Opinion
104804/2003.
Decided June 4, 2004.
Defendant moves, pursuant to CPLR 3211 (a) (7), to dismiss the complaint.
Plaintiff Theodore O'Connor brings this action to recover damages for the defendant's alleged breach of a written employment agreement and misrepresentations it made in inducing O'Connor to terminate his employment with another company.
O'Connor alleges that, on March 6, 2002, defendant Harbrew Imports, Ltd. (Harbrew), a small importer of beer, offered O'Connor a job as its National Sales Director of Janjing Beer. At the time Harbrew made its offer, O'Connor was working for Barton Beer, a larger competitor of Harbrew. Harbrew's offer was in the form of a written letter agreement, and Richard J. DeCicco, the president of Harbrew, signed it. Although Harbrew's offer did not specify the length of the employment, it set forth a target date of employment of April 1, 2002, and that the compensation was "a bi-weekly salary of $4,807.70 x 26 weeks which is equivalent to an annualized amount of $125,000.00" (Kianovsky Aff. Ex., B). The agreement also set forth that a "Signing Bonus" of "$75,000.00 will be awarded after one year of service on April 1, 2003" ( Id.).
The letter agreement set forth further benefits, including, inter alia, the following:
8) Immediate Reimbursement: Upon signing, we will reimburse you the following opportunity cost and the expense to be incurred after you resign your current employer. The following two amounts will be part of the $75,000 signing bonus (outlined No. 5), and therefore we will deduct the reimbursed amount from your signing bonus:
I understand that you will lose 450 shares of stock options to exercise upon your resignation, and will reimburse you the "in-the-money amount (to be calculated at current market price) of approximately $7,500.00 upon your signing.
I understand that you will be liable to pay back approximately $15,000.00 for tuition assistance to your current employer, and that this is the contingent liability that you would not need to payback if you were to stay with your current employer for several years longer. I will reimburse the amount upon your signing (if necessary).
O'Connor contends that the salary provision as well as the bonus provision reflect the parties' understanding that the employment contract was for a period of one year. O'Connor began his employment with Harbrew on April 1, 2002, and was terminated, without cause, two months later, on June 4, 2002. O'Connor asserts that Harbrew breached the employment agreement in four respects: (1) the signing bonus; (2) tuition reimbursement; (3) stock reimbursement; and (4) the yearly salary.
O'Connor also alleges that, in order to induce him to leave Barton Beer, Harbrew falsely stated that it had a $3 million advertising and marketing budget and a 14 person sales staff. In fact, there wasn't even a $50,000.00 advertising and marketing budget. Harbrew also falsely represented that it would be going public shortly after O'Connor joined the company.
O'Connor has alleged causes of action for breach of contract (first cause of action); fraud (second cause of action) and promissory estoppel (third cause of action).
Harbrew asserts that O'Connor's employment was "at will," and thus terminable at any time. Therefore, Harbrew contends, O'Connor cannot assert a cause of action for breach of the employment contract. Nor can Harbrew assert causes of action for fraud or promissory estoppel because there can be no reliance where the employment was terminable at any time. It is well settled that "absent an agreement establishing a fixed duration, an employment relation is presumed to be a hiring at will, terminable at any time by either party [citation omitted]" ( Sabetay v. Sterling Drug, Inc., 69 NY2d 329, 333; Murphy v. American Home Products Corp., 58 NY2d 293, 300; Martin v. New York Life Ins. Co., 148 NY 117, 121. As such, the employer has an unfettered right to terminate the employment at any time ( Murphy v. American Home Prods. Corp., supra at 304). Just because a plaintiff is to be paid on the basis of an annual compensation rate, does not, in and of itself, obligate an employer to retain him for that period, or for any other period ( Martin v. New York Life Ins. Co., supra., at 121: Dalton v. Union Bank of Switzerland, 134 AD2d 174; Chase v. United Hospital, 60 AD2d 558).
On the other hand, where the employment contract does not explicitly set forth a definite term, but the language creates an ambiguity as to whether it was intended to be for a specified term, an issue of fact exists, requiring a trial. Thus, the Appellate Division, First Department, held that where an employment contract with no specified term, nonetheless sets forth the two phrases "1997 Deal" plus "A guaranteed Draw against Commission of $42,000 to be paid quarterly in the last pay period of each quarter," the language was sufficiently ambiguous to create an issue of fact as to whether the parties intended to set forth a specific term ( Perlick v. Tahari, Ltd., 293 AD2d 275; see also TSR Consulting Servs., Inc. v. Steinhouse, 267 AD2d 25).
Here, however, I agree with Harbrew that the wording of its March 6, 2002 letter does not create an ambiguity sufficient to raise an issue of fact as to whether the parties intended to set forth a specific duration of employment. The Signing Bonus, for one year of service, does not create a commitment of continued employment for that duration. Thus, O'Connor's employment was one at will and terminable at any time. What is unclear from the wording of the contract is whether the signing bonus of $75,000 accrued upon signing and was merely payable after one year, or whether it was dependant upon O'Connor remaining with Harbrew for one year. Further, the March 6th letter provides for immediate reimbursement of $7,500.00 and $15,000.00 in tuition "if necessary." O'Connor's breach of contract claim is valid as to these three claims.
O'Connor's second cause of action for fraud is based upon misrepresentations, made by Richard DeCisso, the president of Harbrew, as to the size of the company, its marketing budget, and other factors which were relevant to the position Harbrew was offering O'Connor. O'Connor contends that, based upon DeCisso's false representations, O'Connor was induced to leave his employment with Barton Beer and suffered damages as a result. As a rule, an at-will employee cannot claim damages for leaving his prior position because he cannot show reasonable reliance on a promise of continued employment with the new employer (See Demov, Morris, Levin Shein v. Glantz, 53 NY2d 553; Tannehill v. Paul Stuart, Inc., 226 AD2d 117; Bower v. Atlis Systems, Inc., 182 AD2d 951). Here, O'Connor has also not shown a causal nexus between his reliance on allegedly false representations as to the size of Harbrew and its marketing budget and O'Connor's damages (the loss of employment).
As to O'Connor's claim for promissory estoppel, either party may terminate an employment at will at any time for any reason or even for no reason ( Murphy v. American Home Prods. Corp., 50 NY2d at 300). Where, as here, there is no specific duration of employment, "[t]he fact that defendant promised plaintiff employment at a certain salary with certain other benefits, which induced him to leave his former job and forego the possibility of other employment in order to remain with defendant, does not create a cause of action for promissory estoppel [citations omitted]" ( Dalton v. Union Bank of Switzerland, 134 AD2d at 176).
Accordingly, based upon the foregoing, it is
ORDERED that defendant Harbrew Imports, Ltd.'s motion to dismiss is granted only to the extent that plaintiff's second and third causes of action are dismissed, as is that part of plaintiff's first cause of action for unpaid by-weekly salary; and it is further
ORDERED that the remainder of the action is severed and shall continue.
The parties are directed to appear for a preliminary conference on June 25, 2004 at 10:00 a.m. at courtroom 248, 60 Centre Street, New York, NY.