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LEWIS KURTZMAN v. APPLIED ANALYTICAL INDUSTRIES, INC.

9292November 7, 1997No. No. 103PA97
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Case Details

Citation
347 N.C. 329
Procedural Posture — the stage the case had reached
appeal

Related Laws

No specific laws identified for this ruling.

Claim Types

Breach of Contract

Outcome

The North Carolina Supreme Court reversed the jury verdict for plaintiff and held that an employee's relocation to accept employment, combined with employer assurances of job security, does not constitute sufficient additional consideration to convert at-will employment into employment for cause, affirming the at-will doctrine.

Excerpt

LEWIS KURTZMAN v. APPLIED ANALYTICAL INDUSTRIES, INC. No. 103PA97 (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. WHICHARD, Justice. 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 plaintiffs 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 plaintiffs 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. Sides, 74 N.C. App. at 345, 328 S.E.2d at 828. 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, 25 1 (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 Justice Frye dissenting. Although our cases have in the past made reference to the existence of an “additional consideration” exception to the doctrine of employment at will, see Harris v. Duke Power Co., 319 N.C. 627, 629, 356 S.E.2d 357, 359 (1987); Tuttle v. Kernersville Lumber Co., 263 N.C. 216, 219, 139 S.E.2d 249, 251 (1964), and our Court of Appeals has more fully described the exception based on moving residence, see Sides v. Duke Univ., 74 N.C. App. 331, 345, 328 S.E.2d 818, 828, disc. rev. denied, 314 N.C. 331, 333 S.E.2d 490 (1985); Burkhimer v. Gealy, 39 N.C. App. 450, 454, 250 S.E.2d 678, 682, disc. rev. denied, 297 N.C. 298, 254 S.E.2d 918 (1979), as the majority notes, this Court has never expressly passed upon the precise issue presented by the facts of this case. This Court granted defendant’s petition for discretionary review in this case to decide, first, whether North Carolina recognizes an exception to the rule of employment at will based on: (1) an employer’s making statements that can be construed as assurances that the employee will be discharged only for deficient performance, and (2) an employee’s providing “additional consideration” by moving his residence to accept employment in response to those assurances. I believe a more precise statement of this question is whether an enforceable contract exists between employer and employee, so as to remove the presumption that the employment is terminable at will, where the employer makes specific assurances and the prospective employee gives additional consideration in reliance on those assurances. The majority correctly states that North Carolina follows the doctrine of employment at will. However, employment at will is not, nor should it be, an ironclad mandate which prevents employers and employees from negotiating the terms of the employment relationship to their mutual satisfaction. The general rule of employment at will is more accurately construed as a rebuttable presumption which can be overcome by the words and conduct of the parties, allowing a jury to find that the parties in fact reached certain agreements within a contract of employment. I read the majority’s decision as holding that representations made by an employer to a prospective employee and supported by additional consideration are insufficient as a matter of law to create an enforceable contract unless the employer specifies a definite term of service. Because this holding contradicts established principles of contract law, I must respectfully dissent. The case often cited as the earliest adoption of North Carolina’s employment-at-will rule, Edwards v. Seaboard & Roanoke R.R. Co., 121 N.C. 490, 28 S.E. 137 (1897), in fact recognized the contractual nature of the employment relationship. The facts in Edwards' required the Court to discern the intent of the parties as to the term of employment. The Court held that the contract was not specific as to the term of service, and therefore, “[i]t does not seem unreasonable that the parties intended that the service should be performed for a price that should aggregate the gross sum annually, leaving the parties to sever their relations at will, for their own convenience.” Id. at 491, 28 S.E. at 137 (emphasis added). In reviewing the origins of employment at will, this Court has noted that American courts moved toward the doctrine after “the industrial revolution and the development of freedom of contract.” Coman v. Thomas Mfg. Co., 325 N.C. 172, 174, 381 S.E.2d 445, 446 (1989). Nothing else appearing, freedom of contract arguably presumes the freedom of either party to terminate the employment relationship at will. However, an inflexible adherence to this presumption cannot stand in the face of evidence of contrary intent on the part of the contracting parties. As stated by the majority, “parties can remove the at-will presumption by specifying a definite period of employment contractually.” Likewise, where an employer agrees to restrict his right to discharge an employee in exchange for additional consideration provided by the employee, the courts must recognize that a contract has been formed which removes the presumption of employment at will. In applying this analysis, the essential inquiry is whether the necessary elements of an enforceable contract were present. “A contract is an agreement, upon a sufficient consideration, to do or not to do a particular thing.” Campbell v. Campbell, 234 N.C. 188, 191, 66 S.E.2d 672, 674 (1951). Cases in which an employee relocates merely as an incident of accepting new employment will not rebut the presumption of employment at will. However, an agreement and consideration are both present where the employer has induced the employee to move his residence ba

Similar Rulings

Kurtzman v. Applied Analytical Industries, Inc.
14983Feb 1997

LEWIS KURTZMAN, Plaintiff v. APPLIED ANALYTICAL INDUSTRIES, INC., Defendant No. COA96-50 (Filed 4 February 1997) 1. Labor and Employment § 65 (NCI4th)— employment at will — additional consideration exception — sufficient evidence The “additional consideration” exception to the employment-at-will doctrine was applicable in plaintiffs action for breach of an employment contract where plaintiffs evidence tended to show that plaintiff, who had a secure position with another company, was actively recruited by defendant employer and was persuaded to sell his home in New England and relocate to North Carolina; negotiations between plaintiff and defendant were extensive; and plaintiff was told by defendant’s top management that the job was a career position with tremendous long-term growth potential for him, that he had a job as long as he did his job, that plaintiff would be part of a team making valuable contributions toward the future growth of defendant, and that plaintiffs job was a secure position in which plaintiff could not lose and for which the long-term gain would outweigh the short-term losses. Plaintiff’s recovery was not barred because an employment application which he signed eight days after beginning work for defendant contained language that “employment can be terminated for any reason” where plaintiff was not asked to complete an employment application before he began working for defendant; plaintiff did not consider the language applicable to him because of the numerous assurances he had received from defendant’s top management; and, at the time he signed the application, plaintiff had already resigned his former position and had temporarily relocated in this state while his wife attempted to sell their home in New England. Am Jur 2d, Employment Relationship §§ 10 et seq. 2. Labor and Employment § 72 (NCI4th)— breach of contract — damages—future income — sufficient evidence Evidence of plaintiff’s future income was not too speculative to support the jury’s award of $350,000 to plaintiff for defendant employer’s breach of an employment contract where plaintiff testified he was a capable employee who planned to work until retirement; plaintiff offered proof of his age and salary at the time of his termination by defendant; plaintiff presented evidence showing the efforts he made to find other employment and the wages he was able to earn upon termination by defendant; and expert testimony was offered to illustrate plaintiffs past and future losses. Am Jur 2d, Employment Relationship §§ 52 et seq. Elements and meansure of damages in action by schoolteacher for wrongful discharge. 22 ALR3d 1047. Damages recoverable for wrongful discharge of at-will employee. 44 ALR4th 1131. 3. Judgments § 652 (NCI4th)— breach of contract — prejudgment interest Plaintiff was entitled to prejudgment interest from the date of defendant employer’s breach of his employment contract. N.C.G.S. § 24-5(a). Am Jur 2d, Employment Relationship §§ 10 et seq. Appeal by defendant and cross appeal by plaintiff from judgments and orders entered by Judge W. Allen Cobb, Jr. in New Hanover County Superior Court. • Defendant appeals from (1) the judgment and amended judgment entered 26 June 1995 and 3 August 1995 respectively; (2) the 4 August 1995 order denying defendant’s motion to set aside verdict and judgment and alternative motion for new trial; and (3) all other orders and rulings adverse to defendant by the trial court during the trial and post-trial motion phases of the litigation. Cross appeal by plaintiff is from the Superior Court’s 3 August 1995 amended judgment denying prejudgment interest. Heard in the Court of Appeals 26 September 1996. Shipman & Umbaugh, L.L.P., by Gary K. Shipman, Jennifer L. TJmbaugh and Carl W. Hodges, II, for plaintiff-appellee/ appellant. Robinson, Bradshaw & Hinson, P.A., by John R. Wester and Frank H. Lancaster, for defendant-appellant/appellee. McGEE, Judge. This is an employment contract dispute in which plaintiff, Lewis Kurtzman, brought several claims against defendant, Applied Analytical Industries, Inc. (AAI) including his claim for breach of employment contract. AAI is a company based in Wilmington, North Carolina that provides scientific services to assist clients in securing FDA approval of pharmaceutical products. Although there was conflicting testimony at trial, there was evidence of the following employment arrangement between plaintiff and defendant. In late 1991, AAI contacted plaintiff about leaving his position as national sales manager of E.M. Separations Technology, a Rhode Island company. After some initial reluctance and extensive negotiations which included job security assurances from AAI, plaintiff accepted a position as director of sales for AAI with a minimum yearly salary of $125,000. Plaintiff found temporary housing in Wilmington and began his employment with AAI on 30 March 1992. A few months later, he and his wife sold their home in Massachusetts and made a permanent move to Wilmington. Eight days after beginning his employment with AAI, plaintiff was asked to complete an employment application which included language that employees could be terminated for any reason deemed sufficient by AAI. Plaintiff signed the application, but considered it a simple formality since he had (1) already engaged in extensive negotiations which included assurances as to job security; (2) already accepted a position with AAI; (3) resigned from his employment with E.M. Separations Technology; and (4) relocated from Massachusetts to Wilmington. On 2 November 1992, AAI terminated plaintiff. Despite extensive efforts, plaintiff was unable to secure different employment, so he started a consulting business which paid substantially less than the salary he received while working at AAI. On 2 February 1993, plaintiff filed suit against AAI alleging breach of employment contract, tor-tious interference with contractual relations, intentional infliction of emotional distress and by amendment, negligent misrepresentation. All claims except the breach of contract action were dismissed either voluntarily or by summary judgment. The remaining claim for breach of contract proceeded to a jury trial. On 1 June 1995, the jury returned a verdict in plaintiffs favor and awarded him $350,000.00 in damages. The trial court entered judgment on the jury verdict on 26 June 1995 and subsequently amended judgment on 3 August 1995 to include an award of post-judgment interest. AAI moved the trial court to set aside the verdict or, in the alternative, for a new trial. These motions were denied. Both plaintiff and AAI have appealed to this Court. AAI contends the trial court erred (1) in denying its motion for directed verdict and (2) in allowing the $350,000.00 award to stand because it is too speculative. Plaintiff has appealed the trial court’s denial of prejudgment interest from the date of the breach of contract. I. Denial of the Directed, Verdict The question this Court must consider with a motion for directed verdict is whether the evidence was sufficient to entitle plaintiff to have a jury pass on the matter. Smith v. Price, 74 N.C. App. 413, 418, 328 S.E.2d 811, 815 (1985), aff’d in part and rev’d in part on other grounds, 315 N.C. 523, 340 S.E.2d 408 (1986). The evidence is to be reviewed in a light most favorable to the non-moving party and the non-movant is entitled to every inference which may legitimately be drawn from the evidence. Id. All conflicts are resolved in favor of the non-movant. Id. In arguing the trial court erred in denying its motion for directed verdict, AAI contends North Carolina is an employment-at-will state with relatively few exceptions. AAI argues plaintiffs heavy reliance on Sides v. Duke University, 74 N.C. App. 331, 328 S.E.2d 818, disc. review denied, 314 N.C. 331, 333 S.E.2d 490 (1985) as allowing an exception to employment-at-will in cases where the employee gives special consideration such as removing his residence from one place to another in order to accept employment is misguided and that under these facts, Sides is inapplicable. AAI contends this Court’s holding in Sides is narrow and creates an exception to employment-at-will for public policy reasons in cases where the employee is asked to engage in unlawful behavior. Furthermore, AAI argues any reference in Sides to “removal of residence” is dicta and not part of the Court’s holding. AAI urges “the ‘removal of residence’ concept would be an unsound basis on which to base an exception to the principle of employment-at-will [and] further, such an exception would be contrary to precedent.” We disagree. North Carolina is an employment-at-will state. An employee who is not offered employment for a definite term is considered “an employee at will and may be discharged without reason.” Coman v. Thomas Manufacturing Co., 325 N.C. 172, 175, 381 S.E.2d 445, 446 (1989). This rule is subject to several exceptions including an “additional consideration” exception. Mortensen v. Magneti Marelli U.S.A., 122 N.C. App. 486, 488, 470 S.E.2d 354, 356, disc. review denied, 344 N.U 438, 476 S.E.2d 120 (1996). In Mortensen we said: The providing of additional consideration by the employee does not convert every employment-at-will agreement into an enforceable contract. If, however, the employment agreement expressly or impliedly provides that the employment will be permanent, for life or terminable only for cause and the employee gives an independent valuable consideration other than his services for the position, see Sides v. Duke University, 74 N.C. App. 331, 345, 328 S.E.2d 818, 828, disc. rev. denied, 314 N.C. 331, 335 S.E.2d 13 (1985); Salt v. Applied Analytical, Inc., 104 N.C. App. 652, 658-59, 412 S.E.2d 97, 101 (1991), cert. denied, 331 N.C. 119, 415 S.E.2d 200 (1992); Tuttle v. Lumber Co., 263 N.C. 216, 219, 139 S.E.2d 249, 251 (1964); John D. Calamari & Joseph M. Perillo, The Law of Contracts § 2-9 at 60-63 (3d ed. 1987); see also 30 C.J.S. Employer-Employee § 43, at 83 (1992), the employment can be terminated only for cause until the passage of a reasonable time. See 3A Arthur L. Corbin, Corbin on Contracts § 684 (1960 & Supp. 1994); Tuttle, 263 N.C. at 219, 139 S.E.2d at 251; 30 C.J.S. Employer-Employee § 43, at 83 (1992). After the passage of a reasonable time the employment relationship can be terminated without cause. Id. at 488-89, 470 S.E.2d at 356. This Court has recognized that additional consideration can include the removal of an employee’s residence from one location to another in order to accept employment. See Salt v. Applied Analytical, Inc. 104 N.C. App. 652, 659, 412 S.E.2d 97, 101 (1991), cert. denied, 331 N.C. 119, 415 S.E.2d 200 (1992); Sides, 74 N.C. App. at 345, 328 S.E.2d at 828; Burkhimer v. Gealy, 39 N.C. App. 450, 454, 250 S.E.2d 678, 682, disc. review denied, 297 N.C. 298, 254 S.E.2d 918 (1979). In this case, there was evidence that plaintiff, who had a secure position with another company, was actively recruited by AAI and eventually was persuaded to relocate from New England to North Carolina to accept the sales director position with AAI. Negotiations between plaintiff and AAI were extensive and plaintiff testified he received numerous verbal assurances of job security from top management at AAI. Plaintiff was told the job was a career position with tremendous, long-term growth potential for him and that “[a]s long as I did my job, I had a job.” Other assurances included almost a dozen statements that plaintiff would be part of a team making valuable contributions toward the future growth of AAI; it was a secure position in which plaintiff could not lose and that the long-term gains would outweigh any short-term losses. Plaintiff was told the company was prepared to pay temporary living expenses and the company contributed to the costs of selling plaintiff’s Massachusetts residence. We agree with plaintiff that collectively, these statements constitute specific assurances that plaintiff would not be discharged unless his performance was inadequate. AAI’s argument that plaintiff’s recovery is barred because the employment application which he signed eight days after beginning work for AAI contained language that “employment can be terminated for any reason deemed sufficient by AAI” is without merit. Plaintiff testified he never saw the employment application prior to beginning work for AAI and that when he was asked to sign the form eight days after he became employed, he did not consider the language applicable to him because of the numerous assurances he had already received from top management at AAI. Additionally, by the time plaintiff signed the application, he had already resigned from E.M. Separations and temporarily relocated to Wilmington while his wife was trying to sell their home in New England. Furthermore, AAI’s Director of Personnel testified that during his interviews with plaintiff, he never asked him to complete a job application. He explained that management employees generally used resumes as the method of conveying their prior work experience and employment applications for these people were typically completed after employment and were kept on file for personnel record purposes. II. Damage Award AAI contends the jury’s award of $350,000.00 cannot stand because the calculation of damages was too speculative as to plaintiff’s future income. We disagree. In calculating the damages for this breach of contract claim, plaintiff was entitled to recover the difference between his salary as opposed to his total earnings during the contract period. Thomas v. College, 248 N.C. 609, 615, 104 S.E.2d 175, 179 (1958). Plaintiff presented solid evidence of the damages he suffered as a result of this breach of contract. He testified he was a capable employee who planned to work until retirement. He offered proof of his age and his salary at the time of his termination. Other evidence was introduced showing the efforts plaintiff made to find different employment and the wages he was able to earn upon termination by AAI. Finally, expert testimony was offered to illustrate plaintiff’s past and future losses. As plaintiff noted in his brief, a determination of damages in this case is no more speculative than is an award for loss of future earnings in a personal injury claim. We conclude there was sufficient concrete evidence upon which the jury could calculate plaintiffs damages with a reasonable degree of certainty. III. Prejudgment Interest In plaintiffs cross appeal, he argues the trial court erred in denying his petition for prejudgment interest from the date of AAI’s breach of contract. We agree. In Metromont Material Corp. v. R.B.R. & S.T., 120 N.C. App. 616, 463 S.E.2d 305 (1995), disc. review denied, 342 N.C. 895, 467 S.E.2d 903 (1996), we said: The legislature amended G.S. § 24-5(a) in 1985 to provide that “[i]n an action for breach of contract, . . . the amount awarded on the contract bears interest from the date of the breach.” Subsequently, in Steelcase, Incorporated v. The Lilly Company, this Court noted that, as amended, G.S. § 24-5(a) “clearly provides for interest from the date of breach in breach of contract actions.” Steelcase, Inc. v. The Lilly Co., 93 N.C. App. 697, 703, 379 S.E.2d 40, 44, disc. review denied, 325 N.C. 276, 384 S.E.2d 530 (1989). Here, both parties tailor their arguments to the case law developed prior to the 1985 amendment and the rule quoted from General Metals. However, it is clear to this Court that resort to that rule, developed only to determine the date from which to apply interest, is no longer necessary. When the legislature amended the statute, and provided a time from which to apply interest, it obviated any need for the rule. In doing so, it removed the confusing questions of ascertainment and certainty that so often muddled the statute’s application. Because this case falls under the amended version of the statute, plaintiff’s arguments do not apply, and the trial court did not err in awarding prejudgment interest. Id. at 618, 463 S.E.2d at 307. Our holding in Metromont is clearly dis-positive of this case. To the extent the trial court’s judgment is inconsistent with N.C. Gen. Stat. § 24-5(a), which states that interest shall be paid from the date of breach in breach of contract actions, we reverse and remand the matter for entry of judgment including prejudgment interest. Affirmed in part, reversed in part and remanded. Judges WYNN and JOHN concur.

Plaintiff Win
James Chappel v. Laboratory Corporation of America, AKA National Health Lab
9th CircuitNov 2000
Mixed Result
Umland v. PLANCO Financial Services, Inc.
3rd CircuitSep 2008
Defendant Win
Morris v. Scenera Research, LLC
9292Jun 2016

ROBERT PAUL MORRIS v. SCENERA RESEARCH, LLC and RYAN C. FRY No. 429PA13 Filed 10 June 2016 1. Employer and Employee — Wage and Hours Act — patent bonuses — patents pending when employment ended In a compensation and intellectual property dispute between plaintiff and his former employer arising from the employer’s patent bonus program, the trial court did not err by denying the employer’s motions for direct verdict and judgment notwithstanding the verdict on the issue of whether plaintiff was entitled to patent issuance bonuses for patents still pending when his employment ended. Plaintiff presented more than a scintilla of evidence supporting his Wage and Hours Act claim: Plaintiff testified that his bonuses were earned at the time the patents were filed, and another witness confirmed that bonuses were earned at the time patents were filed. 2. Employer and Employee — Wage and Hours Act — patent bonuses — calculability—question for jury In a compensation and intellectual property dispute between plaintiff and his former employer arising from the employer’s patent bonus program, the Supreme Court affirmed the holding of the Court of Appeals that the question of whether a wage is “calculable” under the Wage and Hours Act is one of fact, not law, and that the trial court properly submitted the question to the jury. Plaintiff argued at trial that value of the patent issuance bonuses for patent applications still pending with the U.S. Patent and Trademark Office could be calculated using the following formula: 150 outstanding patents x $5,000 for each successfully issued patent x 90% patent issuance success rate = $675,000. The employer failed to offer any other formula at trial, and the meaning of “calculable” includes “capable of being estimated.” 3. Employer and Employee — patent bonuses — liquidated damages In a compensation and intellectual property dispute between plaintiff and his former employer arising from the employer’s patent bonus program, the trial court did not abuse its discretion by concluding that plaintiff was not entitled to liquidated damages on the jury’s award of issuance bonuses associated with unissued patents. The employer had reason to believe that it did not owe plaintiff the bonuses. 4. Employer and Employee — patent bonuses — Retaliatory Employment Discrimination Act damages — not trebeled In a compensation and intellectual property dispute between plaintiff and his former employer arising from the employer’s patent bonus program, the trial court did not err when it declined to treble the jury’s award of Retaliatory Employment Discrimination Act (REDA) damages. Proving a willful violation of N.C.G.S. § 95-241 requires a showing of the accused party’s knowledge or reckless disregard of whether an action violated the statute. Competent evidence supported the trial court’s decision to not treble plaintiff’s REDA award. 5. Employer and Employee — patent bonuses — rescission— money damages sufficient remedy In a compensation and intellectual property dispute between plaintiff and his former employer arising from the employer’s patent bonus program, the Court of Appeals erred by holding that plaintiff was entitled to rescission. A party may pursue rescission only when a material breach occurs and all legal remedies fall short of compensating the injured party for its loss. Plaintiff claimed that his employer owed him $5,000 to $10,000 for each patent at issue, and money damages provided him with a complete remedy. On discretionary review pursuant to N.C.G.S. § 7A-31 of a unanimous decision of the Court of Appeals, 229 N.C. App. 31, 747 S.E.2d 362 (2013), finding no error in part, affirming in part, and reversing in part a memorandum opinion entered on 4 January 2012, a judgment entered on 14 May 2012, and an order entered on 27 June 2012, all by Judge James L. Gale in Superior Court, Wake County, and remanding in part for further judgment. On 18 December 2014, the Supreme Court allowed plaintiff’s conditional petition for discretionary review as to additional issues. Heard in the Supreme Court on 18 May 2015. Young Moore and Henderson P.A., by Walter E. Brock, Jr., Andrew P. Flynt, and Patrick M. Aul, for plaintiff -appellee/appellant. Parker Poe Adams&BemsteinLLP, by CatharineB. Arrowood, Scott E. Bayzle, and Catherine R.L. Lawson, for defendant-appellants/ appellees. Smith Moore Leatherwood LLP, by Richard A. Coughlin and Matthew Nis Leerberg, for North Carolina Chamber of Commerce, North Carolina Association of Defense Attorneys, and North Carolina State University, amici curiae. Robinson, Bradshaw & Hinson, P.A., by John R. Wester and Thomas Holdemess, for Qualcomm Incorporated, Qualcomm Technologies, Incorporated, Cisco Systems, Inc., Microsoft Corp., and Cree, Inc., amici curiae. BEASLEY, Justice. This appeal arises out of a compensation and intellectual property dispute between Robert Paul Morris (“plaintiff’) and his former employer Scenera Research, LLC and its CEO Ryan Fry (collectively, “defendants”). In 2004, Stanley Fry, defendant Ryan Fry’s father, hired plaintiff as Scenera’s first employee. The parties did not sign a written employment agreement. They did, however, have several discussions concerning the details of plaintiff’s employment. Plaintiff expressed interest in inventing, but testified at trial that he had no obligation to invent. According to plaintiff, inventing was not part of his regular job duties for which he received a base salary. Plaintiff participated in Scenera’s patent bonus program (the “bonus program”), under which he received $5000 for every patent application submitted to the United States Patent and Trademark Office (“PTO”) and another $5000 if and when the patent issued. Defendant Ryan Fry became concerned with the bonus program’s viability and suspended Scenera’s bonus program for all employees effective 1 January 2008. Plaintiff testified that Scenera owed him $210,000 in patent bonuses at this time. Plaintiff voluntarily suspended receipt of payments beginning in January 2008, believing that defendant Fry had promised to reinstate the original bonus program if Scenera did not create a new compensation plan and, thereafter, provide plaintiff a written employment contract. As of 2009, the parties had not been able to agree on a new compensation plan and plaintiff still had no written contract. Frustrated with this lack of progress, plaintiff hired a lawyer and threatened to sue under the North Carolina Wage and Hour Act (“WHA”) for the $210,000 in bonuses owed. The parties dispute the events that followed. Plaintiff claimed that Scenera fired him in retaliation for his threatening to bring a lawsuit, thereby violating the North Carolina Retaliatory Employment Discrimination Act (“REDA”). Defendants countered that plaintiff clearly intended to leave the company and that his lawyer indicated the only option was to negotiate a severance package — thus, plaintiff “effectively resigned” and defendants merely accepted the resignation. Defendants tendered plaintiff a check for $210,000 on the condition that he acknowledge Scenera’s ownership of patent applications filed and patents issued between 1 January 2008 and 17 June 2009. Plaintiff did not accept defendants’ offer. Plaintiff filed a complaint against defendants alleging breach of contract, fraudulent inducement, uujust enrichment, and WHA and REDA violations. On 1 April 2011, the Chief Justice designated this action as a complex business case and assigned it to the North Carolina Business Court. Defendants asserted a counterclaim for declaratory judgment that (1) Scenera owns all inventions plaintiff developed during his employment, and (2) plaintiff was not entitled to bonuses for patent applications filed or patents issued any time after January 2008. Defendants also sought damages for breach of fiduciary duty and for plaintiffs failure to support prosecution of patent applications to the PTO. Both parties moved for summary judgment. The trial court granted defendants’ motion in part, concluding that plaintiff was “hired to invent,” and that ownership of the patents presumptively rested with Scenera, with the onus on plaintiff to prove that an agreement between the parties vested ownership with him. The trial court also granted defendants’ summary judgment on plaintiffs claims for fraudulent inducement and unjust enrichment. The trial court denied the remainder of plaintiff’s and defendants’ motions for summary judgment. Trial began on 30 January 2012. At the close of the evidence, the trial court granted defendants’ motion for a directed verdict with respect to the issue of patent ownership, but denied defendants’ motion for a directed verdict on the WHA and REDA claims. The trial court submitted the rest of the issues to the jury, and the jury awarded plaintiff (1) $210,000 in patent bonuses under the WHA for applications filed or patents issued between 1 January 2008 and 17 June 2009, (2) $675,000 under the WHA in patent issuance bonuses for patent applications pending as of 17 June 2009, (3) and $390,000 for REDA violations. Plaintiff then requested liquidated damages and attorneys’ fees under the WHA, and treble damages and attorneys’ fees under REDA. The trial court denied plaintiff’s request to treble damages, awarded $450,000 in attorneys’ fees, and awarded $210,000 in liquidated damages for patents that have already issued. The trial court denied plaintiff’s request for liquidated damages under the WHA for patents that had not yet issued. The trial court further ruled that Scenera owned all of the inventions, patents, and patent applications listed in plaintiffs complaint, required plaintiff to assign any unassigned patent applications to Scenera, and ruled that Scenera could not recover damages under its counterclaims. Defendants moved for judgment notwithstanding the verdict (JNOV), and the trial court denied the motion. All parties appealed. The Court of Appeals affirmed the trial court’s ruling on the motions for directed verdict and JNOV, liquidated damages, WHA damages, and REDA damages. The court reversed, however, the trial court’s ruling that plaintiff could not pursue rescission. Morris v. Scenera Research, LLC, 229 N.C. App. 31, 747 S.E.2d 362 (2013). All parties appealed. I A Defendants contend that the trial court should have granted their motions for directed verdict and JNOV as to whether plaintiff was entitled to patent issuance bonuses for patents still pending when his employment with Scenera ended. To survive a motion for directed verdict or JNOV, the non-movant must present “more than a scintilla of evidence” to support its claim. Stark v. Ford Motor Co., 365 N.C. 468, 480, 723 S.E.2d 753, 761 (2012) (citation omitted). While a scintilla is “very slight evidence,” State v. Hawkins, 155 N.C. 466, 470, 71 S.E. 326, 328 (1911) (quoting State v. White, 89 N.C. 462, 464-65 (1883)), the non-movant’s evidence must still “do more than raise a suspicion, conjecture, guess, surmise, or speculation as to the pertinent facts in order to justify its submission to the jury,” Jenrette Transp. Co. v. Atl. Fire Ins. Co., 236 N.C. 534, 539, 73 S.E.2d 481, 485 (1952) (citation omitted). The trial court must construe the evidence in the light most favorable to the non-movant and resolve all evidentiary conflicts in the non-movant’s favor. Smith v. Price, 315 N.C. 523, 527, 340 S.E.2d 408, 411 (1986) (citations omitted). We review this question of law de novo. Green v. Freeman, 367 N.C. 136, 141, 749 S.E.2d 262, 267 (2013) (citations omitted). The WHA provides: Employees whose employment is discontinued for any reason shall be paid all wages due on or before the next regular payday either through the regular pay channels or by mail if requested by the employee. Wages based on bonuses, commissions or other forms of calculation shall be paid on the first regular payday after the amount becomes calculable when a separation occurs. N.C.G.S. § 95-25.7 (2015). At trial, plaintiff testified that he, like other Scenera employees, had a unique bonus plan, and that he was never informed that continued employment with Scenera was a prerequisite for receiving patent issuance bonuses. Plaintiff confirmed in his testimony that “the issuance bonus . . . was earned at the time the patent application was filed.” He further testified that after a patent was filed and he assigned the corresponding rights to Scenera, “I was entitled to $5,000.... There was nothing as far as work with respect to the patent that I needed to do in order to earn that bonus.” Moreover, Mona Singh, an inventor and witness for Scenera, confirmed that “whatever bonuses applied to [her] agreement became earned and due at the time the patent was filed.” Singh also testified that she had received five or six issuance bonuses after leaving Scenera. We hold that plaintiff has carried his minimal burden of presenting more than a scintilla of evidence supporting his WHA claim. While defendants cite conflicting evidence (some of which we discuss below), in the context of a directed verdict and JNOV, the trial court must resolve these conflicts in plaintiff’s favor. Accordingly, we affirm the Court of Appeals’ holding that the trial court properly submitted the question of whether plaintiff was entitled to the issuance bonuses to the jury and properly denied defendants’ directed verdict and JNOV motions. B Defendants further argue that the Court of Appeals erred in construing the term “calculable” under the WHA to mean capable of being estimated. As a preliminary matter, we address the Court of Appeals’ holding that the question of whether a wage is “calculable” under the WHA is one of fact, not law, and that therefore the trial court could properly submit the question to the jury. The Court of Appeals explained that determining whether a wage is calculable “requires a weighing of the evidence and, thus, falls in a jury trial within the exclusive purview of the jury.” Morris, 229 N.C. App. at 44, 747 S.E.2d at 370 (citations omitted). As we have explained, it is for the trial court “to determine whether the evidence ... is sufficient to permit a legitimate inference of the facts essential to recovery; and it is the province of the jury to weigh the evidence and to determine what it proves or fails to prove.” Sneed v. Lions Club of Murphy, N.C., Inc., 273 N.C. 98, 101, 159 S.E.2d 770, 772 (1968) (citations omitted). “It is still for the jury if reasonable [minds] may differ as to its truth or if conflicting inferences may reasonably be drawn from” the evidence. Cutts v. Casey, 278 N.C. 390, 421, 180 S.E.2d 297, 314 (1971) (citations omitted). Because determining whether a wage is calculable involves a weighing of the evidence, we affirm the Court of Appeals’ holding that this issue presents a question of fact. At trial, plaintiff argued that the value of the patent issuance bonuses for patent applications still pending with the PTO could be calculated using the following formula: 150 outstanding patents x $5,000 for each successfully issued patent x 90% patent issuance success rate = $675,000. The trial court instructed the jury to determine whether it could calculate the issuance bonuses owed, and if so, to compute that amount. The Court of Appeals first noted that neither the WHA nor case law define the term “calculable.” The court therefore consulted the American Heritage College Dictionary, which defined calculable as “ ‘[t]hat [which] can be calculated or estimated.'’ ” Morris, 229 N.C. App. at 45, 747 S.E.2d at 371 (quoting The American Heritage College Dictionary 198 (3d ed. 1997) (emphasis added)). The court concluded that plaintiffs proffered formula "was at least one reasonable way to calculate” the bonuses and therefore held that the trial court did not err in submitting this question to the jury. Id. at 45, 747 S.E.2d at 371. Defendants again argue that “calculable” does not mean capable of being estimated because this interpretation would allow impermissible speculation as to future wages. Defendants cite the rule that “the party seeking damages must show that the amount of damages is based upon a standard that will allow the finder of fact to calculate the amount of damages with reasonable certainty.” Olivetti Corp. v. Ames Bus. Sys., Inc., 319 N.C. 534, 547-48, 356 S.E.2d 578, 586 (1987) (citation omitted). Plaintiffs formula, they contend, does not allow for the reasonably certain determination of issuance bonuses associated with pending patent applications. We disagree. In other contexts in which a party seeks to recover lost profits, that party must show “both the amount and [the] cause of his loss. Absolute certainty, however, is not required, but both the cause and the amount of the loss must be shown with reasonable certainty.” Cary v. Harris, 178 N.C. 624, 628, 101 S.E. 486, 488 (1919) (quoting Nance v. W. Union Tel. Co., 177 N.C. 314, 317, 98 S.E. 838, 840 (1919)). The evidence indicated that plaintiff had completed all the work required for the patents to issue. An employer must pay “those wages and benefits due when the employee has actually performed the work required to earn them." Kornegay v. Aspen Asset Grp., 204 N.C. App. 213, 229, 693 S.E.2d 723, 735 (2010) (quoting Narron v. Hardee’s Food Sys., Inc., 75 N.C. App. 579, 583, 331 S.E.2d 205, 208 (emphasis added), disc. rev. denied, 314 N.C. 542, 335 S.E.2d 316 (1985)). We further note that defendants presented no evidence at trial challenging the adequacy of plaintiff’s formula. Because defendants offered no other formula, this Court need only be concerned that the result reached, based on the evidence presented, is reasonable. See Jenrette Transp. Co., 236 N.C. at 539-40, 73 S.E.2d at 485. We therefore affirm the Court of Appeals’ holding that determining calculability of wages under the WHA is a question of fact to be submitted to a jury. II We next address plaintiff’s argument that the Court of Appeals erred in affirming the trial court’s decision to refrain from awarding plaintiff liquidated damages on the jury’s award of issuance bonuses associated with unissued patents. First, we must determine the appropriate standard of review. Plaintiff contends that de novo review applies, while defendants contend that we should apply a three-tiered standard as used by federal courts addressing claims under the Fair Labor Standards Act (“FLSA”). In Kornegay v. Aspen Asset Group, LLC, the Court of Appeals adopted the latter approach. [T]he traditional standard of review that applies to a trial court’s factual findings — in federal court, the “clearly erroneous” standard and in North Carolina, the “competent evidence” standard — applies to findings of fact made by a trial court in addressing a claim for liquidated damages. In reviewing the trial court’s conclusions of law, the courts have held that review is de novo, including on the issue whether the findings of fact support the conclusions of law. 204 N.C. App. at 245, 693 S.E.2d at 745. The trial court’s final decision to award or refrain from awarding liquidated damages is then reviewed for abuse of discretion. Id. at 244, 693 S.E.2d at 744. We adopt the Court of Appeals’ reasoning in Kornegay and review the trial court’s decision to not award plaintiff liquidated damages for an abuse of discretion. We hold that the trial court did not abuse its discretion in concluding that plaintiff was not entitled to liquidated damages. The WHA provides: In addition to the amounts awarded pursuant to subsection (a) of this section, the court shall award liquidated damages in an amount equal to the amount found to be due as provided in subsection (a) of this section, provided that if the employer shows to the satisfaction of the court that the act or omission constituting the violation was in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation of this Article, the court ma

Mixed Result
Mehaffey v. Burger King
9292Nov 2013

DEWEY D. MEHAFFEY, Employee v. BURGER KING, Employer, LIBERTY MUTUAL INSURANCE COMPANY, Carrier No. 24PA12 (Filed 8 November 2013) Workers’ Compensation — attendant care services — family member — prior approval The Industrial Commission exceeded its authority in workers’ compensation case by promulgating the Medical Fee Schedule that prevented the award of retroactive compensation for the attendant care services provided before Commission approval was obtained. While good policy reasons may exist for the prerequisites created in the Schedule, this matter is a legislative determination, not one to be made by the Commission without statutory authorization. However, the matter was remanded for necessary findings and conclusions on the issue of reasonableness of the timing of plaintiff’s request for reimbursement. Justice BEASLEY did not participate in the consideration or decision of this case. Justice NEWBY dissenting in part and concurring in part. On discretionary review pursuant to N.C.G.S. § 7A-31 of a unanimous decision of the Court of Appeals,_N.C. App._, 718 S.E.2d 720 (2011), affirming in part and reversing in part an opinion and award filed on 18 August 2010 by the North Carolina Industrial Commission. Heard in the Supreme Court on 14 November 2012. Sumwalt Law Firm, by Mark T. Sumwalt and Vernon Sumwalt; and Grimes Teich Anderson LLP, by Henry E. Teich, for plaintiff-appellant. Hedrick, Gardner, Kincheloe & Garofalo, L.L.P., by M. Duane Jones and Jeremy T. Canipe, for defendant-appellees. HUDSON, Justice. This case presents the question whether the Medical Fee Schedule promulgated by the North Carolina Industrial Commission (Commission) may bar certain individuals from receiving compensation for attendant care services they provided before obtaining approval for those services from the Commission. We hold that the Commission may not do so since such action would exceed the power granted to the Commission by the General Assembly. Because the Court of Appeals enforced that provision of the Commission’s Medical Fee Schedule, which we conclude was adopted in excess of the Commission’s authority, we reverse in part the decision of the Court of Appeals. But because defendants here have challenged the reasonableness of the timing of plaintiff’s request for approval of attendant care and the Commission’s findings do not address this issue, we remand for the Commission to do so. On 13 August 2007, plaintiff suffered a compensable injury to his left knee while working as a restaurant manager for defendant Burger King, where he had been employed for approximately eighteen years. As a result of his injury, plaintiff underwent a “left knee arthroscopy with a partial medial meniscectomy” at Transylvania Community Hospital. Plaintiff’s condition failed to improve after surgery, and he ultimately developed “reflex sympathetic dystrophy” (“RSD”). Despite undergoing a number of additional procedures, plaintiff continued to suffer pain. Plaintiff eventually was diagnosed with depression related to the injury and resulting RSD, and his psychiatrist concluded that it was unlikely plaintiff’s “mood w[ould] much improve until his pain is under better control.” Likely due to pain, plaintiff increasingly attempted to limit his movements following his diagnosis of RSD. By 8 April 2008, plaintiff was using “an assistive device” to move or walk around. On 21 April 2008, John Stringfield, M.D., plaintiff’s family physician, prescribed a mobility scooter for plaintiff, and medical records show that by 20 June 2008, plaintiff was using a walker. On 18 December 2008, plaintiff requested a prescription for a hospital bed from Eugene Mironer, M.D., a pain management specialist with Carolina Center for Advanced Management of Pain, to whom plaintiff had been referred as a result of his diagnosis with RSD. Dr. Mironer’s office declined to recommend a hospital bed, instructing plaintiff to see his family physician instead. That same day plaintiff visited his family physician, Dr. Stringfield, who prescribed both a hospital bed and a motorized wheelchair. Since plaintiff’s injury, his wife has assisted him with his daily activities in the home. Until 14 August 2008, plaintiff’s wife attended to his needs approximately four hours per day. On 15 August 2008, Mrs. Mehaffey discontinued her outside employment, and since then she has attended to plaintiff’s needs approximately sixteen hours per day. In her caregiver role, Mrs. Mehaffey helps “plaintiff out of bed in the morning, gives him a sponge bath, and assists [him] in dressing.” She also helps “get [him] onto the scooter and transfers [him] from the scooter to a recliner, where plaintiff sits most of the day.” She prepares plaintiffs meals and attends to his bodily needs. At the end of each day, Mrs. Mehaffey helps “plaintiff dress for bed and helps him into bed.” Despite plaintiffs efforts to limit his activity and movement, the medical providers plaintiff saw for pain management indicated that he would derive greater benefit if he attempted to move under his own strength, which would force him to rehabilitate his injury. James North, M.D., the codirector of pain management at Wake Forest Baptist Hospital and plaintiffs preferred treating physician, “opined that providing plaintiff with a power wheelchair was counterproductive to his recovery” because “people using wheelchairs tend to gain weight and avoid using the extremity that causes their pain, both of which impede[ ] the recovery process.” Dr. North reasoned that “the less an injured extremity is used, the worse the condition will become.” Likewise, Dr. North concluded “that there was no scientific or medical basis for requiring a hospital bed for patients with RSD.” Dr. North’s medical opinion was echoed by Dr. Mironer. Nonetheless, plaintiff used these mobility aids and comfort devices, procuring for himself the hospital bed and motorized scooter. Plaintiff’s family physician and other individuals began to recommend that plaintiff receive attendant care services. On 9 March 2009, Judy Clouse, a nurse consultant employed by the Commission, recommended that plaintiff receive eight hours of attendant care daily, Monday through Friday, from a Certified Nursing Assistant. On 5 June 2009, Dr. Stringfield recommended that plaintiff have sixteen hours a day of attendant care services, retroactive to the day plaintiff was diagnosed with RSD, thereby including the almost two years of attendant care plaintiff’s wife had already provided. Bruce Holt, a certified life care planner, also opined that plaintiff “needs attendant care for at least 16 hours per day, seven days a week.” In light of these recommendations regarding his needs, plaintiff sought a hearing before the Commission to clarify the extent of medical compensation owed to him. Defendants denied any failure to pay for necessary medical treatment. Relevant for our purposes, plaintiff and defendants disagree whether plaintiff’s wife should be compensated for the attendant care she provided plaintiff before the Commission approved her rendering that service. Defendants contend that the Commission’s Medical Fee Schedule prevents such an award of retroactive compensation to Mrs. Mehaffey. Plaintiff, on the other hand, views Mrs. Mehaffey’s attendant care services as simply another component of medical compensation within the meaning of N.C.G.S. § 97-2(19) (2007), for which defendants are responsible under N.C.G.S. § 97-25 (2007). The Commission agreed with plaintiff on this issue, choosing not to follow its own fee schedule, perhaps in recognition that it was not authorized to deny reimbursement for these services. First, in an opinion and award filed on 29 January 2010, a deputy commissioner directed defendants to compensate Mrs. Mehaffey for the “attendant care services rendered to plaintiff at the rate of $12.50 per hour, 16 hours per day and seven days per week, from 15 August 2008, through the present and continuing until further order of the Commission.” On appeal the Full Commission affirmed in pertinent part the deputy commissioner’s opinion and award, concluding that Mrs. Mehaffey’s attendant care services were medical compensation for which defendants were responsible under sections 97-2(19) and 97-25 of our General Statutes. In addition, the Full Commission further compensated Mrs. Mehaffey for the attendant care services previously provided from 15 November 2007 through 14 August 2008, while she was still employed outside the home. For those attendant care services the Full Commission awarded compensation for four hours daily, seven days a week, also at a rate of $12.50 per hour. The Court of Appeals, relying on our decision in Hatchett v. Hitchcock Corp., 240 N.C. 591, 83 S.E.2d 539 (1954), reversed the Commission’s decision to provide compensation for Mrs. Mehaffey’s past attendant care services. Mehaffey v. Burger King,_N.C. App _,_, 718 S.E.2d 720, 723-24 (2011). In Hatchett we were presented with a situation in which the Commission had awarded financial compensation to an injured worker’s mother under sections 97-25 and 97-26 of our General Statutes for practical nursing services that she provided to her son without prior approval from the Commission. 240 N.C. at 592-93, 83 S.E.2d at 540-41. Ultimately, this Court determined that the Commission’s fee schedule, promulgated pursuant to the Commission’s rulemaking authority under the Workers’ Compensation Act (the Act), prohibited such an award of compensation for practical nursing services unless that conduct had been first approved by the Commission. Id. at 593-94, 83 S.E.2d at 541-42. As a result, we reversed the Commission’s award. The Court of Appeals reasoned that the outcome in the present case is controlled by our decision in Hatchett. First, that court observed that the claim for payment in this case was brought under sections 97-25 and 97-26 of our General Statutes, the same provisions that were at issue in Hatchett. Mehaffey, _N.C. App. at_, 718 S.E.2d at 724. Additionally, the Court of Appeals explained that the language of the rule at issue in Hatchett, which said, “Fees for practical nursing service by a member of claimant’s family or anyone else will not be honored unless written authority has been obtained in advance,” is nearly identical to the language now found in the Commission’s Medical Fee Schedule. Id. at_, 718 S.E.2d at 723-24 (citations and quotation marks omitted). As a result, the Court of Appeals concluded that the Commission should have followed the holding of Hatchett and thus declined to award compensation for Mrs. Mehaffey’s past provision of attendant care services. Id. at_, 718 S.E.2d at 724. We allowed plaintiff’s petition for discretionary review to consider the Court of Appeals’ decision regarding the Commission’s award of compensation for past attendant care services provided before approval was obtained from the Commission. Mehaffey v. Burger King,_N.C. __, 726 S.E.2d 177 (2012). Plaintiff contends that the Court of Appeals erred by following the holding of Hatchett. Instead, plaintiff asserts that the Commission does not have statutory authority under section 97-26(a) to prohibit compensation of an immediate family member for the provision of attendant care services unless prior authorization was obtained. Defendants, on the other hand, contend that the Court of Appeals properly followed our decision in Hatchett. Moreover, defendants argue that allowing members of an injured employee’s immediate family to be compensated for providing attendant care without the Commission’s having first approved that service would contravene one of the underlying purposes of the Act, which is to control medical expenses. To resolve this dispute we turn first to the provisions of the Act. Generally speaking, the Act provides for the compensation of employees who sustain workplace injuries. N.C.G.S. §§ 97-1 to -101.1 (2011). The Act places upon an employer the responsibility to furnish “medical compensation” to an injured employee. Id. § 97-25. At the time of plaintiff’s injury, the Act defined “medical compensation” as: Medical Compensation. — The term “medical compensation” means medical, surgical, hospital, nursing, and rehabilitative services, and medicines, sick travel, and other treatment, including medical and surgical supplies, as may reasonably be required to effect a cure or give relief and for such additional time as, in the judgment of the Commission, will tend to lessen the period of disability; and any original artificial members as may reasonably be necessary at the end of the healing period and the replacement of such artificial members when reasonably necessitated by ordinary use or medical circumstances. Id. § 97-2(19) (2007). The Act’s catch-all provision for “other treatment” has been understood to include attendant care services. See, e.g., Ruiz v. Belk Masonry Co., 148 N.C. App. 675, 681, 559 S.E.2d 249, 253-54 (upholding an award of attendant care benefits), appeal dismissed and disc. rev. denied, 356 N.C. 166, 568 S.E.2d 610 (2002). Moreover, the parties do not dispute that attendant care services fall under the version of section 97-2(19) in effect when plaintiff was injured and that the current version of that statute expressly includes “attendant care services,” N.C.G.S. § 97-2(19) (2011). The Act is designed also to control medical costs. Indeed, as we said in Charlotte-Mecklenburg Hospital Authority v. North Carolina Industrial Commission, “The General Assembly enacted the Act in 1929 to both provide swift and sure compensation to injured workers without the necessity of protracted litigation, arid to insure a limited and determinate liability for employers.” 336 N.C. 200, 203, 443 S.E.2d 716, 718-19 (1994) (citation, alteration, and internal quotation marks omitted)), superseded by statute, The Workers’ Compensation Reform Act of 1994, ch. 679, sec. 2.3, 1993 N.C. Sess. Laws (Reg. Sess. 1994) 394, 398 (amending N.C.G.S. § 97-26(b) effective 1 October 1994). The latter is essentially a trade-off for the former. In keeping with its desire to control medical costs, in 1994 the legislature directed the Commission to “adopt a schedule of maximum fees for medical compensation,” which would enable employers more accurately to predict their potential financial exposure following an employee’s injury. The Workers’ Compensation Reform Act of 1994, ch. 679, sec. 2.3, 1993 N.C. Sess. Laws (Reg. Sess. 1994) 394, 397 (codified at N.C.G.S. § 97-26(a)). Before that time an employer’s pecuniary liability was tethered to the costs that prevailed “in the same community for similar treatment of injured persons of a like standard of living when such treatment is paid for by the injured person.” Id. Departing from its previous standard, the General Assembly instructed that this new Medical Fee Schedule “shall be adequate to ensure that (i) injured workers are provided the standard of services and care intended by this Chapter, (ii) providers are reimbursed reasonable fees for providing these services, and (iii) medical costs are adequately contained.” Id. The adoption of a Medical Fee Schedule aids in fulfilling a purpose of the Act by indicating to employers the amount of their potential financial exposure. The central issue in the case sub judice is whether the Commission exceeded its authority in promulgating a provision of its Medical Fee Schedule to create a prerequisite to reimbursement for certain care. To answer this question, like all similar questions, we must ascertain whether the General Assembly authorized the administrative body — here the Industrial Commission — to undertake the challenged conduct. E.g., High Rock Lake Partners, LLC v. N.C. DOT, _N.C._,_, 735 S.E.2d 300, 303-04 (2012). Administrative agencies, as creatures of statute, may act only as authorized by the legislature. In re Broad & Gales Creek Cmty. Ass’n, 300 N.C. 267, 280, 266 S.E.2d 645, 654-55 (1980) (citations omitted). As an administrative agency, the Commission must act consistently with the intent of the General Assembly. See, e.g., Gregory v. W.A. Brown & Sons, 363 N.C. 750, 763-64, 688 S.E.2d 431, 440 (2010). A provision of the Commission’s Medical Fee Schedule that is contrary to our General Statutes is, as a result, without effect. Forrest v. Pitt Cnty. Bd. of Educ., 100 N.C. App. 119, 125-28, 394 S.E.2d 659, 662-64 (1990), aff’d per curiam, 328 N.C. 327, 401 S.E.2d 366 (1991). We understand the difficulty in monitoring home health care, especially when furnished by a family member. In an apparent effort to address this issue, the Commission adopted Section 14 of the Medical Fee Schedule, which states in pertinent part: Except in unusual cases where the treating physician certifies it is required, fees for practical nursing services by members of the immediate family of the injured will not be approved unless written authority for the rendition of such services for pay is first obtained from the Industrial Commission. While good policy reasons may exist for the prerequisites created here in the Schedule, this matter is a legislative determination, not one to be made by the Commission without statutory authorization. Neither section 97-26(a) nor any other provision in our General Statutes grants the Commission the power to create such a requirement. See N.C.G.S. § 97-26(a). In fact, the legislature explicitly stated that the Commission’s Medical Fee Schedule “shall . . . ensure that... providers are reimbursed reasonable fees for” their services. Id. And as the enabling legislation indicates, the fee schedule is designed to facilitate uniformity and predictability in the medical costs employers axe required to pay under the Act. See Ch. 679, sec. 2.3, 1993 N.C. Sess. Laws (Reg. Sess. 1994) at 397. Section 97-26(a) of our General Statutes does not give the Commission the authority to mandate that certain attendant care service providers may not be compensated unless they first obtain approval from the Commission before rendering their assistance. N.C.G.S. § 97-26(a). As a result, we are unable to permit Section 14 of the Commission’s Medical Fee Schedule to prevent the award of retroactive compensation for the attendant care services Mrs. Mehaffey provided her husband. See Forrest, 100 N.C. App. at 125, 394 S.E.2d at 662 (noting that the Commission’s Medical Fee Schedule is “superseded by” our General Statutes). We are mindful that this result may appear on its face to be inconsistent with our decision in Hatchett. When, however, a change occurs in the law upon which a prior decision rests, this Court must look afresh at the questioned provision. See Patterson v. McLean Credit Union, 491 U.S. 164, 173, 109 S. Ct. 2363, 2370, 105 L. Ed. 2d 132, 148 (1989) (“In cases where statutory precedents have been overruled, the primary reason for the Court’s shift in position has been the intervening development of the law, through either the growth of judicial doctrine or further action taken by Congress.”), superseded on other grounds by statute, Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat. 1071 (enacting 42 U.S.C. § 1981(b)), as recognized in Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369, 124 S. Ct. 1836, 158 L. Ed. 2d 645 (2004). Our decision in Hatchett was based on the fee schedule (which has remained largely unchanged) and the statutory language of former section 97-26. Under the statutory language at that time, an employer was liable for medical treatment “when ordered by the Commission.” N.C.G.S. § 97-26 (1950). Our decision in Hatchett emphasized that statutory language: “G.S. 97-26 provides for the pecuniary liability of the employer for medical, surgical, hospital service or other treatment required, when ordered by the Commission. ” Hatchett, 240 N.C. at 594, 83 S.E.2d at 542. We reasoned that these “plain and explicit words” meant that the plaintiffs mother should not be compensated for her a

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