## Facts

- Phillip B. Ingle became a minority shareholder and employee of a closely held corporation, Glamore Motor Sales, Inc., initially working without an express agreement governing the duration or conditions of his employment.
- Shareholder agreements executed in 1966, 1973, and 1982 granted the majority shareholder (and later the majority group) an option to repurchase a stockholder’s shares if the stockholder ceased to be an employee “for any reason.”
- By 1982, Ingle owned 40 shares; the remaining shares were held by James Glamore and his two sons, who also served as directors and controlling shareholders.
- In May 1983, the board voted to remove Ingle from his corporate positions and terminate his employment, effective May 31, 1983.
- The next day, the majority exercised the contractual repurchase option and bought Ingle’s shares for $96,000.
- Ingle did not contest the repurchase price; he challenged the termination and asserted that the majority’s actions violated duties owed to him as a minority shareholder in a close corporation.

## Issues

1. Whether a minority shareholder in a closely held corporation, without a contract for a definite employment term, is protected from discharge without cause or is an at-will employee.
2. Whether fiduciary duties owed by majority shareholders to a minority shareholder in a close corporation impose an implied obligation to continue the minority shareholder’s employment and restrict enforcement of a buyback clause triggered by termination “for any reason.”

## Decision

- The New York Court of Appeals affirmed dismissal of Ingle’s complaint.
- The court held that, absent a definite-term employment contract or another recognized limitation on discharge, Ingle’s employment was at-will and could be terminated for any reason or no reason.
- The court held that fiduciary duties arising from shareholder status did not convert at-will employment into protected employment or defeat enforcement of an unambiguous repurchase option tied to termination “for any reason.”
- The court enforced the shareholder agreement’s repurchase mechanism as written, rejecting an attempt to use fiduciary-duty theory to alter the contractual allocation of risk.

## Legal Principles

- In New York, employment is presumed at-will unless the parties agree to a definite term or a legally recognized limitation on the employer’s right to discharge.
- Shareholder status in a closely held corporation does not, by itself, alter the at-will nature of an employment relationship.
- Fiduciary duties among shareholders in a close corporation are distinct from duties in the employment relationship and do not create an implied right to continued employment.
- Courts will enforce clear shareholder agreement provisions requiring or permitting repurchase of shares upon termination of employment “for any reason,” absent a valid contractual or equitable basis to invalidate the provision.

## Conclusion

A minority shareholder-employee in a closely held corporation who lacks a definite-term employment agreement remains an at-will employee, and majority shareholders do not breach fiduciary duty merely by terminating that employment and enforcing an unambiguous buyback clause triggered by termination “for any reason.”


Ingle v. Glamore Motor Sales, Inc., 73 N.Y.2d 183 (N.Y. 1989)