No. CV 04-4005440 S
May 25, 2005
MEMORANDUM OF DECISION ON MOTION TO STRIKE (#104)
This matter concerning an employment dispute appeared on the short calendar on May 9, 2005. After considering the parties' arguments, the court issues this memorandum of decision. For the reasons set forth below, the defendant/employer's motion to strike is granted in part and denied in part.
The plaintiff/employee's complaint is set forth in four counts, the first three of which are the subjects of the motion. The plaintiff alleges that she was offered and she accepted employment as a sales representative, based on a written employment contract, dated December 9, 2003, a copy of which is annexed to the complaint. See complaint, count one, ¶ 6, Exhibit 1. Exhibit 1 provides, under "Terms," at paragraph 10: "The following commission structure: 20% up to 250,000; 22% from 250,000 to 300,000; 25% after 300,000. We will guarantee a minimum salary of at least 4583.33 per month for the first 6 months of employment." The plaintiff claims that, based on the language of the quoted paragraph, she was guaranteed six months of employment.
The plaintiff began employment on February 2. Her employment was terminated on April 29, 2004. See count one, ¶ 8. She contends that, in breach of the agreement, the defendant refused to compensate her for the period May 1, 2004 to August 2, 2004. See complaint, count one, ¶ 9. Additional references to the complaint's allegations are set forth below.
In its motion, the defendant contends that counts one, two and three of the plaintiff's complaint should be stricken since each count fails to state a claim upon which relief can be granted. As to count one, in which the plaintiff claims breach of contract, the defendant contends that, as a matter of law, since the written contract between the parties did not include an agreement for a definite term of employment, there can be no breach, since the plaintiff was an at-will employee. Concerning count two, which alleges breach of the covenant of good faith and fair dealing, the defendant argues that it is insufficient since the plaintiff has not alleged that her discharge violated public policy. As to count three, the defendant asserts that, in the absence of an allegation of a definite term of employment, the plaintiff has not sufficiently stated a claim of promissory estoppel.
II STANDARD OF REVIEW
The standard of review on a motion to strike is well established. "We take the facts to be those alleged in the complaint . . . and we construe the complaint in the manner most favorable to sustaining its legal sufficiency . . . Thus, [i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied . . . Moreover, we note that [w]hat is necessarily implied [in an allegation] need not be expressly alleged . . . It is fundamental that in determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted . . . Indeed, pleadings must be construed broadly and realistically, rather than narrowly and technically . . ." (Citations omitted and internal quotation marks omitted.) Commissioner of Labor v. C.J.M Services, Inc., 268 Conn. 283, 292-93, 842 A.2d 1124 (2004).
III DISCUSSION A Breach Of Contract
Under Connecticut law, employment contracts which are for an indefinite term are terminable by either party at will, without cause. See Burnham v. Karl Gelb, P.C., 252 Conn. 153, 158-59, 745 A.2d 178 (2000); Sheets v. Teddy's Frosted Foods, Inc., 179 Conn. 471, 474, 427 A.2d 385 (1980). "Pursuant to traditional contract principles . . . the default rule of employment at will can be modified by the agreement of the parties." Torosyan v. Boehringer Ingelheim Pharmaceuticals, Inc., 234 Conn. 1, 15, 662 A.2d 89 (1995). "[A]n annual salary term in a contract does not create a contract for definite duration." (Internal quotation marks omitted.) Paris v. Northeast Savings FA., Superior Court, judicial district of Hartford-New Britain at Hartford, Docket No. CV 91 0398144 (June 1, 1994, Corradino, J.) ( 11 Conn.L.Rptr. 575).
"A contractual promise cannot be created by plucking phrases out of context; there must be a meeting of the minds between the parties." (Internal quotation marks omitted.) Reynolds v. Chrysler First Commercial Corp., 40 Conn.App. 725, 730, 673 A.2d 573, cert. denied, 237 Conn. 913, 675 A.2d 885 (1996).
Paragraph 10 of the parties' agreement Exhibit 1, must be read in its entirety. The second sentence, upon which the plaintiff relies, follows the first sentence, which provides for escalating percentages of commission earnings based on sales, up to 25% after reaching $300,000.00. Against this sliding scale, the second sentence follows: "We will guarantee a minimum salary of at least [$]4583.33 per month for the first 6 months of employment." For example, if the plaintiff had reached $300,000.00 in sales, she would have been entitled to compensation in the amount of $75,000.00, which far exceeds an annualized $4,583.33 a month (12 times $4,583.33 equals $54,999.96). Likewise, if she had reached the minimum figure of $250,000.00 in sales, she would have been entitled to twenty per cent (20%), which would amount to $50,000.00 in commission earnings. Clearly, the parties agreed to explicit figures related to commission structure and salary.
Just as clearly, the parties did not agree to a specified term of employment. Read in context, the second sentence of paragraph 10 refers only to a minimum salary as measured against the commission structure. The "guarantee" was of a minimum salary. Thus, the plaintiff was not hired to work on a straight commission basis; rather, she was to get a minimum salary during the first six months that she worked for the defendant. Thereafter, there was no agreement as to a minimum salary.
The reference to "the first 6 months of employment" related to the very specific terms set forth for income, as opposed to an agreement for a definite term. The "guarantee" was only of the amount of a minimum salary, not of an amount of time in which the defendant would guarantee to employ the plaintiff.
The factual allegations here are analogous to those in Paris v. Northeast Savings, FA., supra, where the terms alleged called for a base salary of $75,000.00 for a six month period, plus incentives and commissions, and a reduced salary of $60,000.00 after the first six months. In granting summary judgment for the defendant, the court concluded that "[t]his is not a case where for example the plaintiff was guaranteed a minimum amount of compensation for the first six months or for any period thereafter . . ." (Citation omitted.) Id. "[T]here is no explicit language in the agreement indicating that the plaintiff has a binding six month employment contract." Id. The same is true concerning the parties' agreement here.
Thus, the parties' agreement here contrasts with that in Grauer v. Valve Primer Corp., 47 Ill.App.3d 152, 361 N.E.2d 863 (Appellate Court of Illinois 1977), which was cited by Judge Corradino in Paris v. Northeast Savings, FA., supra, as an example of a binding employment contract for a specific amount of time. There, the corporation's president sent the plaintiff/employee a letter concerning salary for the year 1973, which provided for .75% on all sales and a monthly draw of $1,600 against this commission percentage. See Grauer v. Valve Primer Corp., supra, 47 Ill.App.3d 154. The monthly draw, when annualized, amounted to $19,200.00. When the employee returned the letter unsigned, the president sent it again, accompanied by a memorandum, which stated, "Attached guarantees you a minimum of $22,500.00 in 1973 — more likely $24,000 plus — because I look for $3,500,000 sales (ie. Shipments). I review it annually based on performance." Id. The court found that the "memo `guarantees' Grauer `a minimum of $22,500 in 1973,' a sum which, in view of the Corporation's projected and actual business volume could only accumulate if Grauer were allowed to remain in employment for a full year. The memo also stated that the contract would be reviewed `annually,' again raising a strong inference that a contract of a year's duration was intended." Grauer v. Valve Primer Corp., supra, 47 Ill.App.3d 155. Here, in contrast, while the parties agreed to a guaranteed salary for the first six months of employment, there was no agreement as to the duration of employment and no period of time set for review.
As Judge Corradino stated in Paris v. Northeast Savings, FA., supra, "hiring the plaintiff, was not a charitable venture on the part of the defendant. Obviously, the benefit to the defendant employer in these types of agreement depends on the business someone in the plaintiff's position can generate . . . [T]o say a staggered compensation rate like this one creates a binding contract for the initial compensation period is not required to promote either the fairness or efficiency of such arrangements."
Other recent cases are to the same effect. In Swihart v. Country Home Bakers, Inc., Superior Court, judicial district of Ansonia-Milford at Milford, Docket No. CV97-060945 (December 3, 1998, Corradino, J.), the employer's letter offering the job to the plaintiff referred to a fixed bi-weekly starting salary and "full bonus potential will be 20% of annual salary and could reach 30% if full bonus objectives are exceeded." (Internal quotation marks omitted.) The court found that "[t]here is no offer of a definite term of employment; the letter merely states the terms of compensation and bonuses and fringe benefits that may be earned during the course of employment." Id. See also Mackay v. Rayonier, Inc., 75 F.Sup.2d 22, 27 (D.Conn. 1999) (offer of benefit of three year mortgage assistance support program "simply does not create a term of years"); Ambrosino v. Superior Plating Co., Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV94 309952 S (September 16, 1996, Maiocco, J.) (executive incentive plan did not contain any language indicating promise of long term employment).
Accordingly, since the agreement here did not guarantee the plaintiff a term of employment, she was an at will employee. Count one does not state a claim for breach of contract for failure to pay her the balance of the amount she would have been entitled to receive had she remained in the defendant's employ for a full six months. The motion to strike is granted on this ground.
In paragraph 10 of the count one, the plaintiff alleges that the defendant failed to provide for her health insurance for the period April 1, 2004 through August 2, 2004. As noted above, the plaintiff alleges that her employment was terminated on April 29, 2004. Neither of the parties have addressed the allegation that, for the period April 1, 2004 through the date of termination, the defendant failed to provide health insurance. Since neither party addressed this issue, the court has not considered it.
B Good Faith And Fair Dealing
Since, for the reasons discussed above, based on the allegations set forth in her complaint. the plaintiff was an at will employee, to set forth a claim for breach of the duty of good faith and fair dealing, the plaintiff must allege "that her employment was terminated for an improper reason and that the impropriety derived from a violation of an important public policy . . . To determine whether a public policy has been violated, courts examine whether the discharge violated any explicit statutory or constitutional provision . . . [or] contravened any judicially conceived notion of public policy . . . In the absence of a public policy violation, there is no breach of the implied covenant of good faith and fair dealing." (Citations omitted and internal quotation marks omitted.) Carnemolla v. Walsh, 75 Conn.App. 319, 329, 815 A.2d 1251, cert. denied, 263 Conn. 913, 821 A.2d 768 (2003).
Count two does not contain an allegation of a public policy violation. Accordingly, it is stricken.
C Promissory Estoppel
The defendant contends that count three does not contain a promise which is sufficiently clear and definite to state a claim under the doctrine of promissory estoppel. Our Supreme Court has stated, concerning promissory estoppel, "Section 90 of the Restatement Second states that under the doctrine of promissory estoppel `[a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.' A fundamental element of promissory estoppel, therefore, is the existence of a clear and definite promise which a promisor could reasonably have expected to induce reliance. Thus, a promisor is not liable to a promisee who has relied on a promise if, judged by an objective standard, he had no reason to expect any reliance at all." D'Ulisse-Cupo v. Board of Directors of Notre Dame High School, 202 Conn. 206, 213, 520 A.2d 217 (1987). "The requirements of clarity and definiteness are the determinative factors in deciding whether the statements are indeed expressions of commitment as opposed to expressions of intention, hope, desire or opinion." Stewart v. Cendant Mobility Services Corp., 267 Conn. 96, 105-06, 837 A.2d 736 (2003).
The defendant argues that the plaintiff lists two "promises" in count three, in paragraphs 23 and 30, neither of which is sufficiently clear or definite to induce reliance. See defendant's reply brief to objection to motion to strike (#109), pp. 8-9. The defendant misquotes the parties' agreement, contending that it vaguely alleges that the defendant represented to the plaintiff that one employment benefit it would provide was "a Connecticut health insurance policy or one that is comparable." See defendant's reply brief to objection to motion to strike (# 109), p. 9. In actuality, Exhibit 1 to the complaint the agreement under "Terms," states, in paragraph 2, "A Connecticare health insurance policy or one that is comparable." (Emphasis added.) Likewise, paragraph 23 of count three provides, "Defendant represented to Plaintiff that Defendant would provide health insurance benefits for Plaintiff comparable to Plaintiff's Connecticare health insurance policy which covered Plaintiff and her children."
"Connecti Care, Inc. [is] a managed care organization that provides medical insurance coverage within Connecticut." Connecticut State Medical Society v. Connecticare, Inc., 272 Conn. 482, 483, 863 A.2d 652 (2005). "It contracts with employers to provide health care." Santiago v. Connecticare, Inc., Superior Court, judicial district of Hartford at Hartford, Docket No. CV93-0704032 S (December 12, 1995, Corradino, J.).
Since, as discussed above, the court must construe the complaint in the manner most favorable to sustaining its legal sufficiency, the court concludes that the reference to a specific health insurance provider's policy or one that is comparable, which the defendant agreed to provide, is sufficiently clear and definite to induce reliance, even by an at will employee. See Swihart v. Country Home Bakers, Inc., supra (court denied motion to strike the sixth count, based on promissory estoppel, in view of alleged acceptance by plaintiff of employer's offer of relocation package). Similarly, here, the availability of health insurance is hardly an insignificant employment benefit.
Thus, the allegations concerning the representation made concerning the provision of health insurance are not insufficiently promissory or indefinite. See, in contrast Swihart v. Country Home Bakers, Superior Court, judicial district of Ansonia-Milford at Milford, Docket No. CV97 060945 (July 16, 1999. Corradino, J.) (vague references to a bonus and profit sharing and pension arrangements). Since count three contains allegations of a promise which are sufficiently clear and definite to induce reliance, the motion to strike is denied on this ground.
In paragraph 30 of count three, the plaintiff alleges that she was induced to leave her previous employment by the defendant's guarantee of a minimum salary for the first six months of employment. The court has addressed this subject above concerning count one. Since count three contains at least one allegation of a promise which was sufficiently clear and definite to induce reliance, concerning health insurance, the court need not consider paragraph 30. The motion does not seek to strike individual paragraphs of the third count. See Chavez v. State, Superior Court, judicial district of Hartford at Hartford, Docket No. CV04 0834153 (November 1, 2004, Shapiro, J.).
For the foregoing reasons, the defendant's motion to strike is granted as to counts one and two of the complaint, and is denied as to count three. It is so ordered.
BY THE COURT
ROBERT B. SHAPIRO JUDGE OF THE SUPERIOR COURT