Case Details: Harry S. SINGH Plaintiff vs. CITIES SERVICE OIL CO. Defendant

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Harry S. SINGH Plaintiff
vs.
CITIES SERVICE OIL CO. Defendant

Case:

No. 49881

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Location:

Supreme Court of Oklahoma

Date:

September 28, 1976

Attorneys:

Frank P. Hernandez Hernandez Inc. Dallas Texas for Plaintiff.
Robert N. Price Tulsa Rowland Foster and Frederick J. Fowler Dallas Texas for Defendant.

Court:

Hodges V.C.J. wrote the opinion. All Justices concur.

Author:

The Hon. Justice Hodges

In this case No. CA3-75-1339-F which is pending in the United States District Court for the Northern District of Texas Dallas Division that court has certified the following question pursuant to the Uniform Certification of Questions of Law Act 20 O.S. 1973 Supp. SEC. 1601 et seq.: Under Oklahoma law does a hiring at a specified sum "per year" dictate the duration of the employment or does such language merely connote the rate of compensation for an employment agreement which is otherwise terminable at will?

Harry S. Singh (Singh) plaintiff brought suit against Cities Service Oil Company (Cities Service) defendant seeking damages under an alleged contract of employment. Prior to February 10 1975 and until May 12 1975 Singh was employed by University Computing Company in the position of assistant analyst. During the same period he was also employed as an instructor by the University of Texas at Arlington. On December 2 1974 Singh traveled to Tulsa Oklahoma at the expense of Cities Service to interview for a position with the geophysical research staff. Cities Service sent Singh an application form and transcript release forms to be completed by him and returned to its offices in Tulsa Oklahoma. By letter dated February 10 1975 Cities Service offered to employ Singh as a senior research geophysicist at a starting salary of $24 000.00 per year. After further discussions between Singh and Cities Service by letter dated March 6 1975 a subsequent offer of employment at an increased rate of pay was extended. This offer provided for the employment of Singh at a salary of $26 400.00 per year as a research geophysicist. *fn1

No mention was made in the offer as to the term of employment. Singh accepted the offer of employment at Cities Service's research laboratory in Tulsa Oklahoma in a letter dated March 10 1975. Cities Service withdrew its March 6, 1975 offer of employment to Singh by letter dated May 9 1975.

Cities Service has filed a motion for summary judgment contending that under Oklahoma law the contract at issue in this case was terminable at will by either party and as a matter of law Singh has no cause of action for termination. Plaintiff argues that the term "per year" connotes payment for a term of not less than one year while defendant claims that the term contemplates only the rate and not the duration of the contract. Oklahoma law is unclear. In Foster v. Atlas Life Ins. Co. 154 Okla. 30 6 P.2d 805 808 (1931) Court said:

The defendant contends that the written contract is a complete contract in itself and is a contract at will or at most a contract of monthly hiring or hiring from month to month. There is a conflict among the authorities as to whether or not a contract of employment which specifies no duration of time but which merely provides for hiring at a fixed price on some unit basis per day per week per month or per year is an indefinite hiring of whether it is a definite hiring for the unit of time so named; some of the authorities hold that a hiring at so much per month is a definite hiring for one month at the end of which time it can be terminated without liability. There is another line of authorities holding that a hiring at so much per day per week per month which mentions no other unit or duration of time is an indefinite hiring terminable at will. In the case at bar the defendant did not cancel the contract until after the plaintiff had been working for the defendant for a period of about 6 months and it becomes immaterial in this case whether the contract should be construed as one at will or contract of monthly hiring.

Subsequent Oklahoma decisions have not resolved the two lines of analysis identified in the Foster case.

The determination of whether an employment contract is for a definite period of time or for an indefinite period terminable at the will of either party presents a question which is not free from doubt. Although the authorities are numerous they are sharply conflicting. The minority of jurisdictions adhere to the English doctrine which holds where the duration of the contract is not specified but where compensation is designated at a rate per day week month or year it imports an employment for the stipulated period. The other presumption the more modern American doctrine repudiates the English doctrine and is the majority rule. It provides unless the circumstances indicate otherwise *fn2 or in the absence of special consideration *fn3 a contract of employment which provides that the employee shall receive a fixed sum for each day week month or year of service but makes no provision as to the duration of such service is an indefinite hiring terminable at the will of either party without incurring liability for breach of contract. *fn4 The fact that an employee enters into a contract which merely specifies a salary proportionate to units of time which are utilized for the purposes of accounting or payment such as a month or a year does not of itself indicate the parties have agreed the employment is to continue for the stated unit of time. The specification is merely the indicia of the rate at which the salary is earned or is to be paid.

We therefore find in the absence of facts and circumstances which indicate that an agreement is for a specific term an employment contract which provides for an annual rate of compensation but makes no provision as to the duration of the employment is not a contract for one year but is terminable at will by either party.

All Justices concur.

Notes:

*fn1 The letter provided in pertinent part:

"This letter is to confirm our verbal employment offer of $26 400.00 per year as a Research Geophysicist here in our Tulsa Laboratory. As you will recall this offer is in line with your telephone conversation with Doctor Horn February 28 1975 and supersedes the offer made to you by letter on February 10 1975. Please acknowledge your acceptance in writing as soon as possible."

*fn2 Henkel v. Educational Research Council of America 45 Ohio St. 2d 249 344 N.E. 2d 118 119 (1976); Justice v. Stanley Aviation Corp. 35 Colo. App. 1 530 P.2d 984 985 (1974); Hindle v. Morrison Steel Co. 92 N. J. Super 75 223 A.2d 193 196 (N.J. App. 1966).

*fn3 Henkel v. Educational Research Council of America id.; Matthew v. American Family Mutual Insurance Co. 54 Wis. 2d 336 195 N.W.2d 611 (1972); United Security Life Insurance Co. v. Gregory 281 Ala. 264 201 So.2d 853 (1967); Speegle v. Board of Fire Underwriters 29 Cal. 2d 34 172 P.2d 867 870 (1946); Edwards v. Kentucky Utilities Co. 286 Ky. 341 150 S.W.2d 916 135 A.L.R. 642 (1941); McKelvy v. Choctaw Cotton Oil Co. 52 Okla. 81 152 P. 414 (1915); Garza v. United Child Care 88 N.M. 30 536 P.2d 1086 (N. M. App. 1975); Justice v. Stanley Aviation Corp. id.; Russell & Axon v. Handshoe 176 So. 2d 909 (Fla. App. 1965).

*fn4 The most recent cases our research revealed involved two almost identical letters. Court held unless the circumstances indicate otherwise a contract which sets forth an annual salary rate but states no definite term of employment is considered to be indefinite employment terminable at will of either party without incurring liability for breach of contract. In Henkel v. Educational Research Council of America 45 Ohio St. 2d 249 344 N.E. 2d 118. 119 (1976) the written offer stated:

"Dr. George Baird Executive Director of the Educational Research Council of America has authorized me to offer you a position as Research Assistant in Science effective April 1 1969 at an annual salary of $10 800."

In Justice v. Stanley Aviation Corp. 35 Colo. App. 1 530 P.2d 984 985 (1974) the letter provided in pertinent part:

"We are pleased to confirm our offer to join Stanley Aviation Corporation as a Maintenance Foreman at a starting annual salary of $12 000 per year."

See also Boatright v. Steinite Radio Corp. 46 F.2d 385 390 (10th Cir. 1931); Thoma v. Wolverine World Wide Inc. 352 F. Supp. 580 584 (W. D. Penn. 1972); Lowenstein v. President & Fellows of Harvard College 319 F. Supp. 1096 1098 (D. Mass. 1970); Bell v. South Penn Natural Gas Co. 135 W. Va. 25 62 S.E. 2d 285 288 (1950); Paxson v. Cass County Road Commission 325 Mich. 276 38 N.W. 2d 315 (1949); Saylor v. Marshall & Ilsley Bank 224 Wis. 511 272 N.W. 369

(1937); Trainer v. Laird 320 Pa. 414 183 A. 40 (1936); Peacock v. Virginia-Carolina Chemical Co. 221 Ala. 680 130 So. 411 413 (1930); Greer v. Arlington Mills Mfg. Co. 17 Del. (1 Penne.) 581 43 A. 609 (Del. 1899); Booth v. National India-Rubber Co. 19 R. I. 696 36 A. 714 715 (1897); Martin v. New York Life Insurance Co. 148 N. Y. 117 121 42 N.E. 416 417 (1895); Long v. Arthur Rubloff & Co. 27 Ill. App. 3d 1013 327 N.E. 2d 346 (1975); Freeman v. Hardee's Food Systems Inc. 3 N. C. App. 435 165 S.E. 2d 39 (1969); Garrison v. Lannom Manufacturing Co. 55 Tenn. App. 419 402 S.W. 2d 462 (1966); Hindle v. Morrison Steel Co. 92 N. J. Super. 75 223 A. 2d 193 196 (N.J. App. 1966); Russell & Axon v. Handshoe 176 So. 2d 909 914 (Fla. App. 1965); Annot. Duration of contract of hiring which specifies no term, but fixes compensation at a certain amount per day, week, or year, 11 A.L.R. 469 (1921); Supplemented by 100 A.L.R. 834 (1936); 161 A.L.R. 706 (1946).