## Facts

- Mitzi Stauffer Briggs acquired control of Tropicana Hotel Corporation and sought an experienced general manager for the Tropicana Hotel.
- Briggs recruited Donald (“Don”) Speer, then a general manager at another hotel, who conditioned acceptance on receiving equity in the corporation in addition to salary.
- At a meeting in Atherton, California, the parties agreed on employment terms but did not resolve how Speer would receive stock, largely due to tax-structure concerns and Speer’s goal of netting $100,000 in equity after taxes.
- Speer left his prior job and began working as Tropicana’s general manager.
- Briggs later signed and sent Speer a written employment agreement reflecting prior discussions; Speer did not sign it, citing advice to wait until a satisfactory stock option agreement was prepared and signed.
- After a strike-related closure and management disputes, two of Speer’s subordinates were fired by the executive committee; Speer then left the hotel, with the parties disputing whether he resigned or was terminated.
- Speer sued Tropicana for breach of an alleged oral employment contract and sued Briggs for breach of an alleged oral stock option agreement.
- Following a bench trial, the district court found an enforceable oral employment contract and awarded contract damages, but ruled the alleged stock option agreement unenforceable; both sides appealed.

## Issues

1. Whether the parties formed a binding oral employment contract, or instead intended to be bound only upon execution of a written agreement.
2. Whether an enforceable oral stock option agreement existed despite unresolved material terms concerning transfer mechanics and tax treatment.
3. Whether Speer’s departure could be treated as constructive discharge based on the dismissal of his subordinates and management conflict.
4. Whether contract-based damages were recoverable in light of contract formation and enforceability findings.

## Decision

- The Nevada Supreme Court reversed the judgment enforcing an oral employment contract and vacated the associated recovery.
- The court affirmed the rejection of the stock option claim as too indefinite to enforce.
- The court rejected Speer’s constructive discharge theory on the facts presented.
- The net result was no contract damages to Speer’s estate on either the employment or stock option theories.

## Legal Principles

- When parties anticipate execution of a formal written agreement as a condition to final assent, an alleged prior oral understanding is generally not enforceable as a completed contract.
- A party’s deliberate refusal to sign a proposed written agreement while continuing to negotiate unresolved, material terms is strong evidence the party did not view any earlier oral discussions as binding.
- An agreement is unenforceable for indefiniteness when essential terms remain unresolved such that the court cannot determine the parties’ obligations.
- Constructive discharge requires employer-created conditions so intolerable that a reasonable person would feel compelled to resign; dismissal of an employee’s preferred subordinates, without a contractual right to retain them, ordinarily does not meet that standard.

## Conclusion

The court held that the parties’ conduct showed an intent to be bound only by a signed writing, defeating enforcement of an alleged oral employment contract, and that unresolved, material terms made the alleged stock option arrangement unenforceable; it also concluded the circumstances did not constitute constructive discharge.


Tropicana Hotel Corp. v. Speer, 692 P.2d 499 (Nev. 1985)