Summary
holding that even though there was a written contract that "specifically provided that the employment was terminable at will . . . it is for the trier of fact to determine whether the contract was not terminable at will because of the defendant employer's oral or written assurances"
Summary of this case from Shreve v. City of RomulusOpinion
Docket No. 43298.
Decided January 6, 1981.
Donnelly Associates, P.C., for plaintiff.
James C. Curtiss and Kermit G. Bailer, for defendant.
Plaintiff, Frank Schipani, an employee of defendant Ford Motor Company, filed a complaint against defendant which alleged a breach of contract, age discrimination, malicious and bad faith demotion, impairment of prospective economic opportunity and failure to objectively evaluate plaintiff's performance.
Defendant responded by filing a motion for accelerated judgment and for summary judgment dismissing plaintiff's complaint. The trial court denied defendant's motion in toto and defendant now appeals by leave of this Court.
Plaintiff commenced employment with Ford Motor Company on December 8, 1948, and was periodically promoted, eventually to the position of Superintendent, Production, Frame Plant in 1969. On February 4, 1952, plaintiff signed a written employment agreement with Ford, providing:
"I understand that my employment is not for any definite term, and may be terminated at any time, without advance notice by either myself or Ford Motor Company * * *."
Plaintiff's job performance was evaluated on an annual basis. On November 4, 1977, plaintiff was suspended and thereafter went on medical leave. Effective December 1, 1977, plaintiff was reassigned to a different job classification at a lower salary grade. There is a question whether plaintiff's position as Superintendent of Production was filled by a person or persons younger than plaintiff. Plaintiff was age 53 at the time of reassignment.
Plaintiff's Count I alleges breach of an implied contract to employ plaintiff until he reached age 65 arising from defendant's literature, policy and practices. Defendant moved for accelerated judgment claiming that the action was barred by the statute of frauds. The court denied defendant's motion on the basis of three considerations: (1) the statute of frauds is properly invoked to prevent one from "fraudulently constructing" contracts, and plaintiff here "is clearly not fraudulently constructing a contract in an attempt to bilk defendant"; (2) further discovery was necessary; and (3) the exception of part performance might be invoked to avoid the application of the statute of frauds.
The statute of frauds is not only invoked to prevent fraudulent construction of a written contract but also to prevent disputes over what provisions were included in an oral contract. Plaintiff bases his case on both oral and written contracts.
The only written contract of employment presented in this case specifically provided that the employment was terminable at will. Such contracts are generally held to be indefinite hirings, terminable at the will of either party "in the absence of distinguishing features of provisions or a consideration in addition to the services to be rendered". Lynas v Maxwell Farms, 279 Mich. 684, 687; 273 N.W. 315 (1937), Adolph v Cookware Co of America, 283 Mich. 561, 568; 278 N.W. 687 (1938), Hawthorne v Metropolitan Life Ins Co, 285 Mich. 329, 335; 280 N.W. 777 (1938), Toussaint v Blue Cross Blue Shield of Michigan, 408 Mich. 579; 292 N.W.2d 880 (1980).
Under a contract terminable at will, an employee may be terminated with or without cause. Hernden v Consumers Power Co, 72 Mich. App. 349, 356; 249 N.W.2d 419 (1976). Even an arbitrary and capricious discharge is not actionable under a contract terminable at will. Hernden v Consumers Power Co, supra. However, the Supreme Court in Toussaint stated:
"Employers are most assuredly free to enter into employment contracts terminable at will without assigning cause. We hold only that an employer's express agreement to terminate only for cause, or statements of company policy and procedure to that effect, can give rise to rights enforceable in contract." Toussaint, supra, 610.
Here, as in Toussaint, it is for the trier of fact to determine whether the contract was not terminable at will because of the defendant employer's oral or written assurances.
Plaintiff contends that an oral agreement to employ plaintiff until age 65 served to bind defendant. The alleged oral agreement is unenforceable because employment contracts for a term exceeding one year come within the statute of frauds. McMath v Ford Motor Co, 77 Mich. App. 721, 724; 259 N.W.2d 140 (1977). A contract which is not, by any possibility, capable of being performed within a year is within the statute. Rowe v Noren Pattern Foundry Co, 91 Mich. App. 254; 283 N.W.2d 713 (1979). Under the statute, the agreement is void unless in writing and signed by the party to be charged therewith. MCL 566.132(1); MSA 26.922(1), McMath, supra, 724.
The doctrine of partial performance, relied upon by the trial court to avoid the application of the statute of frauds, is available in land transactions but is inapplicable to employment contracts. McMath, supra, 725.
Plaintiff argued that defendant should be estopped from raising a statute of frauds defense. The elements of equitable or promissory estoppel are: (1) a promise; (2) that the promisor should reasonably have expected to induce action of a definite and substantial character on the part of the promisee; (3) which in fact produced reliance or forbearance of that nature; and (4) in circumstances such that the promise must be enforced if injustice is to be avoided. McMath v Ford Motor Co, supra, 725.
Plaintiff alleges that, based on "Defendant Company's literature, policy, and practices, Plaintiff was led to believe that he would be employed until the normal retirement age of sixty-vie [sic] (65)". The written contract on which plaintiff seeks to rely contains the previously quoted disclaimer.
The Michigan Supreme Court in Toussaint v Blue Cross Blue Shield of Michigan, supra, 619, held that:
"An employer who establishes no personnel policies instills no reasonable expectations of performance. Employers can make known to their employees that personnel policies are subject to unilateral changes by the employer. Employees would then have no legitimate expectation that any particular policy will continue to remain in force."
Plaintiff in Toussaint relied on oral representations and statements in the employer's policy manuals assuring that employees would be dismissed for "cause" only, asserting that his dismissal was not for "cause". In treating the policy manual assertions of Blue Cross as sufficient to give rise to contractual rights in Toussaint, the Court found that whether there was "cause" sufficient to justify dismissal was a question for the trier of fact.
The instant case is distinguishable from Toussaint because the presence of disclaimers in the policy handbooks may serve to negate the reliance on plaintiff's part which would be justified to either give rise to a contract or give effect to the doctrine of promissory estoppel. The Supreme Court's decision in Toussaint, supra, indicates that where such questions exist, the trial judge acts properly in denying a motion for accelerated judgment and allowing the case to be presented to the jury.
The Court of Appeals in Kari v General Motors Corp, 79 Mich. App. 93; 261 N.W.2d 222 (1977), held that where the defendant employer specifically stated that its separation and pay schedule and conditions, contained in its handbook, were not intended to establish a contractual relationship, "[a]n employee reading this language and that of the general disclaimer at the end of the booklet should realize that further negotiations, and not merely the acceptance of employment with General Motors, are necessary to create a contract for severance pay". However, the Supreme Court reversed Kari v General Motors Corp, supra, by order in lieu of leave to appeal, 402 Mich. 926 (1978), remanding the action to the trial court to consider all of plaintiff's claims including claims raised by plaintiff's interpretation of the handbook and possible oral promises to award the separation allowance. This remand may indicate the Supreme Court's belief that under appropriate circumstances, oral promises may negate the effect of disclaimers which are intended to absolve employers from liability for policies presented in handbooks or other employer literature.
Promissory estoppel requires plaintiff to show that his reliance was definite and substantial. In Pursell v Wolverine-Pentronix, Inc, 44 Mich. App. 416; 205 N.W.2d 504 (1973), plaintiff had been employed by Dow Chemical until he was 59 years old as the manager of one of its plants. The plant was acquired by defendant. The defendant offered to keep the plaintiff on as general manager, orally promising to employ him as vice-president until he reached retirement at age 65. In reliance on these promises, the plaintiff severed his employment with Dow and accepted the position offered by the defendant. A few years later defendant terminated plaintiff's employment. Pursell, supra, 417-418. This Court found that the giving up of his prior employment and the substantial retirement benefits that accompanied it was sufficient reliance to estop the defendant from raising the statute of frauds as a defense. Pursell, supra, 419, 420. Likewise, in Rowe v Noren Pattern Foundry Co, supra, 257, the Court found that "plaintiff's giving up of his prior job where he has been employed for 13-1/2 years, and his soon-to-vest retirement benefits constituted a reliance sufficient to circumvent the statute of frauds, at least by raising a question of fact to be resolved by the jury".
In the instant case, plaintiff alleged that, prior to his working for management, he had worked three years for defendant as a union member. By accepting defendant's offer of clerk, plaintiff gave up the security of the union. This, too, would appear to raise at least a question of fact to be determined by the jury. Nor can it be said that defendant should not have reasonably expected to induce such a reliance.
Finally, the handbooks' allusions to the fairness of defendant in any termination or defendant's oral promises, or both, may be required to be enforced in order to prevent injustice.
For the above stated reasons, the trial court's denial of defendant's motion for accelerated judgment based on plaintiff's claim of an implied contract is affirmed.
Plaintiff's Count II alleges that plaintiff was replaced in his position as a superintendent by younger men and that plaintiff was discriminated against on account of his age in violation of Michigan Public Act 453 of 1976; MCL 37.2101; MSA 3.548(101), known as the Elliott-Larsen Civil Rights Act.
Defendant moved for summary judgment asserting that there was no issue of material fact because plaintiff was actually replaced by someone nearly his own age.
GCR 117.2(3) states that a moving party is entitled to summary judgment when:
"(3) that except as to the amount of damages there is no genuine issue as to any material fact, and the moving party is therefore entitled to judgment as a matter of law." GCR 1963, 117.2(3).
With regard to this rule, the Michigan Supreme Court has commented:
"The courts are liberal in finding that a `genuine issue' does indeed exist. As Honigman Hawkins correctly comments, (1) the court will `give the benefit of any reasonable doubt to the opposing party' and (2) `the court must be satisfied that it is impossible for the claim or defense to be supported at trial because of some deficiency which cannot be overcome.' (Emphasis added.)" Rizzo v Kretschmer, 389 Mich. 363, 372; 207 N.W.2d 316 (1973).
Section 202 of the Elliott-Larsen Civil Rights Act provides in pertinent part:
"Sec. 202. (1) An employer shall not:
"(a) Fail or refuse to hire, or recruit, or discharge, or otherwise discriminate against an individual with respect to employment, compensation, or a term, condition, or privilege of employment, because of * * * age." MCL 37.2202(1)(a); MSA 3.548(202)(1)(a).
This statute has been held to create statutory civil rights which may be vindicated by means of a private cause of action. Holmes v Haughton Elevator Co, 404 Mich. 36; 272 N.W.2d 550 (1978).
Because there are no Michigan cases which delineate what constitutes a prima facie case of age discrimination, it is appropriate to examine the consideration given race discrimination by the appellate courts of this state. This is reasonable because the same statute prohibits both age and race discrimination. There appear to be at least two types of the latter. (1) Disparate treatment. To make a prima facie showing of discrimination, the one alleging disparate treatment must show that he was a member of the class entitled to protection under the act and that, for the same or similar conduct, he was treated differently than one who was a member of a different race. Pompey v General Motors Corp, 385 Mich. 537, 542, 549; 189 N.W.2d 243 (1971). (2) Intentional discrimination. Here, plaintiff must show that he was a member of the affected class, that he was discharged, and that the person discharging him was predisposed to discriminate against persons in the affected class and had actually acted on that disposition in discharging him. Civil Rights Comm v Chrysler Corp, 80 Mich. App. 368, 373, fn 3; 263 N.W.2d 376 (1977).
In pertinent part, plaintiff's Count II stated as follows:
"11. That Plaintiff was replaced in his position as a Superintendent without offer or transfer compatible with his age, seniority, and work experience, by younger men to wit: Bennie Tucker and Donald Martin.
"12. That by reason of these premises, Plaintiff has been discriminated against on account of his age in violation of Michigan law, to wit: Michigan Public Act 453 of 1976."
Plaintiff is not alleging disparate treatment. His allegation that he was replaced by younger men indicates that he was discriminated against because of his age; in other words, that the person discharging him was predisposed against plaintiff because of his age and acted on that predisposition.
Defendant insists that plaintiff was only temporarily replaced by two men younger than he. Shortly thereafter, he was permanently replaced by a Gil Miller, a man approximately plaintiff's age. While this tends to undercut plaintiff's assertion of age discrimination, it is not dispositive. It cannot be said that, because plaintiff was not permanently replaced by someone younger than he, it is no longer a question of fact whether defendant discriminated against plaintiff because of age. See Laugesen v The Anaconda Company, 510 F.2d 307 (CA 6, 1975).
Moreover, there is a question of material fact as to whether Gil Miller was plaintiff's permanent replacement since he occupied the position for approximately one month after which time a reorganization occurred and the position was apparently occupied by Bennie Tucker or John Hayes, both of whom are younger than plaintiff.
Since a question of material fact remained, the lower court properly denied defendant's motion for summary judgment as to Count II.
Plaintiff's Count III alleges that "defendant's demotion of plaintiff was malicious and in bad faith and defendant had a duty to refrain from maliciously and in bad faith demoting and refusing to transfer plaintiff". Count IV alleges that because of plaintiff's age and the unjust demotion, his employment opportunities are limited and that "Defendant's unwarranted, malicious and bad faith demotion and failure to transfer Plaintiff has interfered with and impaired Plaintiff's opportunities for securing future employment in the field of work that Plaintiff has devoted his adult working life to".
In its motion for summary judgment, defendant argued that plaintiff had failed to state a claim upon which relief could be granted. The lower court denied defendant's motion stating:
"This court must recognize the duty of an employer not to discharge or harass an employee based on characteristics which are immutable. One cannot change one's color, one's sex, nor one's age. This court holds that, upon a proper showing of fact, plaintiff's allegations make out a case under our statutes."
We find that the defendant's motion for summary judgment should have been granted as regards to plaintiff's Count III alleging malicious and bad faith demotion and failure to transfer and Count IV alleging impairment of prospective economic opportunity.
Regarding plaintiff's Count III, a contract for indefinite employment has generally been held to be terminable at will. Lynas v Maxwell Farms, supra. This Court has stated that "[s]uch a contract is not violated even by an arbitrary or capricious discharge". Hernden v Consumers Power Co, supra, 356. However, this Court has intervened where "the reason for the discharge is an intention on the part of the employer to contravene the public policy of this state". Sventko v The Kroger Co, 69 Mich. App. 644, 647; 245 N.W.2d 151 (1976). The facts of that case are clearly distinguishable from the ones in the case at bar. In Sventko, supra, plaintiff alleged that she had been terminated as retaliation for her filing a workmen's compensation claim. Sventko, 646. The Court conceded that the workmen's compensation statute did not directly prohibit a retaliatory discharge by employers. Sventko, 647. But the Court noted that the statute indicated a specific legislative policy the fulfillment of which an employer should not be allowed to discourage. Sventko, 647-648. In a concurring opinion, Judge ALLEN noted that appellate courts have used this new exception to termination at will sparingly, "declining to apply it in corporate management disputes or in other situations where no clear mandate of public policy is involved". (Emphasis supplied.) Sventko, 651. He approved of its application in the case before the Court because the case "concerns a long standing statute whose clear purpose * * * would obviously be violated". Sventko, 652.
Subsequent decisions by this Court have continued to locate some legislative enactment before finding a breach of public policy with regard to such discharges. Trombetta v Detroit T I R Co, 81 Mich. App. 489; 265 N.W.2d 385 (1978), lv den 403 Mich. 855 (1978) (where plaintiff alleged his discharge was occasioned by his refusal to falsify pollution control reports required by state law), Hernden v Consumers Power Co, supra (where plaintiff alleged his discharge was based on his age in contravention of the then Michigan State Fair Employment Practices Act, MCL 423.301 et seq.; MSA 17.458[1] et seq.). It would seem that the discharge must contravene "some settled public policy". Milligan v The Union Corp, 87 Mich. App. 179; 274 N.W.2d 10 (1978). See Cortez v Ford Motor Co, 349 Mich. 108, 112; 84 N.W.2d 523 (1957), Carry v Consumers Power Co, 64 Mich. App. 292, 296, fn 1; 235 N.W.2d 765 (1975).
If, however, plaintiff's contract with the defendant was not terminable at will then his claim under Count III (malicious and bad faith demotion) merely restates his claim under Count I (breach of contract) and accordingly it should have been struck.
The facts contained in plaintiff's Count IV appear to state additional damages resulting from defendant's breach of contract with plaintiff. As such, it is properly a part of plaintiff's Count I. Insofar as it states an independent action in tort, it also fails to state a claim upon which relief can be granted. Plaintiff is claiming interference with prospective employment opportunities. This cause of action may be found in the Restatement of Torts, 2d, § 766B, p 20:
"One who intentionally and improperly interferes with another's prospective contractual relation (except a contract to marry) is subject to liability to the other for the pecuniary harm resulting from loss of the benefits of the relation, whether the interference consists of
"(a) inducing or otherwise causing a third person not to enter into or continue the prospective relation or
"(b) preventing the other from acquiring or continuing the prospective relation."
This tort would include the interference with the prospect of obtaining employment. Restatement of Torts, 2d, supra, Comment c, p 22. Plaintiff can show the tort only if he also prevails regarding Count I.
In addition, courts in other jurisdictions, which have considered the matter, have looked to see whether the expectation of economic advantage allegedly interfered with was a reasonable one, O'Fallon Development Co, Inc v City of O'Fallon, 43 Ill. App.3d 348; 2 Ill Dec 6; 356 N.E.2d 1293 (1976), Parkway Bank Trust Co v City of Darien, 43 Ill. App.3d 400; 2 Ill Dec 234; 357 N.E.2d 211 (1976), Behrend v Bell Telephone Co, 242 Pa. Super. 47; 363 A.2d 1152 (1976). Of importance is whether the plaintiff alleges interference with specific third parties or an identifiable prospective class of third persons. Parkway Bank Trust Co v City of Darien, supra. In the instant case, plaintiff failed to indicate what, if any, specific and reasonable prospective economic advantage was interfered with. Like the Court in Behrend, supra, this Court could conclude that plaintiff failed to make a proper showing of what reasonable economic advantage was lost:
"The tort of intentional interference with business requires, as a basis, that a business relationship be proved with some degree of specificity, at least to the point that future profit be a realistic expectation and not merely wishful thinking. It is true that where a prospective advantage is alleged, the plaintiff need not demonstrate a guaranteed relationship because `anything that is prospective in nature is necessarily uncertain. We are not here dealing with certainties, but with reasonable likelihood or probability. This must be something more than a mere hope or the innate optimism of the salesman.'
* * *
"As defined by the courts in this Commonwealth, the tort contemplates a relationship, prospective or existing, of some substance, some particularity, before an inference can arise as to its value to the plaintiff and the defendant's responsibility for its loss." (Citations omitted.) Behrend v Bell Telephone Co, supra, 62.
Because plaintiff failed to assert a specific and reasonable economic advantage that was injured by defendant's actions, plaintiff failed to assert a claim upon which relief may be granted. Defendant's motion for summary judgment as to Count IV should be granted.
Plaintiff's fifth count alleges that defendant periodically reviewed plaintiff's job performance and so had a duty to do so "in an objective manner" and, by not evaluating plaintiff in an objective manner, plaintiff was thereby denied placement on defendant's list which would have assured a promotion.
Defendant moved for summary judgment as to Count V because of plaintiff's failure to state a claim upon which relief could be granted. The lower court denied defendant's motion. The lower court's reason for the denial was that even though the court would not impose a duty to evaluate plaintiff's performance on defendant, "in fact, such evaluations were undertaken, and that the duty involved was one to undertake to do the evaluations fairly, and in a manner which would not interfere with plaintiff's opportunities. Defendant's claim that there was no duty to make evaluations is obviated by the fact that such evaluations were undertaken, and it is their character and fairness that is under attack."
In Hart v Ludwig, 347 Mich. 559, 564; 79 N.W.2d 895 (1956), the Michigan Supreme Court cited the following language with approval:
"The law imposes an obligation upon everyone who attempts to do anything, even gratuitously, for another, to exercise some degree of care and skill in the performance of what he has undertaken, for nonperformance of which duty an action lies."
This duty arises only where defendant attempts to do something, even gratuitously, for another. We find that Ford's evaluation of plaintiff was for the benefit of both parties. A duty to exercise reasonable care may arise out of a contract. Hart v Ludwig, supra, 565, Clark v Dalman, 379 Mich. 251, 261; 150 N.W.2d 755 (1967), Williams v Polgar, 391 Mich. 6, 19; 215 N.W.2d 149 (1974), Crews v General Motors Corp, 400 Mich. 208, 226; 253 N.W.2d 617 (1977) (WILLIAMS, J., for reversal). "[A]ccompanying every contract is a common-law duty to perform with ordinary care the thing agreed to be done, and * * * negligent performance constitutes a tort as well as a breach of contract." Clark v Dalman, supra, 261, Williams v Polgar, supra, 19, Crews v General Motors Corp, supra, 226.
We find that where the trier of fact is allowed to determine whether the contract was terminable at will or whether defendant and plaintiff had a binding contract which was breached by defendant (Count I), the issues of defendant's negligence in carrying out the evaluations of plaintiff's performance should also be determined by the trier of fact.
While plaintiff uses the terms "objective" and "subjective", the lower court properly interpreted his claim to mean that the evaluations were unfair. The "subjective manner" of evaluation of which plaintiff complains is the equivalent of arbitrary and capricious conduct. Accordingly, if plaintiff has stated a proper claim in Count I (breach of employment contract), he has stated an adequate claim of negligence in Count V. Should the trial court determine that plaintiff's contract with Ford was terminable at will, so that even arbitrary and capricious termination is permissible, then defendant's motion for summary judgment with regard to Count V should be granted.
Affirmed in part and reversed in part. No costs.
W.A. PORTER, J., concurred.
I agree with the majority that the within case is distinguishable from Toussaint v Blue Cross Blue Shield of Michigan because of the presence of the following provision in plaintiff's written employment agreement with defendant: "I understand that my employment is not for any definite term and may be terminated at any time, without advance notice by either myself or Ford Motor Company".
408 Mich. 579; 292 N.W.2d 880 (1980).
Thus, I would believe that Toussaint does not require the result reached by the majority. Under Lynas v Maxwell Farms, I believe summary judgment should have been granted and, accordingly, would reverse the trial court in that respect.
279 Mich. 684; 273 N.W. 315 (1937).
Regarding Counts I through V, I concur with the majority.