SYLVIA ADAIRE FOGL SALT v. APPLIED ANALYTICAL, INC.
Case Details
- Citation
- 104 N.C. App. 652
- Judge(s)
- Judges Arnold and Lewis concur.
- Procedural Posture — the stage the case had reached
- summary judgment
- State
- North Carolina
- Circuit
- 4th Circuit
Related Laws
No specific laws identified for this ruling.
Claim Types
Outcome
Employer prevailed on summary judgment. Court affirmed that the employment manual was not part of plaintiff's at-will employment contract, plaintiff failed to establish additional consideration removing her from at-will status, and no public-policy exception to at-will employment applied.
Excerpt
SYLVIA ADAIRE FOGL SALT v. APPLIED ANALYTICAL, INC. No. 915SC336 (Filed 17 December 1991) 1. Master and Servant § 10.2 (NCI3d)— employee discharge-violation of personnel manual —no breach of contract The trial court properly granted summary judgment for defendant employer on plaintiff’s claim for breach of her employment contract based on defendant’s failure to follow the disciplinary procedures outlined in its personnel manual when it terminated plaintiff’s employment where the evidence before the court showed that the personnel manual cannot be considered as part of plaintiff’s contract of employment. Am Jur 2d, Master and Servant §§ 48.3, 48.5. Right to discharge allegedly “at-will” employee as affected by employer’s promulgation of employment policies as to discharge. 33 ALR4th 120. 2. Master and Servant § 10.2 (NCI3d)— employment handbook — no unilateral contract An employment handbook does not constitute a unilateral contract which will give rise to a breach of contract action. Am Jur 2d, Master and Servant §§ 48.3, 48.5. Right to discharge allegedly “at-will” employee as affected by employer’s promulgation of employment policies as to discharge. 33 ALR4th 120. 3. Master and Servant § 10.2 (NCI3d)— wrongful discharge — no additional consideration — employment at will applicable Plaintiff did not contribute additional consideration which would remove her employment from the scope of the employment at will doctrine where she failed to show that her move from Greenville to accept employment by defendant in Wilmington was induced by assurances concerning the duration of her employment or the discharge policies of defendant employer. Am Jur 2d, Master and Servant §§ 32, 33. 4. Master and Servant § 10.2 (NCI3d)— wrongful discharge — bad faith — insufficient allegations Plaintiff’s allegations that defendant breached its covenant of good faith and fair dealing by disregarding its promise of a permanent job and by giving third parties false reasons for discharging plaintiff were insufficient to sustain a claim for wrongful discharge. Am Jur 2d, Master and Servant § 43. Modern status of rule that employer may discharge at-will employee for any reason. 12 ALR4th 544. 5. Master and Servant § 10.2 (NCI3d)— wrongful discharge — bad faith — necessity for public policy violation There is no independent tort action for wrongful discharge of an at-will employee based solely on allegations of discharge in bad faith in the absence of a public policy violation. Furthermore, even if prior decisions created a wrongful discharge action based solely on bad faith in failing to follow personnel manual procedures, plaintiff has no cause of action against defendant because the policy manual given to her was not made an express part of her contract or made otherwise applicable to her, and her termination was not governed by the policy manual. Am Jur 2d, Master and Servant §§ 48.3, 48.5, 48.7. Modern status of rule that employer may discharge at-will employee for any reason. 12 ALR4th 544. APPEAL by plaintiff from Order entered 22 January 1991 by Judge Herbert 0. Phillips, III, in NEW HANOVER County Superior Court. Heard in the Court of Appeals in Wilmington on 17 October 1991. Patterson, Harkavy, Lawrence, Van Noppen & Okun, by Martha A. Geer, for plaintiff appellant. Stevens, McGhee, Morgan, Lennon & O’Quinn, by Robert A. O’Quinn, for defendant appellee. COZORT, Judge. Plaintiff employee brought an action for breach of employment contract and for wrongful discharge allegedly based on breach of implied covenant of good faith and fair dealing. The trial court granted summary judgment for defendant employer. We affirm. The depositions and other materials in the record demonstrate that, in 1985, plaintiff was employed at Burroughs Wellcome Company in Greenville, North Carolina, as a chemist testing pharmaceutical products. She held 11V2 years of seniority, earned $22,000 a year, and received many company benefits. An employee of the defendant, Applied Analytical, Inc. (“AAI”), approached plaintiff about taking a chemist’s position with AAI at a salary of $17,500-$18,500 per year. She declined the initial offers, but following negotiations, plaintiff accepted a position with defendant. One of the main topics discussed during the negotiations was plaintiff’s need for job security. She informed defendant that if the job with AAI turned out to be unsatisfactory for either party, she would be unable to return to her job at Burroughs Wellcome, or any other pharmaceutical company, because she did not hold a four-year degree in chemistry. In response, the general manager at AAI discussed career growth with plaintiff and talked of plaintiff’s future with the company in general terms. The letter from AAI’s general manager confirming defendant’s offer of employment stated: This letter is to confirm in writing my verbal offer to you of a Chemist position at Applied Analytical Industries, with an initial annual salary of $17,500.00. All of us at AAI are impressed with your qualifications and believe you can make significant contributions to our company. We hope you will accept our offer and believe you will find the position challenging and rewarding. As I indicated today during our telephone conversation, I believe the position which we are offering you will allow opportunities for your continued career growth in new areas involving method development for pharmaceutical dosage forms and bioanalytical assays for drugs in biological fluids. We would appreciate a response to our offer by April 8, 1985. Plaintiff accepted defendant’s offer and moved to Wilmington, North Carolina, where she began working for defendant in August 1985. In January, 1986, defendant granted plaintiff early tenure in the company, increased her salary by $2,000.00, and made her eligible for profit-sharing and a bonus. Plaintiff received positive evaluations from AAI supervisors after six months of employment, and again after one year with the company. On 14 November 1986, AAI’s president, Frederick Sancilio, called plaintiff into his office and presented her with a letter of termination. The letter stated plaintiff was being discharged for low productivity and for bothering other employees. Plaintiff adamantly protested the grounds for termination, reluctantly signed the letter, packed her personal belongings, and left the same day. Plaintiff filed a complaint against defendant on 9 November 1988, alleging a claim for breach of contract. On 26 July 1989, the North Carolina Supreme Court handed down its decision in Coman v. Thomas Mfg. Co., Inc., 325 N.C. 172, 381 S.E.2d 445 (1989). Based on the Coman decision, plaintiff moved to amend her complaint on 7 September 1989 to include a tort claim for breach of implied covenant of good faith and fair dealing. Defendant’s responsive pleadings included a motion for summary judgment. The trial court granted summary judgment for defendant on 18 January 1991, and plaintiff filed timely notice of appeal. The question before the Court when reviewing a summary judgment motion is whether the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to a material fact and that a party is entitled to judgment as a matter of law. N.C. Gen. Stat. § 1A-1, Rule 56(c) (1990); Meadows v. Cigar Supply Co., 91 N.C. App. 404, 371 S.E.2d 765 (1988). We consider first whether the trial court properly granted summary judgment on plaintiff’s breach of contract claim. It is clear in North Carolina that, in the absence of an employment contract for a definite period, both employer and employee are generally free to terminate their association at any time and without any reason. Still v. Lance, 279 N.C. 254, 182 S.E.2d 403 (1971). This Court has held, however, that in some circumstances employee manuals setting forth reasons and procedures for termination may become part of the employment contract even where an express contract is nonexistent. Walker v. Westinghouse Electric Corp., 77 N.C. App. 253, 335 S.E.2d 79 (1985), disc. review denied, 315 N.C. 597, 341 S.E.2d 39 (1986). Plaintiff argues initially that defendant’s personnel manual constituted part of her employment contract. She contends the contract was breached because defendant failed to follow the disciplinary procedure outlined in the manual. In her deposition, plaintiff testified she was given a copy of AAI’s personnel manual on or about her first day of work at the company. Each employee, including plaintiff, was required to sign a statement verifying the receipt of the manual. Employees were also required to sign periodic verifications acknowledging they had read revisions to the manual. According to the defendant’s manual, employees were classified as either “probationary” or “tenured.” An employee would be classified as probationary for the first six months of satisfactory performance. The employee then is classified as a tenured employee. The manual made no specific reference to “employment at-will.” The section of the manual describing disciplinary procedures provided: “[T]he Company reserves the right, with or without guideline notification to: Terminate an employee at any time. Suspend from work any employee . . . [or] [r]eturn to probationary status from tenured status any employee . . . .” These rights were reserved for a “severe violation” of standards or rules by a “permanent” or “tenured” employee. The handbook’s illustrations of “severe violations” included, but were not limited to: “blatant safety rule violations which endanger the health and safety of the employee and/or his fellow workers, falsification of Company records or data, misappropriation or misuse of Corporate assets, soliciting or engaging in outside activities of any kind or for any purposes on Company property at any time.” For non-severe violations committed by a “tenured” employee, the manual provided for a verbal warning upon the first violation and written notices for the second and third violations. A tenured employee would be terminated after a fourth non-severe violation. Plaintiff contends she never received a verbal or written notice prior to termination, in violation of the prescribed disciplinary procedure. It is clear that “unilaterally promulgated employment manuals or policies do not become part of the employment contract unless expressly included in it.” Walker, 77 N.C. App. at 259, 335 S.E.2d at 83-84. In Rosby v. General Baptist State Convention, 91 N.C. App. 77, 370 S.E.2d 605, disc. review denied, 323 N.C. 626, 374 S.E.2d 590 (1988), this Court found no breach of contract by an employer when the employer’s personnel policies were not incorporated into the oral contract for employment. The plaintiff received the employment manual when he was hired, and was told it would be his “work bible.” The manual included a salary scale, conditions of employment, expected conduct of employer and the employee, and procedures to be followed for disciplinary actions. Id. at 81, 370 S.E.2d at 608. The Rosby court stated: While we are sensitive to the “strong equitable and social policy reasons militating against allowing employers to promulgate for their employees potentially misleading personnel manuals while reserving the right to deviate from them at their own caprice” as enunciated in Westinghouse, supra, at 259, 335 S.E.2d at 83 (1985), we find that in the case sub judice, the material contained within the manual was neither inflexible nor all-inclusive on the issue of termination procedures. The manual, although presented as plaintiff’s “work bible” when he was hired, was not expressly included within his terminable-at-will contract. Id. In contrast, in Trought v. Richardson, 78 N.C. App. 758, 338 S.E.2d 617, disc. review denied, 316 N.C. 557, 344 S.E.2d 18 (1986), this Court held that plaintiff stated a claim for breach of contract based on her allegation that the employer’s policy manual was part of her employment contract. There the plaintiff was required to sign a statement indicating she had read the defendant’s policy manual which provided she could be discharged “for cause” only and which stated that certain procedures must be followed in order for her to be discharged. Id. at 760, 338 S.E.2d at 618. The plaintiff alleged she was discharged without cause and without the benefit of the personnel manual procedures. Id. The Court concluded that “on hearing on a Rule 12(b)(6) motion the plaintiff has sufficiently alleged that the policy manual was a part of her employment contract which was breached by her discharge to survive her motion.” Id. at 762, 338 S.E.2d at 620. In Harris v. Duke Power Co., 319 N.C. 627, 356 S.E.2d 357 (1987), the North Carolina Supreme Court limited the rule in Trought to those specific facts. The plaintiff in Harris contended that his employment manual was part of his contract for employment with defendant and that he was entitled to recover for breach of contract when he was discharged in violation of the manual’s provisions. Id. at 630, 356 S.E.2d at 358. The Court distinguished Trought, finding that Harris had not been told that he could be discharged only “for cause.” Id. The Court also noted that the employment manual in Harris provided rules of conduct which were directed specifically toward management and not targeted at employees. Id. It is clear from the evidence below that the handbook given plaintiff by defendant cannot be considered part of her original contract. As a result, plaintiff’s breach of contract claim based on this theory must fail. Plaintiff next argues that the employment handbook was an independent unilateral contract made by defendant to her. She argues she is entitled to recover for defendant’s breach of that unilateral contract. We disagree. North Carolina has recognized a unilateral contract theory with respect to certain benefits relating to employment. In Brooks v. Carolina Telephone, 56 N.C. App. 801, 290 S.E.2d 370 (1982), the Court found severance payments part of a unilateral contract. In Welsh v. Northern Telecom, Inc. 85 N.C. App. 281, 354 S.E.2d 746, disc. review denied, 320 N.C. 638, 360 S.E.2d 107 (1987), the court acknowledged vacation and retirement benefits. In White v. Hugh Chatham Memorial Hosp. Inc., 97 N.C. App. 130, 387 S.E.2d 80, disc. review denied, 326 N.C. 601, 393 S.E.2d 890 (1990), the Court accepted disability payments. However, in Rucker v. First Union Nat’l Bank, 98 N.C. App. 100, 389 S.E.2d 622, disc, review■ denied, 326 N.C. 801, 393 S.E.2d 899 (1990), the Court declared, “We decline to apply a unilateral contract analysis to the issue of wrongful discharge. . . . [T]o apply a unilateral contract analysis to the situation before us would, in effect, require us to abandon the ‘at-will’ doctrine which is the law in this State. This we cannot do.” Id. at 103, 389 S.E.2d at 625. We find Rucker to be dispositive in this case. Plaintiff next alleges she contributed additional consideration which would remove the contract from the scope of the employment at-will doctrine. In Sides v. Duke University, 74 N.C. App. 331, 328 S.E.2d 818, disc. review denied, 314 N.C. 331, 335 S.E.2d 13 (1985), this Court carved out a significant exception from the employment at-will rule. There the plaintiff did not have an employment contract and thus was employed at-will. The plaintiff’s complaint alleged that she was assured by Duke she could be discharged only for “incompetence,” and these assurances induced her to move from Michigan to accept a job in Durham. Id. at 333, 328 S.E.2d at 821. The Court stated: 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. (Emphasis added.) Id. at 345, 328 S.E.2d at 828 (quoting 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)). The Court then determined: The additional consideration that the complaint alleges, her move from Michigan, was sufficient, we believe, to remove plaintiff’s employment contract from the terminable-at-will rule and allow her to state a claim for breach of contract since it is also alleged that her discharge was for a reason other than the unsatisfactory performance of her duties. Id. We find the facts below distinguishable from Sides. In Sides, the defendant assured the plaintiff “both at her job interview and again when the job was offered to her that nurse anesthetists at [the hospital] could only be discharged for incompetence.” Id. at 333, 328 S.E.2d at 821. In the case at bar, the plaintiff cannot point to any specific assurances given to her which compare to the assurances given to the plaintiff in Sides that she would not be discharged except for “incompetence.” The assurances upon which plaintiff here bases her breach of contract theory do not contain any specific terms or conditions, as in Sides. Plaintiffs deposition reveals: Q. When you had your discussions with [the general manager], did you tell him that you would not take the job unless you understood that you had a permanent position there? A. Not in those particular words, but— Q. What did you tell him? A. —I feel like we established the fact that if I were leaving my job at Burroughs Wellcome then I was going into a job — well, he told me he felt like I could have some career growth there, that there were things that they wanted me to do in the future as far as their microbiology lab and at the time it didn’t exist but they wanted me to help them with the microbiology lab. And, we just talked about things that were far into the future that I couldn’t just go to work there and just do. And, he felt like I had a chance for some real career growth there and, you know, that it was for a permanent job. Furthermore, a reading of defendant’s letter confirming plaintiff’s employment indicates no assurances concerning the duration of plaintiff’s employment or relating to the discharge policies of the company. The letter’s reference to “continued career growth” does not suffice. Plaintiff can show no more than an offer of employment for an undetermined time. The trial court’s entry of summary judgment on plaintiff’s breach of contract claim was properly granted. We now turn to the claims plaintiff raised by the amendment to her complaint. Plaintiff asserts a claim against defendant for breach of implied covenant of good faith and fair dealing implicit in her employment contract. Plaintiff contends that defendant breached its implied covenant of good faith and fair dealing by discharging plaintiff in violation of defendant’s personnel policy, by breaching defendant’s assurance of permanent employment and by communicating to third parties false reasons for discharging plaintiff. We conclude the trial court properly granted summary judgment on this claim. In Coman v. Thomas Mfg. Co., Inc., 325 N.C. 172, 381 S.E.2d 445 (1989), the North Carolina Supreme Court created an exception to the employment at-will doctrine by authorizing a tort claim for wrongful discharge for an at-will employee whose discharge is in violation of a public policy. The Court specifically approved language from Sides v. Duke University, 74 N.C. App. 331, 328 S.E.2d 818, disc. review denied, 314 N.C. 331, 335 S.E.2d 13 (1985). The Court, quoting Sides, stated: [W]hile there may be a right to terminate a contract at will for no reason, or for an arbitrary or irrational reason, there can be no right to terminate such a contract for an unlawful reason or purpose that contravenes public policy. A different int
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