POSTED BY RICHARD D. TUSCHMAN ON JULY 23, 2012

A recent case from Florida’s Fourth District Court of Appeals, Ioannides v. Romagosa (Fla. 4th DCA, July 11, 2012), illustrates these principles.  Dr. Tim Ioaniddes is a dermatologist who recruited Dr. Ricardo Romagosa to open one of his satellite offices in Stuart and work with him for three years under a contract.  The parties anticipated that, after three years, Dr. Romago would become a partner.  

When recruiting Dr. Romagosa, Dr. Ioannides allegedly told him that his “total annual compensation from salary and bonuses would easily exceed $500,000 per year for the years prior to making partner.”  Thereafter, the two doctors entered into a contract that contained specific provisions regarding how Dr. Romagosa’s salary and bonuses would be calculated.

Dr. Romagosa began working for Dr. Ioannides, but the relationship soon soured.  Dr. Romagosa left the practice after 23 months and sued Dr. Ioannides, claiming that Dr. Ioaniddes fraudulently induced him into entering into his employment contract by orally representing that he would earn more than $500,000 per year.  The case went to trial, and the jury awarded Dr. Romagosa $760,000 damages on his fraudulent inducement claim.  

But on appeal, the Fourth DCA vacated the award to Dr. Romagosa and remanded the case to the trial court with directions to enter judgment in favor of Dr. Ioannides.  

Why the reversal of fortune?  Because, under Florida law, a party cannot recover in fraud for alleged oral misrepresentations that are adequately covered or expressly contradicted in a later written contract.  And in this case, the parties’ written contract adequately covered the issue of Dr. Romagosa’s compensation.  Thus, regardless of whether Dr. Ioannides actually told Dr. Romagosa that his compensation “would easily exceed $500,000 per year,” and regardless of whether this statement was true, Dr. Ioannides could not be held liable for fraudulent inducement.  The terms of Dr. Romagos’s compensation were detailed in a subsequent written contract, and it was that contract that determined the parties’ legal rights and obligations.

For Florida employers, the lesson of the Ioannides case is clear.  Set forth the terms of a new hire’s employment in writing in an offer letter or employment contract.  And make it clear that the offer letter or contract, and not any prior representations, will determine the parties’ legal rights and obligations. 

POSTED BY SCOTT T. SILVERMAN ON JULY 10, 2012

The National Labor Relations Board (the Board) has started to move aggressively against "at-will” employment disclaimers that many employers include in their handbooks. Typically, employers include an "at-will" employment policy, which states that employees may be terminated at any time for any lawful reason, with or without notice and with or without cause.  Further, employers advise employees that their "at-will" employment status may not be amended absent a written document signed by a high-level official and require employees to sign an acknowledgement of these provisions.  These statements are intended to counter any argument by employees that the handbook creates a contract of employment, or that they entered into an oral employment contract with the employer.  The Board has recently taken the position that broadly written "at-will" employment policies chill employee's’ rights to engage in protected concerted activity under Section 7 of the National Labor Relations Act (the Act).

In N.L.R.B. v. Am. Red Cross Ariz. Blood Servs. Region, 2012 WL 311334 (N.L.R.B. Feb. 1, 2012), a Board ALJ found that the American Red Cross violated the Act by maintaining an employee handbook policy that stated, in part, "I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.” The ALJ opined that the clause could be reasonably construed by an employee as relinquishment of his or her right to engage in action to change “at-will” status through union representation, collective bargaining or other protected concerted activity.  The ALJ reasoned such an implicit waiver impermissibly chills employees' exercise of Section 7 rights.

Then, on February 29, 2012, the Board's Acting General Counsel issued a Complaint against Hyatt Hotels Corporation (Hyatt), asserting that Hyatt's broadly written "at-will" employment disclaimer violated the Act by interfering with employees' Section 7 rights.  At issue was Hyatt's policy statement that the "at-will" status of employment could only be changed in a writing signed by the employee and either the Executive Vice President/Chief Operating Officer or  President.  Again, the Board took the position that requiring an employee acknowledgement that "at-will" employment could only be altered by written agreement amounted to an interference with protected Section 7 rights.

In response to these developments, employers should carefully examine their "at-will" employment policies.  Broadly worded disclaimers, which unequivocally state that "at-will" employment cannot be altered or can only be changed in a certain way, should be avoided. Employers may wish to consider language that recognizes employees' Section 7 rights, while asserting the employer's position on "at-will" employment.