health, his life, or his morals. Or he may break it by requiring the employee to work for less wages than were agreed upon, or to perform different services. He can make none of these requirements without the employee's consent.

A contract of employment is one involving personal relations and cannot be assigned by either of the contracting parties. Therefore, if the employer sells out his business to other parties, his employees cannot be compelled to work for the new owner. If the employer takes a partner and forms a new firm, or if a firm becomes incorporated, the result, so far as the employees are concerned, is similar to assignment of the contract to a third party.

The bankruptcy or insolvency of the employer or the winding up of his affairs by a public officer, as in the case of a bank or an insurance company in danger of insolvency, puts an end to the contract.

The fact that an employer has no work for an employee will not justify a discharge before the end of the contract.

Notes:

I. In selling out a business, or changing the nature of a business, an announcement of the new arrangement should always be made to the employees. 2. Remaining in the employment with knowledge of the change amounts to an acceptance of the new arrangement.

§ 268. Rights and Remedies

In any case, except where the employee has been guilty of actual disloyalty to his employer by engaging in competition with him, or has offered physical violence to his employer, he is entitled to the wages, salary, or commissions which he has already earned, and, if a bonus has been declared, he is entitled to that too. This is true whether the

breach of the contract is due to his own action or to that of his employer. (See also § 273.)

Where the employer is

Employee's Rights to Damages. guilty of a breach of the contract, the employee is entitled to damages. He may sue at once and collect what is already due him, or he may wait until the contract period is over and then sue for the total damages he has sustained. It is his duty to try to obtain other employment, and the damages which he may recover are limited to the difference between the wages he would have received and any sums which he has been able to earn since.

Where the wages or salary are to be paid at stated periods, the courts in some states allow the employee to sue at the end of each period for the amount then due him; as for instance, where the wages are payable by the month, at the end of each month. In other states the employee may bring only one action, and if he sues before the end of the contract period he may recover only such damages as he has suffered up to that time, and will have no further remedy.

Where a contract of employment provides for notice on both sides, the employer must give the required notice or pay the employee wages for the period of notice before discharging him; and if he fails to do this the employee is entitled to recover this amount as damages.

Employer's Grounds for Damages. If the employee breaks the contract, the employer is entitled to recover any damages he can prove. He must prove that it is impossible for him to procure anyone to do the work in the employee's place. He cannot recover any damages if the employee leaves his employment because of illness. He will be entitled to retain wages equal to the amount of notice the employee is required to give, only in case there was such a provision in the contract. Interfering Between an Employer and Employee. If a third person, knowing that a workman is employed by another

and that the term of his employment is not over, induces an employee to leave his employer before the contract of employment has expired, the third person is responsible to the employer in damages should he have acted with full knowledge of the circumstances.

If a third person induces an employee to make a contract with him after the time of his contract with his employer is up, the employer has no cause of action. Or, if the employee has broken the contract himself and then obtains employment from a third person, the employer has no rights against the third person.

If a third person succeeds in getting an employer to discharge an employee, the employee has a right of action against that person. But if the third person merely attempts to influence the employer and is unsuccessful, the employee has no ground for action.

References. The employee has no legal right to a reference. But nowadays the custom of giving references has become in some places so universal that it almost amounts to an understood part of the contract.

Note:

I. Contracts providing for notice should specify a definite time and a definite amount of wages to be forfeited on the part of the employee for failure to give notice.

$269. Employment After Expiration of Contract

Where the contract sets a definite time for its termination, and the employee continues in the employment after that time without any new understanding, the general rule is that, if the work which he is doing is the same, he is supposed to have been employed on the same terms.

The new contract in such case will be for the same time

as the old. For instance, if a workman hired for a year remains in his employment into the second year without any new agreement, it will be presumed that he was working under an agreement for another year; and it will be a breach of the contract, for which the employer will be liable in damages, if he discharges the workman before the end of this time. The employer, however, may, if he can, show facts to prove that there was no such understanding.

I.

2.

Note:

I. In this case again, it is safer to have a definite understanding about any renewal of the contract.

REVIEW QUESTIONS

What is the distinction between an employee and an agent?

Is a salesman working on commission an employee?

3. What is an independent contractor?

4. When an employee is working by the week or month and leaves without cause during the period, what are his legal rights in your state?

5. What causes would justify the discharge of an employee? In such cases would the employee be entitled to compensation up to the time of discharge?

6. What causes would justify an employee in leaving before the expiration of his period of employment?

7. In what ways in your state may an employee seek redress for an employer's breach of contract for a fixed salary payable at regular intervals?

CHAPTER XLI

RELATIONS OF PARTIES

§ 270. Duties of Employee to Employer

The employee by entering into the contract of employment represents himself to be reasonably competent for his work. If the work is manual labor, he is not required to have any experience and must be given a reasonable time to learn its duties. Where the work requires skilled labor, such as in handling machinery, etc., the employee is required to be reasonably and ordinarily competent. If any high degree of skill is required, it must be stipulated in the contract.

A case is on record where a baseball club engaged a pitcher without any definite requirements expressed in the contract; and when they tried to discharge him because he did not come up to what they expected of him, the court made them pay damages, because it could not be proved that he could not pitch as well as the average professional player.1

There may be a provision in the contract that the employee must be satisfactory to the employer. In most states even then the employer will have to show good reasons for his dissatisfaction before he may discharge his employee.

The courts will not compel an employee to work if he refuses. If the employer can prove that he has suffered by the breach of the contract, the employee is liable to the employer in damages, but there is no way of forcing an unwilling employee to work.

The employee must perform the services stipulated in the

1 Baltimore Baseball Club v. Pickett, 78 Md. 377; 28 Atl. 279; 44 Am. St. Rep. 304; 22 L. R. A. 690.