Skip Navigation

6310 Hillside Court
Suite 160
Columbia, MD 21046

P. 410-290-0707

111 South Calvert Street

Suite 2700

Baltimore, MD 21202

P. 410-962-1199

Employment agreements: for-cause termination provisions versus at-will employment

In Spacesaver Systems Inc. v. Adam, the Maryland Court of Appeals, held that a for-cause termination provision in an employment agreement made the agreement “continuous for-cause” and subject to termination only per the for-cause termination provision in the agreement.  The agreement contained no reference to at-will employment, but made reference to a term, which was undefined.  The resulting caution is that an at-will employment contract which also contains a for-cause termination, is likely no longer one for at-will employment.

In reaching its decision, the Court did not modify Maryland law which presumes at-will employment.  "This judgment in no way erodes that doctrine, as the presumption for at-will employment persists and is only defeated when the parties explicitly negotiate and provide for a definite term of employment or a clear for-cause provision." p. 26.

Similarly, no change was made in the legal prerequisites to a finding of a life-time employment contract.  In order for a lifetime contract to be found, there must be:

1, “proof that there was definite authority, by by-law, action by the board of directors, or otherwise, to make such a contract.”;

2. "consideration beyond that incident to accepting the position"; and

3. stipuated " “terms as to work and salary” in order to be enforceable".

 

BTLG Attorneys At Law

Talk to a lawyer

Bold labels are required.

News from BTLG:

BTLG Attorneys Obtain Jury Verdict in Excess of $2.3M
BTLG attorneys obtained a verdict on November 9, 2017 for a BTLG client in excess of $2.3M after an eight-day jury trial
BTLG Attorneys Assist in Acquisition Creating $40M+ Business Combination
BTLG attorneys assisted client Optivor Technologies LLC in its acquisition of Advanced Communications Solutions Inc.
The American Rule
Maryland’s highest court has re-affirmed the adherence to the American Rule regarding attorneys’ fees, that each party must pay its own way
Joint Employers Under the Fair Labor Standards Act
Under certain circumstances when an employee works for more than one employer those employers may be considered joint employers under the Fair Labor Standards Act (“FLSA”)
More BTLG News