Breach of Employment Contract Claim Dismissed; Offer Letter Did Not Contain Guarantee of Employment of Five Years

In Hodge v. ABACO, LLC, 20-1186-cv (2d Cir. Oct. 9, 2020) (Summary Order), the U.S. Court of Appeals for the Second Circuit, inter alia, affirmed the dismissal of plaintiff’s breach of contract claim, based on the language of an offer letter by plaintiff’s employer.

Plaintiff began working for defendant on October 1, 2018. Before that, the plaintiff had executed an offer letter summarizing the terms and conditions of plaintiff’s anticipated employment with defendant. In relevant part, the offer letter stated:

Employment Relationship. It is anticipated that your employment with the Company will be for a minimum period of five 5 years. During the first three years, it is intended that you will focus on
developing NY based accounts to be serviced. In the following two years the focus will shift to succession planning. …

Termination. Following usual practice, the Company reserves the right to terminate employment of any employee for just cause at any time without notice and without payment in lieu of notice. The Company will be entitled to terminate your employment for any reason other than for just cause, upon providing to you such minimum notice as required by law.

Less than a year after he started, defendant terminated plaintiff’s employment.

Plaintiff sued, alleging that defendant violated the terms of the offer letter by terminating his employment before five years. The district court disagreed, and granted defendant’s motion to dismiss. The Second Circuit agreed, and affirmed.

It started by summarizing the law of “at will” employment in New York:

In New York, it has long been settled that an employment relationship is presumed to be a hiring at will, terminable at any time by either party. … A party can rebut this presumption by establishing an express limitation in the individual contract of employment curtailing an employer’s right to terminate at will.

The Court continued:

Hodge argues that the “durational language” in the Offer Letter “implied the existence of a five-year employment contract.” But the parties’ “anticipat[ion] that [Hodge’s] employment with [Abaco] will be for . . . five [] years,” App’x at 16, does not amount to a promise. As the district court noted, the Offer Letter used this language to refer to “intentions and expectations,” not guarantees. App’x at 20; see also, e.g., App’x at 16 (“It is anticipated that your presence in the New York market will have a significant positive impact on the Company’s business in the USA.”). Moreover, Abaco also expressly reserved the right to terminate Hodge’s employment at will. See App’x at 16 (“The Company will be entitled to terminate your employment for any reason other than for just cause, upon providing to you such minimum notice as required by law.”).

Hodge argues that because Abaco promised him five years’ employment, the “minimum notice” required by law runs to the end of that five-year period. See Appellant’s Br. at 17 (“[T]he term of the contract is itself legal notice. If the employment was at will, there was no obligation to provide Appellant with notice.”). We are unpersuaded. There was no such promise in the Offer Letter, and Hodge has failed to identify any law imposing a notice requirement on Abaco’s right to terminate his employment in the circumstances here. [Citations and internal quotation marks omitted]

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