Witkowski v. Thomas J. Lipton – Contract Law Cases

Witkowski v. Thomas J. Lipton was an employment case in New Jersey that pertained to whether or not an employee handbook is binding enough to constitute an employee contract. These are the types of cases that keep New Jersey employment lawyer, Tayeb Hyderally interested in litigating employment law cases. As cases are tried and judgments are made employment law is shaped and formed over time. The case involving Lipton and Witkowski is one such case.

Witkowski was first hired by the Lipton Company in 1980 as a general maintenance mechanic. Upon his termination he argued that the employee handbook constituted a contractual agreement of his employment. He further felt that the employer had not followed the proper termination procedures as were set forth in the manual. However, Lipton asserted that employees were hired “at-will” and could be terminated at any time with or without cause.

When Witkowski filed his complaint against Lipton he alleged that he had been wrongfully discharged and this was a breach of contract based on the employment handbook that he was given at the time of employment. The trial court found that the manual did not include a comprehensive termination policy. However, it did have a brief list of actions that would demand immediate release.

One of the items on the list of dismissible actions was if an employee was found to have in their possession either an item that was stolen, or an item for which they did not have supervisory permission. During a standard inspection, Witkowski’s locker was found to contain a can of CRC Industrial lubrication oil that was commonly used at the Lipton plant. Even though Witkowski denied that he had stolen the oil and clearly stated that he had obtained the permission of his immediate supervisor, Lipton immediately terminated him.

The employment manual provided by Lipton upon initial employment has several sections. Under Section II the heading, “Warning Notices” can be found. This notice states that there are certain actions for which an employee may receive a warning. Then it lists some serious infractions that are grounds for immediate dismissal. Among the 7 examples that are serious infractions is number 7 which states, “Stealing or unauthorized possession of company property.” This statement was grounds enough for Witkowski to be released from his position immediately. The courts stated that the Lipton manual did indeed create a type of implied employment contract and this gave the company the right to govern termination of employees.

Terrio v Millinocket Community Hospital – Contract Law Cases

Tayeb Hyderally is very experienced in New Jersey Employment law. He has developed his expertise through many years of successful litigation and thorough study in the field of employment law. It is the wide variety of topics in the subject that has kept Mr. Hyderally interested in the field for all these years. Of the many cases he has studied Terrio v. Millinockey Community Hospital has been one of the most interesting.

June Terrio was a highly trained medical technician and worked in the medical laboratory of Millinockey Community Hospital. When she was first employed she was the only personnel who worked in the laboratory and was solely responsible for making all necessary purchases and performing all lab testing. She reportedly delivered high quality work and those who worked with her vouched for her competence even while she was in a supervisory position. Through the years the hospital continued to award her periodic raised and there was never any question of her performance and its quality.

A resident pathologist was placed in charge of the lab and some witnesses stated that Ms. Terrio had been insubordinate and was not doing satisfactory work. During this same time frame she was given an increase in pay and was also allowed to choose better working hours and was reassured that her job was secure as stated by hospital authorities. The new pathologist threatened to resign unless Ms. Terrio was let go, the hospital administrator decided to terminate her employment. She was then 58 years old and had been working for the hospital for about 20 years.

Ms. Terrio pursued a law suit on the basis that she was dismissed without cause and it constituted a breach of contract based on the verbal agreement with the administrator previously. The oral contract and her employment record lined up with the “Personnel Policy” and the “Employees Retirement Plan” to form an enforceable contract. This was defined to be in place until the time of retirement, the age of 65.

The hospital tried to argue that there was not a written contract to be broken and evidence was sparse. When Ms. Terrio won her case the hospital filed an appeal based on the lack of evidence but it was denied by the court. This case set the precedent that substantiates the validity of a verbal contract between employer and employee.

Contract Law and Employment Law

Ty Hyderally is a legal expert in employment law and his firm has had many successful years of litigation concerning contract law and employment law in New Jersey. The terms of at-will employment presume that the employment is indefinite; meaning that employees may quit at anytime for any reason. It also presumes that the employers may layoff or otherwise relieve the employee of duty at anytime with or without reason. Basically, either of the parties may break the employment relationship at anytime without being liable. However, in many instances it is preferable to obtain an employment contract.

An employment contract is binding by law. Employees mainly in executive level positions usually seek to establish job security and stability. Employees may also design employment contracts to help protect confidential business information, patents or trade secrets. In such crucial situations it is best to detail the mutual obligations of both parties involved in the employment relationship. A meaningful employment contract will carefully consider all the various contingencies that could possibly arise during the time involved in the employer-employee relationship.

An employment contract will take the place of the arrangements that are understood by an at-will employment. It becomes a legal document in which the relationship between the employer and employee is written out in great detail. It will include particulars about compensation, stock options, bonuses and severance packages. It will also detail any fringe benefits that are intact during the period of employment as well as retirement.

The employee will usually be asked to sign paperwork that goes along with the employment contract. This will include items such as being forbidden from sharing internal information about the business even after the contract comes to an end. This post employment confidentiality includes refraining from coming back to remaining employees after the contract is terminated and soliciting other employees.

These types of forms are typically signed at the time the contract is drawn up at the time of employment. This usually includes details concerning the terms of the contract and its termination if applicable. The position can only be withdrawn as lined out in the contract. And in many instances it also prohibits the employee from working for a competitive company for at least a certain amount of time. (Usually three years)Even though some of these terms are applicable after the initial contract is terminated, they are still considered part of the conditions of the employment and are legally binding.

Types of Discrimination Law

There has been much progress in trying to alleviate discrimination in the workplace. Discrimination law has been through many changes over the past 40 years. In 1964 the Civil Rights Act was enacted to protect workers from discrimination based on race, religion, national origin or gender. In 1967 Congress then adapted the law to also prohibit discrimination based on age. And in 1990, Congress once again made changes to discrimination law which also makes it illegal to discriminate against an individual based on a disability. Many states have followed suit and also prohibited discrimination based on sexual orientation.

Many of the worst discriminatory practices were alleviated by the 1964 Civil Rights Act. Resistance to enforcement of the laws is what makes it so difficult to eliminate in the workplace. Political resistance to any form of remedial action has made this a very difficult task to undertake and to succeed. Businesses have become much craftier in their employment schemes which make it even more difficult to detect and even harder to correct. Thus the workplace continues to practice unjust and illegal discriminatory practices. Despite the government’s best attempts to eradicate discrimination in the workplace it sadly still exists.

Only about 2% of cases heard on discrimination are won by the plaintiff, the worker who feels they were discriminated against. However, unfair treatment must not be confused with illegal discrimination. Treating an individual differently than others is in violation of discrimination law when the ill treatment is based on the existence of a characteristic which is protected. Actions by a company based on job performance or even something as subjective as personality do not necessarily indicate discriminatory practices.

When it is proven that a company has been engaged in such illegal actions they can be made to pay up to $300,000 in punitive damages. The person who was dealt with unfairly based on one of the protected groups can receive back pay or reinstatement of their previous position or their job if they were fired. They can be compensated for any pain and suffering that was due to the illegal practices of the business.

The Federal law carries a statute of limitations for most forms of discrimination in the workplace. The complaint must be filed within 180 days of the alleged occurrence. The exception occurs for sexual discrimination. Claims for these cases must be filed within 90 days of receiving the “right to sue” letter from the EEO certifying the individual’s right to file a claim for sexual discrimination.

New Jersey Law Against Discrimination (“LAD”)

The New Jersey Law Against Discrimination (“LAD”), N.J.S.A. 10:5-1 et seq., is intended to prohibit discrimination on the basis of several protected categories, including age. However, the LAD contains an exception which permits employers to discriminate against individuals over 70. The “over 70 exception” to the LAD provides that, “nothing herein contained shall be construed to bar an employer from refusing to accept for employment or to promote any person over 70 years of age….” N.J.S.A. 10:5-12(a).

But should this exception permit employers to refuse to renew the contracts of employees based upon their being over 70? Not according to the New Jersey Supreme Court’s recent holding in Nini v. Mercer County Community College, 202 N.J. 98 (2010).

Rose Nini worked for Mercer Community College continuously for twenty-six years under a series of contracts. Her last contract was not renewed and she sued the school for age discrimination. The school countered that since Nini was over 70 she was not covered by the LAD because of its “over 70 exception.” Nini lost in the lower courts, but prevailed in the New Jersey Supreme Court. The Nini majority found that the “over 70 exception” applies to initial hiring decisions, but not to contract renewals. The Nini Court reasoned that a contract renewal amounts to the same thing as a termination, and termination based upon age is prohibited by the LAD’s broad remedial purpose and strong public policy of eradicating discrimination in the workplace. The Supreme Court also observed that it would create a loophole in the LAD’s protections by permitting employers who want to terminate their aging employees to simply put them under contract and then not renew the contract. The Nini Court further noted that it would also have the absurd result of giving greater protections to “at will” employees (i.e., those without contracts) than to contract employees.

One caveat to the Supreme Court’s holding might be the extent of the employee’s pre- existing relationship with the employer. Nini had a long-term and successful pre-existing relationship with the college, which was a significant factor in the Supreme Court’s finding in her favor. What about the over-70 employee whose relationship is only a year or less? The Nini Court failed to address whether or not the pre-existing relationship must be of any specific length or scope. Thus, chances are that employers will try to distinguish cases in which the employee has a short pre-existing relationship from the type of lengthy career that Nini had at the college. Thus, it remains to be seen whether this will be a hard and fast rule, or may be modified down the road.

Restrictive Covenants for Physicians in New Jersey and New York

New Jersey and New York are both “employment-at-will” states. Without a contract restricting termination (such as a collective bargaining agreement), an employer has the right to discharge an employee at any time for any reason. An employer may fire an employee for “no reason” – or even for a reason that might seem arbitrary and unfair — and the employee is equally free to quit at any time without being required to explain or defend that decision.

Exceptions to At Will Employment

There are a few exceptions to “employment-at-will” in New Jersey and New York. The most significant of these are laws which prohibit discrimination based upon race, creed, national origin, age, handicap, gender, sexual orientation or marital status. For physicians in New York, Public Health Law ‘ 2801-b provides protection of hospital privileges.

“It shall be an improper practice for the governing body of a hospital to . . . deny or withhold from a physician . . . staff membership or professional privileges in a hospital, or to exclude or expel a physician . . . from staff membership in a hospital or curtail, terminate or diminish in any way a physician’s . . . professional privileges in a hospital, without stating the reasons there for, or if the reasons stated are unrelated to standards of patient care, patient welfare, the objectives of the institution or the character or competency of the applicant.”

Employment is presumed to be at will. Though the employment relationship is still considered to be contractual, the “at will” relationship may be terminated at any time by either party. Parties may restrict the right to terminate either by providing that the employment is for a “definite term” or by limiting the circumstances under which the employer may terminate the employee (e.g., for “cause”).

To see some examples of employment law at work please take a look at Employment law questions