News & Updates
At-Will Employment Rule in New York: An Employer May Unilaterally Change Terms September 16, 2013
On August 14, the New York Supreme Court Appellate Division, Second Department issued a decision in Minovici v. Belkin recognizing that the employment relationship under common law is presumed to be a hiring at will terminable at any time by either party. Even though the plaintiff and the employer had entered into a written contract under which the plaintiff was to move to the Netherlands to serve as information systems director, the employment contract did not establish a fixed duration of time of the employment.
In this case, relying on the employment agreement, the plaintiff prepared to relocate and sold his house. But prior to the start date of the employment, the employer advised the plaintiff that the position was no longer available, and offered him a junior position at a lower salary instead. The court rejected the plaintiff’s argument that since the contract provided that he would receive housing allowance for two years that it provided a duration of employment. Rather, the court found that the terms of the housing allowance was an offer by the employer that was incidental to the plaintiff’s employment and did not in any way bind either party to a two-year employment contract.
The employer’s offer of a junior position at a lower salary did not amount to a breach of contract since the plaintiff was an at-will employee. Therefore, the employer may unilaterally change the terms of employment and the employee can either accept the new terms or end the employment. Therefore, the employee had no valid cause of action for violation of the covenant of good faith and fair dealing related to the employment contract. The plaintiff’s claims of fraud and fraudulent inducement were dismissed since they were found to be duplicative of the breach of contract claim; since he was an at-will employee, this claim was not viable. The court further dismissed the plaintiff’s claim for intentional infliction of emotional distress, reaffirming that the termination of an at-will employment relationship cannot be the basis for such a claim.
The plaintiff’s last cause of action was for a declaratory judgment declaring that the defendant breached the employment contract. Since the court found that there was no breach of the contract, the Appellate Court remitted the case to the trial court to enter a judgment, declaring that the employer did not breach its obligations under the contract.
This case is a reminder of the strength of the at-will employment rule in New York. It will trump the employment contract unless the contract defines the start and end of the employment term of duration.
If you have questions about how this may impact your business, please contact:
- Latha Raghavan (518.935.4250; firstname.lastname@example.org)
- Sean P. Beiter (716.566.5409; email@example.com)
- Caroline J. Berdzik (609.986.1314; firstname.lastname@example.org)
- Matthew C. Van Vessem (716.566.5476; email@example.com)
- Or another member of the Goldberg Segalla Labor and Employment Practice Group.