Employers can't go breaking their promises at will

Oct. 1, 2004 12 AM PT

CHARLES J. UNGER

A promise is a promise. Those famous words were spoken by the King of

Siam to the Julie Andrews character in “The King and I.” Ms. Andrews’

character had come to Siam in her capacity as an educator -- they

were called teachers back then -- to instruct the children of Siam.

Later in the musical, a discussion takes place as to whether the King

of Siam will build the teacher a home, which was part of her original

deal. The king, played by the inimitable Yul Brynner, uttered the

previously mentioned quote.

Similarly, it is nice to see that the 4th District Court of Appeal

is upholding a promise in an employer- employee debate. This is the

matter of Lynn Agosta, who was working as an account executive at

Clear Channel Communications when he was enticed to come to work for

the Astor Broadcast Group.

The enticement of Mr. Agosta was done quite artfully, as he was

offered a $6,000 monthly salary along with a 2.5% managerial

commission and 1% equity in the station. These terms represented the

final negotiations as the initial offer to Mr. Agosta was for far

less. Mr. Agosta was hired as a general sales manager, a title with a

great deal more cache than the title of account executive.

Now, to the good part. His employment contract had an at-will

provision. An at-will provision generally has been construed to

permit employers to discharge employees at will, in other words, at

their pleasure.

Less than a week after he began working, Mr. Agosta was told that

along with being a general sales manager, he would have to act as an

account executive as well. Shortly thereafter, Mr. Astor told Mr.

Agosta that he was going to withdraw the financial agreement and

rework one much more to his liking. The end came three weeks into Mr.

Agosta’s employment, at which time Mr. Astor sent Mr. Agosta an

e-mail telling him he was fired.

Needless to say, this did not sit well with Mr. Agosta, who had

given up a lot to come to Mr. Astor’s radio network. Mr. Agosta sued

and the case was thrown out. The court held that since Mr. Agosta was

an at-will employee, he could be fired anytime and for any reason, or

no reason at all.

The good news here is that this was reversed by the Appellate

Court, which stated that one who hires and then fires an employee

under these circumstances can be liable for fraud. The Appellate

Court ruled that the case should have not have been dismissed merely

because of the at-will provision. As stated perfectly by presiding

Justice Judith McConnell, “an at-will employer does not have carte

blanche to lie to an employee about any matter whatsoever to trick

him or her into accepting employment.” The Appellate Court decided

that Mr. Agosta could properly sue for “the loss of security and

income associated with his former employment.”

This means that Mr. Agosta’s lawsuit is alive and well. His

attorney thinks it will send a message to employers that an at-will

contract is not quite what it used to be. His hope is that this

ruling will lead employers to treat their employees more fairly.

I like this ruling. I don’t like it when people are induced to

leave their jobs by promises that the person making the promises is

planning to take back. I don’t think anyone would dispute the fact

that Mr. Agosta had a pretty good job with Clear Channel. He traded

his $150,000 salary for a salary half as great, but with the

managerial commission and the equity he had the opportunity to make a

whole lot more. Suddenly, once Mr. Agosta left Clear Channel and was

working for Mr. Astor, the rug was pulled out from under him. Mr.

Astor felt he held all the cards due to the at-will clause he

cleverly included in the agreement. It is nice to see that the

Appellate Court decided this was not how it should be.

Mr. Astor is considering taking this case to the Supreme Court of

the state of California; however, I would like to think if he does

so, he will lose again. You just can’t take someone from his job and

then change the rules on him once he gets there. As Mr. Astor owns a

radio net- work, I assume he has been a successful businessman.

However, I am glad to see that the 4th District Court has given him

his comeuppance.

* CHARLES J. UNGER is a criminal defense attorney in the Glendale

law firm of Flanagan, Unger & Grover, and a therapist at the Foothill

Centre for Personal and Family Growth. He writes a bimonthly column

on legal and psychological issues. He can be reached at

Employers can’t go breaking their promises at will