The Great Atlantic Railroad Company problem
Statutory Issue: Whether the contract between Great Atlantic Railroad Company and the Italian workers is binding upon them or considered as a violation of Act of 1885.
If I were to give legal advice to the Great Atlantic R.R. Co., I will recommend that the subsequent terms and conditions that are included in individual contracts entered between the Italian workers and the company should be declared void and have no effect. Although Section 1 of Act 1885 stated that the law cannot be made applicable to transactions entered prior to the passage of the act, it can be gleaned from the facts of the case that the company vacated the original arrangement for each worker concerned by amending it to contain the new terms and conditions of the revised 3-year employment contract. Before Act of 1885 became effective, Great Atlantic was already engaged in recruitment of laborers based on Europe by entering an agreement with a European agent who will supply the workers who were mostly Italian. The workers were brought to America, where in the transportation expenses will initially be paid by the company, but will later on be deducted to the salary of the workers. The workers agreed to perform construction work for a period of 3 years at the rate of 60 cents per day for 10 hours per day and the workers had to report to work for six days a week. The company also agreed to provide the board and lodging of the workers. The company has agreed to pay their American workers the rate of $1.25 per day to which the workers agreed.
In the event that Great Atlantic shall cancel the original terms of the contract and publishes the new conditions in Italian newspapers, it shall be considered as a breach of the previous contract. The breach of contract will cause damage to the workers who borrowed money to spend for the fare to the U.S. by relying on the promises of Great Atlantic. Although the previous agreement will appear to be binding between the parties since Act 1885 will only be applied to current and future transactions, the act of the company in abandoning the original terms constitutes bad faith and by giving false hopes to the workers. Such act shall be considered a violation of Act of 1885. Section 3 has specifically provided that contracts involving alien workers to who shall be transferred to the U.S. for render labor and service, is void and cannot take effect. Here, the act of the company in making undue advantage to the Italian workers is tainted with bad faith.
The workers who may bring a case against the company may use the doctrine of promissory estoppel also known as “detrimental reliance” wherein any person who has reasonably and substantially relied on the promise of another to acquire some measure of recovery (Miller 173). In this particular case, the Italian workers had relied on the promises made by Great Atlantic that they shall be paid based on the original terms and conditions of the agreement. Hence, in the event that the company shall cancel the original terms of the contract and publishes the new conditions in Italian newspapers, it shall be considered as a breach of contract. The breach of contract will cause damage to the workers who borrowed money to spend for the fare to the U.S. by relying on the promises of Great Atlantic and considered as a violation of the Act of 1885.
Act of 1885
Miller, Roger Leroy. Fundamentals of business law: excerpted cases. Mason, OH: South
Western Cengage, 2013. Print.