New York Law Review

Tag: at-will employment

  • Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458 (1982): Establishing Fraud Based on Promises of Future Conduct

    Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458 (1982)

    To state a cause of action for fraud based on a promise of future conduct, a plaintiff must allege that the defendant had a present intention not to perform the promised future conduct at the time the promise was made.

    Summary

    Weiner sued McGraw-Hill, alleging breach of contract and fraud related to the termination of his employment. The New York Court of Appeals affirmed the dismissal of all 14 causes of action in Weiner’s second amended complaint. The court held that the breach of contract claim was insufficient because it involved a contract terminable at will. The court also found that the fraud claims failed because Weiner did not adequately allege that McGraw-Hill had a present intention not to fulfill its promises of future conduct when those promises were made. The court further held that statements made before the State Division of Human Rights were privileged, thereby defeating the defamation claims.

    Facts

    Weiner brought an action against McGraw-Hill after his employment was terminated. His complaint included multiple causes of action, including breach of contract, fraud, and defamation. The specific details of the initial employment agreement and the alleged defamatory statements are not fully detailed in this memorandum decision, but they form the basis of the claims against McGraw-Hill.

    Procedural History

    The Appellate Division dismissed all 14 causes of action in Weiner’s second amended complaint. Weiner appealed this decision to the New York Court of Appeals.

    Issue(s)

    1. Whether the cause of action for breach of contract was insufficient because it alleged a contract terminable at will.
    2. Whether the causes of action for fraud were insufficient for failure to allege a present intention not to perform the promises of future conduct.
    3. Whether the causes of action for defamation were insufficient because the statements were privileged as they were made before the State Division of Human Rights.
    4. Whether the Appellate Division abused its discretion in denying leave to replead certain causes of action.

    Holding

    1. Yes, because the complaint alleged no more than a contract terminable at will.
    2. Yes, because the complaint failed to allege a present intention not to perform the alleged promises of future conduct. Specifically, the court cited, “Lanzi v Brooks, 43 NY2d 778“.
    3. Yes, because statements made before the State Division of Human Rights are privileged.
    4. No, because the appellant recognized the allegations were insufficient.

    Court’s Reasoning

    The Court of Appeals affirmed the Appellate Division’s decision, finding no error in the dismissal of all 14 causes of action. Regarding the breach of contract claim, the court stated that it was properly classified as a contract terminable at will, which is insufficient to sustain a cause of action. The fraud claims were deemed insufficient because Weiner failed to allege that McGraw-Hill had a present intention not to perform the promised future conduct at the time the promises were made. This aligns with the precedent set in Lanzi v. Brooks. As for the defamation claims, the court held that statements made before the State Division of Human Rights are privileged, providing immunity from defamation suits. The court also upheld the denial of leave to replead, finding no abuse of discretion by the Appellate Division. Regarding the final cause of action, the court found that Weiner failed to allege consideration which could support the promise asserted to have been made to appellant.

  • Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458 (1982): Enforceability of “Just Cause” Termination Policies in Employment Handbooks

    Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458 (1982)

    An employer’s promise of job security in a personnel handbook, coupled with an employee’s reliance on that promise by leaving a prior job and rejecting other offers, can create an enforceable contract requiring just cause for termination, even in the absence of a fixed employment term.

    Summary

    Walton Weiner left his previous employment at Prentice-Hall to work for McGraw-Hill after being assured that McGraw-Hill’s policy was to terminate employees only for “just cause,” as stated in its personnel handbook. Weiner signed an application referencing the handbook. He alleged he relied on this assurance, forfeiting benefits and a raise at Prentice-Hall. After eight years, McGraw-Hill fired Weiner for “lack of application.” Weiner sued for breach of contract. The Court of Appeals held that Weiner stated a cause of action because the promise of job security, combined with Weiner’s reliance, could create an enforceable contract modifying the at-will employment presumption.

    Facts

    In 1969, McGraw-Hill recruited Walton Weiner from Prentice-Hall. McGraw-Hill’s representative assured Weiner that the company’s policy was to terminate employees only for “just cause,” as detailed in its personnel handbook. The handbook stated dismissal would occur “for just and sufficient cause only, and only after all practical steps toward rehabilitation or salvage of the employee have been taken and failed.” Weiner signed an employment application referencing the handbook. Weiner alleges he relied on these assurances, leaving Prentice-Hall, forfeiting accrued fringe benefits, and turning down a salary increase offered by Prentice-Hall to stay. After eight years of employment, Weiner was fired in February 1977 for “lack of application.”

    Procedural History

    Weiner sued McGraw-Hill for breach of contract. The Supreme Court (Special Term) upheld the complaint. The Appellate Division reversed, holding that because Weiner was an at-will employee, he could be terminated arbitrarily. Justice Kupferman dissented. The Court of Appeals reversed the Appellate Division, reinstating the Special Term order.

    Issue(s)

    Whether an employer’s promise of job security in a personnel handbook, coupled with an employee’s reliance on that promise, can create an enforceable contract requiring just cause for termination, despite the employee not being hired for a fixed term.

    Holding

    Yes, because the promise of job security, incorporated in the employment application and relied upon by the employee in leaving prior employment and rejecting other offers, presents a question for trial as to whether the employer was bound not to discharge the employee without just and sufficient cause and an opportunity for rehabilitation.

    Court’s Reasoning

    The Court of Appeals reasoned that the traditional at-will employment rule is a rebuttable presumption, not an absolute bar to contractual obligations. The court emphasized that “mutuality” (coextensive promises) is not always necessary for a binding contract; consideration, which can be a benefit to the promisor or a detriment to the promisee, is the key. Here, Weiner’s leaving his prior employment and rejecting other offers in reliance on McGraw-Hill’s promise of job security constituted sufficient consideration. The court stated, “[i]t is enough that something is promised, done, forborne or suffered by the party to whom the promise is made as consideration for the promise made to him.” The court found sufficient evidence of a contract and breach based on four factors: (1) inducement to leave prior employment with assurances of discharge only for cause, (2) incorporation of those assurances into the employment application, (3) rejection of other job offers in reliance, and (4) internal enforcement of handbook procedures for subordinate dismissals. The court also noted that the trier of fact should consider the parties’ course of conduct, writings, and negotiations to determine if the at-will presumption was overcome. As the court stated, it is “the totality of all of these, given the attendant circumstances, the situation of the parties, and the objectives they were striving to attain”, which will control.

  • Matter of Howard v. Town of Clarkstown, 48 N.Y.2d 554 (1979): At-Will Employment for Unclassified Civil Service Employees

    Matter of Howard v. Town of Clarkstown, 48 N.Y.2d 554 (1979)

    An employee in the unclassified civil service of a suburban town serves at the pleasure of the town board and can be removed without a hearing or for reasons other than misconduct or incompetence, unless otherwise provided by local law.

    Summary

    This case concerns the dismissal of the head of the engineering department for the Town of Clarkstown. The petitioner, Howard, argued that his term of office was governed by Section 53-c of the Town Law, which fixes the term of office for department heads in suburban towns. The Court of Appeals affirmed the lower court’s decision, holding that even if Section 53-c applied, it explicitly states that appointees are “removable at the pleasure of the town board.” Moreover, Section 53-a places department heads in the unclassified civil service, and those employees do not have the same protections against dismissal as those in the classified service.

    Facts

    The Town of Clarkstown is a suburban town. The petitioner, Howard, was the head of the town’s engineering department. Howard was dismissed from his position by the town board. Howard challenged his dismissal, arguing that his term of office was governed by Section 53-c of the Town Law, which fixed a definite term. He asserted that this section provided him with greater job security.

    Procedural History

    The case originated in a lower court, where the petitioner sought to challenge his dismissal. The Appellate Division affirmed the lower court’s decision. The case then reached the New York Court of Appeals, which also affirmed the lower court’s decision.

    Issue(s)

    1. Whether Section 24 of the Town Law or Article 3-A, specifically Section 53-c, governs the petitioner’s term of office.
    2. Whether a department head in a suburban town’s unclassified civil service is protected from dismissal without a hearing or for reasons other than misconduct or incompetence.

    Holding

    1. The court did not explicitly decide which section applied, but held that the result would be the same under either Section 24 or Section 53-c.
    2. No, because Section 53-c states that appointees are “removable at the pleasure of the town board unless otherwise provided by local law,” and Section 53-a places department heads in the unclassified civil service, which does not afford the same protections as the classified service.

    Court’s Reasoning

    The Court of Appeals reasoned that even if Section 53-c applied, it explicitly states that appointees are “removable at the pleasure of the town board unless otherwise provided by local law”. The court also noted that Section 53-a places department heads of suburban towns “in the unclassified service.” The court relied on Matter of Glazer v Hankin, 50 AD2d 924, which held that a person in the unclassified civil service is not protected by Section 75 of the Civil Service Law against dismissal without a hearing or for other than misconduct or incompetency. Therefore, the petitioner’s argument that Section 53-c provided him with greater job security was without merit. The court reasoned that the lack of statutory protection for unclassified civil service employees means they serve at the pleasure of the appointing board. The court’s reasoning underscores the importance of understanding the distinction between classified and unclassified civil service positions and the differing levels of job security associated with each.