This week NBC announced that its failed experiment with late night television in prime time was coming to end – sending Jay Leno back to 11:35 p.m. and bumping Conan O’Brien back after midnight.
I’m not privy to the details of either Leno’s or O’Brien’s contracts, but generally speaking, this sort of unilateral modification of the terms of employment give rise to one or two legal problems…
The principal is simple – one party cannot unilaterally change the terms of what two parties bargained for. In the case of employment law, an employer cannot fundamentally alter the terms of the employment contract (whether it is written or unwritten) without the consent of the employee.
Demotions, decreasing salary, changing titles to something less prestigious, sticking you in the early morning time slot, anything that could be viewed as degrading or embarrassing in terms of working conditions or lowers your actual income, can all be considered such alterations.
And once altered, the aggrieved party, the employee, may successfully argue that the terms of the contract of employment have been frustrated and they have been constructively dismissed. If you are an employer, be very careful about making these sorts of changes. Speak with your lawyer about the effect and the possibility that your actions are giving rise to significant damages.
It’s simple – contracts, whether they are between employers and employees or between billion dollar corporations and million dollar TV personalities, are bargains – promises to do something in the future in exchange for something else. They are bargains made between two parties. Any changes to those bargains must also be made between the two parties.
If you are an employer looking to make any changes to the terms of employment of your workforce, call us first. If you are NBC, we don’t envy you the payout that this is going to cost you.