10.5.10.2 Notes - Jameson v. Board of Education | Kessler, Gilmore & Kronman | September 27, 2012

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10.5.10.2 Notes - Jameson v. Board of Education

by Kessler, Gilmore & Kronman
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NOTE

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1. It appears that in the first action plaintiff recovered her full wages for the first two months of the school year. In the light of the Supreme Court's opinion on the appeal in the second action, that recovery was improper, was it not? If, as the New York court put it in Howard v. Daly, plaintiff is not allowed to collect full wages "while living in voluntary idleness," it must follow that the wrongfully discharged employee must look for other work. Does it also follow that the wages earned in the substituted employment are to be deducted from the recovery in the employee's action against the employer? And further, that if the employee could have found another job but did not take it, then the wages he (or she) could have made will likewise be deducted? To most American courts it has seemed obvious that these conclusions necessarily follow from the "no voluntary idleness" principle. The hypothetically innocent employee must thus labor for the benefit of the hypothetically wicked employer. The decisions show some sympathy for the employee. Work of a substantially different character need not be accepted: the discharged school teacher need not go to work in a factory. Nor is it necessary for the employee to accept work in a different place, which would require him to move his residence or to travel long distances to and from the job. And the employee has often been held privileged to reject the original employer's offer of re-employment at a lower wage. Assume, for example, that the School Board had offered to take Mrs. Jameson back at $50 per month. If she were required to accept this offer, or to have her damages reduced by an amount equal to the difference between her original salary and the one now proposed, the cost of suing her employer might well exceed her largest possible recovery, in which case the School Board could (up to a point) unilaterally "force" a wage cut on her.

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Of course, the widely approved mitigation rule requiring a wrongfully dismissed employee to seek comparable work with another employer has similar consequences: so long as the damages recoverable under this rule are less than the expense of litigation, the employer who has breached his contract can be confident that his wrong will cost him nothing. Indeed, this is a general feature of all remedial systems (like our own) that do not fully compensate the winning party for the out-of-pocket expenses incurred in vindicating his legal rights. Judicial willingness to apply the standard mitigation rule to offers of re-employment must therefore rest on other grounds: Perhaps it simply reflects a desire not to force the employee into, or back into, a personal relationship that has grown sour and litigious. See Hubbard Broadcasting v. C. A. Loescher, 291 N.W.2d 216 (Minn. 1980). The cases on specific enforcement of personal service contracts express a similar idea; see supra p. 1079.

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A related problem involves the question whether unemployment benefits and the like received by the discharged employee are to be credited to the employer and deducted from the recovery. In recent years, courts have expressed some diversity of opinion on this issue. In Billeter v. Posell, 94 Cal. App. 2d 858,211 P.2d 621 (1949), the court concluded that such benefits are not deductible: "Benefits of this character are intended to alleviate the distress of unemployment and not to diminish the amount which an employer must pay as damages for the wrongful discharge of an employee." A different approach was suggested in United Protective Workers of America v. Ford Motor Co., 223 F.2d 49 (7th Cir. 1955). For multitudinous collections of cases on the points referred to in this Note, see 11 Williston ยง1358 et seq.

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2. Under the rule discussed in the preceding Note, what happens to the aspect of anticipatory breach doctrine which says that one of the courses of action which the innocent party may elect to follow is to await performance by the repudiating party, who may meanwhile retract his repudiation?

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3. We may assume that Mrs. Jameson could have waited until the end of the school year and then brought an action to recover damages, calculated in the manner described in Note 1. Alternatively could she bring her action immediately on being discharged? If she attempted to bring such an action, would it make any difference whether she had been discharged in July (before the beginning of the school year) or in October (after the first month of school)? And how should the damages be calculated if the action brought in July or October comes to trial before the end of the school year?

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4. In Dixie Glass Co., Inc. v. Pollak, 341 S.W.2d 530 (Tex. Civ. App.), 91 A.L.R.2d 662 (1960), error refused n.r.e. 162 Tex. 440, 347 S. W.2d 596, 91 A.L.R.2d 681 (1961), Pollak had been employed in 1953 as comptroller of the Dixie corporation. The original contract was for five years but Pollak had the option to extend the contract for an additional fifteen years. He was discharged in 1955. Pollak brought an action against the corporation to recover 1) damages which had accrued at the time of trial and 2) damages for the balance of the twenty year term of the contract. His right to recover the accrued damages (assuming that the discharge was wrongful) was not contested. A jury verdict was taken on what his damages would be for the balance of the term. The jury calculated the damages at $78,000 (i.e., $156,000 which he would have received as salary, less $78,000 deducted on account of his expected future earnings for the remainder of the twenty years). The legal question whether the $78,000 recovery, plus interest, was proper under Texas law was referred to the Court of Civil Appeals. On this question the court observed:

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We find there is a conflict in the authorities in the United States. The majority rule is that recovery of damages may be had for the full term, regardless of when the trial occurs. The minority view is that anticipatory damages may not be recovered but recovery is limited to damages suffered to the date of trial. . . .

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341 S. W.2d at 537. Concluding that the issue had not been "authoritatively decided" in Texas, the court, ignoring contrary dicta in earlier Texas cases, decided to adopt the "majority rule." Remanding the case for a new trial on the issue of whether the discharge had been wrongful, the court cautioned that, if Pollak won on the wrongful discharge issue and a second jury came up with the same damage calculation, judgment should not be for the lump sum of $78,000 but for the $78,000 "discounted to its present worth, based on the unexpired term of the contract at the date of judgment, at the rate of 6% per annum." This disposition of the case was affirmed, per curiam, by the Supreme Court of Texas. An annotation beginning at 91 A.L.R.2d 682 collects authorities on the issue. The learned annotator concluded that Alabama, Arkansas, Georgia, Illinois, Minnesota, North Carolina, and Wisconsin adhered to the "minority view" (limiting recovery to damages accrued at the time of trial); in Kentucky the issue was "apparently unsettled."

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5. Does the rule in the employment cases, illustrated by the Jameson case, seem consistent with the rule announced by the Massachusetts court in the Steinberg case? If the rules are consistent, how are cases like Steinberg to be distinguished from employment cases like Jameson? Further, in connection with Steinberg, do you agree with the court's refusal to allow recovery for the loss on the resale of the "Cliest" horses?

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6. In Griswold v. Heat Incorporated, 108 N.H. 119, 229 A.2d 183 (1967), Griswold, a certified public accountant who was a member of a large firm of accountants in Portland, Maine, and Heat, a corporation doing business in Nashua, New Hampshire, entered into an agreement under which Heat was to pay Griswold "not less than two hundred dollars [per month] beginning January 1, 1964 for such services as he, in his sole discretion may render, the term of the contract to be not less than five years from January 1, 1964. . . ." The Board of Directors terminated Griswold's services at the end of 1964. The New Hampshire court, relying on Wood v. Lucy, Lady Duff-Gordon, supra p. 451, concluded that Griswold's promise was not "illusory," that the contract was binding and that Griswold had been wrongfully discharged. Nor did the court have any doubt (see Notes 3 and 4 supra) that Griswold could recover damages for the full five-year term. It is evident that Griswold was not required or expected to devote his full time to the affairs of the corporation. Assume, in addition, however, that any services Griswold did perform had to be rendered by Griswold himself and could not be delegated to anyone else (for example, an agent or a clerk in the Portland office of his accounting firm). On that assumption, is Griswold's situation "like" that in the Steinberg case or "like" that in the employment cases? That is, must he deduct from his recovery whatever he could earn as an accountant in the time made available to him because he no longer has to perform services for the corporation or is he entitled to recover the full salary of $200 per month for the remaining four years of the contract without deduction?

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7. In the principal case, which party bears the burden of showing that Mrs. Jameson did or did not have other comparable employment opportunities? See Levy v. Tharrington, 178 Okla. 276, 62 P.2d 641 (1936) ("the burden rests upon the employer to show by a preponderance of the evidence that the servant might, with reasonable diligence, have obtained other remunerative employment of a like character after his discharge").

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June 02, 2014

10.5.10.2 Notes - Jameson v. Board of Education

10.5.10.2 Notes - Jameson v. Board of Education

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