These two antithetical statues took center stage in Zhou v. Ruess, which was decided in September 2016 by the Third District Court of Appeal. Dr. Zhou executed a letter of intent (“Letter”) to work for Redding Pathologists (“RP”). Unfortunately for RP, the Letter was silent as to the “at-will” status of Dr. Zhou’s employment. Therefore, when RP terminated Dr. Zhou in June 2009, expensive litigation ensued with Zhou arguing that she was employed for a specified term and her employment could only be terminated for good cause, which she contended was lacking.
Saving the day for RP was its employee handbook / personnel manual (“Handbook”). Dr. Zhou signed an acknowledgment of receipt of the Handbook, and the Handbook expressly stated that employment with RP was at-will. In assessing Dr. Zhou’s employment status, the court of appeal determined that the Letter did not contain all the terms of the parties’ agreement; mainly, her employment status. Therefore, it allowed evidence of the Handbook and conversations between RP and Dr. Zhou about her at-will status. Based on this evidence, the court eventually upheld the trial court’s finding that Dr. Zhou was an at-will employee.
RP won this battle, but it no doubt paid an attorney a LOT of money to go through a trial and an appeal to secure victory. So, here’s the lesson to employers: be careful with do-it-yourself employment offers and contracts to applicants, and make sure you have an appropriate agreement that addresses the material terms, including the employment status of the prospective employee (at-will or for a specified term). And, if your employees are employed at-will, reiterate that status in your employee handbook or in an at-will employment agreement.
By: Stephen L. Ramazzini