Facts
- Dennis McInerney worked as a sales representative for Charter Golf, Inc. from 1988 to 1992.
- In 1989, McInerney received a competing offer to serve as an exclusive sales representative for another company at an 8% commission.
- McInerney informed Charter Golf’s president that he intended to accept the competing offer.
- Charter Golf’s president allegedly promised McInerney a 10% commission in specified territories “for the remainder of his life” and job security terminable only for dishonesty or disability.
- McInerney alleges he rejected the competing offer in exchange for the promised lifetime employment terms and continued working for Charter Golf.
- In 1992, Charter Golf discharged McInerney.
- McInerney sued for breach of an oral lifetime employment contract.
Issues
- Whether an employee’s agreement to forgo another job opportunity is sufficient consideration to modify an at-will employment relationship into lifetime employment.
- If sufficient consideration exists, whether an oral lifetime employment agreement is unenforceable under the statute of frauds absent a writing.
- Whether part performance or promissory estoppel can avoid the statute of frauds for an alleged oral lifetime employment contract.
Decision
- The Illinois Supreme Court held that forgoing another job opportunity can be sufficient consideration to support a promise of lifetime employment.
- The court nevertheless held the alleged oral lifetime employment contract unenforceable because the statute of frauds requires a writing for lifetime employment agreements.
- The court rejected reliance on part performance because McInerney had been compensated for services rendered.
- The court rejected promissory estoppel as a basis to enforce the oral contract despite the statute of frauds.
- The court affirmed judgment for Charter Golf.
Legal Principles
- A promise exchanged for a promise may constitute sufficient consideration to modify an employment-at-will relationship, including by trading continued employment for enhanced job security.
- An employee’s decision to forgo a competing job offer may be a bargained-for legal detriment supporting contractual modification.
- In Illinois, a contract for lifetime employment falls within the statute of frauds’ one-year provision and generally must be in writing to be enforceable.
- Compensation for services performed does not, by itself, establish part performance sufficient to enforce an otherwise barred oral lifetime employment agreement.
- Reliance on an oral promise does not necessarily support promissory estoppel where the statute of frauds requires a writing for the asserted agreement.
Conclusion
The court recognized that rejecting a competing job offer may supply consideration for a lifetime employment promise, but it held that such a promise is unenforceable without a written agreement under the statute of frauds, leaving the employee without a contract remedy for the alleged oral lifetime guarantee.