Please refer to “Case Study A – Discrimina V. Defense Plants” in Course Materials. Study and answer Problem 1 at the end of the case. It is reprinted for you here:
Problem 1. Employment Contracts and Wrongful Discharge
Mr. Discrimina, through Eunice, requests that his employee Jim Arbor sign what he calls a confidentiality agreement. He offers to “consider profit sharing and salary increases” if Jim signs, but does not put profit sharing and wage increases in writing. Jim asks to read the paper before he signs and finds that it also contains a non-competition agreement not allowing Jim to do any machining, mechanical engineering or any work on industrial parts for a period of five years after leaving the company, anywhere in the world. Jim feels that he is being taken advantage of, but does not know what to do. He has been threatened with discharge if he doesn’t sign.
- Analyze Jim Arbor’s situation. Does he have an employment contract now? What is it? Should he ask for the salary increase to be in writing? Why or why not?
- Is it fair for Eunice to take advantage of the fact that Jim does not know why his invention and services have suddenly become more valuable? Explain. Is it fair for her to be the one to approach him, given their personal relationship? Explain.