Employment Law2007 model answers

Employment Law2007 model answers - Employment Law Summer 07...

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Employment Law – Summer 07 Model Answers Question 1 (50 points). 1. Breach of Contract a. Promissory Estoppel / DGFFD According to the language of the job offer, Jim is initially an “at-will” employee. His employment is for no specified term, which creates an at-will relationship by default (Lab. Code § 2922), and the offer makes it clear that there is no agreement to the contrary by explicitly specifying that he is at-will. However, even though Jim was hired as an at-will employee, Jim may have a breach of contract claim on several different theories. In the Grouse case, the court held that the doctrine of promissory estoppel can prevent an employer from firing even an at-will employee. The court noted that if an employer has made a promise of employment upon which the plaintiff relies to his detriment, the employer must give him a good faith opportunity to begin work and perform his duties to the satisfaction of his employer. Jim certainly relied on the job offer to his detriment, as he left his old job and home in the Midwest to move to Los Angeles. The difference between Jim’s situation and the Grouse case is that Jim actually did start work, whereas Mr. Grouse was fired before the job even started. But the court in Grouse anticipated that problem and stated that promissory estoppel would apply even after employment has begun, and will continue for a “reasonable time.” Just what is a “reasonable time” is left open to debate, but one day probably is not reasonable. As discussed in class, a California court on similar facts applied the duty of good faith and fair dealing doctrine to find in favor of an employee. The duty of good faith and fair dealing regulates the performance of the employment agreement and prevents a party from acting in bad faith to frustrate some actual benefit in the contract. Thus, on either of these theories, Jim will have a strong argument that he should have been able to at least start the job and perform his duties without the terms being materially changed on him. Jim quit his old job and moved across the country, which shows great detrimental reliance on the job offer. We know that Jim was not fired for his performance as a consultant, which makes his argument more compelling. Acme will likely argue that it fired Jim for a legitimate business reason, i.e., the failure to sign the client royalty agreement, and that had Jim signed the agreement he could have kept his job. This argument might have some merit if the client royalty agreement were a typical and expected condition of employment, or if it had simply disclosed to Jim at the outset that such additional terms would apply. In either case, Jim could have reasonably known what to expect at the time he made the decision to leave his old job and move to Los Angeles. Unfortunately for Acme, Page 1 of 6
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this did not happen. Jim had no expectation of the client royalty agreement when he accepted the offer. And, as discussed below, the client royalty agreement was not a legitimate business
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Employment Law2007 model answers - Employment Law Summer 07...

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