Commercial Division Blog

Posted: May 23, 2016 / Categories Commercial, Contracts, Labor and Employment Law

Inclusion of No Oral Modification Clause In Employment Agreement Does Not Change At-Will Status

On May 19, 2016, the First Department issued a decision in Gootee v. Global Credit Services, LLC, 2016 NY Slip Op. 03984, explaining that the inclusion of a no-oral-modification clause in an employment agreement did not mean that an employee was not an at will employee, explaining:

The employment agreement did not state a fixed duration for plaintiff's employment or that he could only be terminated for cause. Nor did it expressly state that plaintiff was an "at-will employee." However, it contained a provision that prohibited modification of "any provision" thereof without "a writing signed by the party against whom enforcement is sought" (the no oral modification clause).

. . .

The inclusion of the no oral modification clause in the employment agreement does not, in and of itself, suffice to rebut the at-will presumption. While the clause precluded the modification of "any provision" of the agreement without a writing signed by the party against whom enforcement was sought, there is no express provision in the agreement that precluded defendant from terminating plaintiff without cause.

(Internal quotations and citations omitted). The court went on to make clear that the no-oral-modification clause was enforceable and barred the employer from changing the terms of employment. However, the clause did not bar the employer from terminating the employment.