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Time Warner sales reps can’t reasonably rely on promise of continued employment and better pay

By Ronald Miller, J.D.

“As a matter of law, a party may not rely on oral representations that conflict with written disclaimers to the contrary which the complaining party earlier specifically acknowledged in writing.”

Former sales representatives for Time Warner could not pursue claims of fraud, negligent misrepresentation, and promissory estoppel based on alleged promises by the employer of better pay and continued employment, ruled the Sixth Circuit. Approximately a year after Time Warner acquired another cable company, it announced that its work force would be cut in half and that employees would have to reapply for their position. Prior to Time Warner making the alleged promises, the employees acknowledged and accepted an “Important Notice” stating that their employment was at-will. The question here was whether it was reasonable for them to rely on the Time Warner promises, even though they had read and accepted this notice. The appeals court concluded that it was not. Accordingly, the district court’s grant of summary judgment to the employer was affirmed on appeal (Bisig v. Time Warner Cable, Inc., October 4, 2019, Nalbandian, J.).

Promises made. The employees worked as “multi-dwelling unit” sales reps for Insight Communications, a cable provider. They sold services to apartment and condominium complexes. In 2012, Time Warner acquired Insight. According to the employees, Time Warner induced them to stay in their jobs despite increased market competition and customer service issues by promising them that they would keep their positions and receive better pay (or at least not less pay). They were shocked to learn in October 2013 that their workforce was being cut in half and that they would need to reapply if they wished to keep their positions. Those who could not keep their positions would be offered jobs as “sweep representatives,” which paid less.

The plaintiffs in this action quit working for Time Warner after being told that they would need to reapply. Contending that the company knew these changes were going to occur even while it promised them better pay and continued employment, they filed this lawsuit alleging that Time Warner unlawfully broke its promises. They asserted claims of fraud, negligent misrepresentation, and promissory estoppel. The employees moved for summary judgment on their promissory estoppel claim, and Time Warner moved for summary judgment as to all claims. The district court granted Time Warner’s motion. The employees appealed.

No reasonable reliance. The district court found that the employees failed to establish that they reasonably relied on Time Warner’s promises, an element of both fraudulent and negligent misrepresentation in Kentucky. Like the district court, the Sixth Circuit relied on one of three documents that informed the employees of their at-will status on or before the acquisition date. The document was labeled an “Important Notice,” and stated, “You will be employed on an at-will basis unless you are subject to a written employment agreement signed by a company representative authorized to enter into an employment agreement.”

Each employee electronically acknowledged “having read and accepted the terms” of this notice, and they did so before they detrimentally relied on Time Warner’s alleged promises of continued employment and better pay. So the issue here was whether it was reasonable for the employees to rely on Time Warner’s promises of better pay and continued employment despite having read and accepted this notice. The Sixth Circuit held that it was not.

The written agreement controls. Kentucky law is clear: “As a matter of law, a party may not rely on oral representations that conflict with written disclaimers to the contrary which the complaining party earlier specifically acknowledged in writing.” Thus, the only question was whether the notice “conflicted with Time Warner’s oral representations of continued employment and better pay.” The appeals court had no trouble concluding that it did. In Kentucky, at-will employees may be discharged “for good cause, or for no cause, or for a cause that some might view as morally indefensible.” A narrow public policy exception applies: An employee may not be fired “when the discharge is contrary to a fundamental and well-defined public policy as evidenced by existing law.” The appeals court found no such policy implicated in this instance. As a result, Time Warner’s promises of continued employment directly conflicted with this disclaimer.

The employee’s reliance on Time-Warner’s promise of better pay fared no better. Kentucky law permits an employer to unilaterally modify the terms and conditions of an at-will employment relationship prospectively, upon reasonable notice to the employee. Here, the notice informed each employee that Time Warner could unilaterally modify his or her future pay after giving reasonable notice. Consequently, it followed that Time Warner’s oral promises of better or similar pay directly conflicted with this disclaimer.

The appeals court rejected the employees’ contention that disclaimers may be relevant but are never dispositive of reasonable reliance. Here, the notice stated that employees would be “employed on an at-will basis unless they were subject to a written employment agreement.” Thus, it specifically disclaimed any oral understanding or agreements affecting the employees’ at-will employment status. Thus, the employees were barred from relying on such understandings or agreements to show reasonable reliance. Accordingly, the district court’s grant of summary judgment to the employer was affirmed on appeal.