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Penza v. Bell Atlantic Network Services, Inc.

A-1509-02T2 (N.J. Super. App. Div. 2004) (Unpublished)

EMPLOYER-EMPLOYEE—While an agreement to employ a person for an indefinite time may be enforceable, it must be declared in clear and definite terms.

An employee’s position was transferred to another company pursuant to a court order in anticipation of a divestiture of the original company. The position’s name changed, the new company paid the employee’s salary, and the employee was covered by the new company’s benefit plans. The employee contended that this was only a temporary rotational assignment and that he had an oral buyback agreement with his original employer, under which he maintained a right to return.

After working with nine years with the new company, the employee was terminated pursuant to a settlement agreement. However, the employee brought suit against his original employer, claiming that he was fraudulently induced into executing the agreement. He alleged that he was fraudulently told that his severance pay held tax-free status, and also alleged he was discriminated against on the basis of age and race.

The lower court dismissed the claims because it held that since he was no longer employed by the original company he did not identify any basis for imposing liability. On appeal, the employee contended that he was a permanent employee of the original company and that he would have eventually returned. The Appellate Division disagreed and affirmed the lower court’s holding. It held that the original company was not liable because there was no evidence showing that it participated in any alleged fraud, namely because it was no longer the employee’s employer. The Court noted that the employee’s claim was an assertion of a lifetime employment contract. While an agreement to employ a person for an indefinite time may be enforceable, it must be declared in clear and definitive terms. The employee failed to show any evidence of such a declaration. In addition, the employee did not allege a reasonable duration for the buyback agreement, nor did he indicate the salary, salary grade, job title, or job duties he would have received at the original company had he returned. Therefore, even if he had an oral agreement with his original employer, the Court would have held it to be unenforceable due to its vagueness.

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