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Sunday, November 21, 2004

Cases—Just cause dismissal—Jury can only assess good faith

Maryland_flag When a contract expressly provides that dismissal be only for "just cause," may a jury independently determine whether that cause existed?  Maryland's highest court. in a 5-2 decision, says no—the jury's job in that case is to determine whether the employer acted in objective good faith and acted reasonably under the circumstances.

Dr. Michael Conte had a contract with the Towson State University that provided he could only be terminated for just cause.  He subsequently was fired after he allegedly embroiled the University in a series of accounting irregularities and cost it more than $2 million in state funding.  Conte convinced a jury that he was not, in fact, responsible, and won more than $900,000 in damages.

The Court of Appeals, in a majority opinion by Judge Raker, reversed, holding that it was error to let the jury determine the underlying facts of whether Conte had been guilty of incompetence.  Acknowledging that there is a split of authority on the question, the court chose to follow what it considered to be the majority rule.  Chief Judge.

Towson University v. Conte, No. 55 (Maryland Court of Appeals, Nov. 17, 2004)

Maryland attorney Stuart Levine has published a criticism of the opinion on his tax and corporate law blog.

http://lawprofessors.typepad.com/contractsprof_blog/2004/11/casesjust_cause.html

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