would later receive written confirmation B u s i n e s s F i n a n c e
Case 9-1. Just One Little Slip
Charlene Fisher is a market analyst for the Top Cat Apparel Company, a women’s boutique clothing store with shops in several southwestern states. She joined the company in early 2007 at the corporate office located in Memphis, Tennessee. Charlene previously lived in Richmond, Virginia and worked as a market analyst for a major retailer for 5 years. She was looking for a better job when she found Top Cat’s advertisement for a market analyst. After a telephone interview with Alan Jordan, Top Cat’s human resources manager, she was invited to interview with Ron McCoy, the vice president, in Memphis. At the end of the interview, Mr. McCoy offered her the position and said that she would later receive written confirmation of the offer’s terms. Within a week, Charlene received a letter of confirmation from Vice President McCoy, detailing the terms of compensation and stating that she would be offered an employment contract from year to year as long as her work performance was satisfactory. She also received a booklet containing the company’s benefit plans as well as a copy of the employee handbook for all new employees. Charlene accepted the offer and moved to Memphis from Richmond, though the moving expenses cost her considerably.
As a market analyst at Top Cat, Charlene’s primary function was to anticipate fashion trends and provide the shop managers with purchase recommendations about the type, brand, and quantity of clothing they should have in their store inventories. Her performance was annually rated as being very good during the first 3 years of her employment with the company and therefore her contract was extended each year with a salary increase. Charlene recently made a costly forecasting error by recommending the purchase of a large number of coats that didn’t sell very well in most stores. Tom Long, her manager, informed Charlene that the top management folks were very unhappy with her decision to recommend the coat purchase and the company has decided not to renew her contract.
Charlene asked for a meeting with Mr. Long and Human Resources Manager, Alan Jordan, to appeal the company’s decision not to renew her employment contract, which she considers the same as a discharge for poor work performance. She claims that her job performance should not be based upon one mistake since her performance evaluations have been consistently very good. Charlene feels that since this one error is not a typical example of her work performance throughout her employment with the company, her termination is too severe. She believes that she should have an opportunity to show that she learned from this mistake and that a similar incident will not likely occur again. Charlene points out a statement in the company’s employee handbook that asserts employees will only be discharged for just or sufficient cause. Charlene feels that some lesser form of discipline should be considered in her case. Mr. Jordan informs her that the decision has already been made by upper management and they are not willing to reconsider this decision. He explains that Top Cat Apparel Company is an at-will employer and
her employment can be terminated for any reason as long as the decision is not based upon some discriminatory or illegal grounds. Charlene decides to sue the company for wrongful discharge and breach of contract.
1. Does Charlene have a good argument that she is a contractual employee and that the company has a relationship with her that is controlled by either express or implied terms? Explain your answer.
2. What reasons would you expect the employer to claim in defense of their action? Thoroughly explain your answer.
3. What are the factors or questions that should be considered in order to determine if Charlene Fisher was afforded due process by the company in their decision to not continue her employment?