Burke v. Bevona

758 F. Supp. 118, 1990 U.S. Dist. LEXIS 18439, 1990 WL 267408
CourtDistrict Court, E.D. New York
DecidedJuly 11, 1990
DocketNo. 85 CV 548 (ERK)
StatusPublished
Cited by2 cases

This text of 758 F. Supp. 118 (Burke v. Bevona) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burke v. Bevona, 758 F. Supp. 118, 1990 U.S. Dist. LEXIS 18439, 1990 WL 267408 (E.D.N.Y. 1990).

Opinion

AMENDED MEMORANDUM AND ORDER

KORMAN, District Judge.

The issue presented by defendant’s motion for summary judgment is whether plaintiffs action for breach of his employment contract is barred either because Gus Bevona, as President of Local 32B-32J, lacked the authority to make such a contract or because it does not satisfy the Statute of Frauds. The facts underlying this case are set out in the opinion of the Court of Appeals in Burke v. Bevona, 866 F.2d 532, 534-35 (2nd Cir.1989). There, the Court of Appeals vacated the jury’s finding that defendant had breached plaintiff’s employment contract and held that the jury had been improperly and inadequately instructed on the substantive law when it was told that “if in fact Mr. Bevona binds the Union, then the promise could outlast his tenure.” Id. at 537.1 Although the issue of Bevona’s authority to make a lifetime employment contract with plaintiff was “neither briefed nor argued below,” the Court of Appeals held that it was preserved on appeal because it “involved federal statutory law governing democratic union procedures,” and because the defense counsel “touch[ed] on it in his summation.” Id. (citing the Labor-Management Reporting and Disclosure Act, 29 U.S.C. § 401 et seq. (1985); Finnegan v. Leu, 456 U.S. 431, 441, 102 S.Ct. 1867, 1873, 72 L.Ed.2d 239 (1982)).

The Court of Appeals also rejected the trial judge’s finding that, because “declines in the membership of Local 32B-J could have necessitated [plaintiff’s] termination,” plaintiff’s contract was excused from the writing requirement of the Statute of Frauds. Id. at 538. It held that, under New York law, only an express termination clause can take a contract out of the statute and that this was not such a clause. The Court of Appeals then remanded the breach of contract claim for further proceedings, including a trial de novo, id., but with the proviso that it “[would] not presume to predetermine whether on retrial plaintiff’s proof concerning Bevona’s authority to make a binding contract for lifetime employment will be sufficient to make a question of fact for the jury.” Id. at 537.

The Court of Appeals went on to affirm the dismissal of plaintiff’s fraud claim against Bevona because plaintiff failed to prove “fraudulent intent.” It found that plaintiff could not sustain his claim for “prehiring misrepresentation” because he had been hired as promised and had not been discharged “until a year and a half later, when he fell out of grace with Bevona.” Id. at 539 (citing DiRose v. PK Management Corp., 691 F.2d 628, 632-33 (2nd Cir.1982), cert. denied, 461 U.S. 915, 103 S.Ct. 1896, 77 L.Ed.2d 285 (1983)). It also found that plaintiff, as an experienced union member and official, could not prove that he “reasonably could have believed that Bevona could guarantee him a lifetime term as an officer of Local 32B” as to prevail on his fraud claim. Id. (citing Lanzi v. Brooks, 54 A.D.2d 1057, 1058-59 (3rd Dep’t 1976), aff’d, 43 N.Y.2d 778, 402 N.Y.S.2d 384, 373 N.E.2d 278 (1977)).

After remand, defendant moved for summary judgment on the grounds that Bevo-na did not have the authority to make a lifetime employment contract with plaintiff and that the contract is barred by the Statute of Frauds. Defendant argues that the authority to make a contract as extraordinary as one for lifetime employment can [120]*120not be implied from a president’s general powers to appoint necessary personnel. Because Bevona was not expressly authorized to employ plaintiff indefinitely, defendant argues that the contract is unenforceable. Defendant also argues that plaintiffs oral employment contract does not satisfy the Statute of Frauds because, “[b]y its express terms, [it] is not to be performed within one year from the making thereof_” N.Y.Gen.Oblig.Law § 5-701(a)(1) (McKinney 1989).

A. The Lack of Authority Defense

In order for plaintiff to have an enforceable contract for lifetime employment with the union, the Court of Appeals held that he must establish that Bevona had the authority to make such a contract. Burke v. Bevona, 866 F.2d at 536. Whether such authority existed is determined both by public policy and principles of agency law. The Court of Appeals cited with approval the “New York rule” that a contract for lifetime employment is presumed to be unreasonable and unauthorized and will not be enforced unless it is proven that the person making it on behalf of the company was expressly authorized to do so. Id. (citing Heaman v. E.N. Rowell Co., Inc., 261 N.Y. 229, 231, 185 N.E. 83 (1933)). In Heaman, the New York Court of Appeals observed that:

Alleged contracts of life employment are, however, so unusual as to have been, with rare exceptions, condemned by the courts as unreasonable and unauthorized. The president or other executive officer of a corporation has no authority as such to make a contract that one should remain in the corporate employ for life even under a general power “to appoint, remove and fix the compensation of employees.” That any board of directors or other persons responsible for the management of a corporation should give such unusual power to an executive officer cannot be implied. Plain language of the managing board, clearly showing that such was the intention of the corporation, coupled with power actually or impliedly vested in the corporation itself, must be found to justify such a hiring.

Id. at 231-32, 185 N.E. 83 (citations omitted). The purpose of this rule is to prevent the current officers of a company from imposing unreasonable contracts upon future officers or by otherwise hampering their ability to hire personnel who would be responsive to the needs of the company. Carney v. N.Y. Life Ins. Co., 162 N.Y. 453, 455, 57 N.E. 78 (1900).

This rule was held to “have even greater significance when applied to labor organizations” by virtue of their “democratic” nature. Burke v. Bevona, 866 F.2d at 536-37 (citing Local 3489, United Steelworkers of America v. Usery, 429 U.S. 305, 309, 97 S.Ct. 611, 614, 50 L.Ed.2d 502 (1977); Madden v. Atkins, 4 N.Y.2d 283, 293, 174 N.Y.S.2d 633, 151 N.E.2d 73 (1958)). This is due to the existence of federal laws, which require “ ‘open, periodic elections’ ” and whose “ ‘overriding objective’ ” is to “ ‘ensure a union administration’s responsiveness to the mandate of union election.’ ” Id. at 537 (quoting Finnegan v. Leu, 456 U.S. 431, 441, 102 S.Ct. 1867, 1873, 72 L.Ed.2d 239 (1982)). Based on this authority, the Court of Appeals concluded that “[a]s a general rule, therefore, an elected president such as Bevona has no right to compel those who succeed him in office to honor his staff appointments.”2 Id.

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Bluebook (online)
758 F. Supp. 118, 1990 U.S. Dist. LEXIS 18439, 1990 WL 267408, Counsel Stack Legal Research, https://law.counselstack.com/opinion/burke-v-bevona-nyed-1990.