Slate v. Saxon, Marquoit, Bertoni & Todd

• Decision Date: 08 March 2000
• Citation: 166 Or. App. 1,999 P.2d 1152
• Parties: Glen SLATE, Appellant, v. SAXON, MARQUOIT, BERTONI & TODD, attorneys at law, a partnership; Kenneth W. Saxon, James T. Marquoit, and Gary B. Bertoni, individuals, Respondents.
• Court: Oregon Court of Appeals

999 P.2d 1152

166 Or. App. 1

Glen SLATE, Appellant, v. SAXON, MARQUOIT, BERTONI & TODD, attorneys at law, a partnership; Kenneth W. Saxon, James T. Marquoit, and Gary B. Bertoni, individuals, Respondents.

(9609-06865; CA A99631)

Court of Appeals of Oregon.

Argued and Submitted December 14, 1998.

Decided March 8, 2000.

Jacqueline L. Koch, Portland, argued the cause for appellant. With her on the briefs was Findling & Johnson LLP.

James T. Marquoit argued the cause and filed the brief for respondents.

Before LANDAU, Presiding Judge, and DEITS, Chief Judge, and WOLLHEIM, Judge.

DEITS, C.J.

In this breach of contract action, plaintiff appeals from a judgment granting summary judgment in favor of defendants. On appeal, plaintiff argues that defendants breached an agreement to hire him and, in the alternative, that he is entitled to recover damages under a promissory estoppel theory. We affirm. On review of a summary judgment, we determine whether there are any genuine issues of material fact and, examining the evidence in the light most favorable to the nonmoving party, whether the moving party is entitled to judgment as a matter of law. ORCP 47 C; Jones v. General Motors Corp., 325 Or. 404, 420, 939 P.2d 608 (1997).

The facts in this case do not appear to be in dispute. Plaintiff worked as a law clerk for the defendant attorneys, beginning in June 1992. In December 1993, apparently after plaintiff's clerkship was completed, defendants offered him a position as an associate attorney. The offer was premised on the condition that plaintiff take and pass the Oregon bar examination. The offer also was contingent on the renewal of defendants' juvenile court and indigent defense contracts. The offer was not for a fixed term and did not contain a "termination only for cause" provision. Plaintiff accepted defendants' offer and took the February 1994 Oregon bar examination. Plaintiff passed the bar examination, and defendants' juvenile court and indigent defense contracts were renewed. In March 1994, defendants advised plaintiff that they were terminating the planned employment arrangement, although plaintiff had not yet begun working for them.

Plaintiff sued defendants, seeking relief for the termination. Plaintiff contends that, because he had accepted defendants' job offer, he took the Oregon bar when he otherwise might not have and did not seek other employment opportunities. Defendants moved for summary judgment. The trial court granted the motion and plaintiff appeals, assigning error to the ruling. We hold that defendants are entitled to judgment as a matter of law, because plaintiff has no right of action under either of his alternative theories.

Subject to "some contrary agreement" or to other limitations that neither party suggests are present here, an employment contract implicitly creates an "at will" arrangement that may be terminated by either the employer or the employee at any time, for any reason or for no reason. Lewis v. Oregon Beauty Supply Co., 302 Or. 616, 620, 733 P.2d 430 (1987). Such a "termination by the employer or employee is not a breach of contract." Nees v. Hocks, 272 Or. 210, 216, 536 P.2d 512 (1975). The parties agree that the contract of employment between them was an "at will" agreement under the foregoing principles. Plaintiff argues that he nevertheless has a viable breach of contract claim against defendants, because:

"Defendants' termination of their contract with plaintiff was a breach of an agreement for employment, not a breach of the employment-at-will contract itself. Whether they could or would have fired him after he began working for them is not the issue. Plaintiff reasonably relied on defendants' job offer, and they had reason to know that he would change his plans and incur expenses based on that promise, which he did."

It is unclear whether defendants accept plaintiff's thesis that there was or could be an "agreement for employment" that was somehow separate from the prospective "employment contract itself."¹ Be that as it may, the crux of defendants' position is that, since they could terminate the employment itself at will, they also could "withdraw [their] offer of employment" at will, without incurring liability. Plaintiff's brief ably captures the essence of defendants' argument, to which it then responds as follows:

"Defendants * * * argue that, as a matter of law, plaintiff cannot prevail on his breach of contract claim because defendants' offer to plaintiff was for employment `at will.' Defendants contend that it is illogical to allow an employee-at-will to recover damages if the employer terminates him before he commences work because the employee could not recover contractual damages if he were fired one hour after beginning work. But * * * defendants' logic does not hold water. The mere fact that defendants could have fired plaintiff at any time after hiring him does not absolve them of all liability for damages caused by their decision to breach their promise to employ him. Contrary to defendants' assertion, it does matter whether defendants repudiated the contract before plaintiff commenced employment instead of firing him after he began." (Emphasis plaintiff's.)

Although the question does not appear to have arisen before in any reported Oregon decision, there are numerous cases from other jurisdictions that deal with the actionability of an employer's termination of an at will employment agreement before the employee has begun his or her performance of the job. Cases related to the issue are assembled in Tracy A. Bateman, Annotation, Employer's State-Law Liability for Withdrawing, or Substantially Altering, Job Offer for Indefinite Period Before Employee Actually Commences Employment, 1 A.L.R.5th 401 (1992). In relatively equivalent numbers, the courts deciding those cases have resolved the issue in both of the possible ways, with respect both to claims based on breach of contract and claims based on promissory estoppel.

For purposes of a case like this one, which presents the issues in fairly pristine form (i.e., there are no variations from the at will model in the terms of the parties' agreement, and the only claimed consequences of defendants' action is that plaintiff secured his license to practice law in Oregon rather than elsewhere and did not seek alternative employment while he thought he had this job), we agree with the conclusion of the courts that have held that there is no cause of action in these circumstances.

In our view, it would be completely illogical to hold that an employer is exposed to liability if it invokes the right to terminate at will before the employee begins working but is absolved from liability if it defers doing so until immediately after the employee first reports for work. In addition to being illogical, such a holding would also be most undesirable in its consequences. It would serve the interests of no one—least of all new professional persons in search of work—to discourage putative employers from discharging them earlier rather than later, under circumstances where there is no possibility that an actual employment relationship will ever exist. To those who might say that we should not base our decision on social or policy concerns of that kind, as distinct from the terms of the parties' agreement, there is a simple answer: Our decision is completely consistent with the terms of the contract. Conversely, the parties and courts that have urged or acted on the opposite view of desirable policy have generally found it necessary to devise the fiction that one contract is really two in order to attain their objective.

Even given that fiction, however, plaintiff's argument does not succeed. His distinction between a contract for employment and a contract of employment does not alter the fact that, both before the time of performance and after, whatever contractual relationship there was between the parties was one that related to plaintiff's employment by defendants. As we have noted, the general rule in this state is that employment contracts are terminable at will unless they specify a duration or different conditions for or methods of termination. Plaintiff offers no persuasive reason why that general rule should not apply as much to the post-acceptance, but pre-performance, phase of his contractual relationship with defendants as to the post-performance phase, even if the two phases are viewed as two separate contracts. The parties did not specify a duration or conditions of termination other than at will in connection with either phase.

The dissent's reliance on Taylor v. Mult. Dep. Sher. Ret. Bd., 265 Or. 445, 510 P.2d 339 (1973), and similar cases, is misplaced. As we recently explained in Horton v. Prepared Media Laboratory, Inc., 165 Or.App. 357, 997 P.2d 864 (2000), those cases stand for the proposition that an employer may not unilaterally revoke benefit or similar programs that their employees have accepted "in exchange for their continued work," to the extent that the employer's action purports to impair "any benefits that [an employee has] accrued to the point of revocation." 165 Or.App. at 363, 997 P.2d at 867. In this case, conversely, plaintiff had accrued nothing, except the prospect of retaining an employment relationship with defendant as long as both chose to continue it. Defendants chose to terminate that relationship in the precise manner contemplated by the parties' agreement, and plaintiff has no right of action for breach of contract.

We also hold, although for reasons that appear to be somewhat different from the trial court's and defendants', that the court was correct in granting summary judgment as to plaintiff's promissory estoppel theory. Assuming that promissory estoppel ever could provide a basis for recovery under circumstances of this general kind, but see DeJonge v. Mutual of Enumclaw, 315 Or. 237, 241, 843 P.2d 914 (1992),

it cannot here. Among the elements that a...