On October 18, 2024, Justice Chan of the New York County Commercial Division issued a decision in Saviano v. RTX Holdings, Inc., 2024 NY Slip Op. 33789(U), holding that the statute of frauds did not bar an alleged oral employment agreement, explaining:
Defendants seek dismissal of plaintiffs’ Fourth Cause of Action against the RTX Entities on the grounds that the claim is barred by the statute of frauds, because the agreement could not be performed within a year, thus it had to be in writing. For his part, Saviano argues that Section 5·701 of the General Obligations Law (GOL) does not preclude an oral contract for a term of more than one year if there is the slightest possibility that it can be fully performed within one year. Saviano further explains that, because he was permitted to resign for good reason in less than a year, his oral employment agreement could have been performed in less than one year.
Section Law 5·701 of the GOL, otherwise known as the statute of frauds, provides that every agreement, promise or undertaking is void, unless it or some note or memorandum thereof be in writing, and subscribed by the party to be charged therewith, or by his lawful agent, if such agreement, promise or undertaking by its terms is not to be performed within one year from the making thereof or the performance of which is not to he completed before the end of a lifetime. The defense only applies if an agreement is not capable of performance within a year and/or the terms of the alleged agreement prevent the possibility of performance within one year.
Here, Saviano’s breach of contract claim is premised on an alleged oral agreement between him and the RTX Entities pursuant to which Saviano would be paid a yearly salary of $240,00 per year, gain an equity interest in the RTX Entities of 5.25%, and would devote approximately 20 hours of week to Fintech for a 1 % payment of the issued and outstanding membership interests in Fintech. Although his term of employment was allegedly for two years, Saviano alleges that his equity interests would immediately vest upon termination without cause or if he signed for good reason. Accepting these facts as true and drawing all reasonable inferences in Saviano’s favor (as this court must), these facts sufficiently allege an oral agreement that could have been completed within one year, particularly given that Saviano was hired as an at-will employee. Accordingly, on this present record, there is no basis to bar Saviano’s breach of contract claims under the statue of frauds defense.
(Internal quotations and citations omitted).