K. Fired Inconsistent with a Verbal Promise

In some states it is illegal to be fired or treated differently when you receive a verbal promise of job security or other rights which the company fails to fulfill. When promises of job security are offered at the hiring interview, they may be enforceable provided they can be proved. This is another exception to the employment-at-will doctrine. For example, if a company president tells you at the hiring interview, "Don't worry, Jean, we never fire anyone around here except for a good reason," a legitimate case might be made to fight the firing provided you could prove that the words were spoken and that it was reasonable to rely on them (i.e., that they were spoken seriously and not in jest).

This occurred in a case decided in Alaska. At the hiring, an employer stated that an applicant could have the job until reaching retirement age so long as she performed her duties properly. When the employee was suddenly fired, she argued that her job performance was excellent and that she had relied on the promise of job security in deciding to accept the job. She won the case after proving the words were spoken. Several witnesses had overheard the promises at the job interview and testified to this fact at the trial.

In another case, a New Jersey employee complained that, relying on an employer's oral promise that he could be fired only for cause, he turned down a position offered by a competitor. Several months later he was summarily fired. The court, noting that promises were made inducing him to remain in the company's employ, ruled that the employer had made specific factual representations that transformed the employment-at-will relationship into employment with termination for cause only. After finding that the employee's decision not to accept the competitor's offer was significant, binding the employer, the court ruled in the employee's favor.

Counsel Comments: Not all oral promises are enforceable against a company, particularly when an employee is promised "a job for life." Promises of lifetime employment are rarely upheld due to a legal principle referred to as the statute of frauds. Under this law (recognized in many states) all contracts with a job term exceeding one year must be in writing to be enforceable. As a result, courts are generally reluctant to view oral contracts as creating permanent or lifetime employment. Often, depending on the facts, such contracts are viewed as being terminable at will by either party.

Tip:Some states have laws that limit the duration of an employment contract to a specified maximum number of years (e.g., seven). Thus, where applicable, if you anticipate obtaining and enforcing a lengthy agreement, consult a lawyer and have a formal, comprehensive, unambiguous document prepared and signed by all significant parties (such as the president) to reduce problems.