Greene v. Oliver Realty, Inc.
526 A.2d 1192, 2 I.E.R. Cas. (BNA) 1333, 363 Pa. Super. 534 (1987)
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Rule of Law:
An oral contract for lifetime employment can overcome the at-will presumption if the employee produces clear evidence of the parties' intent to form such a contract. While the presence of 'sufficient additional consideration' is a significant factor in determining intent, it is not a rigid requirement, and courts must consider all surrounding circumstances.
Facts:
- In 1959, William Greene began working for Grant Building, Inc.
- Greene alleged that he agreed to work at a pay rate below the standard union scale.
- In exchange for this lower pay, Grant Building, Inc. allegedly promised Greene employment 'for life'.
- In 1975, Oliver Realty, Inc. took over management of the Grant Building and its president assured employees that existing employment contracts would be honored.
- Shortly after the takeover, Greene informed an Oliver Realty supervisor of the terms of his lifetime employment agreement.
- The supervisor said he would look into the matter but never responded to Greene.
- In 1983, after approximately 24 years of employment under the arrangement, Oliver Realty laid off Greene.
Procedural Posture:
- William Greene sued Oliver Realty, Inc. for breach of contract in the Court of Common Pleas of Allegheny County, a state trial court.
- Oliver Realty filed a motion for summary judgment, asking the court to dismiss the case without a full trial.
- The trial court granted summary judgment in favor of Oliver Realty.
- The trial court ruled that a lifetime contract is terminable at-will without sufficient additional consideration, which it found was not present.
- Greene, the plaintiff, appealed the trial court's decision to the Superior Court of Pennsylvania, an intermediate appellate court.
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Issue:
Can an oral contract for lifetime employment be enforceable if the parties' intent to create such a contract is proven by clear evidence from the surrounding circumstances, even without a showing of sufficient additional consideration separate from the employee's services?
Opinions:
Majority - Cirillo, President Judge
Yes, an oral contract for lifetime employment can be enforceable if the intent is clear from the circumstances. The paramount goal of contract interpretation is to ascertain and give effect to the intent of the parties, and the at-will employment presumption should not be used to frustrate that intent. The court rejected the rigid requirement of 'sufficient additional consideration' as a prerequisite for enforcing such contracts, re-framing it as just one factor, albeit an important one, in determining the parties' intentions. The court reasoned that outdated doctrines like 'mutuality of obligation' are discredited and should not bar enforcement. Instead, courts must examine all surrounding circumstances, including the parties' expressions and the situation they were in, to determine if there is clear evidence they intended to form a contract for a definite period. In this case, Greene's claim of working for decades at below-union wages presents a factual issue for a jury to decide whether the at-will presumption has been rebutted.
Concurring - Popovich, J.
Concurred in the result without a separate written opinion.
Analysis:
This decision significantly softens the traditional, rigid requirements for enforcing oral lifetime employment contracts in Pennsylvania. By shifting the focus from a strict 'additional consideration' rule to a more flexible, intent-based analysis, the court aligned employment law more closely with modern contract principles. The case makes it more difficult for employers to obtain summary judgment against claims of long-term employment, increasing the likelihood that such cases will reach a jury. This empowers employees who may have relied on oral promises by allowing their claims to be judged on the totality of the circumstances rather than being dismissed on a narrow legal technicality.
