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Keywords

contractstatuteappealsummary judgmentwillimplied contract
contractappealtrialsummary judgmentimplied contractrespondent

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Greaves v. Medical Imaging Systems, Inc., 124 Wash.2d 389, 879 P.2d 276

Facts

Robert Greaves was employed as a manager at Centralia General Hospital until it was purchased by Providence Hospital–Centralia. He entered into a three-year employment contract with the hospital, but later accepted an oral offer from MIS for a five-year position at the same salary. Greaves was concerned about job security and was assured by MIS president James Kirker that he would not be displaced. However, after MIS lost its contract with another hospital, Greaves was terminated and replaced by a more senior employee.

From January 1985 to April 1988, Respondent Robert Greaves (Respondent) was employed as manager of the diagnostic imaging department at Centralia General Hospital. In April 1988, Centralia General Hospital was purchased by the Sisters of Providence Hospital and became Providence Hospital–Centralia. Providence Hospital–Centralia and Respondent Greaves entered into an employment contract under which both parties agreed that Mr. Greaves would be employed by the hospital as a nuclear medical technologist for 3 years at an annual salary of $36,000.

Issue

Whether an implied employment contract existed that was terminable only for cause, and whether the oral employment contract was enforceable under the statute of frauds.

The principal question in this case is whether this court should adopt Restatement (Second) of Contracts § 139. A collateral question is whether the Court of Appeals erred in reversing the summary judgment based upon Restatement (Second) of Contracts § 139.

Rule

In Washington, an employer can discharge an employee at will unless there is a contract for a specified period of time. An oral contract for employment that cannot be performed within one year must be in writing to be enforceable under the statute of frauds.

In Washington an employer has the right to discharge an employee, with or without cause, in the absence of a contract for a specified period of time.

Analysis

The court analyzed the circumstances surrounding Greaves' employment and determined that the oral contract did not meet the requirements of the statute of frauds, as it was for a term of five years and lacked a written agreement. The court also found that Greaves' reliance on the oral promise did not constitute sufficient consideration to create an implied contract that would limit termination to just cause.

Respondent Greaves contends he could have been terminated only for cause because the circumstances surrounding his employment by MIS gave rise to an implied contract. Under Roberts v. ARCO, supra, Respondent Greaves' agreement merely to transfer his employment from Providence Hospital–Centralia to MIS is not sufficient independent consideration to support an implied contract.

Conclusion

The Washington Supreme Court reversed the Court of Appeals' decision and upheld the summary judgment in favor of MIS, concluding that the oral employment contract was unenforceable under the statute of frauds.

We therefore reverse the Court of Appeals and uphold the order of summary judgment granted by the trial court to Medical Imaging Systems, Inc. and James Kirker.

Who won?

Medical Imaging Systems, Inc. and James Kirker prevailed because the court found that the oral employment contract was unenforceable under the statute of frauds and that no implied contract existed.

Petitioners Medical Imaging Systems, Inc., and James Kirker (MIS) seek review of a decision of the Court of Appeals, Division Two, reversing and remanding to the Lewis County Superior Court for trial a summary judgment in favor of MIS which dismissed with prejudice Respondent Robert Greaves' claim for breach of an oral employment contract.

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