Opinion
Civ. No. CCB-99-3080.
January 24, 2000.
MEMORANDUM
Now pending before this Court is a motion by Defendant, The National Shipping Company of Saudi Arabia ("NSCSA"), to dismiss the complaint of Plaintiff Gordon B. McDermott for failure to state a claim. In his complaint, Plaintiff alleges that he entered into an employment contract with the Defendant for a period of not less than five years. In Count I of his complaint, Plaintiff asserts that the Defendant breached this contract by terminating Plaintiff's employment prior to the five year term. In Count II of his complaint, Plaintiff brings a claim for detrimental reliance upon the Defendants' promise of continued employment. Defendant moves to dismiss the complaint, pursuant to Federal Rule of Civil Procedure 12(b)(6), for failure to state a claim upon which relief can be granted. This matter has been fully briefed and no hearing is necessary. See Local Rule 105.6. For the reasons that follow, the Court will grant the motion to dismiss.
STANDARD OF REVIEW
The Fourth Circuit recently summarized the basic principles governing the resolution of Rule 12(b)(6) motions:
The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint; "importantly, [a Rule 12(b)(6) motion] does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Republican Party v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). Accordingly, a Rule 12(b)(6) motion should only be granted if, after accepting all well-pleaded allegations in the plaintiff's complaint as true and drawing all reasonable factual inferences from those facts in the plaintiff's favor, it appears certain that the plaintiff cannot prove any set of facts in support of his claim entitling him to relief. See id. . . . We do note, however, that for purposes of Rule 12(b)(6), we are not required to accept as true the legal conclusions set forth in a plaintiff's complaint. See District 28, United Mine Workers of Am., Inc. v. Wellmore Coal Corp., 609 F.2d 1083, 1085 (4th Cir. 1979).Edwards v. City of Goldsboro, 178 F.3d 231, 243-44 (4th Cir. 1999). Exhibits attached to the pleadings are considered part of the complaint. See Fed.R.Civ.P. 10(c). Where matters outside the pleadings are considered by the court, a defendant's motion to dismiss will be treated as one for summary judgment under Rule 56.See Fed.R.Civ.P. 12(b)(6).
BACKGROUND
The facts, as stated in Plaintiff's complaint, are as follows. In early 1996, McDermott, a New Jersey resident, was employed by Maersk, Inc. ("Maersk"), a steamship company known as a world leader in ocean transportation. (Compl. ¶ 9) At that time, Defendant NSCSA, an international shipping company created under the laws of Saudi Arabia, maintained an office in Baltimore, Maryland, from which it conducted its operations in Baltimore and other areas of the United States. (Id. at ¶ 6) At some point in 1996, NSCSA began recruiting McDermott to head up the company's commercial operations marketing efforts. (Id. at ¶ 10) According to the complaint, NSCSA made various representations about a secure future with NSCSA. (Id.)
On December 6, 1996, Ahmed Al-Kowsi, a representative for NSCSA, sent a letter to McDermott offering him the position of "Vice-President of Marketing/Owner Representative's Office." (Id. at ¶ 11 Ex. A) The letter offered McDermott an annual salary of $110,000 and thirty days annual leave. (Id.) The letter also stated that "NSCSA will guarantee your employment and all expenses involved in transferring your sponsorship from your current employer to a Permanent Residency Visa with NSCSA." (Id.) According to McDermott, "[t]hrough its December 6, 1996 correspondence and other communications, NSCSA guaranteed McDermott's employment for a period of not less than five (5) years." (Id. at ¶ 12) McDermott accepted NSCSA's offer of employment, resigned from his position at Maersk, and began working at NSCSA's Baltimore office as the Vice President of Marketing/Owner's Representative's Office. (Id. at ¶¶ 13 15)
Unfortunately, in a letter dated October 12, 1997, Homoud Al-Ajlan informed McDermott that the company was restructuring its operations. (Id. at ¶ 16 Ex. B) The letter stated that the company was closing its Baltimore office and was terminating McDermott's employment effective October 31, 1997. (Id.) On October 31, 1997, NSCSA terminated McDermott's employment. (Id. at ¶ 17) The company paid McDermott two months additional salary, but has not paid McDermott any salary since December 31, 1997. (Id.)
On October 12, 1999, McDermott filed this action. In Count I of his complaint, McDermott alleges that NSCSA breached the employment contract by firing McDermott prior to the completion of his five year term. In Count II, McDermott brings an action for detrimental reliance. McDermott claims that, based on NSCSA's guarantee of employment, he left his position with Maersk and, as a result, continues to suffer serious financial loss and detriment to his career. On December 1, 1999, NSCSA filed a motion to dismiss for failure to state a claim upon which relief can be granted.
ANALYSIS I. Plaintiff's Breach of Contract Claim
"It is a longstanding principle in Maryland that an indefinite hiring is prima facie a hiring at-will. Where, therefore, the employment contract is of an indefinite duration, the contract is one for at-will employment [and] either party at any time may legally terminate it." Lubore v. RPM Associates, Inc., 109 Md. App. 312, 326 (Md.Ct.Spec.App. 1996) (internal citations omitted). Therefore, unless NSCSA agreed to employ McDermott for a specified term, McDermott was an at-will employee and NSCSA was "legally entitled to terminate the contract at any time." Id. at 324; see also Adler v. American Standard Corp., 291 Md. 31, 35 (1981) ("Adler I").
Viewing McDermott's complaint in the most favorable light, and drawing all reasonable inferences, the complaint fails to allege sufficient facts to support a finding that NSCSA agreed to employ McDermott for a specified term. In support of his claim, McDermott attaches to his complaint the December 6, 1996, letter from Ahmed Al-Kowsi. Nowhere in that letter, however, does NSCSA promise to employ McDermott for a specified period of time. While the letter references McDermott's "annual" salary and leave, such references "concern the manner in which compensation was projected [and] do not indicate that [McDermott] was hired for a specific duration." Lubore, 109 Md. App. at 326.
McDermott primarily relies upon a sentence in the December 6, 1996, letter stating that "NSCSA will guarantee your employment and all expenses involved in transferring your sponsorship from your current employer to a Permanent Residency Visa with NSCSA." Compl., Ex. A. To overcome the presumption of at-will employment by reference to another event, "the period of [Plaintiff's] employment [must be] tied to the accomplishment of [a] particularly defined task, the duration of which is fixed or finite." Lubore, 109 Md. App. at 326. Here, the letter's reference to McDermott obtaining a Permanent Residency Visa is simply "too indefinite and non-specific" to suggest that the parties were entering into an employment contract for a specified term. Id. at 327; see also Francis v. Gaylord Container Corp., 837 F. Supp. 858, 861-62 (S.D.Ohio 1992) (finding similar statements with respect to obtaining a green card insufficient to overcome Ohio's presumption of at-will employment).
Finally, McDermott's complaint refers to "other communications" and representations as to a secure future in a position with NSCSA. See Compl., ¶¶ 10 12. But, references to a secure or prosperous future cannot provide legally sufficient grounds to conclude that the parties agreed on a specific employment period. See Lubore, 109 Md. App. at 327 (citing Wiand v. Case, 154 F. Supp. 529, 545 (D.Md. 1957) (even where a contract stated, "`it is our desire to have [the employee] remain active in the business indefinitely,'" the employee was an at-will employee for an indefinite period)). Rather, such references merely reflected the parties' confidence, present at the inception of most employment relationships, that the alliance would last for a long time. See Lubore, 109 Md. App. at 327-28.
The complaint alleges that "[t]hrough its December 6, 1996 correspondence and other communications, NSCSA guaranteed McDermott's employment for a period of not less than five (5) years." Compl., ¶ 12. Nothing in the December 1996 letter, however, refers to a five-year term, and no "other communication" has been identified in the complaint or proffered in the opposition to the motion to dismiss that would suggest a legal basis for enforcing a five year term.
Although a court should not resolve contests surrounding the facts on a motion to dismiss, "a complaint may be dismissed as a matter of law if . . . it alleges insufficient facts under a cognizable legal theory." Mates v. North American Vaccine, Inc., 53 F. Supp.2d 814, 822 (D.Md. 1999). Here, McDermott's complaint fails to allege sufficient facts to show that he was anything but an at-will employee. Since McDermott was an at-will employee, NSCSA was free to terminate his employment and McDermott does not have a claim for breach of contract. Accordingly, the Court will grant NSCSA's motion to dismiss Count I of the complaint.
II. Plaintiff's Detrimental Reliance Claim
In Count II of the complaint, McDermott brings a cause of action for detrimental reliance. According to McDermott, NSCSA guaranteed his employment for a period of time not less than five years. Based on that promise, McDermott left his employment with Maersk, thereby foregoing the benefits of Maersk's continued employment.
In Pavel Enterprises, Inc. v. A.S. Johnson, Inc., 342 Md. 143 (1996), the Court of Appeals adopted the Restatement (Second) of Contracts formulation for detrimental reliance claims. That formulation, as set forth by the Court of Appeals, involves a four-part test. Id. at 166. In Maryland, to succeed on a detrimental reliance claim, the Plaintiff must prove:
1. a clear and definite promise;
2. where the promisor has a reasonable expectation that the offer will induce action or forbearance on the part of the promisee;
3. which does induce actual and reasonable action or forbearance by the promisee; and
4. causes a detriment which can only be avoided by the enforcement of the promise.Id.
Pavel involved a claim between a general contractor and a subcontractor, id. at 146, and a detrimental reliance claim may not be available for an employee challenging the termination of his employment contract. Employment at-will "is a very far-reaching rule in Maryland, and attempts to circumvent it by relying on estoppel or similar theories have consistently met with failure." Adler v. American Standard Corp., 538 F. Supp. 572, 581 (D.Md. 1982) ("Adler II"). For example, Maryland courts have rejected an implied covenant of fair dealing with respect to terminating an employment at-will relationship. See Suburban Hospital, Inc. v. Dwiggins, 324 Md. 294, 309 (1991).
Even assuming that a detrimental reliance claim could be available for an employee challenging the termination of his employment contract, McDermott's complaint fails to allege facts to support such a claim. To establish a detrimental reliance claim, the plaintiff's action must be reasonable. Pavel, 342 Md. at 166. Here, McDermott alleges that he left Maersk based on an expectation of long-term employment with NSCSA. As explained earlier, McDermott has not alleged any facts that could suggest that the parties were entering into an employment contract for a specified term. Therefore, he was an at-will employee and NSCSA could terminate him at any time. Adler I, 291 Md. 31, 35. As a result, neither McDermott's expectation of long-term employment nor his decision to leave Maersk based on that expectation were "reasonable" as a matter of law. See McNierney v. McGraw-Hill, Inc., 919 F. Supp. 853, 861 (D.Md. 1995) ("Because, McNierney's employment could be terminated `at the pleasure of either party at any time' he was not justified in relying on McGraw-Hill's statement of intent to hire him."); see also Francis, 837 F. Supp. at 861-62 (applying Ohio law, none of the employer's oral statements regarding the employment relationship led to a reasonable inference of continued employment). Unfortunately, even assuming the claim is available to him, McDermott cannot establish the third element of detrimental reliance under Maryland law, and the Court must grant NSCSA's motion to dismiss Count II.
A separate Order follows.
ORDER
For the reasons stated in the accompanying Memorandum, it is hereby ORDERED that:
1. The National Shipping Company of Saudi Arabia's motion to dismiss is granted;
2. This case is closed; and
3. Copies of this Order and the accompanying Memorandum shall be mailed to counsel of record.