Sutherland v. Wyer
67 Me. 64, 1877 Me. LEXIS 9 (1877)
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Rule of Law:
A wrongfully discharged employee is entitled to damages equal to the unpaid salary for the remainder of the contract term, less any amount they earned or could have earned through reasonable diligence in seeking and maintaining comparable employment.
Facts:
- The plaintiff, an actor, entered into a 36-week employment contract with the defendants, theatre owners, for a weekly salary of $35.
- The contract contained a clause allowing the defendants to discharge an actor they judged to be incompetent.
- After 18 weeks of performance without any complaints regarding his competency, the defendants informed the plaintiff and the rest of the company that their salaries would be reduced.
- The plaintiff refused to accept the proposed reduction in his salary.
- Immediately following his refusal, the defendants discharged the plaintiff from his position.
- After his discharge, the plaintiff secured other employment but voluntarily left one position before its completion, thereby forfeiting potential earnings.
Procedural Posture:
- The plaintiff sued the defendants in a trial court for breach of an employment contract.
- The case was tried before a jury, which returned a verdict in favor of the plaintiff.
- The defendants filed a motion with the appellate court to set aside the verdict, arguing it was against the weight of the evidence and that the damages were excessive.
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Issue:
Does a wrongfully discharged employee have an immediate right to sue for the full amount of remaining wages under the contract, subject to a reduction for amounts that could have been earned through reasonable mitigation efforts?
Opinions:
Majority - Virgin, J.
Yes. A wrongfully discharged employee can immediately sue for breach of the entire contract and is entitled to recover the stipulated wages for the full remainder of the term. However, this amount must be reduced by what the employee earned or could have earned through the use of reasonable diligence in seeking other employment. The court reasoned that a peremptory discharge constitutes a total breach of an entire and indivisible contract, conferring an immediate right to sue for all resulting damages, both past and future. The prima facie measure of damages is the unpaid stipulated salary. This is subject to the doctrine of mitigation, which obligates the injured party to take reasonable steps to lessen the injury. Therefore, the plaintiff was bound to use ordinary diligence to find another job, and any amount he actually earned, or could have earned through reasonable effort, must be deducted from the total contract wages owed.
Analysis:
This case solidifies two fundamental principles in employment contract law. First, it affirms that wrongful termination constitutes a total breach, allowing the non-breaching party to sue immediately for all future damages rather than waiting for the contract term to expire. Second, it clearly articulates the employee's affirmative duty to mitigate damages, establishing that the recoverable amount is not the gross unpaid salary but the net loss after accounting for actual and potential substitute earnings. This duty to mitigate has become a foundational tenet of contract damages, requiring the non-breaching party to act reasonably to lessen their own losses.
