Employers in Nebraska are required to conduct themselves in good faith.
In Sinnett v. Hie Food Products, Inc., 185 Neb. 221, 174 N.W.2d 720, the court considered the classic good faith and fair dealing case. The plaintiff was promised a bonus if he worked an entire year. He began employment on October 1, 1967, so he would have become entitled to the promised bonus if he had worked a full day on September 30, 1968. But the employer fired him during the day on September 30 and denied him the bonus. The Nebraska Supreme Court held that it did not matter that the employment agreement was terminable at will; the employee was entitled to the bonus anyway where he was fired without good cause. Id. at 223-224, 174 N.W.2d at 722.
Nebraska recognizes the covenant of good faith and fair dealing in employment cases. The court did not categorize its decision in Sinnett as one based on good faith and it may call it something else the next time to avoid direct conflict with its no-good-faith language in other cases. But for practical purposes, when the court is faced with a classic good faith claim (the Sinnett case), it is going to decide it as if it were a good faith claim.
Nebraska will likely follow those states that in Sinnett-like situations permit the covenant to be used only to recover damages, but not to challenge discharge decisions themselves. Recovery of the bonus was the remedy in Sinnett, but that was all that the plaintiff was seeking. So the issue is not resolved. But the skeptical language about the covenant in cases like White v. Ardan makes it likely that the courts will be inclined to limit the cause of action in this way, rather than to treat it more broadly.
If you have questions about whether good faith has been followed in your case, contact Madathil Law Office for a free consultation.
Madathil Law Office, LLC
Omaha Employment and Business Law
In Sinnett v. Hie Food Products, Inc., 185 Neb. 221, 174 N.W.2d 720, the court considered the classic good faith and fair dealing case. The plaintiff was promised a bonus if he worked an entire year. He began employment on October 1, 1967, so he would have become entitled to the promised bonus if he had worked a full day on September 30, 1968. But the employer fired him during the day on September 30 and denied him the bonus. The Nebraska Supreme Court held that it did not matter that the employment agreement was terminable at will; the employee was entitled to the bonus anyway where he was fired without good cause. Id. at 223-224, 174 N.W.2d at 722.Nebraska recognizes the covenant of good faith and fair dealing in employment cases. The court did not categorize its decision in Sinnett as one based on good faith and it may call it something else the next time to avoid direct conflict with its no-good-faith language in other cases. But for practical purposes, when the court is faced with a classic good faith claim (the Sinnett case), it is going to decide it as if it were a good faith claim.
Nebraska is not likely going to interpret the covenant of good faith expansively. This is clear based on White v. Ardan, Inc., 230 Neb. 11, 430 N.W.2d 27 (1988), in which the court rejected a good faith claim where the basic argument was that the discharges were improper because an employer had said false and mean things about the discharged employees.
Nebraska will likely follow those states that in Sinnett-like situations permit the covenant to be used only to recover damages, but not to challenge discharge decisions themselves. Recovery of the bonus was the remedy in Sinnett, but that was all that the plaintiff was seeking. So the issue is not resolved. But the skeptical language about the covenant in cases like White v. Ardan makes it likely that the courts will be inclined to limit the cause of action in this way, rather than to treat it more broadly.
If you have questions about whether good faith has been followed in your case, contact Madathil Law Office for a free consultation.
Madathil Law Office, LLC
Omaha Employment and Business Law
1625 Farnam Street #830
Omaha, NE 68102
angela@madathil-law.com
T: 402.577.0686
F: 402.932.9551
No comments:
Post a Comment