American Broadcasting Companies v. Wolf

Facts

In February 1978, Defendant entered into an employment contract with Plaintiff for the position of a sportscaster. Following the exercise of the renewal option, the contract was to terminate on March 5, 1980. The contract also contained a good-faith negotiation and first-refusal provision which bound Defendant to negotiate in good faith with Plaintiff for a 90-day period and for the first 45 days of this period, the negotiation with Plaintiff was to be exclusive. Then, after the expiration of the 90-day negotiating period, Defendant was required, before accepting any other employment offer, to afford Plaintiff a right of first refusal. And after the expiration of the first-refusal period Defendant was then free to accept any job opportunity, without obligation to Plaintiff. Defendant started discussing the terms of a renewal contract with Plaintiff in September 1979 and agreed to finalize the matter by mid-October. However, unbeknownst to Plaintiff, at the same time Defendant was negotiating with Plaintiff, Defendant met with representatives of CBS. The parties were unable to reach an agreement on the renewal period in mid-October, leading to Defendant a few days later, again discussing employment possibilities with CBS. Plaintiff did not contact Defendant again until January 1980, when they expressed their willingness to meet substantially all of Defendant’s demands. Defendant rejected the offer, stating that Plaintiff’s delay in communicating with him and his desire to explore his options in light of the impending expiration of the 45-day exclusive negotiation period. In February 1980, after the 45-day exclusive negotiation period ceased, Defendant and CBS orally agreed on the terms of Defendant’s employment as a sportscaster. Defendant signed the CBS production agreement three days later. The next day, Defendant submitted a letter of resignation to Plaintiff. Plaintiff met again with Defendant, making various offers and promises, all of which Defendant rejected. Defendant informed Plaintiff that they had delayed negotiations with him and downgraded his worth. Once Defendant’s move to CBS became public knowledge, Plaintiff filed suit against Defendant.