American Broadcasting Co. v. Wolf,

52 N.Y.2d 394, 420, N.E.2d 363, 438 N.Y.S.2d 482 (1981)

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Nature of the Case

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Facts

D is a sportscaster who has developed a rather colorful and unique on-the-air personality. D was employed by P since 1976. In February 1978, P and D entered into an employment agreement which, following exercise of a renewal option, was to terminate on March 5, 1980. There was a good faith negotiation and first-refusal provision. Ninety days prior to the expiration of the extended term of the agreement, D was to enter into good faith negotiations with P for the extension of the agreement. D also agreed that for the first forty-five days of their renegotiation period, he would not negotiate for services with any other person or company other than P. If a deal could not be reached D also agreed not accept, in any market for a period of three months following expiration of the extended term of this agreement, any offer of employment as a sportscaster, sports news reporter, commentator, program host, or analyst in broadcasting (including television, cable television, pay television and radio) without first giving P, in writing, an opportunity to employ D on substantially similar terms. D was bound to negotiate in good faith with P for the 90-day period from December 6, 1979, through March 4, 1980. From December 6 through January 19, the negotiation was to be exclusive. Following expiration of the 90-day negotiating period and the contract on March 5, 1980, D was required, before accepting any other offer, to afford P a right of first refusal. The first-refusal period expired on June 3, 1980, and on June 4 D owed no further obligations to P. D met with P executives in September 1979 to discuss the terms of a renewal contract. D also met with representatives of CBS in early October. D furnished CBS a copy of that portion of the P agreement. On October 12, P and D were unable to reach agreement on a renewal contract. On October 16 D again discussed employment possibilities with CBS. On January 2, 1980 P expressed its willingness to meet substantially all of D's demands. D rejected the offer citing P'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. After termination of the exclusive period, CBS orally agreed on the terms of D's employment as sportscaster for WCBS-TV, a CBS-owned affiliate in New York. The written contract had an effective date of March 6, 1980, and was in two parts; production and employment. D signed the CBS production agreement on February 4, 1980. At the same time, CBS agreed in writing, in consideration of $100 received from D to hold open an offer of employment to D as sportscaster until June 4, 1980, the date on which Wolf became free from P's right of first refusal. The next day, February 5, D submitted a letter of resignation to P. P made various offers and promises that D rejected. D informed P that they had delayed negotiations with him and downgraded his worth. He told the officials he had made a 'gentlemen's agreement' and would leave ABC on March 5. P and D eventually agreed that D would continue to appear on the air during a portion of the first-refusal period, from March 6 until May 28. P commenced this action on May 6, 1980. It was public knowledge that D was going to CBS. P claimed that D breached both the good-faith negotiation and first-refusal provisions of his contract. P sought specific enforcement of its right of first refusal and an injunction against D's employment as a sportscaster with CBS. The court found no breach of the contract and went on to note that, in any event, equitable relief would be inappropriate. A divided Appellate Division concluded that D had breached both the good-faith negotiation and first-refusal provisions, nonetheless affirmed on the ground that equitable intervention was unwarranted. P appealed.