An employment contract may specify a fixed term of employment; but like any other contract, such a contract must be sufficiently definite in its terms.
Lifetime contracts of employment are disfavored. In reality, I seldom, if ever, have seen a contract for life.
Agreements of this nature have not been upheld except where the evidence produced is highly persuasive and it was the intent of the parties to enter into such a long-term commitment and the details of that long-term contract have been clearly and specifically expressed.
Thus, contracts for lifetime or permanent employment are unenforceable unless (1) the responsibilities assumed and obligations imposed are clearly and unequivocally expressed in the contract itself; and (2) the employee has provided some consideration for the lifetime commitment in addition to the services recited in the agreement.
But even if all these requirements are satisfied, it appears that truly lifetime contracts will not be recognized; that contingencies will be read into the contract. For example, the employer must remain in business and there is work available for the employee to do, and the employee is able and willing to do his work satisfactorily and without good cause for his discharge.
Given the unlikelihood of an employer promising to protect an employee from any termination of employment, and the difficulty of determining the terms and enforcing such an agreement, lifetime contract claims generally fail.
In one case, the court recognized that such contracts for lifetime employment were extraordinary, and would be enforced only in the face of clear and convincing proof of a precise agreement setting forth all of the terms of the employment relationship, including the duties and responsibilities of both the employer and the employee. However, a lifetime contract that protects an employee from any termination is distinguishable from a promise to discharge only for cause. The latter protects the employee only from arbitrary termination.
To the extent that plaintiff alleges a promise of discharge for cause only, plaintiff’s breach of contract claim should be analyzed by those contractual principles that apply when the claim is one that an oral employment contract exists.
To discuss your NJ employment matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com. Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Employment Law Attorney