Employment contract breach; Implied covenant of good faith & fair dealing; Hammond v United of Oakland, Inc; Kircher v Boyne USA, Inc; Speculation; Condition precedent; Real Estate One v Heller; Prevention of performance

The court held that plaintiff did not identify a contractual benefit that defendant-former employer (1) denied him through a bad-faith exercise of contractual discretion or (2) breached by terminating his employment or later changing its national accounts approach. Thus, it affirmed summary disposition for defendant on plaintiff’s contract breach claim. He contended “defendant violated the covenant of good faith and fair dealing.” The question was whether it “exercised authority granted by the parties’ agreement in a manner that deprived” him of a contractual benefit. He asserted that “defendant failed to provide him with a 2023 sales target and then fired him for failing to meet” it. The court found that the evidence did not support this claim. He “was terminated before defendant typically distributed annual targets.” The record also showed that it relied on his “failure to generate sufficient sales during 2021 and 2022. More importantly, defendant’s offer of employment expressly provided that plaintiff’s employment was at will. It also stated that variable compensation was not guaranteed and was subject to change. The implied covenant cannot transform those provisions into a promise of continued employment or guaranteed variable compensation.” The parties’ dispute over whether a compensation plan was final was immaterial. Even “accepting plaintiff’s testimony about the plan’s status, no reasonable fact-finder could conclude that defendant withheld compensation” he earned under either the disputed 2022 plan or the lower threshold he acknowledged. As to his unattainable sales targets claim, he had to offer some evidence allowing a reasonable fact-finder to “infer that defendant manipulated his sales targets or terminated him to avoid paying commissions.” He did not. Finally, whether “defendant viewed the targets as compensation thresholds, performance expectations, or both, its decision to end plaintiff’s employment did not violate any express contractual limitation. The covenant of good faith and fair dealing cannot supply the limitation the parties omitted.” As to his condition precedent/performance prevention argument, the prevention doctrine did “not excuse his failure to satisfy the requirements for variable compensation.”