Tag Archives: at-will

Claims of Decreasing Compensation without 30 Day’s Notice–Stanbrough v. Vitek Solutions, Inc.

In Stanbrough v. Vitek Solutions, Inc., 2014 WL 462927 (Mo. Ct. App., E.D.), we have an interesting claim brought by an employee.  It appears from the brief that the employee was working for a firm that does repair work for the employer’s customer–a cable, telephone, internet provider enterprise (Charter Communications).  One of the claims is the employer’s compensation of the employee mirrored amounts payable by the client to the employer, and that decreases violate Missouri law concerning decreasing an employee’s compensation without advance notice.  The brief’s discussion of this matter, in full, is as follows:

III. The Trial Court erred in Concluding that Material issues of disputed fact did not exist to preclude Summary Judgment on Appellant’s breach of contract claims against Appellee.

A Missouri employer may not unilaterally decrease an employee’s pay absent 30 days’ notice. Mo. Rev. Stat. § 290.100.

On several occasions, Appellant inquired to a Vitek supervisor why his pay fell short of the agreed-upon “piece rate” compensation owed to him. On those occasions, Vitek’s supervisor responded that Appellant’s pay only included the “piece rate” items that Charter Communications had paid Vitek. LFRA at 10:1058; 1064. Nowhere does Vitek assert that its agreement to pay Appellant based on the “piece rate” schedule was contingent upon the vagaries of Charter’s subsequent actions after Appellant had provided such services to Charter’s customers. It follows that Vitek’s motion for summary judgment should be denied as to Appellant’s claim under Mo. Rev. Stat. § 290.100.

That’s an interesting way to posture a claim.  I’m interested to see how it works-out.

Continuing Our Discussion of an Obligation Perfectly-Well Expressed

A few days ago, we commented on whether contract language adequately indicates a choice that employment is for a term (not at-will).

Tettamble attempts to apply interpretative guidelines–somewhat tedious ones–formulated long-ago. In brief, they require contract language be very clear if it is to opt-out of the default principle that employment is at-will.  Where a tedious, counter-intuitive interpretative principle is long-standing, it is helpful to assess the context in which the principle developed.  If the contextual legal framework has changed, would it not make sense to re-assess the tedious, counter-intuitive principle?

… More after the break

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Instinct with an Obligation Perfectly-Well Expressed: Tettamble v. TCSI-Transland, Inc., 2013 WL 4854763 (Mo. App. S.D. 2013)

Does an employment agreement adequately specify a term by stating:  “Compensation for Vice President – Driver Resources: $1,250 per week for 52 weeks = $65,000.00” (employee’s brief at 5)?  Tettamble says, “No.”  Is the prior authority indicating a term has not been stated comparable to that in Tettamble?  Well, let’s see.

Brookfield v. Drury College, 123 S.W. 86, 94 (Mo. App. 1909), states:

The law in this state has been well stated that an indefinite hiring at so much per day, or per month, or per year, is a hiring at will, and may be terminated by either party at any time, and no action can be sustained in such case for a wrongful discharge.

Fair enough.  So, we will see the following as giving rise to at-will employment:

“A. All the contract as made by Mr. Harris was one hundred and fifteen dollars a month; did not say when it started or when it was to end.”

Evans v. St. Louis, I.M. & S. Ry. Co., 24 Mo.App. 114 (1887).

 “$12.50 per week for myself and $7.50 per week for my son Arthur, who is 24 years old and grown up in the business, a good hand, and $5 per week for another helper ….”

Harrington v. F.W. Brockman Commission Co., 81 S.W. 629 (Mo. App. 1904).

The Tettamble court describes prior authority as holding the following statements create at-will employment:

salary is to be $12,000 per year

(citing Campbell v. Sheraton Corp. of America, 253 S.W.2d 106, 110 (Mo. 1952))

your compensation for the year 1991–92, effective July 1991, computed at an annual rate, will be:

Salary
$47,600.00
Annuity Contribution
$ 5,474.00

Your first monthly salary payment based on this rate will be made on July 31, 1991.

(citing Clark v. Washington University, 906 S.W.2d 789 (Mo. App. E.D. 1995)).

What’s the difference?  So, in Tettamble, the writing does not simply state a dollar amount per period.  Rather, it states two dollar amounts and two periods.  The court’s reading of the provision gives no effect to the language “for 52 weeks = $65,000.00”—it’s surplusage.  So, what’s the second, longer period, and the second, larger dollar amount to mean, if not to express a term?  And, of course, a construction resulting in some language being surplusage is disfavored, and reading additional language referencing $65k and 52 weeks as not specifying a term results in that language being surplusage.

It seems that the Missouri approach is traceable to Finger v. Koch & Schilling Brewing Co., 13 Mo. App. 310 (1883).  So, what’s Finger’s authority?  Prevailing counsel in Finger cites Wood on Master and Servant, sec. 134, for the proposition that an engagement at “so much per year” is not for a term.  So, what does Wood on Master and Servant say?

“[I]f A agrees with B to work for him eight months for $104, or $13 a month, this will not only be treated as a contract for eight months’ service, but also as an entire contract, performance of which is a condition precedent to a recovery of any portion of the wages ….

H. G. Wood, A Treatise on the Law of Master and Servant § 134, at 273 (1877).

(Note that courts long-ago would have been more willing to provide that, where the agreement was for a term and not divisible, an employee in breach of an employment for a term would have been unable to recover anything, an outcome rejected in Britton v. Turner, 6 N.H. 481 (1834)–Britton reflecting the modern trend.)

Do we really think there is a meaningful difference between the following:  An agreement to work—

$1,250 per week for 52 weeks = $65,000.00

and

for 52 weeks for $65,000, or $1,250 a week

Perhaps we need another tedious rule of construction.  I don’t know; what about contra proferentem?

The background on construction of employment allegedly for a term is somewhat complex.  We plan to devote our next post to more detail on that.

 

An Unfortunate Analysis: Wallace v. St. Francis Medical Center, 2013 WL 5469137 (Mo. App. E.D. Oct. 1, 2013)

So, in Wallace, discussed previously when the case was pending, we now have in the decided opinion the following concerning compensation–and this is important–allegedly for services actually rendered before at-will employment was terminated:

Even accepting Wallace’s premise that the verbal offer and acceptance in 1983 plus the 2004 on-call posting created a contract, to satisfy the statute of frauds, an employment contract must contain all essential terms, including duration of the employment relationship. McCoy v. Spelman Mem’l Hosp., 845 S.W.2d 727, 730 (Mo.App.1993). No such term existed here. Absent a valid contract, Wallace’s breach of contract claim must fail.

This is, of course, unsound.  Although at formation there may be some indefiniteness in the terms of the bargain (such as when it will end), the parties’ performance can fill-in the missing component–the term.  The employee is entitled to bargained-for compensation for services the employee provides–the performance of the contract determines the term.

Is the authority cited by the Wallace court, McCoy, about recovery of bargained-for compensation for work previously provided under an at-will contract?  No.  It’s about seeking compensation for having been terminated before an alleged five-year term claimed to have been provided orally.

Is there Missouri authority allowing recovery of compensation of services actually rendered under a bargained-for under an at-will arrangement, when the employer sought to get away with paying less. Sure:

For the services which the plaintiff has performed, he himself admits he has been paid, with the exception of the $12.75, which have been deducted for his board bill, as he claims without authority.

We are of opinion that there is substantial evidence showing that the plaintiff is entitled to this amount with interest, and that to that extent, but no further, the verdict of the jury is supported by substantial evidence. As the cause has been repeatedly tried, and no other result can be accomplished by a re-trial, we will not remand it, but enter judgment here.

Evans v. St. Louis, I.M. & S. Ry. Co., 24 Mo.App. 114, 1887 WL 1749, at *3 (Mo. App. 1887).

Thus, for example, one will see that an at-will employee who has earned some performance bonus before the employer elects to terminate him is entitled to the bonus.  E.g., Wright v. Cofield, 730 S.E.2d 421 (Ga. App. 2012).

Wallace illustrates what happens when a court takes bromide out-of-context.  One hopes that this erroneous observation in Wallace gets a second look, in one forum or another.

Wallace v. St. Francis Medical Center, 2013 WL 3191820 (Mo. App. E.D.)

An employee, a trauma assistant, initially under at-will employment is paid additional amounts for being “on call”, there being sign-up sheets and the like for this.  The employee alleges the arrangements were made in 2004 so this employee is to have scheduled on-call times.  It is alleged these were complied-with for some time, but the employer, it is alleged, stopped paying the additional amounts some time in 2006.

After summary judgment, in response to the appellant/employee’s brief, some curious observations are made by the employer:

 It is Appellant’s contention that an oral contract created in 1983 and modified by an oral amendment in 2004, both for indefinite periods, neither of which were reduced to writing, falls under an exception to the Statute of Frauds. The Statute of Frauds was designed to prevent just such a situation. As discussed supra, Appellant’s Amended Petition relies entirely on an alleged oral agreement for her employment as the “Trauma Assistant On Call.”

***

Here, Appellant does not allege the contract was to be performed within one year. In fact, Appellant’s Amended Petition indicates she performed under the alleged contract from October 1, 2004 through March 3, 2011. (LF 36 – Amended Petition, ¶ 8). As such, it is clear the alleged agreement was of unlimited duration and, therefore, must have been in writing to be enforceable under the Statute of Frauds. Even assuming the alleged agreement was memorialized in writing, as Appellant suggests was accomplished by Exhibit A of the Amended Petition, the writing must contain all of the essential terms of the agreement, one of which is duration. See Sales Service, Inc. v. Daewoo International (America) Corp., 770 S.W.2d 453, 455 (Mo.App.E.D.1989). Appellant has failed to allege how Exhibit A memorializes a duration provision of the alleged oral contract. Nothing on Exhibit A promises on call pay. (LF 40 – Amended Petition). Further, nothing on Exhibit A limits Saint Francis’ right to interpret its policies and determine who would or would not receive on call pay. The “Surgical Personnel On Call” sheet depicted in Exhibit A is nothing more than a collection of employee names and telephone numbers compiled for easy access by Saint Francis administration and certainly does not memorialize the alleged oral contract and amendment as Appellant suggests.

As such, Appellant has failed to state a claim upon which relief can be granted inasmuch as the Statute of Frauds precludes the enforcement of an oral agreement for an indefinite period of time.

What?  Although there are complicated issues as to whether part performance takes a contract out of the statute of frauds, certainly it cannot be a bar to recovery of what is alleged to be part of the agreed-upon compensation for parts of at-will employment that have been fully performed.

The statute of frauds does not foreclose recovery on oral contracts by application of the statute if the contract has been fully performed by one of the parties. Straatmann v. Straatmann, 809 S.W.2d 95, 99 (Mo.App.1991). Serafin v. Med 90, Inc.,
932 S.W.2d 422 (Mo. App. E.D. 1996).

Clearly Serafin states the doctrinally-correct answer.