Ingle v. Glamore Motor Sales, Inc.
73 N.Y.2d 183, 538 N.Y.S.2d 771, 535 N.E.2d 1311 (1989).
Glamore, his two sons, and Ingle were the only shareholders of Glamore Motor Sales. The shareholders’ agreement had a repurchase provision:
- “In the event that any Stockholder shall cease to be an employee of the Corporation for any reason, Glamore shall have the option…to purchase all of the shares of stock then owned by such Stockholder.”
At a special meeting of the board, Ingle was voted out and fired from his employment as operating manager of the business.
- He then sued, arguing that despite the express language of the agreement, he was entitled to fiduciary-rooted protection due to his status as a minority shareholder in a close corporation.
Whether Ingle was entitled to the implicit covenant of good faith and fair dealing that would preclude his termination except for cause.
- The court basically treated Ingle as an at-will employee and, because of that, there was no implied obligation of good faith and fair dealing.
- The contract expressly provided for termination “for any reason.”
- “By treating the essence of plaintiff’s complaints as a claimed breach of a hiring contract by the employer rather than an unfair squeeze-out of a minority shareholder in a close corporation by the majority, the court simply concludes that plaintiff has no rights at all.”
- The dissent also argued that the repurchase provision was to protect Glamore in case Ingle left the business, NOT to give Glamore the right to terminate him at any time.