McCART v. J WALTER THOMPSON USA, INC
Case Details
- Citation
- 437 Mich. 109
- Judge(s)
- Brickley, Boyle, Riley, and Griffin, JJ., concurred with Cavanagh, C.J.; Mallett, J., took no part in the decision of this case.
- Procedural Posture — the stage the case had reached
- summary judgment
- State
- Michigan
Related Laws
No specific laws identified for this ruling.
Claim Types
Outcome
Michigan Supreme Court reversed the Court of Appeals and reinstated summary disposition for the defendant employer, holding that the plaintiff failed to present evidence sufficient to create a genuine issue of material fact regarding whether his termination was for bona fide economic reasons rather than punitive reasons, and that economic reasons constitute just cause under the plaintiff's alleged oral contract.
Excerpt
McCART v J WALTER THOMPSON USA, INC Docket No. 87309. Argued October 2, 1990 (Calendar No. 4). Decided April 5, 1991. Separate opinion by Levin, J., filed April 8, 1991. Dennis McCart brought a wrongful discharge action in the Wayne Circuit Court against J. Walter Thompson U.S.A., Inc., alleging breach of an oral contract of permanent employment terminable for just cause. The court, Robert J. Colombo, Jr., granted summary disposition for the defendant, finding that the plaintiff failed to provide any evidentiary support for the claim that he was laid off for punitive and not economic reasons. The Court of Appeals, Hood, P.J., and Beasley and Shepherd, JJ., reversed in an opinion per curiam, finding that a factual issue existed regarding the reasons for termination (Docket No. 109434). The defendant appeals. In an opinion by Chief Justice Cavanagh, joined by Justices Brickley, Boyle, Riley, and Griffin, the Supreme Court held: The plaintiff failed to show the existence of a genuine issue of fact material to his wrongful discharge claim. He presented no evidence in response to the defendant’s motion for summary disposition to demonstrate that he was not discharged for bona fide economic reasons. MCR 2.116(G)(4) requires that a party opposing a motion for summary disposition must introduce additional evidence beyond its pleadings and briefs to show that there is a genuine issue of material fact. The plaintiff completely failed to carry his burden. Bona fide economic reasons for discharge constitute just cause for termination of employment. In this case, the situation, as presented by the defendant’s proofs, amounts to no more than termination resulting from an economically motivated work-force reduction. Reversed; summary disposition reinstated. Justice Levin, writing separately, stated that there was a genuine issue of material fact whether the plaintiff’s termination was a result of a reduction of work force or was punitive, in violation of his contract of employment. While the plaintiff did not dispute the defendant’s proofs that adverse business conditions existed, he did raise a genuine issue of fact regarding whether the elimination of his position truly was based on those conditions, and there was evidence to demonstrate that he was not discharged for bona fide economic reasons. In addition, the credibility of the defendant’s president clearly was in issue. Justice Mallett took no part in the decision of this case. 181 Mich App 611; 450 NW2d 10 (1989) reversed. Eric J. McCann, P.C., for the plaintiff. Hodman, Longley & Dahling (by James J. Walsh and David P. Larsen); (Richard Pollet, of counsel), for the defendant. Amici Curiae: Miller, Canñeld, Paddock & Stone (by Diane M. Soubly and John H. Willems) for American Society of Employers, Motor Vehicle Manufacturers Association of the United States, Inc., Greater Detroit Chamber of Commerce, and Michigan State Chamber of Commerce. Conboy, Fell, Stack, Lieder & Hanson (by Lloyd C. Fell) for General Motors Corporation. Clark, Klein & Beaumont (by Dwight H. Vincent, J. Walker Henry, Rachelle G. Silberberg, and Jennifer S. Buckley) for Michigan Manufacturers Association. Mark Granzotto, Monica Farris Linkner, and Charles P. Burbach for Michigan Trial Lawyers Association. Cavanagh, C.J. Defendant J. Walter Thompson U.S.A., Inc., appeals from the Court of Appeals decision reversing the trial court’s grant of defendant’s motion for summary disposition under MCR 2.116(0(10). 181 Mich App 611; 450 NW2d 10 (1989). This Court granted defendant’s application for leave to appeal, limited to the following questions: "(1) whether there was a genuine issue of fact as to whether plaintiff’s employment was terminated for economic reasons only, and (2) assuming there was a genuine issue of fact regarding the reason(s) for the plaintiff’s discharge, was that factual issue material.” 434 Mich 911 (1990). We find that plaintiff failed to show the existence of a genuine issue of fact material to his wrongful discharge claim. Plaintiff conceded that defendant was discharging employees because of economic hardship, and presented no evidence, in response to defendant’s summary disposition motion and supporting evidence, sufficient to raise a jury question whether defendant discharged him for bona fide economic reasons. Accordingly, we reverse. I. PACTS Plaintiff was senior vice-president for defendant at the time of his termination in November 1986. He had been with defendant continuously since 1976, working the last eight years on an advertising account with Burger King Corporation. At the time of his termination, plaintiff was account director for Burger King field marketing, with an annual salary of $111,140 as of 1985. Although he resided and worked out of defendant’s offices in Michigan, he was part of defendant’s New York office. Defendant informed plaintiff that his position was being eliminated as part of a work-force reduction. Plaintiff was notified of his termination by his immediate supervisor, Robert Norsworthy. A few days later, plaintiff received a letter signed by defendant’s corporate officer, Stephen Bowen, informing plaintiff that his employment would be discontinued. Plaintiff filed a complaint against defendant in April 1987, alleging: (1) plaintiff had an oral contract for employment that could only be terminated for just cause, (2) plaintiff was fired without cause, and (3) plaintiff’s discharge was in breach of his contract with defendant. Defendant’s answer included the affirmative defense that plaintiff had been terminated as a part of its work-force reduction. After discovery, defendant filed a motion for summary disposition, alleging pursuant to MCR 2.116(0(10) that no genuine issue of material fact existed regarding whether plaintiff’s employment was terminated as part of a work-force reduction. In support of the motion, defendant offered the deposition testimony of plaintiff and Bowen, and documentary evidence relating to plaintiff’s employment history and a Burger King restaurant franchisee application. Bowen’s testimony cited economic factors affecting the company, efforts to reduce the work force in unprofitable areas, and the nonessential nature of plaintiff’s position. For purposes of its motion only, defendant conceded that plaintiff had an oral contract of permanent employment terminable only for good cause. Additionally, defendant allowed that plaintiff’s performance was not at issue. Defendant contended nonetheless that it was entitled to judgment because plaintiff’s position was eliminated for economic reasons as part of the work-force reduction, and, therefore, his termination was for nonactionable just cause as a matter of law. In opposition to defendant’s motion, plaintiff contended that (1) plaintiff’s termination had "nothing to do with the reduction in work-force,” but was actually a punitive discharge by Bowen, (2) plaintiff had a lifetime good-cause employment contract, (3) Norsworthy would testify "in support of Plaintiff’s case, and will verify the facts contained herein,” (4) defendant attempted to disguise the true nature of plaintiff’s discharge by doing it in the course of a work layoff, (5) plaintiff was offered a bonus and raise shortly before his termination, indicating his value to the company and, in a typical work-force reduction, a highly paid and valued employee would not be let go, and (6) "numerous factual disputes” existed such as the terms of the contract, the reason for discharge, and the method utilized by defendant to accomplish the discharge. Plaintiff conceded, however, that defendant was, at the time, reducing its work force for economic reasons. The trial court granted defendant’s motion for summary disposition. Citing MCR 2.116(G)(4), which requires that the adverse party on a motion for summary disposition must introduce additional evidence beyond its pleadings and briefs to show there is a genuine issue of material fact, the court held: "Plaintiff has failed to provide any evidentiary support for his claim that he was laid off for punitive reasons and not economic reasons.” The Court of Appeals reversed, reasoning that although "there is nothing in the record to indicate that plaintiff’s position was terminated for reasons other than economic motivation,” 181 Mich App 616, the evidence did not show that plaintiff was hired only for the one position he had held, and that plaintiff had cited certain incidents which allegedly contributed to Bowen’s dislike of him. The Court held that "the employer must establish economic motivation to terminate the particular employee, as opposed to the employee’s position, where the employee has a just cause contract and the employer has reasonable alternative options for the employee within the organization.” Id. at 617-618. The Court concluded that "[b]ecause we are unable to say that it will be impossible for plaintiff to factually support his position at trial, we hold that the grant of summary disposition was inappropriate.” Id. at 618. II. ANALYSIS Plaintiff argues that this Court’s decision in Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich 579; 292 NW2d 880 (1980), governs this dispute. In Toussaint, this Court held that an employee may have an enforceable right not to be terminated except for just cause, grounded in either an express oral or written contract or in legitimate expectations arising from an employer’s policy statements. See id. at 598-599. We conclude, however, as the Court of Appeals has held, that bona fide economic reasons for discharge constitute "just cause” under Toussaint. See Friske v Jasinski Builders, Inc, 156 Mich App 468, 472; 402 NW2d 42 (1986); Bhogaonker v Metropolitan Hosp, 164 Mich App 563, 565-566; 417 NW2d 501 (1987). In the instant case, while plaintiff alleges that Bowen disliked him, he has failed to raise any genuine issue of fact regarding the validity of defendant’s proofs that adverse business conditions existed and that the elimination of plaintiff’s position was necessitated by those conditions. Indeed, plaintiff conceded that defendant was instituting layoffs for economic reasons at the time. The objective circumstances, as presented by defendant’s proofs, indicate no more than a termination resulting from an economically motivated workforce reduction. "When properly challenged, plaintiff must establish that he has a case on the law and that there are some evidentiary proofs to support his allegations as to any material fact.” Durant v Stahlin, 375 Mich 628, 638; 135 NW2d 392 (1965). Under MCR 2.116(G)(4), a party opposing a motion for summary disposition is required to respond with affidavits or other evidentiary materials to show the existence of a factual dispute, rather than relying on the allegations or denials in the pleadings. In this case, plaintiff did not specify any facts in opposition to defendant’s motion in any "Affidavits, depositions, admissions, or other documentary evidence,” MCR 2.116(G)(3), instead simply stating in his responsive pleading that he would produce at trial evidence that defendant’s economic necessity rationale was a pretext. This case thus stands in marked contrast to the recent Court of Appeals decision in Ewers v Stroh Brewery Co, 178 Mich App 371; 443 NW2d 504 (1989), where "plaintiff relied on deposition and documentary evidence which he argued indicated that defendant was experiencing substantial economic growth and operating at a substantial profit before and after his discharge.” Id. at 375. Because plaintiff failed to carry his burden under MCR 2.116(G)(4), we need not address the issue discussed by the Court of Appeals regarding whether the defendant must demonstrate economic reasons not only for the elimination of a just-cause employee’s position, but for the termination of the employee as an individual as well. See 181 Mich App 617-618. In the absence of any sufficient response from plaintiff, defendant’s proofs in this case were adequate to support summary disposition on the ground that plaintiff’s termination was for bona fide economic reasons. The following opinion was filed with the Clerk of the Supreme Court on April 8, 1991, after the release of the opinion of the Court on April 5,1991 — Reporter. III. conclusion For the reasons stated, we reverse the judgment of the Court of Appeals and reinstate the trial court’s grant of summary disposition for defendant. Brickley, Boyle, Riley, and Griffin, JJ., concurred with Cavanagh, C.J. Levin, J. Dennis McCart was a senior vice president of J. Walter Thompson U.S.A., Inc., an advertising agency. McCart commenced this action against J. Walter Thompson after he was discharged from his employment in November, 1986. McCart claimed that J. Walter Thompson had agreed that he could not be discharged except for good cause, and that his employment was terminated without good cause. J. Walter Thompson moved for summary disposition on the ground that there was no genuine issue as to any material fact. For purposes of the motion, J. Walter Thompson did not dispute McCart’s contention that he had an "oral contract for permanent employment that could be terminated only for good cause.” J. Walter Thompson asserted that it was entitled to a judgment of dismissal because "it is not disputed” that McCart’s employment was terminated when his position was eliminated "as part of a reduction in force.” i J. Walter Thompson’s assertion that there is no genuine issue whether McCart’s employment was terminated when his position was eliminated as part of a reduction in force is, in a sense, undisputed. The timing of the termination of his employment did, indeed, coincide with a reduction in the work force and the discharge of a number of other employees. McCart did, however, dispute whether the reason for his discharge was a reduction in work force. McCart asserted, in an answer to J. Walter ■Thompson’s motion, that the termination of his employment "had nothing to do with the reduction in work force, but was a punitive discharge by Defendant’s President, Steve Bowen, in violation of Plaintiff’s contract of employment.” McCart asserted that J. Walter Thompson had "attempted to disguise Plaintiff’s discharge by doing it in the course of a work reduction layoff, but such attempt was a ruse.” McCart added that he would "produce[] the testimony of his former boss, Robert Norsworthy, who will testify in support of Plaintiff’s case, and will verify the facts contained herein.” ii The majority faults McCart because he did not file an affidavit or other evidentiary materials, but "simply statfed] in his responsive pleading that he would produce at trial evidence that defendant’s economic necessity rationale was a pretext,” and concludes that McCart "failed to carry his burden” under the court rule. Motions for summary disposition asserting that there is no genuine issue as to any material fact are, indeed, generally supported and opposed with affidavits. The court rule does not, however, require that the motion be supported or opposed in all events by affidavit. The court rule states, rather, that the showing required by an opposing party cannot be made by "resting] upon the mere allegations or denials of his or her pleading . . . .” (Emphasis added.) The showing must be made, instead, "by affidavits or as otherwise provided in this rule . . . ,” The rule provides that "affidavits, depositions, admissions, or other documentary evidence may be submitted by a party to support or oppose the grounds asserted in the motion.” hi J. Walter Thompson pleaded as an affirmative defense that McCart’s "employment was terminated as part of a contraction of defendant’s work force.” The standard jury instructions, applicable in a "wrongful discharge” case, provide that where the plaintiff has carried his burden of showing that the employment relationship could not be terminated except for good or just cause, "[t]he defendant [J. Walter Thompson] has the burden of proving that it had good or just cause to terminate the plaintiff’s employment.” The question then arises whether it is J. Walter Thompson’s burden to show that the asserted good or just cause — reduction in work force/economic necessity — was not, as McCart asserts, pretextual. In an employment discrimination case, the plaintiff has the burden of establishing discrimination, whether it be discrimination based on age, religion, race, or sex. When the plaintiff proffers prima facie evidence of discrimination, the employer must then offer a reason for its action or nonaction negating age, religious, racial, or sexual discrimination. The plaintiff-employee may assert that the reason is pretextual, but nevertheless continues to have the ultimate burden of showing and persuading the trier of fact that there was discrimination. J. Walter Thompson, which has the ultimate burden of proving its reduction in work force/ economic necessity affirmative defense, may, as an aspect of that burden, similarly have the burden of proving that the reason for discharging McCart was its stated reason, economic necessity, and not personal animus. The burden on a party, such as McCart, opposing a motion for summary disposition, is to show that there is a genuine issue as to an essential element of the opposing party’s case. If the bona fides of the asserted good cause — the absence of pretext — is an essential element of J. Walter Thompson’s case, and J. Walter Thompson has the burden of proving that essential element, it is entitled to summary disposition only if it, not McCart, establishes that there is no genuine issue whether McCart was discharged because of economic necessity or personal animus. The parties have neither briefed nor argued the question whether the ultimate burden of proof and persuasion on the issue of good cause remains with the defendant in a "wrongful discharge” case where the defendant asserts as an affirmative defense good or just cause on the basis of reduction in force/economic necessity and the plaintiff contends that this is pretextual. IV Summary disposition is not appropriate when the moving party’s factual assertions depend on the credibility of a witness. The United States Supreme Court has said, in this context, that an affiant who, like Bowen, was an officer of the moving party was "clearly an interested witness” requiring " 'the credibility of his testimony to be submitted to the jury as a question of fact.’ ” Sartor v Arkansas Natural Gas Corp, 321 US 620, 624, 628; 64 S Ct 724; 88 L Ed 967 (1944). MCR 2.116(0(10), "no genuine issue as to any material fact,” is derived word for word from corresponding FR Civ P 56. The advisory committee on the federal rule stated: Where an issue as to a material fact cannot be resolved without observation of the demeanor of witnesses in order to evaluate their credibility, summary judgment is not appropriate. J. Walter Thompson’s assertions that McCart was discharged as part of a work-force reduction, necessitated by the need to economize and reduce overhead, and was not prompted by personal animus, depends entirely on the credibility of Stephen Bowen’s testimony on deposition. McCart was not discharged in accordance with the terms of a facially neutral plan for determining who should be discharged. It appears that Bowen ordered that McCart be discharged, and then left it to Robert Norsworthy, McCart’s immediate superior, to determine how the rest of the work-force reduction would be achieved. Bowen’s assertions in his deposition that he directed that McCart be discharged only because of economic necessity, that he bore McCart no ill will, and that McCart was not discharged because of personal animus, constituted assertions regarding Bowen’s state of mind when he ordered McCart discharged. This Court has said that in such a case summary disposition may not be granted: The probative value of a witness’s testimony as to his own state of mind depends upon his credibility, a
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