Case Study

Case: The Broken Employment Contract

Overview / Background of the Case:

* Arthur Wayne is assistant to the treasurer of EcoCare, a large health insurance company located in Michigan.

Identifying the problem:

* Bell, the treasurer of EcoCare, had told Wayne of the decision to terminate his employment and had requested his immediate resignation in return for a severance pay arrangement whereby he would continue to receive his salary for six months or until he found other employment. Bell had told Wayne that EcoCare was not satisfied with his administration of the company car program and that, given the number of complaints about the program from other employees, it was in the best interest of the company to ask for his immediate resignation. In preparation for the review, the president asked the director of human resources, Chris Miller, to investigate the facts of the situation and the events leading up to Wayne’s termination.

QUESTIONS:

1) Did Wayne have an employment contract, either oral or written, with EcoCare? Why or why not?

* Actually, Wayne did not have a formal employment contract. If he had a written contract, he should offer it to the human resource department. Even his supervisor Bell told that Wayne would have a job as long as his performance was satisfactory; it was not an oral contract. And the supervisory manual is only an aid to supervisors and not seemed an employment contract.

2) What problems, if any, do you see with EcoCare pre-employment process?

* There was no any problem with EcoCare pre-employment process. But, maybe Bell did not make clear conversation with Wayne before she made a job offer, and Wayne maybe misunderstood the meaning what Bell said. Like Wayne knew that he would have a job as long as his performance was satisfactory, but the evaluation is made by supervisor not by himself.

3) Can an employer’s written human resource policies ever be constructed as a contract between an...