Dorman v. Petrol Aspen, Inc.: the Death of Employment at Will?
| Publication year | 1996 |
| Pages | 97 |
| Citation | Vol. 25 No. 11 Pg. 97 |
1996, November, Pg. 97. Dorman v. Petrol Aspen, Inc.: The Death of Employment At Will?
In reversing the Court of Appeals, the Supreme Court held that an employment offer letter that contained statements about future rates of compensation, the opportunity to purchase stock options in subsequent years, and long-range planning was ambiguous with respect to the term of the plaintiffs employment. As a result, the plaintiff had to be given the opportunity to offer extrinsic evidence as to the term of employment and had properly stated a claim for relief for breach of employment contract.
Prior to Dorman, courts have been reluctant to allow claims for breach of contracts of employment based on forward-looking statements in offers of employment. Typically, claims of breach of employment contract have been disposed of by courts at the pleading stage in the absence of specific evidence relating to a term of employment.(fn3) Despite prior decisions, the underlying facts and reasoning of the Dorman decision create significant questions regarding both the strength and the scope of the at-will employment doctrine in Colorado.
At common law, in the absence of an explicit contract to the contrary, there was a presumption that every employment was employment at will.(fn4) As the court stated in Martin Marietta Corp. v. Lorenz:
Re-enforcing this basic rule is a special rule of mutuality of obligation, pursuant to which either the employer or the employee was free to terminate the employment at any time for no cause whatever and without notice. The at-will employment doctrine thus evolved to the point where both employer and employee could terminate the employment relationship without thereby being subjected to legal liability for the termination.(fn5)
In Justice v. Stanley Aviation Corp.,(fn6) the plaintiff brought an action for breach of contract when he was terminated after less than four months on the job. The plaintiff's claim was based on the text of a written offer of employment setting forth: (1) an annual salary of $12,000 per year; (2) reimbursement up to the equivalent of one month's salary for relocation costs; and (3) a provision that should the plaintiff resign within a twelve-month period, all travel and moving expenses would be reimbursed to the company.(fn7)
The Court of Appeals in Justice framed the issue as whether the "contract of employment was for a definite period of one year."(fn8) The court held that unless the facts and circumstances indicate otherwise, "a contract which sets forth an annual salary rate that states no definite term of employment is considered to be indefinite employment, terminable at the will of either party. . . ."(fn9) The court further indicated that the surrounding circumstances---that the plaintiff was seeking permanent employment and that he assumed his employment would be permanent---were insufficient to establish a definite term.(fn10)
Thirteen years later, in Continental Airlines, Inc. v. Keenan,(fn11) the Colorado Supreme Court, despite reversing the trial court's grant of summary judgment, reaffirmed that employment for an indefinite period of time is presumed to be at-will employment. The Supreme Court stated that "[t]his presumption of 'at-will' employment, however, should not be considered absolute but rather should be rebuttable under certain circumstances."(fn12) Keenan involved a breach of employment contract claim on the theory that a unilaterally published employee manual altered the terms of an otherwise at-will relationship.(fn13)
The Keenan court refused to categorically rule that an employee manual either automatically amends the terms of an employment contract or represents only unilateral expressions of general employer policies that have no bearing on the employment relationship.(fn14) Instead, the Keenan decision established that a unilateral manifestation by the employer, such as in the form of an employee manual, may, under certain facts and circumstances, constitute
an amendment to what is otherwise a terminable at-will employment relationship.(fn15) Indeed, the...
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