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Smith v. Ford Motor Company
North Carolina Supreme Court
221 S.E.2d 282 (1976)
A Ford dealership in Winston-Salem, North Carolina, was struggling financially. Ford Motor Company (Ford) (defendant) recommended that the dealership change its name and bring in new management. The dealership changed its name to Cloverdale Ford (defendant), and hired Smith, a manager of a successful dealership in Atlanta. Smith’s employment with Cloverdale was at-will, meaning that either party could terminate the contract at any time and for any reason. Under Smith’s management, Cloverdale Ford became profitable. Smith was a member of the Ford Dealer Alliance, a group of dealers who banded together in order to protect their interests in dealings with Ford. Ford disapproved of Smith’s participation in the Ford Dealer Alliance. Ford told Cloverdale that Ford would terminate its franchise contract with Cloverdale if Cloverdale did not fire Smith. Cloverdale fired Smith. Smith sued Cloverdale and Ford for breach of contract and tortious interference with a contract. Cloverdale and Ford moved to dismiss. The trial court granted both parties’ motions to dismiss. Smith appealed.
Rule of Law
Holding and Reasoning (Lake, J.)
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