Procedural Posture

The Supreme Court of California ordered the appellate court to vacate its denial of petitioner employee’s application for writ of mandate to compel respondent Superior Court of Los Angeles County (California) to vacate its order granting nonsuit in petitioner’s action for breach of an oral employment contract. Review was ordered because Cal. Civ. Code § 1624(a) applied only to contracts that could not be performed within one year.

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Overview

Petitioner employee’s oral employment contract with real party employer called for petitioner to serve as territorial sales manager and representative. The contract was terminable for cause at any time and terminable at the end of three years if petitioner did not meet certain quotas. Petitioner sued for breach of contract when he was terminated. Respondent court granted real party’s motion for nonsuit on grounds that the oral contract violated the statute of frauds, Cal. Civ. Code § 1624(a) (§ 1624(a)) because it was not to be performed within a year. The court reviewed the case as ordered by the Supreme Court in light of its holding that § 1624(a) applied only to those contracts which, by their terms, could not possibly be performed within one year. The court accepted appellant’s allegations as true, finding that the contract was indefinite. His employment extended if he met quotas. Further, he could have been terminated for cause within a year. The contract was performable within a year and did not fall within § 1624(a), even though appellant’s performance extended past one year. Writ of mandate issued ordering respondent court to vacate its order granting nonsuit.

Outcome

Writ of mandate issued ordering respondent court to vacate its order granting real party employer’s motion for nonsuit in petitioner employee’s breach of contract action. The oral employment contract was for an indefinite term, but was otherwise capable of being performed within one year in light of a clause allowing real party to terminate petitioner at any time for cause. Accordingly, the contract did not violate the statute of frauds.