Marshall Durbin Food Corp. v. Baker

Bill Baker (plaintiff), a senior executive at Marshall Durbin Food Corporation (defendant), approached the company's owner during a period of financial difficulty to help secure top managers, including himself, with a termination-and-early-retirement agreement guaranteeing five years of compensation if a triggering event, such as the owner's death or incapacity, occurred. After the owner was diagnosed with cancer and later declared incapacitated by a court, Baker became the company's president, but the company's board refused to honor the agreement, and Baker sued. The trial court found the contract valid and ordered payment; the company appealed, arguing the agreement lacked consideration because Baker, as an at-will employee, could quit at any time and the company could fire him at any time.