Spacesaver Systems, Inc. v. Adam
69 A.3d 494
Md. Ct. Spec. App.2013Background
- SpaceSaver is a Washington, D.C. corporation with 53 employees and a family-controlled ownership structure.
- Adam signed an Executive Employment Agreement as Employee; Craig signed as President on behalf of SpaceSaver.
- The Agreement includes a for-cause termination provision, a contingent duties clause, and a salary provision with Exhibit A (noting discretionary increases).
- There was a board and family dispute over Adam’s compensation, roles, and authority, including a 2009 letter removing Adam from sales duties and threatening reduction of compensation or termination for cause.
- Adam was terminated in 2010, SpaceSaver stopped salary payments in 2010, and Adam sued for breach of contract seeking damages for lost wages, commissions, and benefits.
- The trial court found the Agreement to be a continuous for-cause contract (not lifetime) and awarded damages totaling $255,868.20; on appeal, the court held the Agreement is not at-will nor a lifetime contract, but a continuous for-cause contract; damages for salary and commissions were affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the Employment Agreement at-will or for-cause/lifetime? | Adam argues for lifetime or non at-will. | SpaceSaver argues at-will or non-lifetime contract. | For-cause ongoing contract; not lifetime; not at-will. |
| Did damages flow from salary and commissions despite missing salary provisions? | Adam contends salary and commissions were owed based on Exhibit A and testimony. | SpaceSaver disputes a fixed salary; no clear agreement to salary. | Damages based on salary ($120,000) and commissions affirmed. |
| Whether the for-cause clause independently defeats at-will presumption? | Adam relies on for-cause clause to establish non at-will. | SpaceSaver contends for-cause clause is not enough to override at-will. | For-cause clause, by itself, overcomes at-will presumption; contract is for-cause continuous. |
Key Cases Cited
- Towson Univ. v. Conte, 384 Md. 68 (Md. 2004) (for-cause provision can overcome at-will presumption)
- Gill v. Computer Equipment Corp., 266 Md. 170 (Md. 1972) (undefined duration may be at-will absent mutual understanding or term)
- Shapiro v. Massengill, 105 Md.App. 743 (Md. 1995) (employment contract interpretation and terms)
- Staggs v. Blue Cross of Maryland, Inc., 61 Md.App. 381 (Md. 1985) (policy statements can become contractual undertakings when properly communicated)
- Chesapeake & Potomac Tel. Co. v. Murray, 198 Md. 526 (Md. 1951) (lifetime employment concepts and consideration)
- Lubore v. RPM Assocs., 109 Md.App. 312 (Md. 1996) (discusses at-will presumption and term duration)