Reference no: EM1339766

Explain Employment at Will - Garp Courier Serivce (GARP)

The solution addresses each of the questions below, along with the two at the case closing. There are two references to support the legal conclusion and recommendations of what Mr. Jones should do.

Using the case study provided write a 1 page memo that analyzes the case by:
1) stating the key elements of the applicable law ( in this case the relevant law is employment at will and its exceptions ,
2) summarize key facts
3) apply the facts to the elements of the and its exceptions
4) draw a legal conclusion and explain why you support that conclusion.

Garp Courier Service (GARP) is a successful new business in the Washington DC area. The courier business is a very competitive industry. The key to GARP's success is their unprecedented "money back guarantee" that all deliveries are completed within 30 minutes of receiving the call. GARP is growing fast and plans to establish service in other cities, starting with Baltimore.
Each of GARP 20 employees was hired with a handshake. On their first day employees are given a distinctive blue and red spandex body suit and a detailed employee handbook covering every aspect of the business from dress code and demeanor, to hours of service, pay, profit sharing and discipline. "This manual is the GARP bible. Lose it, or tell anyone our company policies and methods and you will be both fired and sued," warned Tony Armstrong, the owner and manager. Regarding terminations the manual said all employees are conditional employees for one year. After successfully completing one year they would be considered "permanent" employees. Permanent employees are paid $40,000 per year with health benefits and are eligible for profit sharing. It also means they could be fired only for "cause" - a phrase never fully explained. The manual also says in tiny, 8-point type, on the next to last page, and after the signature page, that the manual is for "employee information purposes only and is not an employment contract."
Homer Jones was GARP's most successful courier. He was the first employee hired 3 years ago. He knew he was a fortunate recipient of Tony's business system. He had the best list of clients and he worked very hard. He had to. Homer had a family to support including a little boy with heart problems. Homer realized, unlike other courier services, GARP couriers could ride and park their bikes anywhere - streets, sidewalks, even inside buildings. All doormen cooperated with GARP couriers; in contrast to the hostility they showed other couriers. Homer showed his appreciation; each Christmas he liberally handed out turkeys to friendly doormen, police officers and other "associates" who helped him.
GARP couriers have no trouble with the police. They did not obey traffic or street signs if they slow them down. If they get a ticket, unlike other couriers who pay the fine themselves, they just give the ticket to Tony. Homer tore through the city making twice as many deliveries as other couriers. Last year he earned a six-figure salary through salary, tips, bonus and profit sharing.
Due to his savvy, drive and experience Tony wanted Homer as his manager when decided to expand the business to Baltimore. Naturally, Homer was reluctant to give up his current job to start in a new city. But Tony Armstrong was uniquely persuasive. He said, "I got things set up. Go to Baltimore for a year and see how it goes. You can always get your job back here." It was "an offer he could not refuse". Homer relented and said goodbye to his comfortable job and life. His wife quit her job and the kids were removed from school and relocated in Baltimore where Homer bought a new house. As manager, Homer was guaranteed an annual salary, plus commissions on all deliveries and a higher percentage of company annual profits. The company also promised to hire 12 couriers within 3 months and have 20 hired within one year. The marketing budget called for huge increases in monthly increments through the first year.
On his first day of work Tony sat down with Homer and said; "this is "Management 101" at GARP, Homer. This is a list of police officers, government officials and doormen in the Baltimore area. Every name on the list gets $100 cash on the first day of each month." When Homer asked why, Tony said "How you think we keep the cops from busting the couriers for the reckless riding they do? What gets those doormen to cooperate? This is just "appreciation money". It ensures the cops, bureaucrats and other problems are taken care of. It's why we can guarantee 30-minute deliveries, you idiot! You make these payments or we are just another courier service. Understand!?
Afraid to argue, yet not comfortable paying what he perceived as bribes, Homer tried to make the business work without them. He took the money but put it in the bank. Homer worked day and night, trying all kinds of marketing and operations strategies. He bought motorized scooters and found strategic partners. The business made money but failed to match the DC office. So Homer developed a business plan that aimed for comparable profits within a year. Proudly he took it to Tony; who said very little, but signed off on Homer's plan.
After 3 months Tony and Homer were at odds. Tony never hired more than 3 couriers in Baltimore. When Homer asked Tony to follow through on his promises or give him his DC job back, Tony assured Homer the new hires were coming. Soon Tony withdrew marketing money and short-term credit with the Baltimore bank. Homer could not meet payroll and advertise. After 9 months it was clear the business would fail. Homer was passed over for quarterly bonuses; nor did he receive the commissions from the work being done. Soon Tony stopped marketing in Baltimore and business suffered badly. One day Homer noticed a former GARP courier working in Baltimore. A brief investigation revealed Tony had opened another courier service in Baltimore under a different name. Homer went to Tony and said he wanted his old job back in DC. Tony laughed and said, "We are one week from firing you, Homer. Why don't you quit and save everyone the embarrassment? Homer, you just don't have the right stuff to manage a business. You flinched on the first day. Nothing has been right since." Upset and desperate about family expenses Homer quit. He also went to the newspaper to expose the monthly payments. Finally, Homer came to you to sue GARP. You listen to his story and draft a memo on how you would sue GARP using employment at will is the critical issue (in other words this is NOT a discrimination case.)
What legal theories will you pursue?
What facts/evidence support each theory?