Background
In August 2022, Ashleigh Fisher Consulting, LLC engaged Ashley Sepanski as an independent contractor to provide consulting services for a client, Doral Investors Group. The parties negotiated a written contract that included a payment schedule in Appendix A: Sepanski would “submit an invoice with monthly retainer fee in the amount of $17,000.00 on or before the first of the month” for consulting services estimated to require approximately twenty hours per week. Section 7.2 of the contract provided that either party could cancel on sixty days’ written notice, during which “Company will pay Consultant only for the work completed through the end of the notice period.”
Doral became dissatisfied with Sepanski’s performance, and in October 2022 Fisher Consulting terminated her work on the Doral project—less than two months into the engagement. Fisher Consulting paid Sepanski’s October invoice but told her not to submit any further invoices because no additional client work would be forthcoming. Sepanski declined Fisher Consulting’s offer to keep the contract active for potential future clients and did not perform any further work. She then sent a demand letter claiming she was owed $34,000—two monthly retainer payments for the sixty-day notice period—arguing the “retainer fee” entitled her to payment for availability regardless of whether any work was performed. Fisher Consulting refused. Sepanski sued for breach of contract and breach of the implied covenant of good faith and fair dealing.
After cross-motions for summary judgment, the Wake County Superior Court granted Sepanski’s motion, entering judgment for $26,633.33, reasoning that the retainer fee compensated availability rather than completed work. Fisher Consulting appealed.
The Court’s Holding
Reversed and Remanded for entry of summary judgment in favor of Fisher Consulting. Judge Griffin, writing for a unanimous panel, held that the contract’s use of “monthly retainer fee” in Appendix A did not transform the payment structure into an availability-based obligation. Applying de novo review to contract interpretation as a question of law, the court looked first to dictionary definitions: Merriam-Webster, Oxford, and Cambridge all define “retainer” as payment that secures services “when needed” or “as and when required”—language that presupposes future services to be rendered. None of the definitions supports a reading that a retainer is owed regardless of whether the engagement continues.
The court then harmonized the “retainer fee” language with the rest of the contract, which consistently tied compensation to work: Section 3 required Sepanski to maintain “a record of Consultant’s time and work for which Consultant should be compensated,” the compensation section referred to “[c]onsulting services provided,” and the early-termination clause capped payment to “the work completed.” Sepanski’s own deposition also undercut her position: she described the monthly fee as an advance “instead of dealing with hourly” for an “estimate of the work” she was to perform, not as pure availability compensation. Post-execution conduct reinforced that reading—payment had been made only after Sepanski performed work for Doral, not on a fixed schedule. Because the termination-period language expressly limited payment to “work completed,” and Sepanski performed no work after the October termination, Fisher Consulting owed nothing for the remainder of the notice period. The breach-of-contract claim and the implied-covenant claim both fell.
Key Takeaways
- In North Carolina, the word “retainer” in a consulting contract does not automatically create an obligation to pay a flat fee regardless of work performed. Dictionaries define retainer as payment to secure services “when needed,” which presupposes future work; whether a specific “retainer fee” payment is tied to availability or to completed work depends on the contract as a whole.
- When a contract’s early-termination clause states that “Company will pay Consultant only for the work completed through the end of the notice period,” that clause controls over Appendix or exhibit language describing a monthly payment amount—there is no entitlement to continued payment if no work is actually performed during the notice period.
- Post-execution conduct—the timing and basis of actual payments made by the parties—is admissible evidence of the parties’ practical construction of the contract and can determine the outcome on summary judgment in contract disputes.
- Independent contractors claiming unpaid notice-period compensation should ensure their contracts either (a) specifically state that the monthly fee is owed regardless of work performed during notice, or (b) define “retainer” as an availability payment rather than as compensation for services rendered.
Why It Matters
For Research Triangle and Charlotte-area consulting and staffing firms—common employers and hirers of independent contractors in North Carolina’s tech and financial services sectors—Sepanski clarifies that boilerplate “monthly retainer fee” language, standing alone, does not insulate a consultant against non-payment if she is terminated and performs no work during a notice period. The ruling turns on the ordinary meaning of “retainer” and the whole-contract method of interpretation: courts will synthesize payment, termination, and record-keeping clauses rather than read any single term in isolation.
For independent contractors and their counsel, the decision is a drafting lesson. If a consultant intends to be paid for availability during the notice period—regardless of whether the client assigns any actual work—the contract must say so explicitly. A clause providing that “the monthly retainer fee shall be payable during any notice period regardless of work assignments” would have changed the outcome in this case. Absent such language, early-termination clauses that condition payment on work completed will prevail.