No Fraudulent Inducement Claim For At-Will Employees Who Lost Jobs In Merger
In January 2001, plaintiff Gerald Thunelius, then the director of Dreyfus' Taxable Fixed Income Group (TFIG), heard a rumor that Mellon Financial Corporation, Dreyfus' parent corporation, had made an offer to acquire the fund management company of Standish Ayer & Woods. When asked, Dreyfus' CEO told Thunelius that no merger had occurred or was being considered. Relying on those assurances, plaintiff Martin Fetherston in December 2002 accepted employment in the TFIG. Mellon acquired Standish in March 2001. Between 2001 and 2004, Thunelius repeatedly asked Dreyfus' officers whether there were plans to merge the TFIG with Standish, and they denied any planned merger. During these years, plaintiffs Kenneth Smalley, Darlene Haut and Michael Allen allege that they accepted jobs with the TFIG in reliance on the denials by Dreyfus' officers.
Iin April 2004, Dreyfus' CEO told the TFIG that any merger of the group into Standish was “off the table,” and that the group would remain intact for at least another year. By early fall 2004, merger rumors resurfaced, which at the time Dreyfus' officers refused to confirm or deny. In late 2004, the two groups merged, and in February 2005-four years after the alleged merger discussions began-Dreyfus fired every member of the TFIG.
The five sued Dreyfus for fraudulent inducement to enter into and remain in the employment of the defendant. The trial court dismissed the claims, and the New York Court of Appeals affirmed the dismissals, holding that at-will employees cannot reasonably rely upon their employers' promises of continued employment, and that these employees failed to allege injuries separate and distinct from the termination of their at-will employment.
Smalley v. Dreyfus Corp.