Saturday, June 11, 2005
An at-will employment agreement is an at-will agreement, even if it pays a lot of money and includes profit shares and stock options, according to a recent decision by the California Court of Appeals.
Plaintiff John Cripps was a high demand digital marketing guru. From among a number of offers, he worked out a deal with Fair, Isaac & Co., an at-will deal that paid him $200,000 a year plus one-third of the company's profits and stock options. When Cripps didn't succeed in bringing in as many clients as everyone hoped, Fair Isaac informed Cripps that his employment contract was going to be "reevaluated." Cripps was upset over this and sent a letter in reply to "set the record straight." Fair Isaac thereupon terminated him.
Cripps sued for breach of contract, breach of the covenant of good faith and fair dealing, promissory estoppel, and fraud. The trial court granted Fair Isaac's motion for summary judgment, and Cripps appealed. The Court of Appeals affirmed. In at-will employment contracts, explained the court, the employer has the option of lowering an employee's salary without cause, just like they can terminate employment without cause. Since Cripps was unable to prove elements of fraud or promissory estoppel, he had no legal leg to stand on.
Cripps v. Fair, Isaac & Co.,, 2005 Cal. App. Unpub. LEXIS 4428 (Cal. Ct. App., May 20, 2005).