Unresolved Issues in the Development of Connecticut Employment Contract Law
| Publication year | 2021 |
| Pages | 297 |
64 CBJ 297. Unresolved Issues in the Development of Connecticut Employment Contract Law
The second half of the 1980's saw Connecticut join the ranks of states eroding the at will employment doctrine. However, the parameters of contract law in the employer/employee setting are not yet well defined. The current state of employment contract law in Connecticut is ambiguous at best. While recent decisions attempt to scrutinize the bases of an employee's contractual claim, these decisions fail to adhere to the basic principles of contract formation.
The distinction between detrimental reliance on a sufficiently definite promise giving rise to a claim of promissory estoppel, and reliance on a promise of contractual commitment with accompanying consideration has become blurred.
Connecticut's recognition of employment contracts limiting discharge originally focused upon employment manuals or other written policies. Implied representations of continued employment were generally lumped into a theory of promissory estoppel, primarily due to a lack of contractual formalities. Recently, however, the concept of employment contracts limiting discharge was expanded to implied in fact "contracts" arising out of written representations other than in an employee manual, as well as from oral representations.(fn2)
As seen in D'Ulisse-Cupo v. Board of Directors of Notre Dame High School, (fn3) a distinguishing feature between implied in fact employment contracts and claims of detrimental reliance sounding in promissory estoppel is the existence of an intent to be bound contractually and the contractual element of consideration. The Connecticut Supreme Court took a giant step toward blurring this distinction in the 1988 decision of Coelho v. Posi-Seal International, Inc. (fn4)
Coelho involved a plaintiff who sued for breach of implied and express employment contracts. He had been terminated from his position as quality control manager after a dispute with a production manager within the company. The jury found that no express employment contract existed between plaintiff and defendant, but that an implied in fact agreement existed under which plaintiff could only be terminated for just cause. (fn5)
The evidence of plaintiff's contract with defendant consisted of various statements made to plaintiff by defendant's president, both during and after the hiring process, that plaintiff did not have to worry about his future and that plaintiff could grow with the company. In addition, there was evidence that plaintiff received specific assurances from defendant's president, both prior to and during his employment, that the company would support him in conflicts with the production manager.
The Coelho Court acknowledged the D'Ulisse-Cupo contract standard that a contract implied in fact is akin to an express contract and its existence depends upon an actual agreement (fn6) It further held that the plaintiff must demonstrate that defendant bad agreed by words, action or conduct, to undertake a contractual commitment pursuant to which plaintiff could not be terminated except for just cause. (fn7) Defendant argued that the evidence presented at trial could not have supported this burden, as the statements upon which plaintiff relied were merely expressions of expectations about the future and not offers of a contract.
The Court held there was no need to decide whether sufficient evidence was presented to permit a jury to find the existence of an implied agreement that the plaintiff could not be terminated except for cause under all circumstances. Instead, it held the specific assurances of the defendant's president constituted sufficient evidence to support
an implied agreement that the plaintiff would not be terminated as a esult of conflicts between the quality control and manufacturing department, as long as he performed adequately in his capacity as manager of quality assurance. (fn8)
In finding the evidence supported the existence of an implied contract, the Coelho Court focused on the necessity of consideration. The defendant compared contracts altering the at will status of an employee to contracts of permanent or lifetime employment and argued that to find an enforceable agreement altering at will employment status, the Court must find either detrimental reliance (i.e., promissory estoppel) or additional consideration beyond the acceptance or continuation of employment. This argument is consistent with the Appellate Court decision in Finley v. Aetna Life & Casualty Co. (fn9) In Finley, the Appellate Court noted the dictum in Magnan v. Anaconda Industries, Inc., (fn10) that reliance in taking a new position on an implied representation that employment will not be arbitrarily terminated may support an "agreement" not to discharge but for cause was in direct conflict with Supreme Court precedent in Fisher v. Jackson. (fn11) In Fisher, the Supreme Court stated:
The mere giving up of a job by one who decides to accept a contract for alleged life employment is but an incident necessary on [an employee's part to place himself in a position to accept and perform the contract; it is not consideration for a contraA of life employment. (fn12)
The Appellate Court in Finley did not attempt to resolve this conflict, as the facts in Finley did not involve an employee leaving one job for another. Upon analysis, it found plaintiff's detrimental reliance claim was supportable under a theory of promissory estoppel.
The Court in Coelho dismissed this concern, stating that it was unclear whether Fisher required consideration in addition to the rendering of services to support an agreement for permanent employment or whether this was merely a rule of construction. The Coelho Court cited the Supreme Court decisions in Magnan and Finley, where no mention was made of a need for additional consideration, as consistent with a view that "the only consideration needed to sustain such a contract is the employee's acceptance of employment on such terms." (fn13) In so holding, the Court expressly adopted the rulings of decisions in other jurisdictions, including Touissant v. Blue Cross & Blue Shield of Michigan. (fn14)
The Supreme Court decision in Coelho raises many questions. Is its holding that no additional consideration is required...
To continue reading
Request your trial