SW Legal studies in Business

Paying Someone Not to Work Does Not Breach Employment Contract
Description

Appeals court held that CBS Evening News anchor Dan Rather had no cause of action against CBS for taking him off the news program. CBS paid him the amount due under the contract and was under no obligation to have him appear on air, so there is no basis for any suit.

Topic Contracts
Key Words

Breach; Tortious Interference; Fraud

C A S E   S U M M A R Y
Facts

CBS news anchor Dan Rather was removed from the CBS Evening News in March, 2005. His contract with CBS ran through June, 2006. CBS paid Rather the $6 million a year salary called for in the contract, but did not assign him to any duties. Because he was under contract, he could not work for another network unless CBS agreed. Rather contended that CBS breached the contract, was liable for tortious interference with a contract and for fraud. He claimed that CBS “warehoused” him until June, 2006, rather than allow him to be an anchor on another CBS news program or work elsewhere. The trial court dismissed some claims made by Rather, but not all claims. Both parties appealed.

Decision

All claims should have been dismissed. CBS did not breach its obligations to Rather. The network paid him the full sum due by the contract; it simply chose not to have him appear on the air. Under the contract, CBS was under no obligation to let Rather appear on programs. Rather’s claim that he lost money because he could have worked elsewhere for more than the sum CBS paid him is not a valid argument. The loss of an alternative contractual bargain cannot serve as the basis for fraud or misrepresentation because the loss of the bargain was speculative. Further, he never identified an opportunity that occurred during the time in question when he could have earned more than he did at CBS.

Citation

Rather v. CBS Corp., ---N.Y.S.2d--- (2008 WL 6864421, App. Div., N.Y., 2009)

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