co., 73 App. D.C. 409, 410, 120 F.2d 36, 37 (1941). We first consider whether the oral statements made to Ms. Rinck were sufficiently clear to rebut the presumption and, concluding that they were, go on to examine whether there was adequate consideration to make this agreement enforceable. 1. Sufficiency of the Oral Promise The trial court concluded that even if Ms. Rinck's account regarding the making of a promise to her was true, it was insufficient to form a binding contract. Ms. Rinck admitted that Dr. Cluff did not mention a specific job title, duties, responsibilities, term, benefits or wage. However, she avers that Dr. Cluff did promise her that she would not be terminated, and that her salary and benefits would not be reduced, as a result of the merger. The trial court found that [n]o employment contract can exist which is wholly devoid of any agreement as to material terms, citing Edmund J. Flynn Co. v. LaVay, 431 A.2d 543, 547 (D.C.1981). LaVay, however, can readily be distinguished from the case at bar: LaVay involved the issue of whether a sales commission contract had been formed between a sales agent and certain developers. 431 A.2d at 545-46. A contract was never formed because the parties could not agree on the material terms. Id. at 546. Here the conversation between Ms. Rinck and Dr. Cluff established at the very least that Ms. Rinck would continue her employment, salary and benefits, even though her duties may not have remained exactly the same. Therefore, the conversation between Dr. Cluff and Ms. Rinck involved the continuation of her existing employment and there was no reason for them to deal with the material terms that would remain the same. It has been required in this jurisdiction, however, that the parties clearly state their intention to alter an at-will employment agreement in order to make such an alteration effective. Littell, supra, 73 App. D.C. at 410, 120 F.2d at 37; see also Minihan v. American Pharmaceutical Ass'n, 259 U.S.App. D.C. 10, 11-12, 812 F.2d 726, 728 (1987). This court has held that a personnel manual that states specific preconditions that must be met before employment will be terminated is sufficiently clear to rebut the presumption of at-will employment. Washington Welfare Ass'n v. Wheeler, 496 A.2d 613, 616 (D.C.1985). This court has also held, however, that a personnel manual which makes general references to permanent employees and discusses reasons the management can terminate such employees is too ambiguous to rebut the presumption. Perkins v. District Gov't Employees Fed. Credit Union, 653 A.2d 842, 843 (D.C.1995). We conclude that a statement that an employee will not be terminated for a specific stated reason is analogous to the establishment of preconditions for termination described in Washington Welfare, supra . Therefore, Dr. Cluff's alleged statement that Ms. Rinck would not be terminated as a result of the merger was sufficiently clear and unambiguous. [3] It remains, of course, a jury question whether the statement was made. 2. Consideration Generally, consideration is necessary to make a promise enforceable. According to the RESTATEMENT OF CONTRACTS: (1) To constitute consideration, a performance or a return promise must be bargained for. (2) A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise. RESTATEMENT (SECOND) OF CONTRACTS, § 71 (1981). More than one promise can usually be supported by a single consideration: There is consideration for a set of promises if what is bargained for and given in exchange would have been consideration for each promise in the set if exchanged for that promise alone. Id. § 80(1). Therefore, if a promise of job security is made at the time the parties first enter into the employment contract, the consideration of the employee's services is undoubtedly sufficient to support the various obligations the employer undertakes, including the job security provision: If it is their purpose, the parties may enter into a contract for permanent employment  not terminable except pursuant to its express terms  by stating clearly their intention to do so, even though no other consideration than services to be performed is expected by the employer or promised by the employee. Littell, supra, 73 App. D.C. at 410, 120 F.2d at 37. It is a different situation, however, when an additional promise is made after contractual duties have been undertaken. In general: [t]he parties to a contract are free to modify that contract by mutual consent. In order to be valid, however, the modification must possess the same elements of consideration as necessary for normal contract formation. Hershon v. Hellman Co., 565 A.2d 282, 283 (D.C.1989) (citations omitted). The case before us presents the issue of whether additional consideration beyond the continuation of services is required when a promise of job security is made after the commencement of employment. Some jurisdictions have held that when an employer unilaterally promulgates personnel policies, for example through an employee handbook, they become binding even if the employees do not provide additional consideration beyond the continuation of their services. [4] We need not decide in this case whether consideration beyond continued employment is required when an employer issues employee handbooks to those who have previously commenced employment. [5] The precise issue before us is whether a statement regarding job security made by an employer to an individual employee who is already working can become binding even if the employee gives no new consideration in addition to merely continuing the employment. We hold that additional consideration beyond continued employment per se is required to make such a promise enforceable. We are not disposed to encroach on this jurisdiction's long-established presumption of at-will employment by undermining the consideration requirement in this situation. That conclusion, however, does not resolve this case. We must deal with its particular circumstances. The context in which Dr. Cluff made the alleged promise of job security to Ms. Rinck is significant  a merger was being worked out. Typically mergers involve the consolidation of operations and they often require staff reductions. Ms. Rinck was justifiably concerned about her future with the surviving association, especially because she had worked directly for the head of the association that would not survive, and that person would not remain with the merged association. Therefore, Ms. Rinck might understandably have inquired about her job security. [6] Under the circumstances, a finder of fact could reasonably conclude that Ms. Rinck gave the associations the benefit of her continued services and her assistance in bringing about the merger because of Dr. Cluff's promise, and that she would not have conferred that benefit if he had not made the promise. A finder of fact could also infer that Dr. Cluff, in making the promise, sought to have Ms. Rinck remain on at that time. Therefore, even though Ms. Rinck's merely staying in her job would not normally, in the absence of such a circumstance, amount to consideration that would make binding an employer's statement concerning termination policy, if the jury should find that Dr. Cluff in fact made a promise of the nature alleged and that it was because of that promise that Ms. Rinck decided to forego seeking out other employment but instead to remain with the merging associations, her performance would constitute sufficient consideration to create a binding unilateral contract.