Fair v. Red Lion Inn
943 P.2d 431 (Colo. S. Ct. 1997)
Parties:

Patricia Fair-Plaintiff-Petioner;

Red Lion Inn-Defendant

Facts:

In June 1987 Patricia Fair was hired by Red Lion. She signed an at-will employment agreement. Red Lion's policy on medical leave is that it is not to exceed 3 months in their employee manual.

On April 14, 1990 Fair was in a car accident. She was granted medical leave from May 25 - June 20. Her position at the time was coffee break attendant. Her duties included lifting and moving a heavy table and carrying trays and coffee between the table and the bar.

On June 20 she notified her employer that she would bring a doctor's release on June 22. They said that was "not a problem." The release was partial and precluded her from heavy lifting. Red Lion informed her that the release was unacceptable because of the limitations. Fair then submitted a full release on June 27 stating she could return with no limitations on July 2.

In early July Fair found out she had been terminated on June 20. Her termination stated that her release only allowed her to work starting July 2, consequently, Red Lion could not hold her position open any longer.

On Sept 17 1990, Fair's attorney sent a letter stating her position. Sept. 20 Red Lion responded with an unconditional reinstatement offer open until Oct. 3. Oct. 1 Fair responded with a conditional acceptance. Oct. 9 Red Lion wrote back rejecting some of the conditions, but extended the reinstatement offer to Oct. 15. Fair did not respond.

Procedural History:

Fair filed an action against Red Lion for breach of implied employment contract in El Paso County District Court on November 13, 1991. At trial Red Lion argued that Fair's rejection of their reinstatement offer constituted a failure to mitigate damages, and asked for the court to limit damages. The court denied the motion and the jury awarded $140,000 in actual damages plus interest for a total of $183,414.06. Red Lion appealed to the court of appeals who upheld the liability ruling, but reversed on damages and ordered a new trial on damages. Fair filed a petition for certiorari that was granted by the Colorado Supreme Court.

Issue:

Does the refusal of an employee to accept her former employer's unconditional offer of reinstatement, after a breach of contract by the employer, constitute a failure to mitigate damages?

Holding:

Yes, the employee has a duty to mitigate damages, including "acceptance of an unconditional offer of reinstatement where no special circumstances exist to justify rejection. Fair's reasons did not meet "special circumstances.

Reasoning:

The court cited Giandonato v. Sybron Corp., in which the 10th Circuit Court held that "Donato's refusal to return to work because his wife was ill and because he did not want to work under his previous supervisor were nt valid reasons for refusing the offers of reinstatement." In Fair this court found that Fair's reason's for refusing an offer that was "substantially equivalent" to her previous job, were similarly lacking.