Globe & Rutgers Fire-Insurance Co. v. Jones
Michigan Court of Appeals
89 N.W.2d 580 (1902)
James Jones (defendant) signed a five-year contract in 1898 to serve as Rutgers Fire-Insurance Company's general agent for Michigan, but Rutgers merged with Globe Fire-Insurance Company later that year to form Globe & Rutgers Fire-Insurance Company (plaintiff); Jones, having heard rumors of the merger and confirmed it by March 1899, stopped forwarding account balances after October 1898 and declined Globe & Rutgers's May 1899 offer to keep working as general agent, citing Globe's poor management reputation. Globe & Rutgers sued Jones for the unforwarded balances plus interest, and the trial court found the merger itself breached Jones's employment contract with Rutgers, ruling for Jones; Globe & Rutgers appealed.
Whether a personal-services employment contract for a definite term automatically transfers to, and remains binding on the employee in favor of, a new entity formed when the original employer merges with another company.