Thus, the contract was capable of performance within one year and outside the statute of frauds. Defendant argues that McLaughlin v Ford Motor Co, 269 F.2d 120 (CA 6, 1959), controls this case. In McLaughlin, the plaintiff was promised by the defendant that after he worked for one year in the cost department, he would be offered a position in general management.
To the contrary, the law of the State of Michigan to date appears to be settled that oral employment contracts are terminable at will by either party. Lynas v. Maxwell Farms, 279 Mich. 684, 273 N.W. 315 (1937); Dunn v. Goebel Brewing Co., 357 Mich. 693, 99 N.W.2d 380 (1959); McLaughlin v. Ford Motor Co., 269 F.2d 120 (6th Cir. 1959). The judgment of the District Court is affirmed.
In Michigan such an employment is an employment at will and may be terminated by either party at any time with or without cause. McLaughlin v. Ford Motor Co., 269 F.2d 120 (6th Cir. 1959); Ambrose v. Detroit Edison Co., 367 Mich. 334, 116 N.W.2d 726 (1962); Adolph v. Cookware Co. of America, 283 Mich. 561, 278 N.W. 687 (1938); Lynas v. Maxwell Farms, 279 Mich. 684, 273 N.W. 315 (1937). Whether an employee has performed satisfactorily is to be determined by the employer and not by the courts.
In affirming the action of the District Judge, this Court stated: 269 F.2d 120, 124 (6 Cir. 1959). "We agree with the ruling of the District Judge that the oral contract herein sued upon falls within Sec. 2(1) of the Michigan Statute of Frauds, which declares void `Every agreement that, by its terms, is not to be performed in 1 year from the making thereof * * *', unless some note or memorandum thereof be in writing and be signed by the party to be charged therewith, or by some person by him thereunto lawfully authorized. * * * It is clear that the oral agreement in the present case provided for employment to begin more than a year after the making of the agreement and comes squarely within the terms of the statute.
We agree. Judge Murphy ruled on this subject in his opinion dated February 28, 1964. Apparently he thought the New York statute rather than the Michigan statute applicable, but as they are substantially identical it is immaterial. He correctly found that since plaintiff's services were to last for at least one year, and were to commence at a time after the making of the agreement between the parties, the oral agreement was one which was not to be performed within one year. McLaughlin v. Ford Motor Co., 269 F.2d 120, 124-125 (6 Cir. 1959). The court's error is in construing the contract "as one for the sale of special order goods" and that is to be "governed by the provisions of § 85 of the Personal Property Law rather than § 31."
Id. Under Michigan law, oral contract of employment which did not provide for a specified period of employment constituted employment for indefinite time terminable at will of either party, upon termination of employment by employer, had no cause of action for breach of such contract. McLaughlin v. Ford Motor Company, 269 F.2d 120 (6th Cir.1959). The court in Hill v. General Motors Acceptance Corporation, 207 Mich.App. 504, 509-10, 525 N.W.2d 905 (1994) states that "[i]f there is any possibility that an oral contract is capable of being completed within a year, it is not within the statute of frauds, even though it is clear that the parties may have intended and though it probable that it would extend over a longer period and even though it does extend."
Ambrose v. Detroit Edison Co., 367 Mich. 334, 339, 116 N.W.2d 726 (1962); Adolph v. Cookware Co. of America, 283 Mich. 561, 568, 278 N.W. 687 (1938); Lynas v. Maxwell Farms, 279 Mich. 684, 273 N.W. 315 (1937); Toussaint v. Blue Cross, 79 Mich. App. 429, 434, 262 N.W.2d 848 (1977); Hernden v. Consumers Power Co., 72 Mich. App. 349, 249 N.W.2d 419 (1976); and McMath v. Ford Motor Company, 77 Mich. App. 721, 259 N.W.2d 140 (1977). Federal courts, applying Michigan law, have consistently applied this rule, McLaughlin v. Ford Motor Co., 269 F.2d 120 (6th Cir. 1959); Percival v. General Motors Corp., 539 F.2d 1126 (8th Cir. 1976); Giocosa v. Sony Corp., (Civil No. 6-71173, E.D.Mich., 1978) and Schroeder v. Dayton-Hudson Corp., 448 F. Supp. 910 (E.D.Mich. 1977), rehearing granted in part on other grounds, 456 F. Supp. 650 and 456 F. Supp. 652 (1978).
The settled law in the majority of American jurisdictions is that an employment contract for an indefinite period, such as plaintiff has here, is terminable at will by either party for any or no reason, even if done with improper or malicious motive. McLaughlin v. Ford Motor Co., 269 F.2d 120 (6th Cir. 1959). The State of Michigan, whose law must govern in this diversity action for wrongful discharge, Donahoo v. Thompson, 291 S.W.2d 70 (Mo. 1956), cert. denied 352 U.S. 941, 77 S.Ct. 261, 1 L.Ed.2d 237 (1956) follows the majority rule.
The foregoing language in the Murray case is quoted with approval in Winand v. Case, D.C.Md.1957, 154 F. Supp. 529, 541. In McLaughlin v. Ford Motor Co., 6 Cir., 269 F.2d 120, 125, where plaintiff sought damages for an alleged breach of contract to give him a position in general management of Ford Motor Company, and plaintiff urged that he had a right of recovery because he gave up his employment with General Motors Corp., the court said: "The action of the appellant in giving up his position with the General Motors Corp., was only a necessary incident in placing himself in a position so that he might perform his agreement with the Ford Motor Company.
Firmly established in Michigan is the general rule that in the absence of distinguishing features or provisions, or a consideration in addition to the services to be rendered, contracts for life or permanent employment are indefinite hirings terminable at the will of either party. Lynas v Maxwell Farms, 279 Mich. 684; 273 N.W. 315 (1937);Adolph v Cookware Co of America, 283 Mich. 561; 278 N.W. 687 (1938); McLaughlin v Ford Motor Co, 269 F.2d 120 (CA 6, 1959). In Lynas, defendant prevailed upon plaintiff to sell his restaurant business in Detroit, which he did at a loss, and to become manager of defendant's Birmingham store. It was understood that plaintiff was to have a "permanent lifetime position with the defendant".