Baxter, at age 45, was hired as the general manager of the CountrySide Shipping Company by Carrothers, the company president. The initial contract of employment was for a three-year term and was embodied in an exchange of letters between Baxter and Carrothers in 2008. At the end of the three-year term, Baxter continued on as general manager, receiving annual increases in salary, executive profit sharing, pension contributions, and discretionary bonuses, if business was exceptionally good in a given year. In January 2020, for no apparent reason, Carrothers called Baxter into his office, and told him his services were no longer required. Carrothers offered Baxter a week's salary as "severance pay." At the time of termination, Baxter was earning a salary of $70,000 per year, received company paid pension contributions of $5,000 annually, and, in 2019, had received $3,000 from profits shared, and a $5,000 bonus. Any earnings received by Baxter for a reasonable time after he left the employ of the company would be taken into consideration in determining the damages to which he might be entitled as a result of his termination.

Question

Quizplus · Accepted Answer

Baxter's continued employment after the initial contract term, along with the receipt of annual salary increases, profit sharing, pension contributions, and bonuses, indicates an implied contract of continued employment, making the severance of a week's salary potentially insufficient and actionable under employment law principles.

Baxter, at Age 45, Was Hired as the General Manager