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
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
* 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
www.charlieunger.com or at 244-8694.