Ballard v. El Dorado Tire Co.

512 F.2d 901 (5th Cir. 1975)

 

RULE:

An employee's damages in a wrongful discharge case are reduced only if the employer proves with reasonable certainty that employment was available in the specific line of work in which the employee was engaged.

FACTS:

Plaintiff employee filed an action to determine his rights under his employment contract with defendant employer. Plaintiff, a general manager of defendant's subsidiary, alleged wrongful discharge after defendant sold all of its stock in the subsidiary to a stockholder who desired to take over management thereof. The lower court held that defendant's sale of the subsidiary constituted a breach of contract and awarded damages to plaintiff. Defendant appealed the lower court's refusal to mitigate plaintiff's damages by what he might have earned in other employment. Plaintiff cross-appealed the lower court's holding that he was not entitled to compensation for loss of pension benefits and stock in defendant's company.

ISSUE:

Did the defendant’s sale of a subsidiary constitute a breach of contract?

ANSWER:

Yes

CONCLUSION:

The court affirmed the judgment in part. Defendant had failed to sustain its burden of proving the existence of similar employment, a managerial position in the tire industry. The case was remanded for a determination of whether 20 percent of defendant's net profits during the contract term amounted to $ 6000, in order to decide how much of defendant's stock plaintiff would have earned under the contract. Plaintiff was not entitled to loss of pension benefits.

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