NY Court of Appeals Reaffirms Presumption of Employment at-Will
If you have an employment contract for a set period of time and it has a renewal provision, follow that provision. If you don’t, employment at-will is the result in New York. A common-law presumption that parties intend to renew an employment contract for an additional year if the employee continues to work after the contract expires is, for all practical purposes, non-existent -- it directly conflicts with the favored presumption of employment at-will.
This was discussed recently, in Goldman v. White Plains Center for Nursing Care, and the Court of Appeals strongly reaffirmed the presumption of employment at-will. Plaintiff had signed an agreement in 1990 for a two-year employment period. The contract provided that at expiration of the contract or termination of employment, the employer would "be released of any responsibility or obligation hereunder, except for payment of salary and benefits accrued to the effective date of such expiration or termination." The parties were to discuss renewal during the two-year term. They did not. After the two-year term expired, the employee received annual salary adjustments; in 2004 the employer was sold and the purchaser assumed the contract. Three months later the employee was terminated.
She claimed the employment contract was breached relying on a common law presumption that an employment contract is renewed for successive one-year terms after an initial set period expires. The Court of Appeals ruled that the employment was a hiring at-will because the contract was clear and unambiguous, expired on a certain date, and required written modification.
The court noted that implying one-year renewals would conflict with the established rule that an employment contract, which doesn’t have a fixed duration, is presumed to be terminable at any time by either party. Giving an unusual – for Court of Appeals decisions -- practice tip, the court stated: “Parties to future contracts can avoid uncertainty regarding application of the common-law rule simply by specifying that continuation of the employment relationship after the expiration of the contractual period will result in either successive one-year extensions of employment or at-will employment status.”
