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Eilen v. Tappin''s Inc.

Decided: September 25, 1951.

YETTA EILEN, PLAINTIFF,
v.
TAPPIN'S, INC., A CORPORATION, AND FRANK GOODMAN, DEFENDANTS



On defendants' motion for summary judgment.

Francis, J.c.c. (temporarily assigned).

Francis

Plaintiff brought this action against defendant, Tappin's, Inc., seeking damages for breach by it of a contract under which she claims to have had lifetime employment. Defendant moved for summary judgment in its favor under Rule 3:56-3, which requires such judgment "if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show palpably that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law."

Following the oral argument defendant's motion for summary judgment was granted. However, before the order was submitted for signature the matter seemed to require and was given some further consideration, and it is fair to say that the persuasive dissenting opinion of Justice Oliver in Lewis v. Minnesota Mutual Life Insurance Company , 240 Ia. 1249, 37 N.W. 2 d 316, 329 (Sup. Ct. Ia. 1949), was largely responsible for the view now expressed herein.

As defendants point out, there are many cases throughout the country (and perhaps they express the majority view) to the effect that:

"The general rule is that in the absence of additional express or implied stipulations as to duration, a contract for permanent employment, for life employment or for other terms purporting permanent employment, where the employee furnishes no consideration additional to the services incident to the employment, amounts to an indefinite general hiring terminable at the will of either party, and therefore, a discharge without cause does not constitute a breach of such contract justifying recovery of money damages therefor." (135 A.L.R. 654; 35 Am. Jur. 460, sec. 24.)

And:

"* * * Where the employee has given consideration additional to the services incident to the employment, or, as it is sometimes stated, where the employee purchases the employment, in the absence

of a statute, other terms in the contract, or circumstances to the contrary, a contract for permanent employment, for life employment, or for other terms purporting permanent employment, is valid and enforceable and not against public policy, and continues to operate as long as the employer remains in the business and has work for the employee, and the employee is able and willing to do his work satisfactorily and does not give good cause for his discharge, a discharge without cause constituting a breach of such a contract entitling the employee to recover damages therefor." (135 A.L.R. 654., Anno. Contract for Permanent Employment.)

The rule which speaks of "additional consideration," beyond the mere agreement on the part of the employee to render service, as a requisite to support a contract of life employment, is merely a device created by the courts to test whether or not the parties specifically and definitely intended to make such a contract. Assuming the legality of the subject matter, there is no reason why two understanding persons, bargaining at arms' length, cannot make an agreement contemplating lifetime employment so long as they clearly and unequivocally state their intention to do so. As Associate Justice Miller said in Littell v. Evening Star Newspaper Co. , 73 App. D.C. 409, 120 F.2d 36, 37 (U.S.C.A.D.C. 1941):

"Some of the courts have reasoned from these cases that, to prove a contract of permanent employment, two considerations must be shown; that is, a consideration in addition to the services to be performed; and that in the absence of two considerations there can be no such contract. This misconception results from mistaking the form for the substance. If it is their purpose, the parties may enter into a contract for permanent employment -- not terminable except pursuant to its express terms -- by stating clearly their intention to do so, even though no other consideration than services to be performed is expected by the employer or promised by the employee. The meaning of the cases previously referred to is that where no such intent is clearly expressed and absent evidence which shows other consideration than a promise to render services, the assumption will be that -- even though they speak in terms of 'permanent' employment -- the parties have in mind merely the ordinary business contract for a continuing employment, terminable at the will of either party."

Basically what the courts are saying when they declare that some additional consideration, ...


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