Following a voluntary resignation from the company, the employee was rehired as a fixed-term employee under the condition, as set forth in the employee’s employment contract, that after two years of service, the employee would be converted to a permanent employee. However, at the end of the second year, the company decided not to renew the contract, thereby resulting in the end of the employment relationship. The employee filed suit alleging wrongful termination.
In this case, Lee & Ko analyzed the cases and statutes related to the termination of employment relationships, the standard for determining the reasonableness of an employee’s expectation of contract renewal, as well as the relevant facts of the case. Ultimately, Lee & Ko was able to persuade the court that the employer’s decision of non-renewal was legally justified.
This case is significant in that it invalidated a contractual provision that stated that a fixed-term employee will be automatically converted to a permanent employee upon the end of the fixed-term period and also recognized as an employee’s expectation of contract renewal under such circumstances is unreasonable.