Summary
holding that "[a]n agent acting legitimately within the scope of his authority cannot be held liable for interfering with or inducing his principal to breach a contract between his principal and a third party, because to hold him liable would be, in effect, to hold the corporation liable in tort for breaching its own contract"
Summary of this case from Asset Management Solutions v. One Corporate DriveOpinion
File No. 209923
Where one's employment is at the will of his employer, tort liability for discharge will arise only where the discharge contravenes a clear public policy. The plaintiff, an at will employee of the named defendant hospital, brought an action against the hospital challenging her discharge. The hospital moved to strike the second, fourth and fifth counts of the complaint. In the second count, the plaintiff alleged that she had been wrongfully discharged, that the hospital had failed to conduct an evaluation of her job performance and that her termination, in combination with that failure, constituted an intentional tort. Because she did not claim that the discharge contravened any clear public policy, because the hospital owed her no duty under an implied contract to conduct a job performance evaluation, and because what she alleged in the second count about an implied contract did not support her allegations therein of intentional tort, the court ordered that count stricken. In the fourth count, the plaintiff alleged that the hospital had discriminated against her on the basis of her age and sex and further alleged that she could be discharged only for insubordination or dishonesty. Since, however, her employment contract was for an indefinite term and terminable at will and nowhere barred the hospital from terminating her with notice and for any reason, the court ordered the fourth count stricken. In the fifth count, the plaintiff alleged that the hospital had committed the intentional torts of interference with a contract and of infliction of emotional distress. Since the nature of the hospital's failure to conduct a job performance evaluation, i.e., whether that failure was so extreme and outrageous as to cause the intentional infliction of emotional distress, was a question of fact, the court denied the defendant's motion to strike the fifth count.
Memorandum filed January 26, 1984
Memorandum on the named defendant's motion to strike the second count, the fourth count and the fifth count of the plaintiff's complaint. Motion granted to strike the second and fourth counts; motion denied to strike the fifth count.
Brennan, McNamara Brennan, for the plaintiff.
Pullman, Comley, Bradley Reeves, for the defendants.
The plaintiff was discharged from employment at the defendant Bridgeport Hospital. The employment contract was for an indefinite duration and was terminable at will. The defendant now moves the court to strike the second count, the fourth count and the fifth count of the plaintiff's complaint.
As a general rule, contracts of permanent employment, or for an indefinite term, are terminable at will, reflecting the view that an employer has the absolute right to run his business as he sees fit. Somers v. Cooley Chevrolet Co., 146 Conn. 627, 629, 153 A.2d 426 (1959). In Sheets v. Teddy's Frosted Foods, Inc., 179 Conn. 471, 475, 427 A.2d 385 (1980), the court carved out an exception to the employment at will doctrine and held that an "employer [may] be responsible in damages if the former employee can prove a demonstrably improper reason for dismissal, a reason whose impropriety is derived from some important violation of public policy." Consequently, public policy imposes some limits on an employer's unfettered discretion to terminate the employment of someone hired at will. Id., 476. Moreover, by recognizing a cause of action for wrongful discharge, the court set forth the premise that a contractual right, such as an employer's right to discharge his at will employee with or without cause, can be performed in a tortious manner. Id., 475.
The second count alleges that the defendant wrongfully discharged the plaintiff and further alleges that the defendant failed to conduct a job performance evaluation pursuant to an implied contract. The plaintiff, moreover, asserts that "termination" in combination with the defendant's "failure to evaluate" constitutes an intentional tort.
The rule enunciated in Sheets, supra, however, is controlling. Contract rights, in the employment at will context, may give rise to tort liability where the discharge contravenes a clear mandate of public policy. Sheets v. Teddy's Frosted Foods, Inc., supra, 475. The plaintiff, however, has failed to allege a public policy limitation on the defendant's absolute right to terminate in this instance.
Moreover, the plaintiff's assertion that the defendant's wilful "failure to evaluate" and "termination" taken together constitute an intentional tort is inaccurate. As set forth above, the discharge was not tortious. Consequently, the defendant's act of failing to conduct an "evaluation" must independently give rise to a claim sounding in tort in order for the second count to survive the present motion to strike. The "failure to evaluate" allegation is premised on an implied contract between the plaintiff and the defendant. One authority notes that the fundamental difference between tort and contract lies in the nature of the interests protected. Prosser, Torts (4th Ed.) 592, 613. The duties of conduct giving rise to tort actions "are imposed by law, and are based primarily upon social policy." Id. "Contract actions [however] are created to protect the interest in having promises performed. Contract obligations are imposed because of . . . the parties' manifesting consent, and are owed only to the specific individuals named in the contract." Id. In the present case there was no duty owed by the defendant, apart from the contract, to perform the "evaluations," and consequently the plaintiff can only maintain an action ex contractu.
Finally, the plaintiff contends that the second count states a cause of action under Magnan v. Anaconda Industries, Inc., 37 Conn. Sup. 38, 429 A.2d 492 (1980). The court in Magnan held that in employment contracts there is an implied covenant of good faith and fair dealing which may be breached if the conduct of the employer constitutes "an aspect of fraud, deceit or misrepresentation." Id., 41. The Magnan court consequently recognizes a new cause of action in contract in the employment at will context. Id., 40, 41; see Monge v. Beebe Rubber Co., 114 N.H. 130, 316 A.2d 549 (1974). ( Monge spawned the rule in Magnan and was a contract action.) Fortune v. National Cash Register Co., 373 Mass. 96, 364 N.E.2d 1251 (1977) (suit on an implied covenant of good faith is a contract action). The second count, however, alleges intentional tort, whereas the Magnan rule is limited to contract actions as found in the first count.
Accordingly, the second count is hereby ordered stricken.
The fourth count reiterates the alleged tort of wrongful discharge that was alleged in the second count. The plaintiff further alleges that her termination was based on her age and/or sex and that the defendant's failure to provide the "Formal Grievance Procedure" was a breach of contract. The express contract which forms the basis of the plaintiff's fourth count is for an indefinite term and terminable at will. The plaintiff construes the termination section of the contract to mean that she can be discharged only for "insubordination [or] dishonesty," to imply that the contract is not terminable at will. The plaintiff has misconstrued the section by overlooking the operative language which provides that "[e]mployees can be discharged without notice and without terminal vacation" for certain enumerated reasons. This section of the contract does not bar the defendant from terminating an employee with notice for any reason or for no reason.
Since the contract is terminable at will, Sheets is controlling. The plaintiff concedes that when an allegation is made with respect to a protected category under the Fair Employment Practices Act, such as an allegation of age or sex discrimination, the exclusive remedy is in the procedures established by the act, and there is no cause of action for a private lawsuit. Consequently, the plaintiff contends that "the right to enforce express contracts" is an important public policy limitation under Sheets. The right to enforce express contracts does not fall within the purview of the Sheets doctrine, and an ordinary contract action cannot be transformed into a tort by linking public policy to contract enforcement. In fact, the gravamen of the plaintiff's grievance is properly characterized as a contract action as already set forth in the third count.
Accordingly, the fourth count is hereby ordered stricken.
The fifth count alleges the intentional torts of interference with contract and infliction of emotional distress. Consequently, the alleged torts will be treated seriatim to determine if either tort is legally sufficient.
The plaintiff alleges that two executive supervisors of the defendant hospital interfered with the contractual relationship between the plaintiff and the defendant hospital by failing to conduct a job performance evaluation.
An agent acting legitimately within the scope of his authority cannot be held liable for interfering with or inducing his principal to breach a contract between his principal and a third party, because to hold him liable would be, in effect, to hold the corporation liable in tort for breaching its own contract. Bowman v. Grolsche Bierbrouweij B.V., 474 F. Sup. 725, 733 (D. Conn. 1979). An agent, however, can be held liable for such interference or inducement if he did not act legitimately within his scope of duty but used the corporate power improperly for personal gain. Id. In Vassardakis v. Parish, 36 F. Sup. 1002, 1004-1005 (S.D.N.Y. 1941), the court held that an officer or employee actuated solely by self-interest could be held liable in tort for inducing his principal to dismiss another employee. Still later, the court in Bradkin v. Leverton, 32 N.Y. App. Div. 2 d 1057, 1058, 303 N.Y.S.2d 1020 (1969), stated that tort liability should be swiftly imposed whenever an officer, director, employee or stockholder induces a breach of contract for private benefit or to satisfy personal feelings against a third party. The Connecticut rule as enunciated in Bowman relied on Bradkin.
In the fifth count there is no allegation that the individual defendants profited in any way by inducing the alleged breach. Similarly, there is no allegation that the defendant's acts were actuated by personal feelings against the plaintiff. In short, lack of justification is a condition precedent to liability, Vassardakis v. Parish, supra, 1005. Even a liberal reading of the allegations do not support an inference that the individual defendants took advantage of their relationship with the corporation to divert corporate benefits elsewhere to their own benefit or that they harbored personal feelings against the plaintiff. Consequently, the claim for tortious interference is defective. See Allison v. American Airlines, 112 F. Sup. 37 (N.D. Okla. 1953) (an express allegation that the defendant personally benefited from his acts, which led to the discharge of the plaintiff, is necessary to state a good cause of action for intentional interference with contract relations in this context).
The fifth count also alleges that the individual defendants wilfully and wantonly failed to conduct a job performance evaluation of the plaintiff with the knowledge that that failure would cause mental distress.
The tort of intentional infliction of emotional distress is recognized in the employment context. Agis v. Howard Johnson Co., 371 Mass. 140, 355 N.E.2d 315 (1976). In order for the plaintiff to prevail in a case for liability under this tort, four elements must be established. It must be shown: (1) that the actor intended to inflict emotional distress or that he knew or should have known that emotional distress was the likely result of his conduct; (2) that the conduct was extreme and outrageous; (3) that the defendant's conduct was the cause of the plaintiff's distress; and (4) that the emotional distress sustained by the plaintiff was severe. Hiers v. Cohen, 31 Conn. Sup. 305, 329 A.2d 609 (1973); 1 Restatement (Second), Torts § 46.