Breach of Contract and Promissory Estoppel in Virginia

MEMORANDUM

To:   Partner

 From: Associate

Re:   Memorandum Assignment, Johnson v. Bully Co. (with attachments)

 Date:  January 28, 2014

Discussion

To enable the claims survive the anticipated demurer, we need to prove legal basis for them. For “breach of contract” claim, to survive the anticipated demurer grounded on the alleged at-will employment of client Mr. Ted Johnson (hereafter “Ted”), we need to prove Ted is not an at-will employee of the defendant, Bully Co. (hereafter “Bully”). Obviously, ambiguity exists as there are contrary terms regarding the hiring period in a single contract, the jury will be instructed to determine whether or not the employment is an at-will one. See Cave Hill Corp. v. Hiers, 264 Va. 640, 645 (Va. 2002). For the claim based on promissory estoppel, my preliminary analysis of the availability of promissory estoppel as affirmative claim shows the anticipated demurrer against it might be granted; the claim could be dismissed.

. Breach of Contract

A. The Jury

The jury will be instructed to determine whether the employment contract is at will or for a definite term. In Virginia, “[w]here the evidence concerning the terms of a contract of employment is in conflict, the question whether the employment is at will or for a definite term becomes one of fact for resolution by a jury.” Miller v. SEVAMP, Inc., 234 Va. 462, 466-7 (Va. 1987); see also Cave Hill Corp. v. Hiers, 264 Va. 640, 646 (Va. 2002). In the instant case, Ted and Bully entered into an employment contract whereby two terms regarding Ted’s hiring period are completely contrary; one says he will be employed for a two-year period and can only be terminated for cause, the other, however, states the employment is terminable at will. In Hiers, although the court also holds it “must construe the language as written if its parts can be read together without conflict.” Hiers, 264 Va. 640, 645., it is more likely the court will instruct the jury to make a fact finding on the issue whether or not it is at-will employment, because the two terms could hardly be read together for a clear and unambiguous result without conflict.

B. At-will or Not?

The employment contract between Ted and Bully is not an at-will one. In Virginia, a rebuttable presumption of at-will employment exists in contract where there is no definite term regarding the employment period, See Cave Hill Corp. v. Hiers, 264 Va. 640, 646 (Va. 2002). however the court also holds “the employment-at-will doctrine is not absolute.” Miller v. SEVAMP, Inc., 234 Va. 462, 466. The court treats an employer’s promise not to dismiss a employer as additional consideration in exchange for the employee’s service, and it will drag the contract out of the category of employment at will. See Id. In Miller, the plaintiff’s employment is renewable but subject to a condition that the employer receives enough federal funds, the court held the employment was not at will as the condition was completed when the employer had been covered by federal funding for the fiscal year. See general Miller v. SEVAMP, Inc., 234 Va. 462. In Ted’s case, the conditional offer from his employer requires him to go through an internal training and he fulfilled the condition successfully, whereby the additional consideration not to dismiss him without cause has been exchanged for his complete performance of going through the training. Thus, Ted’s employment is apparently not an at will one given the condition and he completed the condition, not to mention there is a term saying the employment period is two years.

Ⅱ. Promissory Estoppel

The promissory estoppel claim will be dismissed for it cannot survive the anticipated demurer. In Virginia, promissory estoppel is not a cognizable cause of action and the court declines to create such a cause of action. See W.J. Schafer Assocs. v. Cordant, Inc., 254 Va. 514, 522. And as the court said in Cordant promissory estoppel can only be applied defensively to establish consideration for a unilateral contract. Id. at 517. Hence, there is no more need to discuss whether this claim can survive demurer as it is not even a cause of action in Virginia.

Conclusion

Only the breach of contract claim could be able to survive the anticipated demurer. Ted could possibly success in arguing that the employment is not at will. Because the court holds the presumption of at-will-employment is rebuttable, and a contract is out of the category of at will employment where there are definite hiring period terms or additional consideration for not to dismiss an employee in the contract. In Ted’s employment contract, there are such terms as what courts recognize for rebutting the presumption. As far as the promissory estoppel claim, unfortunately, although Ted significantly changed his position to worst off in reliance of the contract, the Supreme Court of Virginia has not recognized promissory estoppel as a cause of action.

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Vigilante

China Bar Association; Current GWU Law Student; A man had cried at midnight.

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