Main Menu

New York Appellate Court Rejects Breach Of Contract Claim Brought By Former In-House Attorney Against KM&M Client

April 26, 2002

The New York State Supreme Court, Appellate Division, Second Department, recently affirmed the dismissal of a breach of contract claim that was brought against a KM&M client by its former in-house immigration attorney. Plaintiff argued that his discharge gave rise to a cognizable claim for breach of contract under the "Wieder" doctrine, an exception to the employment-at-will rule announced by the New York Court of Appeals in Wieder v. Skala, 80 N.Y.2d 628 (1992). The Appellate Division rejected plaintiff's claim.

Under New York's well-established "employment at will" rule, an employee who is hired for an indefinite term may be discharged at any time for any reason. In Wieder the Court of Appeals announced an exception to this rule, holding that when an attorney is hired to perform legal functions, the employer impliedly agrees not to discharge the attorney for complying with his ethical obligations. Based on this implied obligation, the Court permitted the plaintiff in Wieder (who claimed that he was terminated from his position as an associate in a law firm because he insisted that the firm report the misconduct of another attorney) to bring a breach of contract claim.

In our case, plaintiff claimed that he was discharged for refusing to file allegedly fraudulent visa applications on behalf of our client. We moved to dismiss the complaint on the basis of information we acquired following plaintiff's discharge showing that plaintiff's license to practice law had been suspended throughout his employment with our client. Specifically, we argued that because plaintiff's law license had been suspended, he could not invoke the Wieder exception to the at-will rule. The trial court agreed, and dismissed plaintiff's case.

Plaintiff subsequently appealed this decision, arguing (among other things) that because there was no evidence that the company became aware of his suspension prior to the time that it decided to discharge him, he should be allowed to bring a Wieder claim. The appellate court rejected this argument, holding that mere fact that plaintiff had been suspended from practicing law throughout his employment rendered him unqualified to invoke the Wieder exception to the at-will rule. The appellate court therefore affirmed the dismissal of plaintiff's breach of contract claim against our client.