holding that there is not a "moving residences" exception to the general rule of at-will employmentSummary of this case from Farrell v. Planters Lifesavers Co.
Filed 7 November 1997
Labor and Employment § 65 (NCI4th) — employment contract — assurances — moving residence — not converted from at-will An action for breach of an employment contract was remanded for an order setting aside the verdict for plaintiff and entering judgment for defendant notwithstanding the verdict where defendant contacted plaintiff and recruited him for a position as director of sales; plaintiff inquired into the security of the proposed position during negotiations; he was told "If you do your job, you'll have a job," "This is a long-term growth opportunity for you," "This is a secure position," and "We're offering you a career position"; plaintiff began his employment with defendant on 30 March 1992, moved immediately from Massachusetts to Wilmington, with his wife and daughter joining him following the sale of their home; and defendant terminated his employment on 2 November 1992. Although plaintiff argues that the combination of defendant's assurances and plaintiff's move to accept the offer of employment created a contract under which plaintiff could be discharged only for cause, plaintiff-employee's change of residence in the wake of defendant-employer's statements here does not constitute additional consideration making what is otherwise an at-will employment relationship one that can be terminated by the employer only for cause. The employment-at-will doctrine has prevailed in North Carolina for a century; the narrow exceptions to it have been grounded in considerations of public policy designed either to prohibit status-based discrimination or to insure the integrity of the judicial process or the enforcement of the law. The society to which the employment-at-will doctrine currently applies is a highly mobile one in which relocation to accept new employment is common. To remove an employment relationship from the at-will presumption upon an employee's change of residence, coupled with vague assurances of continued employment, would substantially erode the rule and bring considerable instability to an otherwise largely clear area of the law.
Am Jur 2d, Employment Relationship § 35.
Justice FRYE dissenting.
On discretionary review pursuant to N.C.G.S. § 7A-31 of a unanimous decision of the Court of Appeals, 125 N.C. App. 261, 480 S.E.2d 425 (1997), affirming a judgment awarding damages to plaintiff entered by Cobb, J., out of session on 1 August 1995, following a jury verdict for plaintiff at the 22 May 1995 Civil Session of Superior Court, New Hanover County. Heard in the Supreme Court 14 October 1997.
Shipman Associates, L.L.P., by Gary K. Shipman and C. Wes Hodges, II, for plaintiff-appellee.
Robinson, Bradshaw Hinson, P.A., by John R. Wester and Frank H. Lancaster, for defendant-appellant.
Hunton Williams, by Amy E. Simpson, for North Carolina Citizens for Business and Industry, amicus curiae.
Patterson, Harkavy Lawrence, L.L.P., by Martha A. Geer, for the North Carolina Academy of Trial Lawyers, amicus curiae.
Plaintiff, Lewis Kurtzman, brought suit against his former employer, Applied Analytical Industries, Inc., alleging, inter alia, breach of an employment contract. On 1 June 1995 a jury returned a verdict in plaintiff's favor and awarded him $350,000 in damages. Defendant moved to set aside the verdict or, in the alternative, for a new trial. The trial court denied both motions. Defendant appealed to the Court of Appeals, which unanimously affirmed the trial court except in immaterial part. This Court allowed defendant's petition for discretionary review on 5 June 1997.
Defendant, Applied Analytical Industries, Inc., is based in Wilmington, North Carolina, and assists clients in securing FDA approval of pharmaceutical products. Plaintiff has worked in the pharmaceutical industry for over twenty years and was employed as national sales manager of E.M. Separations Technology in Rhode Island immediately prior to his employment with defendant. Defendant contacted plaintiff in October 1991 and began recruiting him for a position as director of sales in Wilmington. In January 1992 defendant offered plaintiff the position, and the parties negotiated the terms of employment until plaintiff accepted defendant's offer on 6 March 1992.
Evidence at trial tended to show that during negotiations, plaintiff inquired into the security of his proposed position with defendant. Defendant's agents attempted to assure plaintiff by statements that included the following: "If you do your job, you'll have a job"; "This is a long-term growth opportunity for you"; "This is a secure position"; and "We're offering you a career position." Plaintiff began his employment with defendant on 30 March 1992. He immediately moved to Wilmington, and following the sale of his home in Massachusetts, his wife and daughter joined him there. Defendant terminated plaintiff's employment on 2 November 1992.
Plaintiff argues that the combination of the additional consideration of moving his residence and defendant's specific assurances of continued employment removed the employment relationship from the traditional at-will presumption and created an employment contract under which he could not be terminated absent cause. This asserted exception is gleaned principally from Sides v. Duke Univ., 74 N.C. App. 331, 328 S.E.2d 818, disc. rev. denied, 314 N.C. 331, 333 S.E.2d 490 (1985). Plaintiff argues that the exception is well established in North Carolina's jurisprudence and that the judgment in his favor thus should be affirmed. We disagree.
North Carolina is an employment-at-will state. This Court has repeatedly held that in the absence of a contractual agreement between an employer and an employee establishing a definite term of employment, the relationship is presumed to be terminable at the will of either party without regard to the quality of performance of either party. Soles v. City of Raleigh Civil Serv. Comm'n, 345 N.C. 443, 446, 480 S.E.2d 685, 687 (1997); Harris v. Duke Power Co., 319 N.C. 627, 629, 356 S.E.2d 357, 359 (1987). There are limited exceptions. First, as stated above, parties can remove the at-will presumption by specifying a definite period of employment contractually. Second, federal and state statutes have created exceptions prohibiting employers from discharging employees based on impermissible considerations such as the employee's age, race, sex, religion, national origin, or disability, or in retaliation for filing certain claims against the employer. See, e.g., 29 U.S.C. § 623(a) (1988) (Age Discrimination Act); 42 U.S.C. § 2000e-2a (1988) (Equal Employment Opportunities Act); 42 U.S.C. § 12112(a) (Supp. 1988) (Americans with Disabilities Act); N.C.G.S. § 95-241 (1993) (prohibiting discharge in retaliation for filing workers' compensation, OSHA, and similar claims). Finally, this Court has recognized a public-policy exception to the employment-at-will rule. See Amos v. Oakdale Knitting Co., 331 N.C. 348, 416 S.E.2d 166 (1992) (discharging an employee for refusing to work for less than minimum wage violates public policy); Coman v. Thomas Mfg. Co., 325 N.C. 172, 381 S.E.2d 445 (1989) (discharging an employee for refusing to falsify driver records to show compliance with federal transportation regulations offends public policy).
Plaintiff does not rely upon any of these exceptions. He instead invokes an asserted exception earlier described by the Court of Appeals as follows:
Generally, employment contracts that attempt to provide for permanent employment, or "employment for life," are terminable at will by either party. Where the employee gives some special consideration in addition to his services, such as relinquishing a claim for personal injuries against the employer, removing his residence from one place to another in order to accept employment, or assisting in breaking a strike, such a contract may be enforced.
Burkhimer v. Gealy, 39 N.C. App. 450, 454, 250 S.E.2d 678, 682 (emphasis added), disc. rev. denied, 297 N.C. 298, 254 S.E.2d 918 (1979). The Court of Appeals relied upon this "moving residence" exception as additional support for its holding in Sides v. Duke University. There, the plaintiff, a nurse anesthetist who had moved from Michigan to North Carolina to accept employment at Duke University Medical Center, sued the Medical Center based on the termination of her employment. After concluding that the plaintiff had stated a claim that fell within a public-policy exception to the at-will doctrine, the court considered a "moving residence" exception, stating:
The additional consideration that the complaint alleges, her move from Michigan, was sufficient, we believe, to remove plaintiff's employment contract from the terminable-at-will rule and allow her to state a claim for breach of contract since it is also alleged that her discharge was for a reason other than the unsatisfactory performance of her duties.
Here, plaintiff wishes to rely on this asserted "moving residence" exception to state a claim for relief. He does not contend that defendant's assurances of continued employment were sufficient, standing alone, to create an employment contract for a definite term. Under well-settled law, they are not. This Court has held that a contract for "a regular permanent job" is not sufficiently definite to remove the employment relationship from the at-will presumption. Still v. Lance, 279 N.C. 254, 259, 182 S.E.2d 403, 406 (1971); Malever v. Kay Jewelry Co., 223 N.C. 148, 149, 25 S.E.2d 436, 437 (1943). The assurances defendant made here were no more specific than those in Still and Malever. Further, the assurance plaintiff here primarily relies upon, "If you do your job, you'll have a job," is not sufficient to make this indefinite hiring terminable only for cause. See Tuttle v. Kernersville Lumber Co., 263 N.C. 216, 219, 139 S.E.2d 249, 251 (1964) (plaintiff-employee's contention that he had an agreement with defendant-employer such that plaintiff would "have a permanent job as long as [his] work was satisfactory" was insufficient to remove the employment contract from the terminable-at-will rule).
Nor does plaintiff contend that a statutory or public-policy exception to the at-will doctrine applies. Rather, he argues that the combination of defendant's assurances, such as, "If you do your job, you'll have a job," and plaintiff's move from Massachusetts to North Carolina to accept the offer of employment, created a contract under which plaintiff could be discharged only for cause. The question thus is whether this Court should recognize a "moving residence" exception to the general rule of employment at will.
Plaintiff's contention that this exception is well established in our jurisprudence is incorrect. This Court has not heretofore expressly passed upon it. While Malever, on which defendant relies, is somewhat pertinent, we do not consider it dispositive. The Court's focus there was on whether the employer's use of the term "permanent" in reference to the employment sufficed to remove the case from the employment-at-will doctrine, not on whether the employee's relocation constituted additional consideration that accomplished such removal. Further, the Court noted that the employee's relocation appeared motivated primarily by family rather than employment considerations. Malever, 223 N.C. at 149, 25 S.E.2d at 437. In Harris v. Duke Power Co., we cited application of the "moving residence" exception in Sides as part of a background discussion of exceptions to the general rule of employment at will. Harris, 319 N.C. at 629, 356 S.E.2d at 359. We neither specifically approved nor disapproved such an exception, however, and any language in Harris that may be viewed as suggesting the contrary is disapproved. The pertinent language quoted above from the Court of Appeals' opinions in Burkhimer and Sides is also disapproved.
The employment-at-will doctrine has prevailed in this state for a century. See Edwards v. Seaboard Roanoke R.R. Co., 121 N.C. 490, 491-92, 28 S.E. 137, 137 (1897). The narrow exceptions to it have been grounded in considerations of public policy designed either to prohibit status-based discrimination or to insure the integrity of the judicial process or the enforcement of the law. The facts here do not present policy concerns of this nature. Rather, they are representative of negotiations and circumstances characteristically associated with traditional at-will employment situations.
Further, as we recognized in Coman, "adoption of the [at-will] rule by the courts greatly facilitated the development of the American economy at the end of the nineteenth century." Coman, 325 N.C. at 174, 381 S.E.2d at 446. A century later, the rule remains an incentive to economic development, and any significant erosion of it could serve as a disincentive. Additional exceptions thus demand careful consideration and should be adopted only with substantial justification grounded in compelling considerations of public policy.
We perceive no such justification here. The society to which the employment-at-will doctrine currently applies is a highly mobile one in which relocation to accept new employment is common. To remove an employment relationship from the at-will presumption upon an employee's change of residence, coupled with vague assurances of continued employment, would substantially erode the rule and bring considerable instability to an otherwise largely clear area of the law. See House v. Cannon Mills Co., 713 F. Supp. 159, 164 (M.D.N.C. 1988) ("Recognition of a general exception whenever relocation or a job change is involved would emasculate the terminable-at-will rule, because many if not most hirings involve either a job change or a change of residence or both."). We thus hold that plaintiff-employee's change of residence in the wake of defendant-employer's statements here does not constitute additional consideration making what is otherwise an at-will employment relationship one that can be terminated by the employer only for cause.
We do not, as the dissenting opinion suggests, hold that the establishment of "a definite term of service" is the sole means of contractually removing the at-will presumption. We simply follow settled law which holds that the employer's assurances of continued employment do not remove an employment relationship from the at-will presumption, Tuttle, 263 N.C. at 219, 139 S.E.2d at 251, and now hold that the asserted additional consideration of the employee's relocation of residence to accept the employment likewise does not alter this status. Because we do not recognize the exception plaintiff seeks, we need not consider, as does the dissent, whether the evidence sufficed to support a verdict for plaintiff under the asserted exception.
For the reasons stated, the decision of the Court of Appeals is reversed. The case is remanded to that court for further remand to the Superior Court, New Hanover County, for an order setting aside the verdict for plaintiff and entering judgment for defendant notwithstanding the verdict.
REVERSED AND REMANDED