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For a binding contract of employment to exist, the employer must unequivocally indicate a definite intent to be bound not to terminate the employee except under clearly specified circumstances. General comments that an employee will not be discharged as long as his work is satisfactory do not in themselves manifest such an intent. Neither do statements that an employee will be discharged only for good reason or good cause when there is no agreement on what those terms encompass. Without such agreement the employee cannot reasonably expect to limit the employer's right to terminate him.
For 10 years, petitioner employed respondent. After her employment terminated, respondent brought an action against petitioner for breach of oral and written contracts of employment. The trial court granted summary judgment for petitioner, and the court of appeals reversed on the ground that there were questions of fact concerning the existence of an oral employment contract based on petitioner's alleged assurances that respondent's employment would not be terminated without good cause.
Can an at-will employment be modified by an employer’s oral assurances that an employee whose work was satisfactory will not be terminated without good cause?
On appeal, the court held that petitioner's oral statements did not modify respondent's at-will status absent a definite, stated intention to the contrary, and that petitioner's general statements did not justify the conclusion that it intended to make a binding contract of employment. Accordingly, the court reversed the judgment of the court of appeals.