InterVarsity Christian Fellowship/USA v. Board of Governors of Wayne State University

SCHOLZ v MONTGOMERY WARD & CO, INCORPORATED Docket No. 80709. Argued October 2, 1990 (Calendar No. 1). Decided April 5, 1991. Jane Scholz brought an action in the Kent Circuit Court against Montgomery Ward & Co., Incorporated, alleging age and religious discrimination and breach of contract. The plaintiff claimed that oral assurances by the defendant at the time of hiring that she would not be required to work on Sundays modified her subsequent written acknowledgment by completing a sign-off sheet supplied by the employer that she was an employee at will. The court, George R. Cook, J., entered judgment on a jury verdict for the plaintiff. Following trial, the defendant’s motions for judgment notwithstanding the verdict or for a new trial were denied. The Court of Appeals, Burns, P.J., and Gribbs and R. I. Cooper, JJ., affirmed the rulings on the motions in an unpublished opinion per curiam, reasoning that Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich 579 (1980), does not permit an employer to unilaterally modify a contract, and concluding that because the question whether the defendant retained the right to unilaterally change the terms of the oral agreement with the plaintiff not to work on Sundays was one of fact, the jury reasonably could have concluded that the oral agreement remained in force (Docket No. 86118). The defendant appeals. In an opinion by Justice Riley, joined by Chief Justice Cavanagh and Justices Brickley, Boyle, and Griffin, the Supreme Court held: The signing by an employee of a disclaimer providing employment at will, unless subsequently modified, permits termination of the employee for any or no reason. 1. Employers may provide employment at will by way of express disclaimers in statements of employment policies. In this case, as a matter of law, the plaintiff’s employment relationship at the time of discharge was governed by the employer’s disclaimer. Thus she was an employee at will, and unable to maintain an action for wrongful discharge. 2. Failure to obtain an explanation of a contract is ordinary negligence, estopping avoidance of the contract on the ground of ignorance. In this case, the plaintiff assented to the terms of the employment agreement by signing the sign-off sheet and returning it to her employer. The disclaimer included in the sign-off sheet was unambiguous on the subject of discharge and comprehensive on the subject of termination. Regardless of whether an implied contract arose with respect to Sunday work, as a matter of law, it did not apply at the time of discharge because the express modified contract under the terms of the sign-off sheet was in effect at the time of her discharge. Affirmed in part, reversed in part, and remanded for entry of judgment notwithstanding the verdict. Justice Levin, writing separately, stated that modification of an employment contract, in general, is subject to the same rules of law applicable to the modification of other contracts. These rules seek to achieve a reasoned balance between competing values and policies and to protect and enforce the true agreement. There are no special rules of law designed to lighten the burden of an employer who seeks to modify an express oral agreement. Employers have full freedom of contract and managerial control; however, when they enter into an agreement with an employee, they give up something and generally obtain something worthwhile in return. The law recognizes the utility of and the employer’s need for standardized agreements. Where, however, as in this case, before an agreement is standardized, a separate agreement is entered into with a person with whom a standardized agreement is later signed, rules of law designed to protect the enforceability of the earlier agreement of the parties come into play, if it appears, on an examination of all the facts and circumstances, that it continues to represent the true agreement of the parties. These rules should not be brushed aside or ignored. Justice Mallett took no part in the decision of this case. Pinsky, Smith, Fayette & Hulswit (by H. Rhett Pinsky) for the plaintiff. Dykema, Gossett (by Charles C. DeWitt, Jr., and Bruce G. Davis) for the defendant. Amici Curiae: Clark, Klein & Beaumont (by Dwight H. Vincent, J. Walker Henry, and Rachelle G. Silberberg) for Michigan Manufacturers Association. Conboy, Fell, Stack, Lieder & Hanson (by Lloyd C. Fell) for General Motors Corporation. Miller, Canñeld, Paddock & Stone (by Diane M. Soubly) for American Society of Employers, Motor Vehicle Manufacturers Association of the United States, Inc., Greater Detroit Chamber of Commerce, and Michigan State Chamber of Commerce. Mark Granzotto, Monica Farris Linkner, and Charles P. Burbach for Michigan Trial Lawyers Association. Sommers, Schwartz, Silver & Schwartz, P.C. (by Lionel J. Postic), and Charles Gottlieb for Michigan Employment Lawyers Association. Riley, J. I. INTRODUCTION AND FACTS This case is a wrongful discharge/religious discrimination action brought against the defendant, Montgomery Ward & Co., Incorporated, by Jane Scholz, a- former employee of defendant at its North Kent Mall Store in Grand Rapids, Michigan. The Court held in abeyance defendant’s application for leave to appeal pending decisions in Bullock v Automobile Club of Michigan, 432 Mich 472; 444 NW2d 114 (1989), and In re Certified Question, Bankey v Storer Broadcasting Co, 432 Mich 438; 443 NW2d 112 (1989). On May 2, 1990, we granted leave to appeal. The sole issue to be decided in this appeal is whether plaintiff had a contract not to be terminated for refusing to work on Sundays on the basis of oral statements and circumstances surrounding her employment. We hold, as a matter of law, that at the time of her discharge plaintiff’s employment relationship was governed by the employer’s 1982 sign-off sheet, and that plaintiff was an employee at will. Thus, plaintiff cannot maintain an action for wrongful discharge. Accordingly, the decision of the Court of Appeals is reversed to the extent it found that plaintiff could bring an action for breach of contract, and the case is remanded to the trial court for entry of an order pursuant to this opinion. The facts of this case are set forth in the Court of Appeals decision, unpublished opinion per curiam of the Court of Appeals, decided January 27, 1987 (Docket No. 86118): Plaintiff was hired by defendant as a sales person on August 31, 1970, at defendant’s location at the North Kent Mall in northern Kent County. At the time of her hiring, she discussed Sunday working hours with the personnel director, Donald Hansen. At that time, the North Kent Mall store was not open for business on Sundays. Nevertheless, plaintiff indicated her desire not to work on Sundays. Hansen took the matter up with the store manager, Robert Bergman. Bergman indicated that, although he did not anticipate the store opening on Sundays, there would be no difficulty in honoring plaintiff’s request in the event the store opened on Sundays. Hansen relayed this decision to plaintiff, who accepted a position with defendant. Four or five months later, the store opened for Sunday trade. Two years after that, plaintiff was asked to work on Sundays. She refused, citing religious convictions. The matter was dropped. Sometime later, in 1977, plaintiff was formally notified by defendant that she would have to work on Sundays. Plaintiff’s pastor, Wesley A. Samuelson of Bethlehem Lutheran Church in Grand Rapids, sent a letter to defendant indicating that plaintiff’s religious convictions prevented her from working on Sundays. Although she was scheduled to work three Sundays in 1977, she refused. No action was taken by defendant. In 1982, defendant issued a policy manual. On the face of the manual, there was a sheet entitled "new employees sign-off sheet,” which plaintiff signed on May 10, 1982. That sheet contained, inter alia, the following paragraph: "I have read and fully understand the rules governing my employment with Montgomery Ward. I agree to employment with Montgomery Ward under the conditions explained. I understand these conditions can be changed by the Company, without notice, at any time. I also understand and agree that my employment is for no definite period and may, regardless of the time and manner of payment of my wages and salary, be terminated at any time, with or without cause, and without any previous notice.” In 1983, plaintiff was informed that if she refused to work on Sundays, she would be terminated. She responded by letter that it was her understanding at the time of hiring that she would not be required to work on Sundays. She was scheduled for work on Sundays, she refused to work on Sundays, and she was terminated. Defendant admits plaintiff had an excellent work record and that the sole reason for her discharge was her failure to report for Sunday work. [Slip op, pp 1-2.] Plaintiff brought suit in Kent Circuit Court on January 16, 1984, against Montgomery Ward, alleging age and religious discrimination and breach of contract. A jury awarded her $8,250 on the religious discrimination claim and $16,503 on the breach of contract claim, plus costs, interest, and attorney fees. Scholz, supra, slip op, p l. Following the trial, defendant moved for a judgment notwithstanding the verdict or, in the alternative, for a new trial. The trial court denied both motions. Defendant appealed, and the Court of Appeals affirmed the trial court’s ruling on the motions, reasoning that Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich 579; 292 NW2d 880 (1980), reh den 409 Mich 1101 (1980), does not permit an employer to unilaterally modify a contract. Scholz, supra, slip op, p 4. The Court of Appeals concluded that since the question whether defendant retained the right to unilaterally change the terms of the oral employment contract with plaintiff was one of fact for the jury and not one of law for the trial court, the jury reasonably could have concluded that provisions of the 1970 oral contract remained in force. Therefore, the trial court properly denied the motion for judgment notwithstanding the verdict and similarly did not abuse its discretion in refusing to grant a new trial. Scholz, supra, slip op, pp 5-6. ii A In Toussaint, we recognized that employers may provide a contract of employment at will by way of express disclaimers in their employment policies. In Valentine v General American Credit, Inc, 420 Mich 256, 258-259; 362 NW2d 628 (1984), we reaffirmed: Employers and employees remain free to provide, or not to provide, for job security. Absent a contractual provision for job security, either the employer or the employee may ordinarily terminate an employment contract at any time for any, or no, reason. In the instant case, plaintiff relies on the prehiring statements made by Mr. Hansen, Montgomery Ward’s personnel director, to allege an express contract that she was not required to work Sundays. Plaintiff also relies on several instances during her employment where defendant acquiesced in her refusal to work Sundays. Even if we were to assume plaintiff had an express oral contract with Montgomery Ward that she did not have to work on Sundays, she reached a new understanding with Montgomery Ward governing the terms of her employment status once she signed the disclaimer providing employment at will in May of 1982. Montgomery Ward took action which we expressly approved of in Toussaint and entered into a contract with plaintiff making her employment terminable at will. On the basis of this agreement, Montgomery Ward properly terminated plaintiff’s employment. This case is analogous to Ledl v Quik-Pik Stores, 133 Mich App 583; 349 NW2d 529 (1984). In Ledl, the plaintiff was given assurances at the time she accepted employment that she would continue to be employed as long as her performance was satisfactory. Approximately seven and one-half years after being hired, she signed an employment agreement which provided that the defendant could terminate her employment with or without cause. The Court of Appeals concluded that the plaintiff failed to state a claim for breach of an employment contract because the language of the contract negated any prior oral agreements she may have had that were based on her employer’s assurances. In the instant case, on May 16, 1982, thirteen years after plaintiff was hired, she signed an employment agreement which provided that her employment was at will. A closely related sign-off sheet was involved in Dell v Montgomery Ward & Co, Inc, 811 F2d 970 (CA 6, 1987). In Dell, the plaintiff alleged a breach of contract claim under Toussaint against Montgomery Ward after being fired for deceptively covering up the wrongful conduct of one of his subordinates. The plaintiff executed the sign-off sheet, expressly acknowledging that his employment was at will and was terminable with or without just cause. The trial court granted the defendant’s motion for summary judgment. On appeal, the United States Court of Appeals for the Sixth Circuit affirmed the trial court’s ruling on the Toussaint issue. Writing for the court, Judge Ryan concluded: It is difficult to imagine what more the defendant might have done to make it crystal clear to Dell, and all Montgomery Ward employees, that, unless some other arrangement were made directly with the President and Chief Executive Officer or Executive Vice President of Human Resources, Montgomery Ward employees are employees "at will” who may be discharged with or without cause. [Id., p 974. See also Haas v Montgomery Ward & Co, Inc, 812 F2d 1015 (CA 6, 1987).] Plaintiff argues that although she read and understood the written employment-at-will agreement, she did not believe it applied to her Sunday work arrangement. Plaintiff contends that because mutual assent is lacking, the executed sign-off sheet defining her status as an employee at will did not alter the fact that she would not be terminated for refusing Sunday employment. It is well settled that the failure of a party to obtain an explanation of a contract is ordinary negligence. Accordingly, this estops the party from avoiding the contract on the ground that the party was ignorant of the contract provisions. As this Court has previously held: The stability of written instruments demands that a person who executes one shall know its contents or be chargeable with such knowledge. If he cannot read, he should have a reliable person read it to him. His failure to do so is negligence which estops him from voiding the instrument on the ground that he was ignorant of its contents, in the absence of circumstances fairly excusing his failure to inform himself. [Sponseller v Kimball, 246 Mich 255, 260; 224 NW 359 (1929).] If plaintiff did not understand the terms of the sign-off sheet, she had a duty to inquire about its contents. The record does not reflect any attempt by plaintiff to find out whether or not she was excused from Sunday employment under the terms of the disclaimer. In any case, we find the disclaimer unambiguous on the subject of discharge and comprehensive on the subject of termination. It does not suggest that she was immune from discharge for refusing Sunday work. In sum, Montgomery Ward took the action expressly approved in Toussaint and entered into a contract with plaintiff making her employment terminable at will. Plaintiff assented to the terms of the employment agreement by signing the sign-off sheet and returning it to Montgomery Ward. Upon the basis of this agreement, Montgomery Ward terminated plaintiff’s employment. Therefore, regardless of whether an express oral contract actually existed at the time of her hiring, as a matter of law, plaintiff and Montgomery Ward later reached a mutual understanding with regard to termination through the sign-off sheet. We find that plaintiff’s employment with Montgomery Ward was, as a matter of law, an employment-at-will relationship. Therefore, plaintiff cannot prevail in her breach of contract action. B Plaintiff also argues that defendant acquiesced in her refusal to work Sundays, thus creating a contract implied in fact that she not be terminated for such refusal. Regardless of whether an implied contract arose, as a matter of law, it did not apply to plaintiff at the time she was discharged because the express modified contract under the terms of the sign-off sheet was in effect at the time of her discharge. An implied contract cannot be enforced where the parties have made an express contract covering the same subject matter. In re De Haan Estate, 169 Mich 146; 134 NW 983 (1912); Steele v Cold Heading Co, 125 Mich App 199, 202-203; 336 NW2d 1 (1983); Hickman v General Motors Corp, 177 Mich App 246, 251; 441 NW2d 430 (1989). Under the rule set forth above, plaintiff cannot prevail on her claim for breach of contract. III. CONCLUSION Our decision recognizes that once a disclaimer providing employment at will is signed by an employee, excepting any subsequent modification, the employee may be terminated for any, or no, reason. Thus, in the present case, plaintiff cannot prevail on a claim for breach of contract. The decision of the trial court and Court of Appeals is reversed with regard to the breach of contract claim, and a judgment notwithstanding the verdict shall be entered. However, we affirm the trial court’s ruling on the religious discrimination issue because of defendant’s failure to object to the instructions given at trial. We do not retain jurisdiction. Cavanagh, C.J., and Brickley, Boyle, and Griffin, JJ., concurred with Riley, J._ Levin, J. The jury found that Montgomery Ward —agreed that Jane Scholz would not be required to work on Sunday, and —wrongfully discharged her when she refused to work on Sunday. The majority does not challenge the jury’s findings of fact. It states rather that "[e]ven if we were to assume plaintiff had an express oral contract with Montgomery Ward that she did not have to work on Sundays,” a contract Scholz claimed was entered into when she was hired, Scholz subsequently reached a "new understanding” with Montgomery Ward, in May, 1982, when she signed the sign-off sheet, "governing the terms of her employment status” and providing for employment at will. (Ante, pp 89-90.) The majority concludes that because Scholz was an employee at will she cannot maintain an action for wrongful discharge. It affirms the verdict for Scholz on the religious discrimination claim, and to that extent I concur. I The "new understanding” is embodied in the following paragraph of the "new employee sign-off sheet” that Scholz was asked to and did sign in May, 1982, although she was not a new employee: I have read and fully understand the rules governing my employment with Montgomery Ward. I agree to employment with Montgomery Ward under the conditions explained. I understand these conditions can be changed by the Company, without notice, at any time. I also understand and agree that my employment is for no definite period and may, regardless of the time and manner of payment of my wages and salary, be terminated at any time, with or without cause, and without any previous notice. Scholz testified that she did not understand that by signing the sign-off sheet she could be required to work on Sundays. Scholz argued that the rules and regulations in the Welcome to Montgomery Ward Handbook that accompanied the new employee sign-off sheet had nothing to do with Scholz’ "other agreement,” entered into when she was hired, whereby she had conditioned her employment on not working on Sundays, and to which Montgomery Ward had agreed. ii The facts are essentially undisputed. This is not a case where the testimony of the witnesses for the employer differed significantly from the testimony of the employee’s witnesses. Employer claims that juries are inclined to be sympathetic to employees, and, on that basis, in defiance of the evidence, resolve against employers