## Facts

- Dr. David O’Neill was a nontenured professor at New York University (NYU) working under successive one-year employment contracts.
- NYU’s Faculty Handbook described nontenured appointments as positions “for a definite period of time” and set out disciplinary policies and procedures applicable to faculty.
- NYU’s Code of Ethics required faculty to report suspected violations and stated that NYU would not retaliate against individuals for reporting suspected misconduct.
- O’Neill suspected his supervisor engaged in research misconduct and reported that suspicion to NYU officials.
- NYU terminated O’Neill’s employment, stating that the termination was based on O’Neill’s disrespectful conduct during his communications with superiors concerning the suspected misconduct.
- O’Neill brought a plenary action for breach of contract, alleging NYU retaliated against him for making a report and failed to use the Faculty Handbook’s disciplinary process before firing him.
- The Supreme Court dismissed the complaint on the ground that O’Neill was an at-will employee who could be discharged without cause.
- O’Neill appealed to the Appellate Division, First Department.

## Issues

1. Whether a nontenured professor employed under successive one-year contracts is properly treated as an at-will employee, such that NYU could terminate him without contractual constraint.
2. Whether provisions in NYU’s Faculty Handbook and Code of Ethics—particularly discipline procedures and a non-retaliation promise tied to reporting suspected misconduct—can constitute enforceable contractual terms supporting a breach-of-contract claim.

## Decision

- The Appellate Division, First Department held that the Supreme Court erred in treating O’Neill as an at-will employee where the pleadings and documents described his appointment as for a definite one-year term.
- The court held that, at the pleading stage, O’Neill sufficiently alleged contractual obligations arising from NYU’s written policies, including the handbook’s disciplinary framework and the code’s promise against retaliation for reporting suspected misconduct.
- The court therefore reinstated O’Neill’s breach-of-contract theory to the extent it was based on alleged noncompliance with those specific written commitments and reversed/modified the dismissal accordingly.

## Legal Principles

- New York’s at-will rule applies by default, but employment for a definite term is not at-will; termination within the stated term is governed by the parties’ contract and any incorporated conditions.
- A university’s faculty handbook or policy code may supply contractual terms when it contains specific promises or procedures that are alleged to be part of the employment agreement, rather than merely aspirational statements.
- A stated non-retaliation commitment connected to an internal reporting duty may be treated, at least at the pleading stage, as a contractual undertaking that can support a breach claim if an employee plausibly alleges discharge because of protected reporting.
- On a motion to dismiss, courts accept the complaint’s well-pleaded allegations as true and assess whether the plaintiff has stated a legally recognized contract claim based on definite terms and alleged breach.

## Conclusion

The Appellate Division, First Department rejected the view that O’Neill was an at-will employee and held that his allegations—based on one-year term contracts and specific written promises in NYU’s Faculty Handbook and Code of Ethics, including disciplinary procedures and a no-retaliation assurance for reporting suspected misconduct—were sufficient to state a breach-of-contract claim at the pleading stage.


O'Neill v. New York University, 97 A.D.3d 199 (2012)