Law, Business, and Society 9th Edition by Tony McAdams

Exercise 36

Lampley began work as an at-will (can be dismissed or can quit at any time) employee of Celebrity Homes in Denver, Colorado, in May 1975. On July 29, 1975, Celebrity announced a profit-sharing plan for all employees if the company reached its goals for the fiscal year, April 1,1975, to March 31, 1976. Lampley was dismissed in January 1976. Celebrity distributed its profits in May 1976. Lampley sued when she did not receive a share of the profits. Celebrity argued that its promise to share its profits was a gratuity, unsupported by consideration. Decide. Explain. See Lampley v. Celebrity Homes, 594 P.2d 605 (Col. Ct. App. 1979).