Suit vs. school OK despite disclaimer

A teacher dismissed from a private school could sue his former employer for breach of contract despite the fact that the employment offer he signed expressly stated that it was not a contract, that his employment would be at will, and that the offer could be revoked at the discretion of the school, a Superior Court judge in Rhode Island has ruled.

The defendant school argued that by including the disclaimer that the offer “is not a contract,” the school put its employees on notice that they had no right to continued employment.

But Judge Brian P. Stern found the terms used in the offer to be ambiguous and denied a motion for summary judgment filed by the school.

“[B]oth parties raised a genuine issue of material fact as to whether there was a mutual assent as to the duration of a contractual relationship,” Stern stated. “It is clear from the evidence submitted by Plaintiff and Defendant that a dispute exists about the parties’ intent in signing the Offer.”

The 13-page decision is Laurent v. St Michael’s Country Day School.

Cranston attorneys Stephen Rodio and Michelle Felix represented the plaintiff. Providence attorneys William O’Gara and Matthew Reeber defended the school.

Lost job

The defendant, St. Michael’s Country Day School, is a private school in Newport.

Instead of engaging in collective bargaining with its employees, the defendant’s practice was to send an “Offer of Employment” for the upcoming year to the individuals it wished to hire for the following year.

Plaintiff James Laurent was employed by St. Michael’s as a history teacher for 12 years. Toward the end of the 2008-2009 academic year, he received a document titled “Offer of Employment for the Year 2009-2010 Employee Compensation Projection.”

The offer, which was signed by Whitney Slade in his capacity as the head of the school, was signed by the plaintiff on May 7, 2009.

The terms of the offer included the position offered to Laurent, the base salary, the daily rate of $225.68 and benefits. Below the parties’ signatures, the offer also included a disclaimer that read: “This is not a contract. All employment at St. Michael’s Country Day School is strictly on ‘at will’ basis. This offer of employment can be withdrawn at the discretion of the Head of School.”

On June 8, 2009, the plaintiff got into an argument with Lauren Abraham, the head of St. Michael’s “Lower School” and a direct supervisor of the plaintiff’s daughter-in-law. Allegedly, a few days prior to June 8, 2009, after consultation with Abraham, the daughter-in-law was advised that she probably would not be rehired for the upcoming 2009-2010 academic year.

The incident led to the defendant’s decision to fire the plaintiff. On June 10, 2009, Slade advised the plaintiff that his employment for the 2009-2010 academic year had been terminated, effective immediately.

On Aug. 7, 2009, the plaintiff filed suit. His complaint included counts for breach of contract, breach of implied covenant of good faith and fair dealing, and promissory estoppel.

Finding of ambiguity

In Count I, the plaintiff claimed that he had an employment contract and that the defendant breached the contract by terminating his services without cause or justification.

Conversely, the defendant argued that the terms of the contract clearly provided that the plaintiff was an “at-will” employee and, as such, his employment was terminable for a good reason, a bad reason or no reason at all.

The school argued that because the offer provided only that the employment was for “year 2009-10,” rather than a specific start and end date, the employment was for indefinite duration.

The plaintiff countered that the annual employment contracts were generally accepted by the St. Michael’s community as contracts for a set term — specifically for the following academic year — and that it was generally understood that a teacher who was awarded a contract for the upcoming academic year was entitled to hold that position for the full term, except in extraordinary circumstances.

The plaintiff further contended that the language of the contract was contradictory, unclear and ambiguous, and, thus, the language should be construed against the defendant.

The judge observed that each party agreed to receive a specific benefit in exchange for the opposing party’s return promise of that benefit.

“[T]here is seemingly valid consideration,” he said. “Specifically, the Plaintiff agreed to provide teaching services in exchange of Defendant‘s promise to compensate the Plaintiff for the services rendered.”

Stern then addressed the disclaimer, specifically the first sentence that said: “This is not a contract.”

That language “could reasonably be construed as an indication to the offeree that the document, in itself, is not a contract, but requires acceptance to be perfected through the … process of ‘sign[ing] and return[ing] one copy to the business office as soon as possible,’” the judge found.

The defendant also was relying on the provision in the disclaimer reserving to the school’s head the right to withdraw any offer.

“However, once an offer is accepted, it cannot simply be ‘withdrawn,’” Stern responded.

By lodging the term “at will” in the disclaimer, the school “has attempted to capture the entire import of legal rights and obligations surrounding the term notwithstanding the surrounding indicia of a term employment,” he said.

“Though not rising to the level of unconscionability, the Defendant desires the document in question to operate in both ways,” the judge continued. “The Defendant admittedly uses the documents as a means of gleaning the intention of employees to commit to another year of service to St. Michael’s, while in the same breath, the Defendant also wishes to maintain that such documents should not serve as a basis of understanding of a contractual employment relationship between the parties.”

Thus, on one hand, “objectively the Offer was intended by the parties as a legally binding contract,” Stern found. “On the other hand, the conflicting language undermines the determination that the parties have mutual assent as to the type of the document signed and the terms of the same document, and consequently, the intended nature of the employment between the parties.”

The disclaimer was located below the parties’ signatures, “which additionally raises a factual question as to whether there was a mutual assent between the parties with regard to the language located below their signature,” the judge observed. “Therefore, rather than adding clarity to the document, if the disclaimer is part of the agreement, it creates further ambiguity on its face.”

The terms of the document “are not clear and unambiguous,” Stern concluded, adding that “the language will be strictly construed with all ambiguities decided against the drafter.”