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Posner v. Seder - 184 Mass. 331, 68 N.E. 335 (1903)

Rule:

When a contract employee is discharged, the employee may either sue on the contract for damages for the breach, or, if he so elects, he may regard the action of the employer as indicating a purpose on his part to repudiate the contract, may accept the repudiation and recover upon a quantum meruit the value of his services as if the special contract had not existed. 

Facts:

An employee was expected to report for work at six in the morning and to continue work until six in the evening with the exception of a one-hour lunch break. The employee was also entitled to extra pay for overtime. However, the overtime was limited to no more than two hours in one day and not more than two months in the aggregate for the year. Moreover, under the contract between the employer and the employee, the employee was to have worked for one year in return for $17 a week in wages. Eventually, the employer discharged the employee. The employee brought a wrongful termination action against the employer that was based upon quantum meruit for the value of his overtime work. The trial court found in favor of the employee, and the employer filed exceptions to the judgment.

Issue:

Should the court grant the employer's filing of exceptions?

Answer:

Yes

Conclusion:

The court sustained the employer's exceptions to the trial court's judgment that was rendered in favor of the employee. The employee was entitled to accept the employer's repudiation of the contract and to recover upon a quantum meruit the value of his services. The contract was to have been taken as a whole. The court stated that if the employee desired to proceed upon the theory of contract repudiation, then his proper course was to proceed upon quantum meruit for the value of all of his services less what he actually received as wages. If he had been paid what they are worth, he could recover nothing. Otherwise, he could recover the balance due him.  The Court held that the sum due him was not necessarily the fair price for the extra hours in addition to the sum of $17 per week that he had already received. He could not appropriate the $17 to the payment of the ordinary week's work and sue only for the balance because, for the reasons above stated, that is not in accordance with the contract under which the payment was made. 

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