Professor Manfred Wright was the president of the New South Wales Board of Australian Legal professionals. Wright was a world-renowned speaker -- a celebrity of sorts. His wit, charisma, practical wisdom and powerful oratory skills would hold his audience spellbound.

Professor Wright was invited by Columbia University to address a large assembly of students. Columbia offered him $15,000 for the event. He scheduled his speaking tour in New York City for the week of Jan 16th, booking a couple of side engagements at community colleges for $1000 apiece.

En route to Melbourne Airport for his flight to New York, Professor Wright received the following email on his Blackberry from Columbia University:

    We apologize for any inconvenience on your part. However we regret to inform you that there are insufficient resources available to cover your appearance. At this point, we must cancel your engagement until further notice.

    Sincerely,
    Ripley Offerman
    Assistant Comptroller
    Columbia University

The professor's stomach sank as he realized that the time and expenses he would incur to just deliver the two minor addresses would be a losing business proposition. His airfare alone would cost more than the remuneration he'd receive from the community college addresses.

According to Jewish law, does Columbia University have any financial responsibility towards Professor Wright?

The Answer

An employer who cancels on an employee can incur the following financial responsibilities:

  • If the employee turned down alternative work and can no longer attain them, the employer must compensate for employee's losses [Shulchan Aruch, Choshen Mishpat 333:2].
  • If the employee subsequently finds another job at a lower rate, the initial employer pays the difference between the employee's expected wages and actual wages received [ibid].
  • If the employee already began working, even if they did not forfeit alternative work, the employer must fulfill his side of the deal and “provide work and its compensation for the employee”. Even setting out to the job site can be considered the beginning of work. [Shulchan Aruch, Choshen Mishpat 333:1]

We can establish the exact amount of liability by determining how much the employee would honestly be willing to take for not having to actually work [ibid; Radva"z Vol. II, Responsa 793]. This is subjective to the nature of the job, the worker, and the worker's financial situation. For example, some workers would agree to take less money if it meant not having to work, while others would rather work hard and receive their full pay. [Babylonian Talmud Bava Metzia 77a]

The employer must cover any expenses the employee responsibly incurred because of relying on his employer, even those incurred before actually beginning the job [Shulchan Aruch, Choshen Mishpat 14:5, Ram"a].

Application to our case:

Professor Wright incurred losses by relying on Columbia University's commitment. Thus, Columbia is responsible to pay Wright for any financial loss incurred due to the booking and cancellation of his ticket and travel arrangements.

If Wright can find an alternative appearance for $15,000, Columbia need not pay him. If he turned down an offer as a result of Columbia's commitment and now cannot find another engagement, Columbia must reimburse him for the losses they caused to him. Additionally, even if he did not turn down another offer, he technically had already begun working for Columbia. His traveling to the airport for his appearance is considered the "beginning of the job." [Shulchan Aruch, Choshen Mishpat 333:1]

Columbia in turn accepts responsibility to compensate him as promised (provided he does not cancel and an unforeseen occurrence does not transpire) [Shulchan Aruch, Choshen Mishpat 333:5].

There is valid reason to assume that, as a celebrity, Professor Wright would have preferred to work than to remain idle. Celebrities enjoy the stage and each appearance is an advertisement for them. Hence, in a case when Columbia would be liable, they would have to pay Wright close to the full $15,000 if not the entire amount.

[Question Submitted by Rabbi Menachem Nissel: Member, Fellow-Yesharim Research Center - Jerusalem, Israel

Answered by: The Fellow Yesharim Research Center- Jerusalem, Israel

Written by: Rabbi Yosef Y. Ettlinger Executive Director: Fellow-Yesharim Foundation for Ethical Law, Jerusalem, Israel]