Employment Contract Cannot Be Implied, New York Federal Court Holds January 6, 2010

In Bernhardt v. Tradition North America, a case very similar to the one we discussed recently in “Why Whistleblower Protection Clause In Employee Manual May Be Worthless,” the plaintiff, who was a vice president at defendant Tradition North America Inc., notified the SEC of various securities schemes that he had supposedly uncovered at his company. Not surprisingly, after he told defendant’s senior vice president and the company’s legal department that he had gone to the SEC, he was fired.

In seeking to recover damages for breach of contract and wrongful termination, the plaintiff asserted that he had an implied contract of employment (rather than being a mere “at will” employee) because he had been assured “that [d]efendants would operate the firm, and that [p]laintiff would be permitted to perform his job responsibilities, in accordance with the prevailing laws, rules and regulation of the securities profession.” In a similar vein, he claimed that since the defendants had made clear that he would be terminated for violating any laws, the defendants thereby impliedly warranted that they would not fire him for upholding those same laws.

As you may have guessed, these arguments didn’t even make it out of the starting gate; the Court dismissed the complaint without even requiring the defendants to answer the complaint.

And the reason the Court did so is straightforward: not only did the plaintiff fail to overcome the presumption of employment at will, the plaintiff did not produce any writing that limited the defendant’s right to hire, fire, promote, demote, transfer or take any other employment action it deemed otherwise appropriate.

Jonathan Cooper is a New York Business Litigation and New York Commercial Litigation Lawyer with a focus on New York breach of contract and New York business fraud claims before the Nassau, Queens, Brooklyn, Bronx, Westchester and Suffolk County courts of New York State. For more information, feel free to contact his Long Island office at 516-791-5700.

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