The opinion of the court was delivered by: Haight, District Judge:
MEMORANDUM OPINION AND ORDER
Plaintiff Victoria A. Stewart, an attorney, was terminated on
December 31, 1990 from her employment as an associate at the
defendant law firm of Jackson & Nash (the "Firm"). The
individual defendants are partners of the Firm. Stewart
commenced this diversity action against defendants alleging
causes of action in fraud and negligent misrepresentation.
Defendants move under Rule 12(b)(6), Fed.R.Civ.P., to dismiss
the complaint on the ground that it fails to state a claim upon
which relief can be granted.
Plaintiff alleges that until October 1988 she was employed as
an attorney in the environmental law department of another law
firm. While plaintiff was so employed defendant Ronald Herzog,
a partner of the defendant Firm, approached plaintiff and
offered her a job at the Firm as head of its environmental law
department. ¶ 20 of the complaint alleges that Herzog
represented to plaintiff that the Firm "had recently secured a
large environmental law client, that [the Firm] was in the
process of establishing an environmental law department, and
that [plaintiff] would head the environmental law department,
and be expected to service the Firm's substantial existing
environmental law client."
Stewart alleges that those representations were false when
made; that the Firm knew they were false; and that she accepted
the Firm's offer in reliance upon the representations, to her
detriment when the Firm discharged her in December 1990.
The complaint pleads causes of action for fraud and negligent
New York law governs this diversity action. Defendants move
to dismiss the complaint on the ground that plaintiff's
employment by the firm was at will, a relationship in which New
York law "accords the employer an unfettered right to terminate
the employment at any time." Murphy v. American Home Products
Corp., 58 N.Y.2d 293, 306, 461 N.Y.S.2d 232, 237,
448 N.E.2d 86, 91 (1983). See also Sabetay v. Sterling Drug, Inc., 69
N Y2d 329, 334, 514 N.Y.S.2d 209, 212, 506 N.E.2d 919, 922
(1987) (under New York law "an employer has the right to
terminate an at-will employee at any time for any reason or for
no reason, except where that right has been limited by express
agreement"); Weiner v. McGraw-Hill, 57 N.Y.2d 458,457 N.Y.S.2d
193, 443 N.E.2d 441 (1982).
Defendants further contend that plaintiff cannot avoid the
effect of that rule by labeling the action as one for fraud or
negligent misrepresentation, citing Mayer v. Morgan Stanley &
Co., Inc., 703 F. Supp. 249 (S.D.N.Y. 1988); Shipper v. Avon
Products, Inc., 605 F. Supp. 701 (S.D.N.Y. 1985); and Dalton v.
Union Bank of Switzerland, 134 A.D.2d 174, 520 N.Y.S.2d 764
Dept. 1987). Accordingly, defendants contend, even accepting
the truth of plaintiff's allegations for purposes of this
motion to dismiss, the complaint fails to state a claim.
Alternatively, defendants contend that even if plaintiff had
viable claims sounding in contract, they would be barred by the
New York Statute of Frauds, General Obligations Law §
Plaintiff says that she is not suing in contract, she is
suing for the torts of fraud and negligence misrepresentation.
Moreover, she contends that her claim "is not concerned with
— nor is the fraud alleged connected to — her termination."
Brief at 7.
That is a bold assertion. If the Firm had not terminated
plaintiff's employment she would still be working there, and by
definition would not have commenced this action. Thus it is
difficult to agree, at least as a matter of logic, that
plaintiffs claim "is not concerned with" her termination.
Nevertheless, plaintiff insists that in part at least, the Firm
fraudulently misrepresented existing facts prior to her
accepting the Firm's offer of employment, and that makes all
the difference. In making that argument, plaintiff concedes
that she was an at-will employee, and appears to acknowledge
that misrepresentations "related to future acts or promises,
not to existing facts" (brief at 7, emphasis in original) would
not sustain a claim. The principal "existing fact" allegedly
misrepresented to plaintiff was the existence of the Firm's
"recently secured" large environmental law client. The
complaint alleges that this client and the resulting
substantial environmental law case work did not materialize,
and that in May 1990 "upon information and belief, Herzog
admitted that he had been misled by Jeff Steinberg — the
partner who had allegedly secured the aforesaid client for the
firm." Complaint at ¶ 31.
New York case law supports the general proposition that
misrepresentations of material facts prior to contracting may
give rise to a cause of action for fraud in the inducement.
See, e.g., Triangle Underwriters, Inc. v. Honeywell, Inc.,
604 F.2d 737, 746-48 (2d Cir. 1979) and cases cited. But plaintiff
cites no case applying that general principle in the particular
context of employment at will, and holding that the employer's
unfettered right to terminate the employment at any time
becomes fettered by fraudulent representations given to induce
Bluntly put, the Firm's argument is that an employer may lie
to a prospective employee to obtain her services, and then
discharge her with impunity if the employment is at will. It is
an argument singularly lacking in grace, and the conclusion
does not necessarily follow. An employer's freedom to fire an
employee at will for any or no reason does not necessarily
imply a freedom to seduce the employee into its service by
Nevertheless, the New York decisions establish that a
terminated at-will employee has no claim in contract, and are
uniformly hostile to efforts to assert claims sounding in tort.
In Shipper, supra, the terminated at-will employees alleged
fraudulent misrepresentations made during negotiations leading
to the employment, "that they would only be fired for just
cause." 605 F. Supp. at 707. While that allegation described a
lie with respect to a then-existing policy, Judge Cannella
discussed the claim on the authority of Murphy and Weiner.
As I construe present New York law, an individual relying
upon particular representations made during negotiations for
employment must include them in the contract of employment. If
the individual consents to become an employee at will, he or
she is subject to termination by the employer at the latter's
will. I do not think that Aspesi v. Shahinian Acoustics, Ltd.,
84 A.D.2d 543, 443 N.Y.S.2d 242 (2d Dept. 1981), relied upon by
plaintiff, supports on its facts the distinction plaintiff
seeks to draw between existing facts and future promises (the
case turned upon an employer's alleged promise to pay plaintiff
a salary if he entered into defendant's employ); but in any
event Aspesi antedates the decisions of ...