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No Implied Employment Contract Where Employee Left Former Job, Forewent Full Severance Benefits, on Employer's Assurances of Future Employment with Company

In a recent decision, the U.S. District Court for the Western District of Pennsylvania considered whether an employee who had left his former position of employment to join a competitor and forewent full severance benefits was able to establish an implied employment contract with his new employer, who had terminated him after only three months of employment despite having given him assurances of future employment. Morini v. Civil Castle Cheese, No. 10-1739, 2013 U.S. Dist. LEXIS 139032 (W.D. Pa. Sept. 27, 2013). The court resolved this issue in the negative.

Noting a long line of precedent holding that employment relationships in Pennsylvania are presumed to be terminable at will, the court concluded that the employee was unable to carry his burden of proof of demonstrating either that he had been offered employment for a definite term or that he had given additional consideration for such employment.

With respect to the former, the court concluded that vague assurances from the employer that it had hoped that the employee would help build the company within ten-year's time were merely "aspirational" and could not form the basis for an implied employment contract, especially when they were not in writing. Id. at *13-17.

Likewise, in regard to the latter, the court similarly found that evidence to support the finding of an implied employment agreement was lacking, even though the employee had acted to his detriment in accepting the new position. Specifically, the court found that the employee was unable to demonstrate that his acceptance of less than the full severance benefits to which he was entitled or that the shortening of his non-compete with his former employer were conditions of employment or for the benefit of the new employer. Id. at *20-22. The court also found that it was irrelevant that:  (1) the employee had signed a non-compete with the new employer because the employee knowingly entered into the agreement as part of his employment, and (2) the employee had relocated to a different state for the position because the employer paid the moving costs. Id. Consequently, under these facts, the court determined that the employee could not prove that an employment agreement existed with the employer. The court concluded its analysis by finding that, for many of these same reasons, the employee also could not prevail on his claim of fraud in the inducement. Id. at *33.

As this case illustrates, the presumption of at will employment in Pennsylvania is strong. As such, concrete evidence ordinarily is required before the court will consider implying an employment contract between an employer and an employee.

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