Wrongful Termination Cases
6,866 employment law court rulings from public federal records (1863–2026)
About Wrongful Termination Claims
Wrongful termination claims arise when an employee is fired in violation of federal or state law, public policy, or an employment contract. While most employment is at-will, employers cannot terminate employees for illegal reasons such as discrimination, retaliation, or exercising legal rights. These cases examine whether the stated reason for termination was pretextual.
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LYTLE v MALADY Docket No. 102515. Argued January 16, 1997 (Calendar No. 16). Decided July 31, 1997. Rehearing granted post, 1202. Nancy Lytle brought an action in the Muskegon Circuit Court against Michael Malady, her supervisor, and Howmet Corporation, her employer, after she was discharged from her employment, alleging breach of a contract providing for termination of employment for just cause only, and age and sex discrimination. Howmet asserted that the discharge was the result of a company-wide reduction in its work force. The court, R. Max Daniels, J., granted summary disposition for the defendants on all counts. The Court of Appeals, D. E. Holbrook, Jr., EJ., and Murphy and J. C. Kingsley, JJ., reversed (Docket No. 157627). The defendants appeal. In an opinion by Justice Riley, joined by Chief Justice Mallett, an opinion by Justice Cavanagh, joined by Justice Kelly, an opinion by Justice Boyle, joined by Justice Weaver, and an opinion by Justice Brickley, the Supreme Court held: Even when an employer’s decision to reduce its work force is determined to be bona fide, an employee still may establish a genuine issue of material fact that the employer’s justification for the discharge was not the true reason for its decision. In order to establish a genuine issue of material fact when an employer contends that its decision to discharge the employee was based on a work-force reduction, a discharged employee may not rely merely on unsubstantiated allegations or denials in the pleadings, but, rather, must come forward with admissible evidence, affidavits, or other evidentiary materials, demonstrating the existence of a factual dispute that the employer’s articulated reason was merely a pretext to discrimination. 1. Employment contracts for an indefinite duration are presumed to be terminable at the will of either party. To overcome the presumption, any verbal assurances or statement of policy and procedure regarding job security must be clear and unequivocal. A just-cause policy may be changed unilaterally to one of employment at will by giving reasonable notice to all affected employees. In this case, the method of notification instituted was not reasonably calculated to uniformly assure awareness of the change from termination only for just cause to employment at will for all the affected employees. Thus, the plaintiff’s legitimate expectation of just-cause employment was left undisturbed. 2. A reduction in work force for economic reasons constitutes termination for just cause; however, layoffs that are conducted must be bona fide, i.e., necessitated by business conditions. To establish a genuine issue of material fact that the employer’s decision was not bona fide, the employee may not rely merely on unsubstantiated allegations or denials in the pleadings, but, rather, must come forward with admissible evidence, affidavits, or other evidentiary materials, demonstrating the existence of a factual dispute. 3. The plaintiff’s relief, if any, rests in the Civil Rights Act. Under the act, to survive a motion for summary judgment, once an employer articulates a legitimate, nondiseriminatory reason for laying off a plaintiff, the plaintiff must introduce sufficient evidence to support two findings: that the employer’s articulated reason for laying off the plaintiff is a pretext, and that the true reason is discriminatory. Under some circumstances, a plaintiff may not need to introduce additional evidence because the plaintiff’s prima facie case may establish that the employer’s articulated reason for its adverse employment action is a pretext and, in so establishing, the plaintiff may have created a question of fact regarding whether the true reason is discriminatory. A plaintiff will not always present a triable question of pretext simply by disputing the employer’s stated reasons. Simply disproving the employer’s articulated reason will suffice if, and only if, disproving the employer’s reason also proves discrimination. In other instances, simply disproving an employer’s articulated reason will not establish discrimination, and the plaintiff would then have to introduce additional evidence. In all actions involving claims of discrimination, there must be evidence upon which reasonable minds could conclude that discrimination was the true motive for the employer’s adverse conduct against the plaintiff. That there may be a triable question of falsity does not necessarily mean that there is a triable question of discrimination. 4. The plaintiff need not show that age was the determining factor in the defendant’s decision to discharge her; rather, she need only prove that it was a determining factor. Despite the defendant’s claim that it based its decision on economic necessity, the plaintiff produced evidence that would permit reasonable persons to conclude that age more likely than not was a determining factor in the adverse employment action the defendant took against the plaintiff. This evidence suggests that the defendant’s reason for discharging the plaintiff was only a pretext for favoring the younger hirees over the older plaintiff. 5. Viewing the evidence in a light most favorable to the plaintiff and drawing every reasonable inference in her best regard, the plaintiff created a genuine issue of material fact whether the defendant considered her sex in its decision to discharge her. Justice Cavanagh, joined by Justice Kelly, concurring in part and dissenting in part, stated that it is premature to decide whether defendants’ alleged reduction in work force was bona fide because it is clear that discovery in this matter was not complete. Thus, remand to the trial court is required for the completion of discovery and to afford the plaintiff an equal opportunity to present further evidence. In order for a defendant to show that it discharged a plaintiff for bona fide economic reasons, it must demonstrate that adverse business conditions existed and that the elimination of the plaintiff’s position was necessitated by those conditions. Where a plaintiff’s proofs show that the elimination of the position was not motivated by the alleged reduction in work force, but rather by some other illegal reason, summary disposition should be precluded. Justice Boyle, joined by Justice Weaver, concurring in part and dissenting in part, stated that the plaintiff is not entitled to assert a legitimate expectation of just-cause employment where the handbook on which she relies disclaims any intent on the part of the employer to bind itself to the contents of the handbook. In conjunction with the disclaimer of contractual obligation, the policy language is insufficient to overcome the presumption of at-will termination. If the disclaimer were found to be inapplicable because it does not expressly mention plaintiff’s department, then the entire handbook must be found inapplicable. Because the plaintiff did not present evidence sufficient to raise a triable issue of fact that her position would not have been eliminated but for her age, summary disposition for the defendant was appropriate. Justice Brickley, concurring in part and dissenting in part, stated that summary disposition of the wrongful-termination claim was properly awarded to the defendant. Justice Weaver joined Justice Brickley to further state that the lead opinion’s finding with respect to the discrimination claims misapplies the governing law regarding the discrimination claims, and oversimplifies the facts of a complex case. Essentially, it allows a plaintiff to overcome summary disposition if the plaintiff can identify anyone who has less seniority, receives greater compensation, and does not share in the plaintiff’s characteristics. Apparently, it is now irrelevant if the retained person’s job was different than that held by the plaintiff or if that person was qualified for the job. The lead opinion second-guesses the employer’s decisions on the basis of its assumptions concerning which employee was more qualified. Affirmed in part and reversed in part. 209 Mich App 179; 530 NW2d 135 (1995) affirmed in part and reversed in part. Bott & Spencer, P.C. (by Timothy J. Bott), for the plaintiff. Vamum, Riddering, Schmidt & Howlett (by Joseph J. Yogan and Paul M. Kara) for the defendants. Riley, J. In the matter now before us, this Court is asked to clarify the evidentiary threshold a discharged employee must satisfy in order to create a genuine issue of material fact when an employer asserts that its decision to discharge an employee was precipitated by business conditions. We are also asked to decide whether a discharged employee may challenge an employer’s decision to reduce its work force charging discrimination, even when the reduction in work force (rif) decision has been deemed bona fide. We hold that even when an employer’s rif decision is concluded to be bona fide, an employee may still establish a genuine issue of material fact that the employer’s justification for discharging him was not the true reason for its decision to discharge. We also hold that in order for a discharged employee to establish a genuine issue of material fact when an employer contends that its decision to discharge the employee was based on a work-force reduction, the employee may not merely rely on unsubstantiated allegations or denials in the pleadings. Rather, he must come forward with admissible evidence, affidavits, or other evidentiary materials, demonstrating the existence of a factual dispute that the employer’s articulated reason was merely a pretext to discrimination. In the instant case, we conclude that defendant’s policy statement could have reasonably created a legitimate expectation of just-cause employment. We also conclude that defendant did have just cause to reduce its work force as a matter of law, but not with respect to this plaintiff. Rather, we hold that plaintiff did sufficiently establish a genuine issue of material fact regarding whether age was a determining factor in defendant’s decision to discharge her. We also conclude that plaintiff presented evidence sufficient to establish a genuine issue of material fact regarding whether defendant considered her sex in its decision to discharge her. We affirm the decision of the Court of Appeals finding that plaintiff could have reasonably had a legitimate expectation of just-cause employment. We also affirm its ruling that plaintiff raised a genuine issue of fact with respect to whether defendant discriminated against her on the basis of her age, as well as its decision concluding that plaintiff raised a genuine issue of material fact regarding her claim of sex discrimination. FACTS AND PROCEEDINGS On January 29, 1973, plaintiff Nancy Lytle was hired by defendant Howmet Turbine Components Corporation as a general clerk in its human resources department, which at that time served all divisions making up the Whitehall operation. Plaintiff received a manual containing a statement of defendant’s policies and procedures regarding employment. In the section containing defendant’s policy regarding the relationship it sought with each of its employees, defendant expressed that a probationary period existed that afforded it time to decide whether it was in its interest as well as the employee’s interest to continue the relationship following the probationary period. In that same section, the manual also stated that “[n]o employee will be terminated without proper cause or reason and not until management has made a careful review of all facts.” The last two paragraphs of the manual stated: The contents of this booklet are not intended to establish, and should not be interpreted to constitute any contract between the Misco Whitehall Division, Product Support Operations, Reactive Metal Operations or the Technical Center of Howmet Turbine Components Corporation and any employee, or group of employees. For over twenty years we have concentrated on the production of the finest investment castings, with the development of policies and principles which aim at the attainment of pride in every day’s work for every employee, plus the satisfaction of finding opportunities for individual growth and security. [Emphasis added.] In 1981, defendant placed a disclaimer in its policy manual: “[T]he Company reserves the right to terminate employees without assigning cause; therefore, the employee serves at the will of the employer.” Direct notification of the disclaimer was provided only to new employees, but plaintiff was involved in placing the disclaimer in new employee manuals. At the time of plaintiffs hiring, John Ozar was the human resources director, serving as her immediate supervisor. Under Ozar’s supervision, plaintiff received exemplary performance evaluations and was rewarded with a succession of promotions. In 1979, plaintiff spoke with Ozar about resigning and seeking employment elsewhere. Ozar assured plaintiff that her employment with defendant was secure and that she could expect advancement. Soon after that conversation, plaintiff was promoted to employment manager of the entire human resources department. Additionally, about the same time, Ozar hired Walter Boczkaja. Boczkaja became plaintiffs subordinate trainee. For approximately two years, Boczkaja trained under plaintiff, receiving promotions to various positions within the personnel department, and continued to be one of plaintiffs subordinates until 1989. During the 1984-85 fiscal year, Ozar retired and was replaced by William Roof. In March 1987, Roof determined a need to decentralize the human resources department. He planned for each of the Whitehall divisions to have its own human resources representative. Roof hired defendant Michael Malady to head the Whitehall Machined Products Division and to serve as plaintiffs supervisor. Plaintiff was reassigned to serve as human resources representative for defendant’s Ti-Ingot Division. A personality conflict between Malady and plaintiff soon developed. In June 1987, Malady requested all female employees under his supervision to wear dresses to a company picnic. Plaintiff wore slacks. Shortly thereafter, in September 1987, Malady submitted an unfavorable evaluation of plaintiffs job performance. In January 1989, on Malady’s recommendation and with Roof’s approval, plaintiff’s job title was changed from human resources representative to human resources specialist. Plaintiff’s duties, as well as her salary, remained the same. Malady suggests that the change was necessary to reduce the number of direct reports he had to address, in addition to “centraliz[ing] the total employment function under one person instead of having it split with two different people doing part of it.” He also asserts that he had “some performance concerns . . . with [plaintiff’s] supervisory abilities],” as reflected in his latest performance evaluation. Plaintiff held her new position from January 1989, until her discharge on November 1, 1991. Plaintiff contends defendant’s policy manual created an expectation that her employment would not be terminated unless there was sufficient cause to do so. Also, she claims that she relied on verbal assurances by Ozar that her employment with defendant was secure. Defendant argues that plaintiff was terminated pursuant to a company-wide reduction in work force. Defendant asserts that as a result of declines in military spending and a downturn in the commercial airline industry between 1988 and 1991, it was forced to institute a series of reductions in its work force. Defendant suggests that it initially sought to cut costs in the 1992 budget without terminating any employees. In an August 21, 1991, intracompany memorandum to all the personnel support departments, Dr. Thomas Wright, vice president in charge of the Whitehall operations, directed all department supervisors to cut their respective 1992 budgets by fifteen percent. At the same time reductions were being sought, defendant was embarking on a plan that would use work cells as the primary facility structure, where employees would be working in teams instead of in the traditional hierarchical order. Notwithstanding the fact that he had to eliminate fifteen percent of his projected 1992 budget, Roof was told by the Operhall management to somehow compile a list of employees from the human resources department to head an independent department. From that list someone was to be selected to oversee the development of the work-cell plan. After reviewing the qualifications of those listed, Operhall management identified Malady and Boczkaja as the two most promising candidates. Malady was not available and Boczkaja, who was interviewed by Operhall management, later decided to stay on in his current position. Then Roof went to the private sector and found Andrea Achterhoff. She was thirty-one years old and had previous experience as a production supervisor, personnel manager, and human resources manager. Plaintiff never was interviewed for the position. By November 1, 1991, in an effort to comply with Wright’s mandate, Roof had eliminated approximately $300,000. Roof needed to cut $439,950 in costs in order to meet Wright’s directive of a fifteen-percent reduction in expenditures for the human resources department’s 1992 operating budget. Roof eliminated four positions in the human resources department, which included two plant medical staff, the employee assistance program assistant, and plaintiff’s position as human resources specialist. Roof contended that in terminating these four individuals, he focused on “functions” rather than “individuals or relative qualifications.” He suggested that the decision was based on who was absolutely critical and what they could get by without. Roof claimed that he terminated plaintiff because the primary function of her position involved hourly employees, where a substantial portion of the reduction in work force had already occurred, and the fact that little, if any, hiring was forecasted in the near future. The same day plaintiff was discharged, defendant hired Jeff Billingsley to work in the training program for the work-cell project. As far as plaintiff understood, Billingsley “worked for the corporate office” and was merely assigned to take an office where plaintiff previously worked so that he would have a place to work. Moreover, plaintiff admitted that she had no idea how Whitehall’s operation budget and personnel were allocated among all the Pechiney subsidiaries. On November 22, 1991, Boczkaja completed a final performance evaluation on plaintiff, which Malady accepted, indicating that she would be rehired in the event a nonsupervisory, administrative position became available. When plaintiff was finally discharged, her duties were assigned to other persons within the human resources department. On January 7, 1992, plaintiff filed a complaint in the Muskegon Circuit Court against defendant How-met, alleging: (I) breach of a contract providing for termination for just cause only, (II) age discrimination, and (III) sex discrimination. Following some discovery, defendants Howmet and Malady moved separately for summary disposition pursuant to MCR 2.116(C)(10), which the circuit court granted on all counts. The Court of Appeals reversed, and this Court granted defendant’s application for leave to appeal. A motion for summary disposition under MCR 2.116(C)(10) tests whether there is factual support for a claim or defense. Adkins v Thomas Solvent Co, 440 Mich 293, 302; 487 NW2d 715 (1992); General Motors Corp v Detroit, 372 Mich 234, 239-240; 126 NW2d 108 (1964). The affidavits, pleadings, depositions, admissions, and other material supporting and opposing the motion must be considered, so that it may be decided whether “ ‘it is impossible for the claim or defense to be supported at trial because of some deficiency which cannot be overcome.’ ” Stevens v McLouth Steel Products Corp, 433 Mich 365, 370; 446 NW2d 95 (1989), quot
Employment relations—Age discrimination by employer—At-will employee discharged allegedly on the basis of her age is entitled to maintain common-law tort action against employer for wrongful discharge in violation of public policy.
WILLIAM PAUL FEARRINGTON, Petitioner-Appellant v. UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL, Respondent-Appellee No. COA96-1296 (Filed 15 July 1997) 1. Appeal and Error § 203 (NCI4th)— notice of appeal — prior order — absence of jurisdiction — treatment as petition for certiorari Where the notice of appeal specified that the appeal is from an order of the Orange County Superior Court, the Court of Appeals was without jurisdiction to review a prior order entered in Wake County Superior Court. However, the purported appeal from the Wake County order will be treated as a petition for a writ of certiorari so that the merits of petitioner’s assignment of error to this order may be considered. Am Jur 2d, Appellate Review §§ 285 et seq. Right to perfect appeal, against party who has not appealed, by cross appeál filed after time for direct appeal had passed. 32 ALR3d 1290. 2. Administrative Law and Procedure § 37 (NCI4th)— attorney fees — validity of administrative rule — authority of ALJ An administrative law judge had no authority to make a “final decision” as to the validity of an administrative rule governing the award of attorney fees in cases before the State Personnel Commission. N.C.G.S. § 150B-33(b)(9).' Am Jur 2d, Administrative Law § 309. 3. Public Officers and Employees § 41 (NCI4th)— State Personnel Commission — attorney fees — promulgation of rules — statutory authority The State Personnel Commission’s promulgation of 25 N.C.A.C. I B .0414, which provides the circumstances under which the Commission may award attorney fees, is consistent with the Commission’s jurisdiction over state employee grievances and the statutory authority delegated to it pursuant to N.C.G.S. § 126-4(11). Am Jur 2d, Civil Service §§ 8 et seq. 4. Public Officers and Employees § 63 (NCI4th)— State Personnel Commission — denial of attorney fees The State Personnel Commission did not violate N.C.G.S. § 126-4(11) by applying its rale governing attorney fees to deny attorney fees to a petitioner who was reclassified and received back pay at UNC where the Commission neither found discrimination, ordered reinstatement, nor ordered back pay; UNC found that petitioner’s under-classification was not due to racial discrimination but resulted from administrative error; and petitioner dismissed his discrimination claim. Am Jur 2d, Civil Service §§ 8 et seq. Rights of state and municipal public employees in grievance proceedings. 46 ALR4th 912. 5. Administrative Law and Procedure § 65 (NCI4th)— State Personnel Commission — legal issues — de novo review The trial court properly reviewed petitioner’s appeal of a State Personnel Commission decision under the de novo standard of review where the issues presented on appeal were legal issues. Am Jur 2d, Administrative Law §§ 559, 582. 6. Administrative Law and Procedure § 76 (NCI4th)— administrative decision — time limitations — statutory amendment inapplicable The State Personnel Commission’s decision was not arbitrary or capricious because it was not filed within time limitations specified in the 1991 amendment to N.C.G.S. § 150B-44 where petitioner filed his case before the effective date of the amendment and the amendment did not apply to his case. Am Jur 2d, Administrative Law § 569. On writ of certiorari to review order entered 2 September 1993 by Judge Wiley F. Bowen in Wake County Superior Court, and appeal by petitioner from order entered 8 August 1996 by Judge F. Gordon Battle in. Orange County Superior Court. Heard in the Court of Appeals 22 May 1997. McSurely, Dorosin & Osment, by Alan McSurely, Mark Dorosin, and Ashley Osment, for petitioner-appellant. Attorney General Michael F. Easley, by Special Deputy Attorney General Thomas J. Ziko and Assistant Attorney General R. Bruce Thompson, II, for respondent-appellee. MARTIN, John C., Judge. Petitioner William Paul Fearrington, an employee of respondent University of North Carolina at Chapel Hill, filed a grievance through the University’s internal' grievance procedure alleging that he had been denied a reclassification because of his race. In the course of the grievance proceedings, the University discovered evidence that petitioner’s position had been under-classified and it retroactively reclassified and promoted him, resulting in retroactive pay of $9,804.91. Petitioner, however, continued to pursue his grievance and, after a report and recommendation by the University Staff Employee Grievance Committee, the Chancellor concluded that petitioner’s under-classification had not been the result of racial discrimination and denied the grievance. Petitioner filed a contested case with the Office of Administrative Hearings (OAH) in which he claimed he was “denied reclassification and other privileges because of his race” and, in addition, asserted a claim for attorneys’ fees pursuant to N.C. Gen. Stat. § 126-4(11), based on respondent University’s decision to retroactively reclassify him. Petitioner subsequently dismissed all of his claims against the University except for his claim for attorneys’ fees. By order entered 3 April 1992, an Administrative Law Judge (AU) determined that the administrative rule governing the award of attorneys’ fees in cases before the State Personnel Commission (Commission), 26 N.C.A.C. IB .0414, was void as applied in this case because it was “not within the statutory authority of the Commission to adopt.” On 28 August 1992, the AU entered an “Amendment To Order And Determination That Rule Is Void” to clarify that his 3 April 1992 order was a “final decision” appealable to the superior court. The AU then issued a “Recommended Decision” in which he recommended that the Commission award petitioner reasonable attorneys’ fees pursuant to N.C. Gen. Stat. § 126-4(11). Respondent University filed a petition for judicial review in Wake County Superior Court of the AU’s “final decision.” Upon review, Judge Bowen ruled that the AU did not have authority to enter a final decision determining that 25 N.C.A.C. IB .0414 is void and remanded the case to OAH “for the entry of a recommended decision to the State Personnel Commission pursuant to N.C. Gen. Stat. § 150B-34(a).” Petitioner filed notice of appeal from the trial court’s order, and in an unpublished opinion, No. 9310SC1281, this Court dismissed petitioner’s appeal as interlocutory. On 19 October 1994, the ALJ • entered an “Amendment to Recommended Decision” which recommended “that 25 N.C.A.C. IB .0414 as applied in this particular case is void because it is not within the statutory authority of the State Personnel Commission to adopt,” and that the petitioner be awarded reasonable attorneys’ fees pursuant to N.C. Gen. Stat. § 126-4(11). The Commission rejected the ALJ’s findings of fact and conclusions of law, holding that 25 N.C.A.C. IB .0414 is not void and that, pursuant to this rule, petitioner is not entitled to any attorneys’ fees. Petitioner filed a petition for review in Orange County Superior Court. In an order dated 8 August 1996, the trial court determined that the Commission did not hear new evidence; that the Commission stated specific reasons for not adopting the recommended decision; that 25 N.C.A.C. IB .0414 was not void as applied to this case; and that the Commission acted within its statutory authority when it denied petitioner’s request for attorneys’ fees. Petitioner appeals. I. WAKE COUNTY ORDER The notice of appeal specifies that the appeal is from the order of the Superior Court of Orange County entered 8 August 1996. However, by his first assignment of error, petitioner attempts to present for our review the propriety of the order of 2 September 1993 issued by the Superior Court of Wake County, from which an earlier appeal was dismissed by this Court as interlocutory. Fearrington v. University of North Carolina at Chapel Hill, No. 9310SC1281 (unpublished opinion filed 6 September 1994). N.C.R. App. P. 3(d) (1995) requires that the notice of appeal “designate the judgment or order from which appeal is taken . . . .” Because the notice of appeal completely omits any reference to the Wake County order, we are without jurisdiction to review it. Guilford Co. Dept. of Emergency Services v. Seaboard Chemical Corp., 114 N.C. App. 1, 441 S.E.2d 177, disc. review denied, 336 N.C. 604, 447 S.E.2d 390 (1994). The jurisdictional requirements of N.C.R. App. P. 3(d) may not be waived by this Court, even under the discretion granted by N.C.R. App. P. 2. Von Ramm v. Von Ramm, 99 N.C. App. 153, 392 S.E.2d 422 (1990). However, N.C.R. App. P. 21(a)(1) gives this Court the authority to treat the purported appeal as a petition for writ of certiorari to review the Wake County order, and we elect to do so and consider the merits of petitioner’s assignment of error. Anderson v. Hollifield, 345 N.C. 480, 480 S.E.2d 661 (1997). Petitioner contends that the Superior Court of Wake County erred when it determined that the AU had no authority to enter a final decision declaring 25 N.C.A.C. IB .0414 to be void. N.C. Gen. Stat. § 150B-33(b)(9), entitled “Powers of administrative law judge,” provides that an ALJ may determine that a rule as applied in a particular case is void, however, it does not authorize an ALJ to make a “final decision” with respect to the validity of agency rules. See N.C. Gen. Stat. § 150B-33(b)(9) (1995). Generally, an AU makes a recommended decision or order in a contested case except as provided in N.C. Gen. Stat. § 150B-36(c). N.C. Gen. Stat. § 150B-34(a) (1995). N.C. Gen. Stat. § 150B-36(c) provides: The following decisions made by administrative law judges in contested cases are final decisions: (1) A determination that the Office of Administrative Hearings lacks jurisdiction. (2) An order entered pursuant to the authority in G.S. 7A-759 (e). (3) An order entered pursuant to a written prehearing motion that either dismisses the contested case for failure of the petitioner to prosecute or grants the relief requested when a party does not comply with procedural requirements. (4) An order entered pursuant to a prehearing motion to dismiss the contested case in accordance with G.S. 1A-1, Rule 12(b) when the order disposes of all issues in the contested case. In the present case, the ALJ attempted to make a “final decision” regarding the validity of the rule governing the award of attorneys’ fees, which is not one of the issues upon which an AU can make a final decision pursuant to N.C. Gen. Stat. § 150B-36(c). Therefore, the AU had no authority to make a “final decision” in this case. The order of the Superior Court of Wake County so holding, and remanding this case to the OAH for entry of a recommended decision to the State Personnel Commission in accordance with N.C. Gen. Stat. § 150B-34(a) is affirmed. II. ORANGE COUNTY ORDER The issues presented by petitioner’s appeal from the order of the Orange County Superior Court upon judicial review of the final decision of the State Personnel Commission are (1) whether 25 N.C.A.C. IB .0414, the Commission’s rule regarding the award of attorneys’ fees, is void as applied in this case; (2) whether the Commission acted within its statutory authority when it adopted 25 N.C.A.C. IB .0414; and (3) whether the superior court’s ruling affirming the decision of the Commission is correct. The standard of appellate review of a superior court’s order regarding a decision of an administrative agency requires the appellate court to examine the superior court’s order for error of law, i.e., to determine whether the superior court employed the correct standard of review, and, if so, whether it did so correctly. ACT-UP Triangle v. Commission for Health Services, 345 N.C. 699, 483 S.E.2d 388 (1997). The standard for the superior court’s review of the agency decision depends on the issues presented in the petition for review. Id. If [petitioner] argues the agency’s decision was based on an error of law, then “de novo” review is required. If, however, [petitioner] questions (1) whether the agency’s decision was supported by the evidence or (2) whether the decision was arbitrary or capricious, then the reviewing court must apply the “whole record” test. In re Appeal by McCrary, 112 N.C. App. 161, 165, 435 S.E.2d 359, 363 (1993) (citations omitted). “De novo" review requires a court to consider a question anew, as if not considered or decided by the agency, while the “whole record” test requires the reviewing court to examine all competent evidence, i.e., the “whole record,” in order to determine whether the agency decision is supported by substantial evidence. Amanini v. N.C. Dept. of Human Resources, 114 N.C. App. 668, 674, 443 S.E.2d 114, 118 (1994). A. In his petition for judicial review of the final decision of the State Personnel Commission, petitioner contended that 25 N.C.A.C. IB .0414 is void, both generally and as applied to this case. These contentions required the superior court to employ “de novo” review. The superior court did so, ruling as a matter of law that the rule is not invalid. Petitioner assigns error, contending the superior court should have found the rule, 25 N.C.A.C. IB .0414, to be void. The State Personnel Commission is granted the authority to promulgate regulations regarding the award of attorneys’ fees under N.C. Gen. Stat. § 126-4(11), which provides: Subject to the approval of the Governor, the State Personnel Commission shall establish policies and rules governing each of the following: (11) In cases where the Commission finds discrimination or orders reinstatement or back pay whether (i) heard by the Commission or (ii) appealed for limited review after settlement or (iii) resolved at the agency level, the assessment of reasonable attorneys’ fees and witnesses’ fees against the State agency involved. Pursuant to N.C. Gen. Stat. § 126-4(11), the Commission promulgated 25 N.C.A.C. IB .0414 et seq., which provides that the Commission may award attorneys’ fees when: (1) the grievant is reinstated to the same or similar position from either a demotion or dismissal; (2) the grievant is awarded back pay from either a demotion or a dismissal, without regard to whether the grievant has been reinstated; (3) the grievant is determined, by the commission or by the agency’s internal grievance procedure, to have been discriminated against in violation of G.S. § 126-16; (4) the grievant is awarded back pay as the result of a successful grievance alleging a violation of G.S. § 126-7.1; (5) any combination of the above situations. N.C. Admin. Code tit. 25, r. 1B .0414. Petitioner argues that 25 N.C.A.C.1B .0414 is void on its face because it is inconsistent with N.C. Gen. Stat. § 126-4(11). The Commission concluded that it had been given statutory authority to adopt rules with respect to the award of attorneys’ fees, but that there was no statutory mandate requiring that it award such fees in all cases. Rather, the Commission concluded that a determination as to those circumstances appropriate for an award of attorneys’ fees was vested in the Commission. Pursuant to the authority granted it by N.C. Gen. Stat. § 126-4(11), the Commission established rules governing the assessment of attorneys’ fees in state employee grievance proceedings. The Commission’s determinations regarding its authority under N.C. Gen. Stat. § 126-4(11) are entitled to considerable weight. See Newsome v. State Board of Elections, 105 N.C. App. 499, 415 S.E.2d 201 (1992). The Commission has discretionary authority to enter an award of attorneys’ fees under N.C. Gen. Stat. § 126-4(11). See North Carolina Dept. of Correction v. Myers, 120 N.C. App. 437, 462 S.E.2d 824 (1995), affirmed, 344 N.C. 626, 476 S.E.2d 364 (1996). The Commission’s jurisdiction over the appeals of state employee grievances derives from Chapter 126, the State Personnel Act. Batten v. N.C. Department of Correction, 326 N.C. 338, 389 S.E.2d 35 (1990). The Commission has jurisdiction to review appeals involving government employees subject to the Personnel Act where an employee was: (1) discharged, suspended or demoted for disciplinary reasons without just cause, N.C. Gen. Stat. § 126-35 (1995); (2) denied employment, promotion, or training because of illegal discrimination or in retaliation for opposition to alleged illegal discrimination, N.C. Gen. Stat. §§ 126-36, 126-36.1 (1995); (3) demoted, laid off or terminated because of illegal discrimination or in retaliation for opposition to alleged illegal discrimination, N.C. Gen. Stat. § 126-36 (1995); (4) denied promotion because the agency failed to post notice of the job vacancy or denied state employee priority consideration in violation of N.C. Gen. Stat. §§ 126-7.1, 126-36.2 (1995); and (5) any other contested case arising under Chapter 126, N.C. Gen. Stat. § 126-37 (1995). The Commission’s promulgation of 25 N.C.A.C. 1B .0414 is consistent with the Commission’s jurisdiction over state employee grievances and the statutory authority delegated to it by the General Assembly. Petitioner also argues that 25 N.C.A.C. IB .0414 is void as applied in this case because it is inconsistent with the Commission’s authority, granted by N.C. Gen. Stat. § 126-4(11), to assess attorneys’ fees when back pay is awarded. However, in petitioner’s case, the Commission neither found discrimination, ordered reinstatement, nor ordered back pay, which are prerequisites for the assessment of reasonable attorneys’ fees pursuant to N.C. Gen. Stat. § 126-4(11). Rather, the University retroactively reclassified petitioner, who had been under-classified due to administrative error. The University found that petitioner’s under-classification had not been due to racial discrimination “or any other impermissible factor” and denied his grievance, and petitioner subsequently dismissed his claim that he had been discriminated against. Because petitioner’s case does not meet the criteria established by N.C. Gen. Stat. § 126-4(11) for the Commission to award attorneys’ fees, it properly determined that' petitioner is not entitled to attorneys’ fees in connection with the resolution of his grievance. B. Petitioner also alleged, in his petition for judicial review, that “the Commission’s findings, conclusions of law, and decision were arbitrary and capricious.” Such an allegation would ostensibly require that the trial court employ “whole record” review of the agency decision. However, careful review of the Petition for Review and the contentions contained therein discloses that the substantive issues presented to the superior court were legal issues, i.e., (1) whether the administrative rule is invalid, either as in excess of the Commission’s authority, or as applied to petitioner’s case, and (2) whether the Commission incorrectly interpreted N.C. Gen. Stat. § 126-4(11) in determining that petitioner is not entitled to an award of attorneys’ fees. Thus, petitioner’s argument, essentially, was that the conclusion of the Commission that “petitioner is not entitled to any attorney fees” was affected by error of law, and was properly reviewed “de novo" by the trial court. We conclude the trial court applied the correct standard of review and, in view of our holding in Part II. A. above, that the trial court did so correctly. Finally, petitioner argued in his brief that the Commission’s decision was arbitrary and capricious because it was not filed within the time limitations specified in the 1991 amendment to N.C. Gen. Stat. § 150B-44, requiring that agency decisions be rendered within specified time limitations. However, at oral argument, petitioner conceded that the 1991 amendment is applicable only to contested cases filed on or after 1 October 1991, and that petitioner filed his case before the effective date of the amendment. For the reasons stated, the 2 September 1993 order of the Superior Court of Wake County remanding this matter to the State Personnel Commission, and the 8 August 1996 order of the Superior Court of Orange County affirming the final decisi
HERWEYER v CLARK HIGHWAY SERVICES, INC Docket No. 103802. Argued April 8, 1997 (Calendar No. 3). Decided July 8, 1997. Jack Herweyer brought an action for wrongful termination in the Missaukee Circuit Court against Clark Highway Services, Inc., alleging breach of an employment contract, age and handicap discrimination, and retaliatory discharge for filing a worker’s compensation claim. The court, Charles D. Corwin, J., granted summary disposition for the defendant, citing the contract’s saving clause to provide a period of limitation to bring an action shorter than the applicable statutory period. The Court of Appeals, Sawyer, P.J., and Griffin, J. (Neff, J., dissenting), affirmed (Docket No. 171720). The plaintiff appeals. In a unanimous opinion by Justice Kelly, the Supreme Court held: When the period of limitation in an employment contract is unreasonably short, the applicable period is that established by statute. 1. A statutory period of limitation provides a defense that bars a plaintiffs cause of action because of an undue lapse of time since the cause of action arose. Parties may contract for a period of limitation shorter than the applicable statute of limitations, but that period must be reasonable. A limitation period is reasonable if the claimant has sufficient opportunity to investigate and file an action, the time is not so short as to work a practical abrogation of the right of action, and the action is not barred before the loss or damage can be ascertained. 2. Employer and employee often do not deal at arm’s length when negotiating contract terms. Where one party has less bargaining power than another, the contract might be, but is not necessarily, one of adhesion, and at the least deserves close judicial scrutiny. In this case, the plaintiff had little or no negotiating leverage. The saving clause is vague and ambiguous, and must be construed against the defendant. It does not call for an alternate limitation period. Instead, it uses the terminology “as far as legally possible.” A legal period has already been determined by the Legislature. The defendant has not stated a convincing argument why the objective indicator should be abandoned and nonspecific contractual periods of limitation authorized. By enacting a statute of limitation, the Legislature determines the reasonable maximum period a plaintiff can take to file a claim. Courts should defer to the statutory period unless the period in the parties’ contract is specific and reasonable. A contractual saving clause providing for enforcement “as far as legally possible” cannot be construed to allow imposition of uncertain, varying periods of limitation case by case. Reversed and remanded. 212 Mich App 105; 537 NW2d 225 (1995) reversed. Bott & Spencer, P.C. (by Timothy J. Botf), for the plaintiff-appellant. Warner, Norcross & Judd (by Douglas E. Wagner, Robert J. Chovanec, and Melvin G. Moseley, Jr.), for the defendant-appellee. Amici Curiae: David A. Kotzian, Kenneth Watkins, and Jan C. Leventer for Wolverine Bar Association. Stark & Gordon (by Sheldon J. Stark and Carol A. Laughbaum) for Michigan Trial Lawyers Association, American Civil Liberties Union of Michigan, Michigan State AFL-CIO, and International Union UAW. Amberg, McNenly, Zuschlag, Firestone & Lee, P.C. (by Joseph H. Firestone), for Michigan Education Association. Kelly, J. In this wrongful termination case, the single issue is what limitation period for filing suit is appropriate where the period written into the employment contract is unreasonably short. Defendant, Clark Highway Services, Inc., asks that we interpret a saving clause in the contract to allow the courts to establish the period. The interpretation would require legal action be brought by a date earlier than that set by the applicable statute of limitations as long as it is reasonable. We hold that, when the period of limitation in an employment contract is unreasonably short, the applicable period is that established by statute. i The pertinent facts of this case are not in dispute. Plaintiff, Jack Herweyer, was hired by defendant in June, 1987, to operate a truck that paints the center and edge lines on state highways. Because the work is seasonal, plaintiff’s employment ran from May to November. In May, 1989, defendant asked plaintiff to sign an employment contract. The agreement stated in pertinent part: I will not commence any action or suit relating to my employment with the Company (or termination of the employment) more than six (6) months after the termination of my employment, and I agree to waive any statute of limitations to the contrary. I understand that this means that even if the law would give me the right to wait a longer time to make a claim, I am waiving that right, and that any claims not brought within six (6) months after my employment will be barred. I agree to the above terms of employment. I agree that if any of the above commitments by me is ever found to be legally unenforceable as written, the particular agreement concerned shall be limited to allow its enforcement as far as legally possible. Plaintiff signed the agreement. On November 7, 1989, he was injured while in the course of his employment. Nevertheless, he continued working until November 13, 1989, the last day of the season. After treating plaintiff for his injury, plaintiff’s doctor placed a fifty-pound lifting restriction on his work. In January, 1990, he increased the restriction to seventy pounds. Nonetheless, defendant did not ask plaintiff to work again the following season. In May, 1990, when plaintiff contacted defendant, he learned that he had no job. In December, 1992, plaintiff filed suit alleging breach of the written employment contract, age discrimination, handicap discrimination and retaliatory discharge for filing of a worker’s compensation claim. Defendant moved for summary disposition under MCR 2.116(C)(10), arguing that the action was barred by the six-month period of limitation contained in the employment contract. Plaintiff responded that the six-month period was unenforceable as unreasonably short, given the applicable statute of limitation governing the claims. The trial court granted defendant’s motion for summary disposition. It expressed reservations about enforcing the six-month period of limitation. Nevertheless, it concluded that, even if the six-month period were unreasonable, plaintiff was not entitled to file suit as late as thirty-one months after the alleged breach. The court found that the contract’s saving clause should be interpreted to mean that suit must be filed within a minimally reasonable time. A reasonable time in this case was a period shorter than the thirty-one months that plaintiff waited to file. Without determining what period would have been minimally reasonable, the trial court concluded that the action was time-barred. The Court of Appeals affirmed. 212 Mich App 105, 108; 537 NW2d 225 (1995). It stated: The savings clause in the contract can be read as providing that the period of limitation shall be the minimum reasonable time in excess of six months. Furthermore, like the trial court, we agree that thirty-one months is in excess of the minimum reasonable time. While we do not draw a bright line with respect to what the minimum reasonable time is, we are not persuaded that plaintiff required thirty-one months in which to investigate and file the action, nor would a period of less than thirty-one months operate as a practical abrogation of the right to sue and certainly did not bar the bringing of the action before the loss or damage could be ascertained. See Camelot [Excavating Co, Inc v St Paul Fire & Marine Ins Co, 410 Mich 118, 127; 301 NW2d 275 (1981)]. Therefore, whatever the minimum reasonable time is, it is less than thirty-one months. Accordingly, the action was barred by the provisions of the contract at the time plaintiff brought the action. Thus, the trial court properly granted summary disposition in favor of defendant. The Court also rejected plaintiff’s argument that allowing employers to shorten the statutory period of limitation for employment actions is contrary to public policy. Although the argument may have merit, we do not address it because of the constraints in our order granting leave to appeal. Also, we express no opinion regarding the reasonableness of any shortened period agreed to by the parties. We granted plaintiff’s application in order to determine whether the contract’s saving provision can be read to require any claims to be brought within the minimum reasonable period. n A statutory period of limitation provides a defense that bars a plaintiff’s cause of action because of an undue lapse of time since the cause of action arose. 51 Am Jur 2d, Limitation of Actions, § 2, p 592. There are several policy reasons underlying the adoption of statutes of limitation. They protect defendants’ rights by eliminating stale claims, shielding defendants from protracted fear of litigation, and ensuring that they have a fair chance of defending themselves. Chase v Sabin, 445 Mich 190, 199; 516 NW2d 60 (1994); Bigelow v Walraven, 392 Mich 566, 576; 221 NW2d 328 (1974). Statutes of limitation are also constructed to give plaintiffs a reasonable opportunity to bring suit. Chase, supra. This Court has discussed the use of contracts to shorten the period of limitation. Camelot, supra. In Camelot, a general plumbing contractor, Priestley, contracted with an insurance company, St. Paul, for a labor and materials payment bond. Id. at 125. Priestly entered into a subcontract with Camelot Excavating Company for excavation work. Camelot completed its work under the contract. In April, 1974, Priestly abandoned the project without paying monies it owed to Camelot. Id. In August, 1976, Camelot sued St. Paul on the bond. St. Paul asserted in defense that the suit was barred by a one-year limitation clause contained in the bond. Id. at 126. We held that parties may contract for a period of limitation shorter than the applicable statute of limitation. Id. at 125. The limitation period must be reasonable. Id. at 126. It is reasonable if (1) the claimant has sufficient opportunity to investigate and file an action, (2) the time is not so short as to work a practical abrogation of the right of action, and (3) the action is not barred before the loss or damage can be ascertained. Id. at 127. Courts have held that limitation periods written into certain insurance, shipping, and bond contracts were valid although they shortened legislatively prescribed limitation periods. See, generally, anno: Validity of contractual time period, shorter than statute of limitations, for bringing action, 6 ALR3d 1197. In Camelot, Justice Levin expressed concerns about the development of a rule authorizing contractually shortened periods of limitation. Camelot, supra at 141 (Levin, J., concurring). He reasoned: The rationale of the rule allowing parties to contractually shorten statutory periods of limitation is that the shortened period is a bargained-for term of the contract. Allowing such bargained-for terms may in some cases be a useful and proper means of allowing parties to structure their business dealings. In the case of an adhesion contract, however, where the party ostensibly agreeing to the shortened period has no real alternative, this rationale is inapplicable. We share Justice Levin’s concerns. Employment contracts differ from bond contracts. An employer and employee often do not deal at arm’s length when negotiating contract terms. An employee in the position of plaintiff has only two options: (1) sign the employment contract as drafted by the employer or (2) lose the job. Therefore, unlike in Camelot where two businesses negotiated the contract’s terms essentially on equal footing, here plaintiff had little or no negotiating leverage. Where one party has less bargaining power than another, the contract agreed upon might be, but is not necessarily, one of adhesion, and at the least deserves close judicial scrutiny. In this case, neither the trial court nor the Court of Appeals upheld the six-month period of limitation in the contract. Defendant argues, notwithstanding, that both courts properly interpreted the saving clause as requiring that plaintiff’s claims must be brought within the minimum reasonable time in excess of six months. We find the interpretation unworkable. A The saving clause is vague and ambiguous. It does not call for an alternate limitation period of two, three, four, or five years. Instead, it uses the terminology “as far as legally possible.” The Court of Appeals found that the term could be interpreted to mean suit should be brought in the minimum reasonable time beyond the six-month limitation period. However, it could as easily be read to mean that, if the contractual period of limitation is found unreasonable, the statutory period governs. A legal period has already been determined by the Legislature. As the contract period under consideration is ambiguous, it must be construed against the drafter, the defendant. Lichnovsky v Ziebart Int’l Corp, 414 Mich 228, 239; 324 NW2d 732 (1982). B For reasons of policy, courts should not determine periods of limitation on a case-by-case basis. We agree with the observation in the Court of Appeals dissent that claimants are entitled to certainty in their legal dealings. Statutes of limitation embody the important public policy considerations of stimulating business activity, punishing negligence, and giving security and stability to human affairs in general. 51 Am Jur 2d, Limitation of Actions, § 18, p 603, citing Kyle v Green Acres at Verona, Inc, 44 NJ 100; 207 A2d 513 (1965). A statutory limitation period provides peace of mind to a potential defendant. A defendant can be certain that, once the period expires, extensive defense of a new lawsuit will be unnecessary. A plaintiff, also, is entitled to certainty in legal dealings. Allowing courts to fashion arbitrary periods of limitation depending on the facts of each case sometimes would force claimants to file suit prematurely, lending further instability to employment relations. In many cases, suit would have to be brought before adequate investigation had been completed. The public policy considerations underlying limitation periods are not advanced, either, by encouraging uncertain periods of limitation. We agree with the Court of Appeals dissent that the applicable statutory limitation period is a straightforward and objective indicator of what period is reasonable. Lothian v Detroit, 414 Mich 160, 165; 324 NW2d 9 (1982). In the case before us, defendant has not stated a convincing argument why we should abandon the objective indicator and authorize nonspecific contractual periods of limitation. c Historically, courts have relied on the Legislature to establish limitation periods. As we stated over a century ago: Every suitor must have a reasonable time in which to commence an action to enforce his rights, and it is for the Legislature to provide a general rule applicable to all cases falling within a class, and not for the judiciary to declare what is or should be a reasonable time varying with the circumstances of each case as it arises. Important legal and property rights depend upon the rule within which such right must be asserted, or, failing to do it, will be lost; and the necessity of a fixed, certain, and definite rule established by legislative authority is manifest. [McKisson v Davenport, 83 Mich 211, 215; 47 NW 100 (1890).] Similarly, where the Legislature has not provided a statutory period of limitation governing a particular claim, this Court has not allowed lower courts to apply differing periods on a case-by-case basis. Instead, we have adopted the period of limitation of analogous statutes. See Hart v Detroit, 416 Mich 488; 331 NW2d 438 (1982). Federal decisions follow the same principle. Where no federal statute of limitation applies to a particular suit, the court does not assume that no time limit applies, nor does it determine a reasonable time. Rather, the most suitable statute or other established rule of timeliness is “borrowed.” DelCostello v Int’l Brotherhood of Teamsters, 462 US 151, 158; 103 S Ct 2281; 76 L Ed 2d 476 (1983). By enacting a statute of limitation, the Legislature determines the reasonable maximum period a plaintiff can take to file a claim. Nielsen v Barnett, 440 Mich 1, 8; 485 NW2d 666 (1992). Courts should defer to the statutory period unless the period in the parties’ contract is specific and reasonable. m In conclusion, a contractual saving clause providing for enforcement “as far as legally possible” cannot be construed to allow imposition of uncertain, varying periods of limitation case by case. As a consequence, the limitation period for each of plaintiff’s claims is the applicable statutory period. The decision of the Court of Appeals is reversed. We remand this case to the trial court for further proceedings. Mallett, C.J., and Brickley, Cavanagh, Boyle, Riley, and Weaver, JJ., concurred with Kelly, J. The period of limitation for plaintiffs breach of contract claim is six years. MCL 600.5807(8); MSA 27A.5807(8). For the rest of his claims, the period is three years. MCL 600.5805(8); MSA 27A.5805(8). The trial court was concerned that shortening the limitation period to six months might foster premature lawsuits because of a lack of investigation time. Also, plaintiff did not have a realistic choice in deciding to sign the agreement. If he did not sign, he would have risked discharge. The transaction was not at arm’s length. Finally, there are public policy reasons for prohibiting the shortening of the limitation periods in discrimination lawsuits. 453 Mich 915 (1996). The contract in Camelot provided as follows: “No suit or action shall be commenced hereunder by any claimant: Ms * * “After the expiration of one (1) year following the date on which principal ceased work on said contract, it being understood, however, that if any limitation embodied in this bond is prohibited by any law controlling the construction hereof such limitation shall be deemed to be amended so as to be equal to the minimum period of limitation permitted by such law.” [Id. at 128.]
WILMA K. HANTON, Plaintiff v. LAWRENCE I. GILBERT, in his personal and official capacity; EDWARD D. SALMON, in his personal and official capacity; PAUL HARDIN, in his personal capacity; and the UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL, Defendants No. 96-1009 (Filed 1 July 1997) 1. Libel and Slander § 23 (NCI4th)— memo by department head — explanation of plaintiff’s dismissal — qualified privilege The trial court did not incorrectly rule in a defamation action that defendant Gilbert had a qualified privilege with respect to a memo he distributed to department members where plaintiff had been employed at UNC in the Department of Biology maintaining an electron microscope and assisting faculty members in the use of the microscope; defendant Gilbert, the chair of the department, changed the department’s policy and began charging for the use of the microscope and for plaintiff’s time; plaintiff believed that the changed policy violated the terms of the grant with which the microscope had been bought and resisted the change; she was ultimately dismissed; and defendant Gilbert circulated the memo at issue here to explain the dismissal. The essential elements of a qualified privilege are good faith, an interest to be upheld, a statement limited in its scope to this purpose, a proper occasion, and publication in a proper manner and to proper parties only. Dr. Gilbert, as chair of the department, had an interest in the smooth running and morale of his department and distributed the memo only to members of the department in order to put an end to misleading rumors and inaccurate accounts of plaintiff’s dismissal. Under these circumstances, the essential elements of a good faith privilege were satisfied. Furthermore, portions of the memo addressed plaintiff’s accusations against him for which he had the privilege of self-defense. Am Jur 2d, Libel and Slander §§ 328 et seq. Defamation: loss of employer’s privilege to publish employee’s work record or qualification. 24 ALR4th 144. 2. Libel and Slander § 29 (NCI4th)— memo by department head — explanation of plaintiffs dismissal — instructions— jury consideration limited to four statements — burden of proof The trial court did not err in a defamation action when it instructed the jury to limit its consideration to four particular statements in a memo explaining plaintiffs dismissal from the UNC Department of Biology, that plaintiff bore the burden of proving the falsity of these statements, and that plaintiff further had the burden of showing actual malice. The four statements submitted to the jury were the only statements which plaintiff claimed were false and the court correctly instructed the jury regarding the burden of proving falsity and actual malice because the court had determined as a matter of law that the memo from the department chair was privileged and a presumption arose in his favor that the statements were made in good faith and without malice. Am Jur 2d, Libel and Slander §§ 512-518. 3. Constitutional Law § 98 (NCI4th)— dismissal from employment — federal and state claims — dismissal of federal claim not res judicata as to state claim — state claim fully already litigated and relief obtained The trial court did not err by granting defendants’ motion for summary judgment on plaintiffs state constitutional claim where plaintiff was dismissed from the UNC Biology Department and a memo written explaining the dismissal; plaintiff brought suit alleging violation of her state and federal constitutional rights to due process, violation of the state Whistleblower Act, and defamation; the case was removed to federal district court which granted summary judgment on all federal constitutional claims and remanded the remaining claims to state court; and the state trial court granted summary judgment for defendants on all but the defamation claim against the department chair in his individual capacity. Although the trial court erred by dismissing the state claims on the basis of res judicata because summary judgment in federal court on plaintiffs federal constitutional claim did not mandate dismissal of her state constitutional claim, plaintiff had already fully litigated and been afforded relief for the violation of procedural due process in her termination in that the Personnel Commission adopted an Administrative Law Judge’s conclusion that due process had not been exercised and awarded back pay and attorney’s fees, the superior court affirmed, and plaintiff did not appeal that decision. Since plaintiff had already prevailed on a statutorily established claim for violation of procedural due process and been afforded relief, she has no additional cause of action on that issue under the North Carolina Constitution. Am Jur 2d, Constitutional Law §§ 813-815; Judgments §§ 539 et seq. 4. Public Officers and Employees § 58 (NCI4th)— whistle-blower claim — summary judgment for defendants — no error The trial court did not err by granting summary judgment for defendants on plaintiffs claim under the Whistleblower Act where defendants supported their motion for summary judgment with evidence that plaintiffs termination was based on insubordination and the record does not reveal that plaintiff met her burden of coming forward with evidence that her alleged whistleblowing activity was a substantial causative factor for her dismissal. A prima facie claim under the Whistleblower Act consists of a plaintiff engaged in protected activity followed by adverse employment action with the protected conduct a substantial or motivating factor in the adverse action. Once a defendant presents evidence that the adverse action was based on a legitimate nonretaliatory motive, the burden shifts to plaintiff to present evidence raising a genuine issue of fact that plaintiffs actions under the Act were a substantial causative factor, or provide an excuse for not doing so. N.C.G.S. § 126-85(a). Am Jur 2d, Judgments §§ 203, 205. Appeal by plaintiff from judgment entered 16 February 1996 by Judge F. Gordon Battle and order entered 29 January 1996 by Judge Donald Stephens in Orange County Superior Court. Heard in the Court of Appeals 24 April 1997. McSurely, Dorosin & Osmént, by Alan McSurely, Mark Dorosin and Ashley Osment, for plaintiff-appellant. Michael F. Easley, Attorney General, by Thomas J. Ziko, Special Deputy Attorney General, and Barbara A. Shaw, Assistant Attorney General, for defendants-appellees. WYNN, Judge. The University of North Carolina at Chapel Hill (“UNC”) employed Wilma K. Hanton (“Hanton”) as a Research Analyst I in the Department of Biology. Her duties included maintaining an electron microscope which UNC had purchased with monies from a 1984 National Institute of Health (“NIH”) grant, teaching electron microscopy and assisting faculty members with research projects using the electron microscope. Faculty members used the microscope without charge until Dr. Lawrence I. Gilbert, Chairman of the UNC Department of Biology, changed the policy on 1 January 1990 and began charging for use of the microscope and Ms. Hanton’s time. To implement the new policy, Dr. Edward D. Salmon, Chairman of the Electron Microscope Committee and Ms. Hanton’s supervisor, informed Ms. Hanton that she would need to keep a daily log of her activities in the electron microscope facility. Ms. Hanton, however, believing that the new charges violated the terms of the grant, resisted the policy change of charging for microscope use and her time, and did not start keeping a record of her activity in the electron microscope facility until June 1990. Consequently, when Dr. Salmon reviewed her records in September 1990, he was unable to determine the use of the facility. He recommended her dismissal to Dr. Gilbert who in turn met with and wrote to Ms. Hanton on 1 October 1990 informing her that failure to follow the rules and policies of the department, including record keeping, would result in her termination. In the spring of 1991, Dr. Salmon again examined Ms. Hanton’s records and found them to be incomplete and in disarray. Subsequently, the Electron Microscope Committee met and discussed Ms. Hanton’s refusal to adequately maintain records of her daily activity. The committee unanimously recommended Ms. Hanton’s termination in a letter to Dr. Gilbert. In response, Dr. Gilbert conducted a pre-dismissal hearing during which Ms. Hanton refused to say that she would obey the rules of the department and keep records. As a result, Dr. Gilbert dismissed her from her position effective 24 May 1991. Five days later, he circulated the following memo to members of the Department of Biology explaining Ms. Hanton’s dismissal: As many of you know, Wilma Hanton was discharged from the Department of Biology on Friday, May 24. Since she has talked to many of you either before or after that event, I thought it best to inform you of the true sequence of events leading to her dismissal. On December 18, 1989, a memo was sent from me to the faculty of the department with a copy to W. Hanton initiating a series of fees for the use of the electron microscope and Ms. Hanton’s time. This was in response to the recommendation of the Electron Microscope Committee and a direct result of the financial problems besetting the University and this department. . . . From January 1990 on, there were a series of incidents in which Ms. Hanton made it quite clear that she disagreed with the policy, challenged the policy and simply was not going to abide by it. Indeed, she refused to keep track of her time, refused to bill for her time, etc. and, in general, made it very difficult for the EM Committee and for anybody who wished to use the facility in accord with the departmental regulations. . . . Since she did not follow my orders nor those of Prof. Salmon, she by definition, did not fulfill her job responsibilities and was given several “unsatisfactories” on her performance evaluation. This has led to a series of very unfortunate events instigated by Ms. Hanton. First, she appealed the performance evaluations made by Prof. Salmon, her supervisor. A three person committee composed of UNC SPA personnel heard this appeal and recommended that the performance evaluations stand as is. Chancellor Hardin so notified Ms. Hanton. The second action was her appeal to the Graduate Student Attorney General to prevent Mr. Ji-da Dai from receiving his doctorate because she accused him of stealing some of her data. This was absolutely untrue and it is of interest that after his doctoral seminar, she congratulated him, came to the Bird Room where she ate his food and toasted him with champagne. The Student Attorney General and faculty advisor examined the evidence and threw out her charges as they rightly should have. Having failed in those two actions, she turned her attention to me and filed complaints to the Dean of the College of Arts and Sciences. Among them were that I purloined some unknown letter written by Dean Williamson from the University Archives, a letter she could not describe and which does not really exist; that I stole her data, etc. All charges were dismissed by Dean Cell except for the accusation that I stole her data since there are specific guidelines indicating how such an accusation must be handled, and this is ongoing. These events have nothing to do with her dismissal since she is obviously entitled to make appeals, take advantage of the grievance procedures, etc., and her slanderous accusations regarding my own integrity will ultimately be resolved in a court of law. After discussing the situation of her insubordination and refusal to carry out the duties of her office with officials of the University, I sent Ms. Hanton a letter on May 23 indicating that a pre-dismissal hearing would be held on May 24 with me, W. Hanton and Collin Rustin from the Department of Human Resources. At that meeting, she was read the letter from the Electron Microscope committee to me dated May 10, 1991 and which is enclosed for your edification. . . . Since she refused to make any comments at that meeting, and after consultation with Mr. Rustin, I informed her that she was dismissed as an employee of the Department of Biology at the University of North Carolina at Chapel Hill effective immediately, i.e. May 24, 1991. . . . This is a synopsis of the events leading to the dismissal of Ms. Hanton and I bring them to your attention only so that you know the real facts of the matter. The department and university, in general, cannot allow technical assistants to make the final decision as to how a facility will be run. . . . For those of you who have listened to Ms. Hanton’s accusations and innuendos [sic], I would be glad to talk to you in person regarding her many ongoing problems with the University beginning as a graduate student in the Department of Botany in 1967. Dr. Gilbert attached to the memo a copy of the letter sent to him from the Electron Microscope Committee recommending Ms. Hanton’s dismissal and explaining the reasons for their recommendation. Following her dismissal, Ms. Hanton brought suit against Dr. Gilbert and Dr. Salmon in their personal and official capacities; the then Chancellor of UNC, Dr. Paul Hardin in his personal capacity; and UNC. She alleged violation of her state and federal constitutional rights to procedural due process, violation of the state Whistleblower Act (N.C. Gen. Stat. § 126-85) and defamation. The case was removed to the United States District Court for the Middle District of North Carolina which granted summary judgment for all defendants on the federal constitutional claim and remanded thé remaining claims to state court. There, the trial court granted summary judgment in favor of the defendants on all the remaining claims except Ms. Hanton’s claim for defamation against Dr. Gilbert individually in his personal capacity. The ensuing trial on that issue resulted in a jury verdict in favor of Dr. Gilbert. Ms. Hanton appeals from the order granting summary judgment and the judgment rendered on the jury verdict. Before this Court, Ms. Hanton contends that the trial court erred by: (I) Ruling that Dr. Gilbert had a qualified privilege in the defamation claim, (II) Improperly instructing the jury as to the defamation claim, (III) Granting summary judgment for defendants on the state constitutional claim on the grounds of res judicata, and (IV) Granting summary judgment for defendants on plaintiffs claim under the Whistleblower Act. We affirm the order and judgment of the trial court. I. Plaintiff first contends that the trial court incorrectly ruled that Dr. Gilbert had a qualified privilege with respect to the 29 May 1991 memo that he distributed to department members. We disagree. In considering the qualified privilege issue the trial court first determined as a matter of law that Dr. Gilbert’s memo was libelous per se. “When a publication is libelous per se, a prima facie presumption of malice and a conclusive presumption of legal injury arise entitling the victim to recover at least nominal damages without proof of special damages.” Arnold v. Sharpe, 296 N.C. 533, 537-38, 251 S.E.2d 452, 455 (1979). The parties do not dispute the trial court’s ruling that the memo was libelous per se\ however, in response, Dr. Gilbert raised the affirmative defense of qualified privilege and thus bore the burden of establishing that the publication of the defamatory statement was made on a privileged occasion. Clark v. Brown, 99 N.C. App. 255, 262, 393 S.E.2d 134, 138, cert. denied, 327 N.C. 426, 394 S.E.2d 167 (1990). “Whether the occasion is privileged is a question of law for the court, subject to review, and not for the jury, unless the circumstances of the publication are in dispute, when it is a mixed question of law and fact.” Id. (quoting Shuping v. Barber, 89 N.C. App. 242, 245, 365 S.E.2d 210, 212 (1988)). A defamatory statement is qualifiedly privileged when made (1) on subject matter (a) in which the declarant has an interest, or (b) in reference to which the declarant has a right or duty, (2) to a person having a corresponding interest, right or duty, (3) on a privileged occasion, and (4) in a manner and under circumstances fairly warranted by the occasion and duty, right or interest. Id. Thus, “[t]he essential elements thereof are good faith, an interest to be upheld, a statement limited in its scope to this purpose, a proper occasion, and publication in a proper manner and to proper parties only.” Stewart v. Check Corp. 279 N.C. 278, 285, 182 S.E.2d 410, 415 (1971). In the subject case, the record indicates that Dr. Gilbert, as Chairman of the Department of Biology, had an interest in the smooth running and morale of his department. To protect against the undermining of employee morale, he distributed the memo in question only to members of the Department of Biology in order to put an end to misleading rumors and inaccurate accounts of Ms. Hanton’s dismissal that were circulating in that department. We hold that under these circumstances the essential elements of a qualified privilege were satisfied. Furthermore, portions of Dr. Gilbert’s memo addressed Ms. Hanton’s accusations against him personally for which he had a privilege of self defense. See Gregory v. Durham County Bd. of Educ., 591 F. Supp. 145, 156 (M.D.N.C. 1984). Therefore, we conclude that the trial court properly ruled that Dr. Gilbert had a qualified privilege with respect to the subject memo. II. Ms. Hanton next contends that the trial court erred when it instructed the jury that it should limit its consideration to four particular statements on the 29 May memo, that she bore the burden of proving the falsity of these statements, and that she further had the burden of showing actual malice by Dr. Gilbert. We disagree. Since the trial court determined as a matter of law that Dr. Gilbert’s memo was privileged, a presumption arises in his favor that the statements were made in good faith and without malice. Clark, 99 N.C. App. at 262, 393 S.E.2d at 138. Furthermore, since Dr. Gilbert’s presumption rebutted Ms. Hanton’s presumption of actual malice, Ms. Hanton then had the burden of proving both the falsity of the charge and that it was made with actual malice. See, Clark at 262-63, 393 S.E.2d at 138; Boston v. Webb, 73 N.C. App. 457, 326 S.E.2d 104, disc. review denied, 314 N.C. 144, 332 S.E.2d 479 (1985). Thus, the trial court correctly instructed the jury regarding the burden of proving falsity and showing actual malice. In order for a defamatory statement to be actionable, it must be false. Long v. Vertical Technologies, Inc., 113 N.C. App. 598, 439 S.E.2d 797 (1994). The undisputed evidence in the record indicates that many of the statements in the subject memo were true. Since the four statements submitted to the jury were the only statements which plaintiff claimed were false and thus the only defamatory statements at issue, the trial court acted properly in presenting only those statements for the jury’s consideration. III. Plaintiff next contends that the trial court erred by granting defendants’ motion for summary judgment on her state constitutional claim because res judicata does not preclude relitigation of her claim. We agree that the doctrine of res judicata does not preclude her state claims; however, we nonetheless affirm the trial court’s award of summary judgment for a different reason. In its order granting summary judgment, the trial court concluded: [U]nder the doctrine of res judicata and collateral estoppel the Plaintiff cannot re-litigate anew her claim of wrongful dismissal. Such claim has been fully litigated adversely to the Plaintiff in the administrative proceedings with a determination that her employment termination was [for] just cause and was free of any substantial due process violation. Collateral estoppel would bar further review of that issue by this court. Similarly, the Plaintiff failed to satisfy the federal court that t
Susan Handrahan vs. Red Roof Inns, Inc. No. 96-P-126. Middlesex. February 10, 1997. June 23, 1997. Present: Brown, Kaplan, & Perretta, JJ. Anti-Discrimination Law, Handicap, Burden of proof. Prima facie case, Employment, Damages. Practice, Civil, Instructions to jury. Evidence, Expert opinion. Damages, Punitive. In an action alleging handicap discrimination in employment in violation of G. L. c. 15IB, § 4, the plaintiff met her burden of establishing a prima facie case [16]; where the defendant articulated a legitimate nondiscriminatory reason for the plaintiff’s discharge, the plaintiff further carried her burden of proving that the asserted reason was a pretext [16-18], At the trial of an action alleging handicap discrimination in employment, the judge’s instructions on the issue of pretext, based on Blare v. Huskey Injection Molding Sys. Boston, Inc., 419 Mass. 437 (1995), contained no reversible error. [18-19] At the trial of an action alleging handicap discrimination in employment, the judge properly admitted expert testimony to assist the jury in assessing the amount of punitive damages [20-21], and there was no error in his excluding the use of the finding of lack of probable cause in the matter by the Massachusetts Commission Against Discrimination in the defendant’s opening statement, where the evidence was never proffered at trial [21-22], Evidence at the trial of a handicap discrimination case was sufficient to warrant the judge to submit the issue of punitive damages to the jury. [22] At the trial of a handicap discrimination in employment case, the issue of ■ “front pay” damages was correctly submitted to the jury [23-24] and there was no basis in the evidence for consideration of reinstatement as an alternative to front pay [24-25]: however, the front pay award was excessive, even after remittitur, as lacking support in the record, and the matter was remanded for recomputation of those damages [25]. Civil action commenced in the Superior Court Department on April 30, 1992. The case was tried before John C. Cratsley, J. Douglas W. Stoddart for the plaintiff. Scott C. Moriearty (Laurie Rubin with him) for the defendant. Stephen S. Ostrach, for New England Legal Foundation, amicus curiae, submitted a brief. Brown, J. On April 30, 1992, the plaintiff, Susan Handrahan, filed this action in Superior Court alleging that the defendant, Red Roof Inns, Inc. (Red Roof), discriminated against her on the basis of her handicap. See G. L. c. 151B, § 4. Following a jury trial, a jury awarded the plaintiff $1,705,000 in damages; that amount was comprised of $55,000 in back pay, $600,000 in front pay, $50,000 for emotional distress, and $1,000,000 in punitive damages. The defendant then filed motions for judgment notwithstanding the verdict (n.o.v.), new trial, and remittitur. The judge denied the defendant’s motions for judgment n.o.v. and new trial but allowed its motion for remittitur, reducing the front pay award by $112,200 and the punitive damage award by $900,000. Judgment was subsequently entered for the plaintiff in the amount of $732,700. Both parties appeal from the judgment. We first consider the defendant’s contention that the trial judge erred in denying its motion for judgment n.o.v. The defendant asserts that there was insufficient evidence to support the jury’s finding of discrimination under G. L. c. 151B, § 4(16). In bringing a claim for handicap discrimination under this section, the plaintiff bears the initial burden of establishing a prima facie case. Tardanico v. Aetna Life & Cas. Co., 41 Mass. App. Ct. 443, 447 (1996). Once the plaintiff has established a prima facie case, the burden shifts to the employer to articulate a legitimate reason for its actions. Ibid. Thereafter, the burden shifts back to the employee to show that the employer’s asserted reason was not the true reason, but rather a pretext. Ibid. “[I]f the fact finder concludes that the plaintiff has proved that the employer’s reasons are a pretext,[] then the plaintiff prevails.” Blare v. Husky Injection Molding Sys. Boston, Inc., 419 Mass. 437, 446 (1995). From the evidence presented at trial, the jury could have found the following facts. The plaintiff, an epileptic, began working for the defendant as a housekeeper in 1983. At that time, she did not disclose her epilepsy to the defendant because she feared that she might be fired. From December, 1983, through December, 1990, the plaintiff received favorable performance evaluations and, on several occasions, was generally noted as being a good employee. The plaintiff, however, was often criticized for her inability to clean her assigned rooms in a timely manner. On the morning of April 10, 1991, the plaintiff suffered an epileptic seizure while at her brother’s home. Since the plaintiff was scheduled to work that day, her sister-in-law called the defendant and spoke with one of its female employees. She told the woman that the plaintiff had had a “grand mal seizure,” and requested that she relay this information to the plaintiff’s boss. The woman agreed to do so. When the plaintiff returned to work the next day, her boss, Brian Thompson, requested a note from her doctor. The plaintiff subsequently obtained a doctor’s note indicating that she could return to work. The note, which contained the heading “Neurological Services,” made no mention of the plaintiff having had a seizure. On April 16, 1991, the plaintiff told Thompson that she needed to leave work early because her medication had made her tired. On April 11, 1991, Annie M. Cowles, a former coworker of the plaintiff, filed a complaint against the defendant with the Massachusetts Commission Against Discrimination. In her complaint, Cowles alleged that the defendant discriminated against her on the basis of her epilepsy. On May 27, 1991, the plaintiff received a disciplinary warning for failing to complete her room assignments. Three days later, the plaintiff received a second warning for not completing her rooms in the allotted time frame. At that time, the plaintiff was warned that if she fell behind again she would be terminated. On June 4, 1991, the plaintiff was fired after she failed, once again, to finish cleaning her assigned rooms within the allotted time. 1. Evidence of discrimination. a. Prima facie case. Contrary to the defendant’s contention, we think that the plaintiff met her initial burden of establishing a prima facie case. “To establish the prima facie case of unlawful employment discrimination on the basis of handicap pursuant to G. L. c. 151B, a plaintiff who has been terminated from employment must show that: (1) [s]he suffers from a handicap; (2) [s]he is a ‘qualified handicapped person’; and (3) [s]he was fired solely because of [her] handicap.” Labonte v. Hutchins & Wheeler, 424 Mass. 813, 821 (1997), and cases cited. Here, the plaintiff introduced sufficient evidence on each of the required elements. b. Defendant’s articulated reason. It is undisputed that the defendant articulated a legitimate nondiscriminatory reason for its actions. It was the defendant’s contention at trial that it terminated the plaintiff because she routinely failed to clean her assigned rooms within the allotted time. According to the defendant, each housekeeper was expected to comply with a thirty minute per room requirement (“thirty-minute rule”). The defendant contended that, in an effort to become more competitive, it began to enforce strictly its thirty-minute rule. The defendant stated that, after implementing this stringent enforcement policy, the plaintiff continued to have difficulty completing her room assignments. The defendant introduced evidence that the plaintiff was given two warnings, and was not terminated until she failed for a third time to comply with the thirty-minute rule. c. Evidence of pretext. Although the evidence is slim, the jury reasonably could have found the defendant’s asserted reason to be a pretext. Based on the evidence, the jury could have disbelieved the defendant’s claim that the thirty-minute rule was an established company policy. The plaintiff indicated that the first time she learned of the thirty-minute rule was May 30, 1991, the date she received her second disciplinary warning. Although some of the plaintiff’s evaluations refer to a company standard, none mentions a thirty minute per room requirement. Moreover, the housekeeping handbook contains no mention of the thirty-minute rule. In fact, Thompson, during cross-examination, acknowledged that the thirty-minute rule was not “per se” in the handbook. There was also conflicting evidence as to when the thirty-minute rule was implemented. According to Thompson, the thirty-minute rule was already in place when he returned to Framingham in February, 1990. However, Patricia V. Freeman, the head housekeeper at that time, indicated that the thirty-minute rule was not implemented until some time after Thompson arrived. The timing of the enforcement of the thirty-minute rule as to this plaintiff is also suspect and could support an inference that the defendant’s real motive was discrimination. The defendant asserts that the plaintiff’s difficulties in timely completing her room assignments were long-standing. Yet despite this recurring criticism, her reviews throughout her employment with Red Roof were generally good. Moreover, prior to her disclosure of her handicap, she never received a warning for failing to complete her assignments, nor was she ever disciplined on that basis. The defendant’s explanation that the sudden stepped-up enforcement of the thirty-minute rule in May, 1991, was motivated by economic concerns also could have been rejected by the jury. Thompson testified that toward the beginning of 1991, the company began to focus on controlling costs, and that in January or February of that year, there was emphasis placed on lowering the number of minutes spent cleaning each room. However, when asked whether there was an increased focus on enforcement of the thirty-minute rule during this time period, 1990 to 1991, Gregg Weisz, another employee of the defendant, testified that he could not recall such an increase. The defendant contends that Weisz’s testimony did not contradict that of Thompson’s because Weisz at that time worked at a Red Roof Inn in Salem, New Hampshire. However, there was evidence that both the Framingham and Salem locations were controlled by the same regional director, Mark G. Workman. Therefore, the jury could have concluded that, if there were such a shift in direction, Weisz would have been aware of it. Based on this somewhat equivocal evidence, the jury could have disbelieved some or all of the testimony of the defendant’s agents that their real motivation in strictly enforcing the thirty-minute rule was to contain costs. See Finney v. Madico, Inc., 42 Mass. App. Ct. 46, 51 (1997). On the foregoing evidence, the jury could reasonably have concluded that the thirty-minute rule was not a well-established company policy, as the defendant contended, but rather a new rule implemented and enforced only after the defendant learned of the plaintiff’s handicap. Accordingly, the trial judge correctly denied the defendant’s motions for a directed verdict and for judgment n.o.v. 2. Jury instructions. The trial judge instructed the jury that “once the plaintiff has established a prima facie case and shows that the employer’s articulated reasons are pretext . . . the plaintiff is entitled to recover for illegal discrimination under Chapter 151B.” The defendant argues that the judge erred in not instructing the jury that the plaintiff must prove not only that the employer’s asserted reasons are a pretext, but also that they are a pretext for discrimination. See note 6, supra. Essentially, the defendant asks this court to depart from the teachings of Blare v. Husky Injection Molding Sys. Boston, Inc., supra, wherein, in dicta, at 446, the court said: “Combined with establishment of a prima facie case by a preponderance of the evidence, a showing of pretext eliminates any legitimate explanation for the adverse hiring decision and warrants a determination that the plaintiff was the victim of unlawful discrimination. The plaintiff need not conclusively exclude all other possible explanations for the decision and prove intent beyond a reasonable doubt.” Acknowledging that the Blare case was an appeal from a grant of summary judgment, we nonetheless believe that we are constrained, even in the face of thin evidence of pretext, to follow the language of Blare. As the judge’s instructions flowed from and were consistent with the teaching of Blare, we cannot rightly say the judge committed reversible error in this regard. 3. Evidentiary rulings. a. Admission of expert testimony. To assist the jury in assessing the amount of punitive damages, the plaintiff, over the defendant’s objection, was permitted to introduce expert testimony concerning the value of Red Roof. Michael Bradley, an “expert” in the hotel industry, testified that the $620,000,000 which a buyer paid to acquire Red Roof in 1993 was probably a fair price. The defendant does not challenge Bradley’s qualifications as an expert. Instead, the defendant maintains that the plaintiff failed to provide an adequate foundation for his testimony. Specifically, the defendant contends that — since Bradley was not involved in the actual purchase and was not privy to the specifics of the transaction — there was no basis for him to evaluate Red Roof’s worth. We agree with the trial judge that the defendant’s objection went to the weight and not the admissibility of the evidence Although Bradley’s testimony with regard to the purchase price was based exclusively on published reports, the plaintiff did not object to its admission. Once the $620,000,000 figure came in without objection, we think that there was a reasonable basis for Bradley to assess whether the buyer paid a fair price for its acquisition. Therefore, we find no abuse of discretion. See Giannasca v. Everett Aluminum, Inc., 13 Mass. App. Ct. 2Q8, 211 (1982) (“The admission of expert testimony rests in large part in the sound discretion of the trial judge”). b. Exclusion of agency finding. The defendant next argues that the trial judge erred in excluding from evidence the Massachusetts Commission Against Discrimination’s (MCAD) finding of lack of probable cause. See and compare Tate v. Department of Mental Health, 419 Mass. 356, 364 (1995) (MCAD finding considered on summary judgment). Specifically, the defendant maintains that it was error for the judge to exclude the MCAD finding because it was “relevant to the supposed ‘egregiousness’ or ‘recklessness’ of Red Roof’s conduct” and thus, could have made a difference in the jury’s assessment of punitive damages. The defendant, however, did not articulate this contention below. On the plaintiff’s pretrial motion in limine the defendant argued that the MCAD finding should have been admitted because it was relevant to whether the plaintiff could prove her claim of discrimination by a preponderance of evidence. Although the defendant referred to punitive damages during a colloquy between defense counsel and the judge, the defendant’s remarks were addressed to the judge and centered on whether he should permit the jury, in light of the MCAD finding, to consider punitive damages at all. “Having stated specifically the basis of [its] objection, the defendant], in fairness, ought not to be permitted to urge other groúnds in this court.” Kagan v. Levenson, 334 Mass. 100, 107 (1956). Moreover, the judge’s ruling merely prohibited the use of the MCAD finding in the defendant’s opening. See note 16, supra. As such, it was preliminary in nature. The docket fails to disclose the final resolution of the motion in limine, and merely indicates that the motion was “allowed as to any mention in the defendant’s opening.” It does not appear from the record on appeal that the disputed evidence was ever proffered. The defendant also argues that the trial judge erred in permitting the plaintiff to introduce evidence that it contested her unemployment compensation claim. However, the defendant did not object below, and has waived the issue for review. See Freyermuth v. Lufty, 376 Mass. 612, 616 (1978). 4. Damages. a. Punitive damages. The jury awarded the plaintiff $1,000,000 in punitive damages. Thereafter, the trial judge, concluding that the amount was excessive, reduced the award to $100,000. On appeal, the defendant maintains that the trial judge erred in allowing the jury to consider punitive damages because there was no evidence to suggest that its conduct was intentional or reckless. We disagree. There was evidence presented at trial from which the jury could have concluded that, upon learning of the plaintiff’s condition, the defendant endeavored to bring about the plaintiff’s termination. Although the evidence of discrimination was less than overwhelming, we agree with the trial judge that it was sufficient to warrant submitting the issue of punitive damages to the jury. See Bain v. Springfield, 424 Mass. 758, 767 (1997) (punitive damages are appropriate “where a defendant’s conduct warrants condemnation and deterrence”). b. Front pay. The jury awarded the plaintiff $600,000 in front pay. Thereafter, the trial judge, concluding that the amount was excessive, reduced the award to $487,800. Although the judge found that the jury might have credited the plaintiff’s testimony that she intended to work for the defendant for the rest of her life, and that the front pay reflected the jury’s calculation of the plaintiff’s salary and benefits over a thirty-year period, he concluded that the jury had failed to take mitigation into account. Noting that the plaintiff had been able to secure seasonal employment at a country club, the judge determined that the plaintiff would be able to mitigate her damages by obtaining part-time employment. The judge then recalculated the award to reflect the likelihood that tihe plaintiff would be able to obtain, at least, seventeen weeks of full-time employment per year. Accordingly the judge reduced the award by $112,200, the judge’s estimate of the plaintiff’s part-time wages over a thirty-year period. The defendant raises several contentions regarding the front-pay award. First, the defendant argues that the trial judge erred in not considering whether reinstatement was a viable option. Under Massachusetts law, “a plaintiff’s rejection of an objectively reasonable offer of reinstatement terminates an employee’s eligibility for an award of damages based upon lost pay accruing after such a rejection.” Conway v. Electro Switch Corp., 402 Mass. 385, 389-390 (1988). Here, however, there was no evidence that the defendant offered to reinstate the plaintiff. A plaintiff is not required “to make a request for reinstatement as a prerequisite to a claim for front pay.” Id. at 390. Thus, the defendant’s contention is without merit. In addition, the defendant argues that, since front pay is equitable in nature, the trial judge, not the jury, should have determined whether the plaintiff was entitled to receive front pay. We disagree. The award of front pay in cases brought under c. 15IB is compensatory in nature. Id. at 387-388. Although we think that the issue of front pay was properly before the jury, we agree with the defendant that the front pay award, even as remitted, is excessive, and lacks adequate support in the record. Cf. doCanto v. Ametek, Inc., 367 Mass. 776, 787 (1975). “[D]amages may not be determined by speculation or guess, must be causally related to the defendant’s, wrongdoing, and the plaintiff should not be made more than whole.” Conway v. Electro Switch Corp., supra at 388 (citations omitted). Here, as noted by the trial judge, there is no evidence to suggest that the plaintiff will be unable to obtain comparable full-time employment in the future. In fa
Robert C. Powers vs. H.B. Smith Company, Inc., & another. No. 96-P-625. Hampden. February 10, 1997. - May 20, 1997. Present: Brown, Kaplan, & Perretta, JJ. Practice, Civil, Default, Relief from judgment, New trial, Judgment notwithstanding verdict, Attorney’s fees. Anti-Discrimination Law, Age, Termination of employment, Prima facie case, Burden of proof, Attorney’s fees, Damages. Employment, Discrimination, Termination. Evidence, Relevancy and materiality. Damages, Under anti-discrimination law, Emotional distress. In a civil action, a Superior Court judge did not abuse his discretion in granting the plaintiff’s motion pursuant to Mass. R. Civ. P. 60(b)(6) to vacate a default judgment entered against the plaintiff for failure to appear at a pretrial conference. [660] In an action brought under G. L. c. 15IB, alleging age discrimination in employment, in which the plaintiff established a prima facie case and the defendant articulated a legitimate nondiscriminatory reason for its conduct, the evidence was sufficient for the jury reasonably to conclude that the defendant’s asserted reason was a pretext. [660-662] At the trial of an age discrimination case, the judge properly excluded certain evidence as irrelevant. [662-663] The defendant in a civil action was not entitled to contend on appeal that the trial judge improperly excluded certain evidence, where the judge’s ruling was not final and the defendant never thereafter demonstrated the evidence was relevant. [663-664] This court declined to consider an argument on appeal that was inadequate and which did not rise to the level of acceptable appellate argument within the meaning of Mass. R.A.P. 16(a)(4). [664-665] In an age discrimination case, the judge’s award of damages on remittitur was not excessive and there was sufficient evidence of emotional distress to support the award of damages thereon. [665-666] In a civil action the judge did not abuse his discretion in denying the defendant’s motion for a new trial; [666] or in denying the defendant’s motion for judgment n.o.v. where the defendant had failed to renew its motion for a directed verdict at the close of all the evidence [666]. Where the plaintiff in an age discrimination action had not first filed a complaint against one defendant with the Massachusetts Commission Against Discrimination, the judge did not err in allowing that defendant’s motion for summary judgment. [666-667] In an age discrimination in employment case, the plaintiff was entitled to an award of attorney’s fees under G. L. c. 15IB, § 9, where the judge did not make any finding that special circumstances would render such an award unjust. [667] Civil action commenced in the Superior Court Department on February 3, 1992. Motions for summary judgment were heard by Constance M. Sweeney, J.; the case was tried before William H. Welch, J., and posttrial motions were heard by him. Peter J. Stasz for H.B. Smith Company, Inc. Rosemary J. Cooper for the plaintiff. Timothy J. Ryan for Mestek, Inc. Mestek, Inc. The plaintiff does not challenge the judgment entered for his supervisor, Donald F. Schmidt. Brown, J. This case, that seemingly neither party wanted to win, causes us to navigate around numerous procedural tangles and wade through several critical missteps. As will be seen, after this curious journey, all we are left with is the uncomfortable sense that the ultimate result is not “inconsistent with substantial justice.” Mass.R.Civ.P. 61, 365 Mass. 829 (1974). After being discharged from his position as a quality control inspector with H.B. Smith Company, Inc. (Smith), the plaintiff, Robert C. Powers, filed a complaint with the Massachusetts Commission Against Discrimination (MCAD) alleging age discrimination. On February 3, 1994, the plaintiff, with the MCAD’s assent, filed this action in Superior Court. In the complaint, the plaintiff, for the first time, named Mestek, Inc. (Mestek), as a defendant. Prior to trial, Mestek moved for summary judgment contending that, since it was not named in the MCAD complaint, the plaintiff’s claim against it was barred. The motion judge agreed and entered judgment for Mestek. Returning a verdict on special questions, a Superior Court jury found the plaintiff was discharged “by reason of age discrimination” and awarded him $750,000 in damages. The defendant then filed a motion for a new trial. The trial judge denied Smith’s motion, but reduced the damage award to $350,000. Both parties appeal from the ensuing judgment. The defendant argues that: (a) it was error to allow the plaintiffs motion for relief from a default judgment; (b) the plaintiff failed to establish a prima facie case of age discrimination and the jury’s verdict was against the weight of the evidence; (c) certain evidence was improperly admitted or excluded; (d) the damages were excessive; and (e) the trial judge abused his discretion in denying its posttrial motions. The plaintiff, in turn, contends that the trial judge erred in denying his request for attorney’s fees. The plaintiff also argues that summary judgment was improperly entered for Mestek. Based on the evidence presented at trial, the jury would have been warranted in finding the following facts. Smith is a manufacturer of boilers. The plaintiff began working for Smith in January, 1982, as a quality control inspector. The plaintiffs duties included the processing of returned parts. When defective parts were returned, the plaintiff would check to see if they were still under warranty and then arrange for the parts to be returned to the vendors. The plaintiff also inspected parts purchased from vendors to ensure that they met company specifications. In 1986 or 1987, Smith opened a new plant approximately five miles away from its main facility and moved the assembly line for residential boilers to the new plant. Prior to that time, the assembly work had been performed at the main plant. Initially, the plaintiff assisted in monitoring the new assembly line, as Smith had not yet hired an inspector for the new facility. Marianne Fortier was later hired as quality control inspector for the new plant. The plaintiff, however, filled in for Fortier when she was on vacation, performing Fortier’s duties with the exception of the “100th boiler test.” The plaintiff had not been trained to perform that test. The plaintiff also performed several quality control functions that Fortier had not. Sometime prior to 1990, Smith began to experience financial difficulty. In February, 1990, Mestek made a tender offer for approximately forty-eight percent of Smith’s shares. Thereafter, a Mestek official, John Kaddaras, at the behest of .Smith’s board of directors, conducted an analysis of Smith’s organizational structure. The board had concluded that “major restructuring” was necessary in order for Smith to stay afloat. Another Mestek official (Walter Markowski) met with Smith employees, including the plaintiff. At that time, there were three inspectors in the quality control division: the plaintiff, Fortier, and Ray Deso. Markowski recommended that the number of quality control inspectors be reduced from three to one. Markowski conveyed his opinion to Kaddaras that Fortier possessed the most “technical ability.” A few days later, Kaddoras spoke with Donald F. Schmidt, the plaintiff’s supervisor, who, when asked, opined that Fortier was the “most capable” of the three. At the time of the layoffs, Schmidt and Fortier were romantically involved. Kadd-aras recommended that Fortier be retained, and the plaintiff and Deso were subsequently laid off. 1. Defendant’s appeal. a. Rule 60(b) motion. Before moving on to the other issues in this case, we pause briefly to dispose of Smith’s claim that the judge abused his discretion in vacating the default judgment entered earlier against the plaintiff for failure to appear at a pretrial conference. See in this regard Berube v. McKesson Wine & Spirits Co., 7 Mass. App. Ct. 426, 433-434 (1979). Upon review of the record, we conclude that the judge, pursuant to Mass.R.Civ.P. 60(b)(6), 365 Mass. 829 (1974), reasonably could have found extraordinary circumstances warranting relief from the judgment. See Parrell v. Keenan, 389 Mass. 809, 814-815 (1983). See generally 11 Wright, Miller & Kane, Federal Practice and Procedure § 2864 (2d ed. 1995). b. Age discrimination claim. The alleged discriminatory act arises in the context of a reduction in force decision by the plaintiff’s employer. In analyzing claims of discrimination brought under the Massachusetts antidiscrimination statute (G. L. c. 15 IB, § 4) we look to the familiar three-stage order of proof paradigm articulated in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-804 (1973). See Wheelock College v. Massachusetts Commn. Against Discrimination, 371 Mass. 130, 134-136 & n.5 (1976). In stage one, the plaintiff bears the initial burden of establishing a prima facie case of discrimination. Tardanico v. Aetna Life & Cas. Co., 41 Mass. App. Ct. 443, 447 (1996). In stage two, the burden shifts to the employer to articulate a legitimate nondiscriminatory reason for its actions. Ibid. Finally, in stage three, the burden shifts back to the plaintiff to show that the employer’s articulated reason is not the true reason, but rather a pretext. Ibid. As “Massachusetts is a pretext only jurisdiction” (Blare v. Husky Injection Molding Sys. Boston, Inc., 419 Mass. 437, 443 [1995]), if successful in stage three, “the plaintiff is entitled to recovery for illegal discrimination under G. L. c. 15 IB.” Id. at 444-445. Contrary to Smith’s contention, our review of the record indicates that the plaintiff met his initial burden of establishing a prima facie case of age discrimination. The plaintiff showed that: (1) he is a member of a class protected by G. L. c. 15 IB (he was over the age of 40); (2) he was qualified for the position of quality control inspector; (3) he was terminated; and (4) a similarly or less qualified younger person was retained. See Tardanico, supra at 447 n.4; LeBlanc v. Great American Ins. Co., 6 F.3d 836, 842 (1st Cir. 1993). See also Finney v. Madico, Inc., ante 46, 50 (1997). “The exact prima facie proof required can vary depending on the factual situation.” Harrison v. Boston Financial Data Servs., Inc., 37 Mass. App. Ct. 133, 137 (1994). See Blare v. Husky Injection Molding Sys. Boston, Inc., supra at 441. It is uncontroverted that Smith articulated a legitimate nondiscriminatory reason for its conduct. According to Smith, the plaintiff was laid off as a result of corporate restructuring. Based on Mestek’s recommendations, Smith decided to reduce the number of quality control inspectors from three to one. Smith stated that after comparing the qualifications and duties of Fortier and the plaintiff, it concluded that Fortier possessed better qualifications. See and compare Finney v. Madico, Inc., supra at 50-51. Thus, the pivotal phase is stage three. On appeal, Smith maintains that there was no reasonable basis for the jury to conclude that its asserted reason was a pretext. We disagree. At trial, Smith emphasized the fact that the plaintiff was unable to perform the “100th boiler test.” However, Richard A. Lemelin, a former employee of Smith, testified that depending on the number of boilers produced, only one or two were tested a week and that each test took approximately one or two hours. Moreover, Lemelin indicated that the test was not that difficult to perform and that no outside training was required. It was Lemelin who trained Fortier to perform the test. In addition, Schmidt, the plaintiffs supervisor, indicated that the only job that the plaintiff had not performed was the “100th boiler test,” and that Fortier had not performed some of the plaintiffs duties. Moreover, given the romantic relationship between Schmidt and Fortier, a finder of fact would be entitled to discredit some or all of Schmidt’s testimony. In these circumstances, the juty reasonably could have concluded that Smith’s asserted reason was a pretext, and “not the real reason[] for the action.” Blare v. Husky Injection Molding Sys. Boston, Inc., 419 Mass, at 443, quoting from Brunner v. Stone & Webster Engr. Corp., 413 Mass. 698, 700 (1992). c. Evidentiary rulings. At trial, the plaintiff, without objection, introduced in evidence two written evaluations of his work performance. Later, Smith sought to introduce a written assessment of Fortier’s work. The plaintiff objected, claiming that Fortier’s evaluation was irrelevant. In its offer of proof, Smith argued that, since the qualifications of both the plaintiff and Fortier were at issue, the evaluations were relevant. The judge then asked the Smith representative whether he considered that evaluation in making his decision. He indicated that he had not. The judge then excluded the evidence. On appeal, Smith maintains that it was error for the judge to exclude the evaluation because (a) it was relevant, and (b) in its absence, the jury could not properly evaluate the defendant’s decision to retain Fortier over the plaintiff. “The decision whether evidence is relevant remains within the sound discretion of the trial judge.” McLaughlin v. Vinios, 39 Mass. App. Ct. 5, 8 (1995). “A trial judge will not be reversed on review except for palpable error.” Ibid. Here, given that the defendant appears to have conceded that the evaluation played no role in its decision, we find no abuse of discretion. Moreover, even if the evaluations were relevant, we discern no prejudice to Smith’s case, as evidence of the quality of Fortier’s work was introduced during Schmidt’s testimony. See Pina v. McGill Dev. Corp., 388 Mass. 159, 164 (1983) (no prejudice found where excluded evidence was merely cumulative of other evidence pointing to the same fact). The defendant further argues that the judge erred in failing to admit in evidence two disciplinary letters concerning the plaintiff. The record indicates, however, that the judge’s ruling was not final. The judge clearly indicated that he would admit at least one of the letters if Smith could demonstrate that it had relied on the letter in making its determination. Smith did not mention the matter again during the course of the trial. “Such an omission fatally ‘dispose[s] of [an] exception to a ruling which expressly was not final and which related to the order of proof, a matter [well within] the discretion of the trial judge.’ ” Cooke v. Walter Kidde & Co., 8 Mass. App. Ct. 902, 904 (1979), quoting from Donahue v. Kenney, 330 Mass. 9, 12 (1953). Thus, the defendant cannot now contend that the letters were improperly excluded. The defendant also argues that the judge erred in permitting evidence of a romantic relationship between Fortier and Schmidt. However, the defendant’s argument with respect to this matter — consisting of five sentences — is inadequate, and provides us little assistance in evaluating the merits of the claim: The defendant fails to cite any authority in support of its contention and, taken all in all, the defendant’s treatment of the issue does not rise to the level of acceptable appellate argument within the meaning of Mass.R.A.P. 16(a)(4), as amended, 367 Mass. 921 (1975). d. Damages-Remittitur. Smith claims that the damage award, despite the remittitur, is excessive. Compare Labonte v. Hutchins & Wheeler, 424 Mass. 813, 823-826 (1997); Davis v. Walent, 16 Mass. App. Ct. 83, 96 (1983). “The field of discretion of the trial judge in these matters is very broad. Only in rare instances can it be ruled that there has been an abuse of discretion amounting to an error of law” (citations omitted). Davis v. Walent, supra at 96-97. Smith first argues that to the extent the damages award represents compensation for front pay, they are excessive. Specifically, Smith contends that, since Fortier testified that she was laid off in 1992, the plaintiff is not entitled to compensation beyond that date. However, the precise circumstances attending Fortier’s termination are not clear from the record. What is clear is that the plaintiff had intended to work for Smith until age sixty-five. Therefore, even if Smith’s assertion is correct, absent a showing that the plaintiff would not have been able to transfer to another position (or branch of the company), there is no basis for disturbing the judge’s ruling. Contrary to Smith’s contention, there was sufficient evidence of emotional distress. The plaintiff, who at that time was a member of Alcoholics Anonymous (AA), testified that he attended more AA meetings as a result of his layoff. Although he did not seek independent counseling as a result of his termination, the plaintiff indicated that he availed himself of the counseling services provided by A A. “[I]n c. 15 IB cases an award of emotional distress damages can be sustained even in the absence of . . . psychiatric consultation” (citations omitted). Labonte v. Hutchins & Wheeler, 424 Mass. at 824. We conclude there is not sufficient record support to find an abuse of discretion. See Bartley v. Phillips, 317 Mass. 35, 43-44 (1944). e. Posttrial motions. With regard to the defendant’s several posttrial motions we are obliged at the outset to point out that the defendant’s failure to renew its motion for a directed verdict at the close of all the evidence is a critical misstep. See, e.g., Martin y. Hall,369 Mass. 884-885 (1976). But see Mass.R.Civ.P. 61, 365 Mass. 829 (1974). We address each motion in turn. As grounds for a motion for a new trial, Smith attacks, among other things, the plaintiffs prima facie case, the damages award, and the weight of the evidence. The standard that a trial judge is to apply on a motion for a new trial in a civil case is too well known to be restated. See, e.g., W. Oliver Tripp Co. v. American Hoechst Corp., 34 Mass. App. Ct. 744, 748 (1993), and cases cited therein. See also Bartley v. Phillips, 317 Mass, at 42. In light of the above discussion, we do not think the judge abused his discretion in denying Smith’s motion for a new trial. In addition, the judge stated in his memorandum and order denying the motion that “there were inconsistencies in some of the evidence” rebutting the plaintiffs prima facie case. As to the defendant’s claim that the damages were excessive, as has already been mentioned above, the judge, pursuant to Mass.R.Civ.P. 59(a), 365 Mass. 827 (1974), ordered, we think properly so, that $400,000 of the verdict be remitted. Compare Davis v. Walent, 16 Mass. App. Ct. at 96. We likewise reject Smith’s collateral contention that the excessive nature of the verdict demonstrates that it was the result of juror prejudice or bias. Smith’s argument consists entirely of conjecture and is not supported by the record. The judge did not abuse his discretion or commit an error of law by denying Smith’s Mass.R.Civ.P. 50(b), 365 Mass. 814 (1974), motion for judgment n.o.v., for the reason, if no other, that Smith failed to renew its motion for a directed verdict at the close of all the evidence. See Michnik-Zilberman v. Gordon’s Liquor, Inc., 390 Mass. 6, 9 (1993). 2. Plaintiff’s cross appeal. a. Summary judgment. The plaintiff contends that the motion judge erred in allowing Mestek’s motion for summary judgment. The motion judge concluded that, since the plaintiff did not name Mestek in his MCAD complaint, his claim against Mestek was barred. There was no error. “Resort to judicial process is not available to a party claiming age discrimination . . . unless that party has first lodged a complaint of unlawful discrimination with the MCAD within six months of the occurrence of the discriminatory event.” Tar-danico v. Aetna Life & Cas. Co., 41 Mass. App. Ct. at 444. See Charland v. Muzi Motors, Inc., 417 Mass. 580, 583 (1994). At the time the plaintiff filed his complaint with the MCAD, he was aware of Mestek’s involvement in his layoff. The plaintiff could have moved to amend his MCAD complaint, but failed to do
DOLAN v CONTINENTAL AIRLINES/CONTINENTAL EXPRESS Docket No. 102413. Argued January 16, 1997 (Calendar No. 19). Decided May 20, 1997. Sue Ann Dolan brought an action in the Wayne Circuit Court against Continental Express, alleging wrongful discharge from employment in violation of Michigan’s Whistleblowers’ Protection Act, MCL 15.362; MSA 17.428(2), breach of contract principles, and public policy. The plaintiff had been asked to be alert to and to report to the Federal Drug Enforcement Agency persons purchasing tickets or otherwise contacting the airline who fit a designated profile description relating to drug trafficking or terrorist activities. Later, her employer posted a notice directing employees to seek management approval before making such reports. The plaintiff was discharged after her employer was informed that she made another report without management approval. The court, William J. Giovan, J., granted summary judgment for the defendant. The Court of Appeals, Taylor, J. (R. D. Gotham, J., concurring in the result only), and (Shepherd, P.J., not participating), affirmed (Docket No. 149512). The plaintiff appeals. In a unanimous opinion by Justice Boyle, the Supreme Court held: The plaintiff stated a valid claim of wrongful discharge from employment under the Whistleblowers’ Protection Act. 1. Employees who report violations or suspected violations of law by either their employers or fellow employees to a public body are entitled to protection under the Whistleblowers’ Protection Act. The plaintiff alleges she was fired because she reported or was believed to have reported a violation of law. The allegation is sufficient to state a claim of wrongful discharge under the act. In addition, the reported violation was sufficiently related to the employment setting to be protected under the act. The trial court erred in granting the defendant’s motion for summary disposition of the wpa claim. Because the wpa is the exclusive remedy against such discharge, the grant of summary disposition of the public policy claim was proper. 2. The plaintiff had no legitimate expectation of continued employment as a matter of law on the basis of the defendant’s written disciplinary policies alone. Nor could an inference be drawn that the relationship between the parties was a contract for termination only for good cause. Affirmed in part, reversed in part, and remanded for further proceedings. 208 Mich App 316; 526 NW2d 922 (1995) affirmed in part and reversed in part. Cunningham & Associates (by Douglas C. Cunningham) for the plaintiff. Miller, Canfield, Paddock & Stone (by Megan P Norris) for the defendant. Boyle, J. i In this case we are asked to determine whether plaintiff has stated a valid claim of wrongful discharge from employment under Michigan’s Whistleblowers’ Protection Act (wpa), breach of' contract principles, and public policy. For the reasons that follow, we hold that plaintiff has failed to state a claim of wrongful discharge from employment under public policy and breach of contract principles, but has stated a valid claim under the WPA. Accordingly, we affirm the grant of summary disposition as it relates to the public policy and breach of contract claims, and reverse and remand for further proceedings on the wpa claim. n Plaintiff worked as a ticketing agent for defendant airlines at the Capitol City Airport in Lansing, Michigan. In early 1991, as a means of tightening airport security during the Persian Gulf War, plaintiff and her colleagues were asked to stay alert to individuals purchasing tickets or otherwise contacting the airline who fit a designated profile description relating to drug trafficking or terrorist activities. Plaintiff did just that and, in January or February, 1991, she and a coworker informed airport security of individuals who fit the profile description. On the basis of plaintiffs tip, the Federal Drug Enforcement Agency intervened and made an arrest. Shortly thereafter, plaintiff again contacted the authorities to report yet another individual whom she believed fit the designated profile. The dea assured plaintiff that she would be rewarded. On February 10, 1991, the general manager of Continental Express posted a written notice directing employees to seek management approval before contacting authorities to report individuals believed to fit the profile description. One month later, plaintiff was approached by the general manager and asked if she had contacted the DEA after February 10, 1991. Plaintiff claimed that she had not, but was sent home pending an investigation. According to plaintiff, Continental’s investigation unearthed two individuals who agreed to provide written statements indicating that plaintiff had reported two passenger names to the dea after February 10, 1991. When confronted, plaintiff admitted that she contacted the dea after the February date, but insisted that she did so only because she wanted information on the status of her reward. Plaintiff contends that she did not report passenger names after the February 10 posting. In March, 1991, the general manager of Continental Express contacted the plaintiff and told her that her relationship with Continental was over. The next day, plaintiff was shown one of two written statements that alleged that she had contacted the dea without Continental Express’ approval after February 10, 1991. Plaintiff was told that corporate headquarters would make the final determination on her employment status. Subsequently, plaintiff’s employment was terminated. Plaintiff’s original complaint alleged wrongful discharge from employment under the Michigan Whistleblowers’ Protection Act and breach of contract principles. The circuit court granted defendant’s motion for summary disposition on the wpa claim. Shortly thereafter, plaintiff filed an amended complaint, adding a new charge of wrongful discharge from employment in violation of public policy. Defendant again sought dismissal of plaintiffs claims under MCR 2.116(C)(8). At the same time, plaintiff filed a motion for relief from the October 10, 1991, order granting defendant summary disposition on the wpa claim. After consolidating the matters, the court granted defendant’s motion to dismiss plaintiff’s first amended complaint with prejudice and denied plaintiff’s motion for relief from the October 10, 1991, order. The Court of Appeals affirmed. We granted leave to appeal. 452 Mich 867 (1996). m Plaintiff alleges that the court dismissed the wpa claim on the basis of a faulty interpretation of the law. According to plaintiff, the December 16, 1991, decision in Dudewicz v Norris Schmid, Inc, 192 Mich App 247, 254; 480 NW2d 612, aff’d in part and rev’d in part 443 Mich 68; 503 NW2d 645 (1993), extended the application of the act and required that the court grant relief from its earlier order dismissing the whistleblowers’ claim. In considering plaintiff’s motion for relief from that order, the circuit court reviewed the whistleblowers’ claim in light of the Court of Appeals opinion in Dudewicz and determined that the grant of summary disposition had been appropriate. On appeal, the Court of Appeals, having the benefit of this Court’s analysis in Dudewicz, reduced the instant issue to whether the wpa was intended to protect “third parties whose violations, if any, have no connection to the business.” 208 Mich App 316, 318-319; 526 NW2d 922 (1995). The Court of Appeals found that the act did not apply, stating that “in order for the wpa to apply, the violation or suspected violation must be committed in the course of doing business.” Id. at 320. IV Michigan’s Whistleblowers’ Protection Act was first enacted in 1981, largely in response to the accidental PBB-contamination of livestock feed. The act “encourage[s] employees to assist in law enforcement and . . . protects] those employees who engage in whistleblowing activities.” It does so with an eye toward promoting public health and safety. The underlying purpose of the act is protection of the public. The act meets this objective by protecting the whistleblowing employee and by removing barriers that may interdict employee efforts to report violations or suspected violations of the law. Without employees who axe willing to risk adverse employment consequences as a result of whistleblowing activities, the public would remain unaware of large-scale and potentially dangerous abuses. To establish a prima facie case under the wpa, plaintiff must prove that she “reported] or [was] about to report ... a violation or a suspected violation of a law ... to a public body.” MCL 15.362; MSA 17.428(2). Plaintiff asserts that she was terminated “because [she] reported and/or was perceived to report a violation or a suspected violation of a law . . . .” Because plaintiff appeals from a motion granting summary disposition, all factual allegations supporting her claims must be accepted as true. v A motion for summary disposition under MCR 2.116(C)(8), tests the legal basis of the claim and is granted if the claim is so manifestly unenforceable as a matter of law that no factual progression could possibly support recovery. Simko v Blake, 448 Mich 648, 654; 532 NW2d 842 (1995). Motions for summary disposition are examined on the pleadings alone, absent consideration of supporting affidavits, depositions, admissions, or other documentary evidence, and all factual allegations contained in the complaint must be accepted as trae. Id. at 654. VI The pivotal question in this case is whether the plaintiff stated a valid claim of wrongful discharge from employment under the wpa where she alleged that she reported or was perceived to report a violation or suspected violation of the law. We find that she did. A plain reading of the wpa reveals that employees who report violations or suspected violations of the law to a public body are entitled to protection under the act. As interpreted, the act provides protection to employees who report violations of law by either their employers or fellow employees. Dudewicz, 443 Mich 68. The act was intended to protect employees who alert the public to “corruption or criminally irresponsible behavior in the conduct of government or large businesses.” Id. at 75. Frequently, a close connection exists between the reported violation and the employment setting, although no such limitation is found in the statute. Id. In Dudewicz, the plaintiff worked as a parts manager for the defendant automobile dealership. In an effort to gain better service for a customer, the plaintiff, along with the dealership’s owner, convinced the service manager to perform work for the customer under warranty. After the owner left the area, the service manager allegedly assaulted the plaintiff. The plaintiff was fired when he refused to drop criminal charges against the service manager. A majority of this Court afforded the plaintiff protection under the WPA. While acknowledging that the connection between the violation and the employment setting was slightly more attenuated than “traditional notions of whistleblowing,” the majority found that the violation was “very much within the employer-employee setting.” In light of the approach taken in Dudewicz, we decline to limit application of the wpa to reported violations of the employer alone. In accordance with the plain language of the act, plaintiff has alleged that she was fired because she reported or was believed to have reported a violation of the law. This allegation is sufficient to state a claim of wrongful discharge from employment under the wpa. In addition, we find that the reported violation in the present case was sufficiently related to the employment setting to be protected under the wpa. This is not to say that only those violations that are connected to the employment setting are contemplated under the wpa, only that the reported violation in the present case was sufficiently connected to the employment setting to be contemplated under the majority opinion in Dudewicz. Accordingly, we find that the trial court erred in granting the defendant’s motion for summary disposition on the wpa claim. Because the wpa is the exclusive remedy against discharge in retaliation for the conduct at issue, the grant of the motion for summary disposition on the public policy claim is affirmed. Id. at 80. vn Lastly, plaintiff alleges that the defendant maintained written policies that gave rise to an express or implied contract of continued employment and a legitimate expectation that the plaintiff would not be terminated in a manner contrary to those policies. Both the circuit court and the Court of Appeals held that, as a matter of law, on the basis of defendant’s written disciplinary policies alone, plaintiff had no legitimate expectation of continued employment, nor could an inference be drawn that the relationship between the parties was a contract for termination for good cause only. We agree. It is a settled tenet of Michigan law that employment contracts for an indefinite term produce a presumption of employment at will absent distinguishing features to the contrary. Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich 579; 292 NW2d 880 (1980). To overcome this presumption, evidence may be produced that proves the existence of an express contract for a definite term or an express provision in a contract that forbids termination absent just cause. Proof of a promise of job security implied in fact, such as employment for a particular term or a promise to terminate only for just cause, may also overcome the presumption. Rowe v Montgomery Ward & Co, Inc, 437 Mich 627; 473 NW2d 268 (1991). Furthermore, company policies and procedures may become an enforceable part of an employment relationship if such policies and procedures instill legitimate expectations of job security in employees. Rood v General Dynamics Corp, 444 Mich 107, 117-118; 507 NW2d 591 (1993). This presumption does not prevent proof of actual intent, nor should it sanction unjustified evasions of promissory liability. A Plaintiff does not allege that the defendant orally promised that her employment would continue indefinitely absent just cause for termination. Instead, she alleges that the defendant’s Human Resources Policy Manual incorporated written policies that established a progressive disciplinary system whereby plaintiff could be terminated only for cause. It is by virtue of these policies that plaintiff contends that an express or implied contract of employment arose and that a legitimate expectation was created that plaintiff would not be disciplined or terminated in a manner contrary to those stated policies. In Toussaint, supra at 610, this Court acknowledged that written statements in a company policy and procedure manual could give rise to enforceable rights in contract or to a legitimate expectation of just-cause employ-ment. In Renny v Port Huron Hosp, 427 Mich 415; 398 NW2d 327 (1986), that same idea found expression when the Court held that an employee handbook could provide the basis of a just-cause employment contract. Later, in Rood, this Court once again considered whether written policy statements provided the basis for an employment agreement terminable only for cause. The Court opined that where policy manuals are distributed throughout the company our inquiry is not limited to the question whether the employer sufficiently manifested an intention to enter a single contractual just-cause employment relationship with the party before the Court, but, rather whether the employer has sufficiently manifested an intention to enter such a relationship with all employees subject to the relevant policies and practices. [Id. at 136.][] According to the Court in Rood, the mere dissemination of an employee handbook that implied a discharge-for-cause policy was insufficient as a matter of law to state a cause of action for breach of contract. Policies such as these “may become part of an employment contract only when the circumstances (e.g., the language in the handbook itself, or an employer’s oral statements or conduct) clearly and unambiguously indicate that the parties so intended.” Id. at 137. Plaintiff alleges that she was wrongfully terminated from her employment contrary to defendant’s written policy statements that expressly or impliedly formed the basis of her employment agreement with the defendant. Plaintiff acknowledges that defendant’s policies were not unique to her, but were applicable to all the defendant’s employees. Absent allegations in the pleadings that clearly and unambiguously indicate the defendant’s intent to create a just-cause employment relationship with all its employees, or in particular with this plaintiff, we hold that plaintiff has not, as a matter of law, stated a claim on which relief can be granted. B Plaintiff next contends that she had a legitimate expectation that she would not be terminated, or otherwise disciplined, in a manner contrary to the policies set forth in the defendant’s policy and procedure manual. In other words, plaintiff contends that she had a legitimate expectation of just-cause employment. The legitimate-expectations prong of Toussaint was founded on this Court’s common-law authority to recognize enforceable obligations that arise outside the scope of normal contract principles. The theory operates as a viable, independent basis for enforcing promises of job security contained in policy statements that are circulated “either ‘to the work force in general or to specific classifications of the work force, rather than to an individual employee.’ ” Having announced its policy, and presumably having been benefited by that policy, the employer may not then treat it as illusory. Employer policy statements that are “reasonably capable of being interpreted” as promises to discharge for just cause only, or that are capable of two reasonable interpretations, create an issue of fact for the jury. Defendant’s policy manual states that its progressive disciplinary action plan “allows an employee the opportunity to make necessary corrections in their performance.” It also establishes that discipline “should be used only when other efforts have failed or if the violation in question precludes other alternatives.” Additionally, the manual states that “[t]he supervisor must investigate early and thoroughly to be fair as well as to prepare for possible testimony that just cause existed for disciplinary action.” Defendant’s disciplinary policies also expressly indicate, however, that certain situations may require more severe action than that detailed in the policy manual. In situations where the appropriate disciplinary action is not designated in the manual, the supervisor is not precluded from taking the necessary action, but is required to contact the Human Resource Department to “discuss the proper approach.” Particularly relevant are defendant’s policies on involuntary terminations. Although the policies indicate that “[e]very effort will be made to improve employee performance and correct deficiencies to avoid termination of employment,” they also state that “[w]ith the exception of serious infractions, an employee will be given the opportunity to correct deficiencies.” Infractions serious enough to require automatic termination are listed in the policy manual. Also listed are those infractions that may warrant dismissal on the first offense. Infractions resulting in possible first offense termination include “[r]efusing to follow directions from supervisors or showing gross insubordination.” The policy and procedure manual expressly states that the listed offenses are only “examples of common offenses for which employees may be terminated for cause” and is not an all-inclusive list. As this Court held in Rood, supra, “[a] nonexclusive list of common-sense rules of behavior that can lead to disciplinary action or discharge, clearly reserves the right of an employer to
TONY JENNINGS JOHNSON, Plaintiff-Appellant v. MAYO YARNS, INC., Defendant-Appellee No. COA96-772 (Filed 20 May 1997) 1. Labor and Employment § 70 (NCI4th)— refusal to remove Confederate decal — termination of employment — not wrongful discharge Plaintiff’s dismissal from private employment for refusing to remove a Confederate flag decal from his toolbox used at work did not constitute wrongful discharge in violation of public policy based on his free speech rights because plaintiff’s conduct carried out in private employment was not constitutionally protected speech and expression. Am Jur 2d, Employment Relationship §§ 30, 40-43, 45. 2. Labor and Employment § 54 (NCI4th)— implied contract— employee handbook — claim properly dismissed The trial court properly dismissed plaintiff employee’s claim for breach of implied contract based on defendant employer’s failure to follow the employee handbook in terminating him where plaintiff failed to allege how defendant’s employee handbook was made part of his employment contract. Am Jur 2d, Employment Relationship §§ 10-30, 39. Right to discharge allegedly “at-will” employee as affected by employer’s promulgation of employment policies as to discharge. 33 ALR4th 120. Judge Greene concurring. Appeal by plaintiff from order entered 21 May 1996 by Judge William C. Gore, Jr. in Bladen County Superior Court. Heard in the Court of Appeals 26 February 1997. Barrington, Jones &Pikul, P.A., by Carl A. Barrington, Jr.; and Jack E. Carter; for plaintiff-appellant. Womble Carlyle Sandridge & Rice, PLLC, by Charles A. Edwards and Jeffrey M. Hahn, for defendant-appellee. WALKER, Judge. On 1 February 1996, plaintiff filed suit seeking damages from his former employer for his alleged wrongful termination. He alleged five claims for relief against defendant who moved to dismiss the complaint pursuant to Rule 12(b)(6) of the N.C. Rules of Civil Procedure, on the grounds that it failed to state a claim upon which relief could be granted. The trial court granted the motion dismissing all claims. “[A] complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Sutton v. Duke, 277 N.C. 94, 102, 176 S.E.2d 161, 165-66 (1970). Therefore, we must look to the allegations included in plaintiff’s complaint to determine if dismissal was proper under Rule 12(b)(6). Plaintiff alleged the following facts in his complaint: Plaintiff began working in the Bladenboro yam plant on 5 June 1988. On 1 May 1992, defendant acquired the plant and plaintiff continued to work there as a shift technician whose responsibility was to repair the textile spinning frames used in the plant. Plaintiff kept and maintained a toolbox, which he purchased at his own expense, for performing these repairs. On this toolbox, plaintiff had attached a 2 X 3 inch decal of a Confederate naval flag before defendant acquired the plant. During this time, plaintiff had never received a complaint about the decal nor had anyone ever asked him to remove it until 8 August 1994. On this date, plaintiff’s supervisor, Curley Edwards, told him that Ed Harris, the plant manager, had told Edwards to ask plaintiff to remove the decal. Plaintiff did not work on Saturday 13 August 1994 and when he returned to work the following day, he found that the flag decal had been removed from the toolbox and put back upside down. Plaintiff returned the decal to its original position. The next day, plaintiff arrived at work to find the flag decal missing from his toolbox. He replaced it with a similar flag decal the next day. Later that week, plaintiff was told by Edwards, that he should meet with Harris. At the meeting, Harris told plaintiff to write out a statement explaining why he wanted the flag decal on his toolbox and why he refused to remove it. Plaintiff wrote a statement explaining that the flag was part of his Southern heritage and he displayed the flag decal to show his pride. After providing his explanation, plaintiff was again asked to remove the flag decal. Plaintiff again refused and was issued a warning for violation of defendant’s harassment policy. The following Monday plaintiff was again instructed to remove the flag decal and was told specifically that if he did not do so, he would be fired. Plaintiff refused and was subsequently terminated for being in violation of the harassment policy. Plaintiff argues that the trial court erred by granting the defendant’s motion to dismiss his complaint. In his brief, plaintiff only argues the sufficiency of the complaint as to his claims for wrongful discharge in violation of public policy and breach of implied contract. No arguments are brought forward regarding the three additional claims for relief. Therefore, we do not consider the assignment of error relating to these three claims. Plaintiff first contends his complaint is sufficient to state a claim for wrongful discharge in violation of public policy. Plaintiff asserts that his rights to “freedom of speech and to freedom of expression...protected by the First Amendment of the United States Constitution, as well as the Constitution and laws of the State of North Carolina...ris[es] to the level of public policy within the workplace” and that “ [defendant's acts... off end the public policy of the State of North Carolina. . . .” Plaintiff cites 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); Coman v. Thomas Manufacturing Co., 325 N.C. 172, 381 S.E.2d 445 (1989); and Amos v. Oakdale Knitting Co., 331 N.C. 348, 416 S.E.2d 166 (1992), in support of what he contends is a growing prohibition against discharging employees for engaging in conduct that is protected by “public policy.” In each of the above cases, our State has recognized an exception to the employment-at-will doctrine by identifying a cause of action for wrongful discharge in violation of public policy. In Sides, the plaintiff was terminated in retaliation for her refusal to testify falsely or incompletely in a medical malpractice case. This Court in reversing the lower court’s dismissal of the plaintiffs claim, stated “. . . while 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.” Sides, 74 N.C. App. 342, 328 S.E.2d 826. In Coman, our Supreme Court adopted the public policy exception to employment-at-will when it reversed the Court of Appeals’ decision affirming the trial court’s dismissal of the plaintiff’s claim for wrongful discharge in violation of public policy. In that case, the plaintiff was terminated for his refusal to violate U.S. Department of Transportation regulations by operating his vehicle excessive hours and by falsifying records. The Court found that it was the public policy of this State to protect the safety of persons or property on public highways due to the fact that “[o]ur legislature has enacted numerous statutes regulating almost every aspect of transportation and travel on the highways in an effort to promote safety.” Coman, 365 N.C. 176, 381 S.E.2d 447. Our Supreme Court again examined the contours of the public policy exception in Amos. There, the Court held that the dismissal of the plaintiffs claim for wrongful discharge in violation of public policy was error where the plaintiff alleged she was terminated for her refusal to work for less than the statutory minimum wage. Moreover, the Court stated that “at the very least public policy is violated when an employee is fired in contravention of express policy declarations contained in the North Carolina General Statutes.” Amos, 331 N.C. 353, 416 S.E.2d 169. From these decisions, a definition of “public policy” has evolved which connotes the principle of law that holds no citizen can lawfully do that which has a tendency to be injurious to the public or against the public good. Therefore, we must determine whether the constitutional protections of free speech and expression, in a workplace setting, would constitute a “public policy” so as to prevent defendant from discharging the plaintiff. Defendant contends that the right of free speech and expression does not extend to the workplace where a private employer must have flexibility in adopting and enforcing its employment policies and practices. As such, plaintiff has no support for extending the public policy exception to prohibit his discharge. Plaintiff also relies on Lenzer v. Flaherty, 106 N.C. App. 496, 418 S.E.2d 276, disc. review denied, 332 N.C. 345, 421 S.E.2d 348 (1992) to support his contention that our State Constitution can serve as the source of public policy in his wrongful discharge claim. In Lenzer, the wrongful discharge in violation of public policy claim was brought by a state employee against state officials alleging she was terminated for exercising her free speech rights in reporting possible patient abuse. Id. at 500, 418 S.E.2d at 279. We find the facts in Lenzer to be distinguishable from the facts in the case at hand. In Lenzer, this Court stated: As to plaintiff’s claim for wrongful discharge, the facts of this case fit within the public policy exception to the employment-at-will doctrine as that exception has recently been delineated by our Supreme Court. In Amos... the Court declared that “at the very least public policy is violated when an employee is fired in contravention of express policy declarations contained in the North Carolina General Statutes.” That observation, in our view, applies with equal force to rights guaranteed by the State Constitution such as Plaintiff’s free speech claim. Id. at 514-15, 418 S.E.2d at 287. In reversing summary judgment for the defendants, our Court concluded that “public speech about suspected patient abuse in State facilities merits legal protection.” Id. at 508, 418 S.E.2d at 284. We conclude that the plaintiffs conduct carried out in private employment is not constitutionally protected activity. Therefore, plaintiff has failed to allege facts sufficient to support a claim of wrongful discharge based on his activity being protected speech and expression by our Constitution. The trial court did not err in granting defendant’s motion to dismiss the claim of wrongful discharge in violation of public policy. Plaintiff next assigns as error the trial court’s dismissal of his claim for breach of implied contract. He asserts in his complaint that “the statements and promises made by the defendant ... to its employees, as contained in the Employee handbook, create an implied contract as between the parties, and that the failure of the defendant to honor these promises in terminating this plaintiff gives rise ... to a cause of action for . . . breach of implied contract.” This Court has previously rejected claims that an employee termination violated a contract allegedly embodied in an employment handbook, holding that such policy documents do not constitute a contract unless expressly made part of the employment contract. See Salt v. Applied Analytical, Inc., 104 N.C. App. 652, 412 S.E.2d 97 (1991), disc. review denied, 331 N.C. 119, 415 S.E.2d 200 (1992); Rucker v. First Union Nat. Bank, 98 N.C. App. 100, 389 S.E.2d 622, disc. review denied, 326 N.C. 801, 393 S.E.2d 899 (1990); 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). In this case, plaintiff has failed to allege how defendant’s employee handbook was made part of his employment contract with defendant. Thus, the trial court correctly dismissed plaintiff’s claim for breach of implied contract. Affirmed. Judge GREENE concurs with separate opinion. Judge McGEE concurs. . The Harassment Policy provides: “It is the policy of Mayo Yarns, Inc., to promote an atmosphere that is free of harassment in any form in all levels of employment. The Company’s goal is to provide a workplace free of tensions created by racial, ethnic, sexist, religious, age-based remarks or animosity, unwelcome sexual advances, requests for sexual favors, or other conduct of a sexual nature. Such actions or conduct are viewed as creating an intimidating, harmful, and offensive environment and will not be tolerated.” Judge Greene concurring. The discharge of an at-will employee is wrongful if the reason for the termination contravenes public policy. E.g. Coman v. Thomas Mfg. Co., 325 N.C. 172, 175, 381 S.E.2d 445, 447 (1989). The plaintiff argues that his discharge was based on his refusal to remove a Confederate naval flag decal from his toolbox he used at work and that because the display of the decal was an exercise of his First Amendment rights, his discharge is wrongful because any action by his employer limiting his First Amendment rights contravenes public policy. There is no question that if the display of the decal at the plaintiff’s place of employment was an exercise of his First Amendment rights, any discharge based on the display of that decal would be violative of the public policy of this State and support an action for wrongful discharge. See Lenzer v. Flaherty, 106 N.C. App. 496, 515, 418 S.E.2d 276, 287 (1992). In this case, however, the plaintiff’s First Amendment rights are not implicated because the United States Constitution (Constitution) does not secure rights to individuals against other individuals. Pub. Util. Comm’n v. Pollak, 343 U.S. 451, 461, 96 L. Ed. 1068, 1077 (1952). It is only the officials of the State “that are obligated to conduct themselves in accordance with the Constitution.” Thus because there is no evidence in this record that the employer was acting for or on behalf of the State, the First Amendment rights of the plaintiff were not implicated when he was discharged for displaying the decal. It follows that there has been no violation of the public policy of this State and the trial court correctly dismissed the wrongful discharge claim.
Alan J. Labonte vs. Hutchins & Wheeler. Suffolk. October 7, 1996. May 5, 1997. Present: Wilkins, C.J., Abrams, O’Connor, & Fried, JJ. Anti-Discrimination Law, Handicap, Termination of employment. Estoppel. Employment, Discrimination, Termination. Damages, Emotional distress, Punitive. Words, “Qualified handicapped person.” In an action asserting a claim based on handicap discrimination in employment, the plaintiff was not estopped from pursuing that claim because he applied for and received disability benefits after being terminated from his employment, where the plaintiff never claimed to have been totally disabled during the time he was seeking a reasonable accommodation and where he demonstrated that he was quite able to perform his duties had he been given a reasonable accommodation. [816-820] In a handicap discrimination case, the evidence presented supported the conclusion that the plaintiff was a qualified handicapped person, able to perform the essential functions of his job provided his employer made a reasonable accommodation for him, and the evidence was sufficient to warrant the denial of the employer’s motion for judgment notwithstanding the verdict. [820-823] In a handicap discrimination case, the jury reasonably could have concluded that the evidence of depression the plaintiff suffered as a result of his termination from employment was sufficient to warrant an award of damages for emotional distress [823-824]; however, the award was excessive based on the evidence presented and the matter was remanded for a hearing on the amount of a remittitur [824-826], A handicap discrimination case was remanded for reconsideration of the punitive damages award in light of BMW of N. Am. v. Gore, 517 U.S. 559 (1996), decided after the trial and the hearing on the motion for new trial. [826-827] Civil action commenced in the Superior Court Department on September 11, 1992. The case was tried before Catherine A. White, J. The Supreme Judicial Court granted an application for direct appellate review. Richard W. Renehan (Joshua M. Davis with him) for the defendant. David Rapaport (Jerry E. Benezra with him) for the plaintiff. Tames G. Wheeler and others, copartners doing business under the law firm name and style of Hutchins & Wheeler. We shall refer to a single defendant (law firm). Abrams, J. The defendant, the law firm of Hutchins & Wheeler (law firm), appeals from a jury verdict in favor of the plaintiff, Alan J. Labonte, based on handicap discrimination. See G. L. c. 15 IB, § 4. The law firm argues that: (1) the plaintiff is estopped from pursuing his claim because he sought disability benefits; (2) the evidence was insufficient to withstand a motion for directed verdict; and (3) the judge erred in denying its motion for remittitur or a new trial based on excessive damages. We allowed the law firm’s application for direct appellate review. We affirm the determination of liability. We remand the case to the Superior Court for further proceedings on the issue of damages. 1. Facts. In June, 1990, the plaintiff, Alan J. Labonte, was hired as the executive director of the law firm. When hired, he was informed that his job would have a “continuously high” stress level. He was told that he would be required to perform many functions, although the exact functions never were incorporated explicitly into a written job description. At the job interview the law firm implied that the hours would be long. The plaintiff was to receive $115,000 per year for his services. The plaintiff, a Greenfield resident, took up residence in an apartment near the law firm. His family remained in Greenfield. The plaintiff stayed in Boston during the week and traveled to Greenfield on weekends to be with his family. After a year, the plaintiff bought a home in the Boston area so that his family could be with him. Various partners of the law firm knew of and assisted with the mechanics of the purchase of the home and none dissuaded him from making the purchase or gave any indication that his job was in jeopardy. During the first year, the plaintiff created a timekeeping system that saved the law firm $13,000 per month, arranged for a better life insurance package for the attorneys, rearranged leasing agreements to save rental payments of $43,000, lowered client disbursement costs by $200,000, and devised a system to cut overtime expenses to save $40,000. In June, 1991, the plaintiff received an evaluation stating that the partners were “very satisfied” with the work that he was doing. The plaintiff received a raise of $4,600 a year. Approximately one year after starting at the law firm, the plaintiff developed a limp. A partner at the law firm suggested that he visit a doctor who was a client of the law firm. The plaintiff did so. The plaintiff learned that he had multiple sclerosis. He was referred to a neurologist, who specialized in the disease. After learning that the plaintiff had multiple sclerosis, the partners on the management committee began to shun him. Despite a request to do so by the plaintiff, the partners never communicated with the specialist to determine what measures could be taken to accommodate the plaintiff in light of his condition. The only effort made was to meet over lunch on one occasion with the plaintiff’s referring doctor. The doctor told them to limit the amount of walking that the plaintiff would be required to do. He also stated that the plaintiff might need to rest during the day. The plaintiff continued to work long hours, including taking on additional tasks assigned by the partners such as leading a search committee for a replacement for an employee who had left. The partners at the law firm made no effort to move the plaintiff’s office or to limit his need for walking. On one occasion, one partner did tell the plaintiff that he should go home if he was tired so that he would not wear himself out and then be ineffective. The partners continued to maintain a heavy work load for the plaintiff, and also pressured him to cancel a personal trip to Florida that he had planned in December, 1991. In January, 1992, the plaintiff was terminated by the law firm. With the exception of the one lunch meeting with the referring doctor, the partners never met with any of the plaintiff’s doctors or the plaintiff himself prior to his termination to discuss whether reasonable accommodation to assist the plaintiff was possible. The reason given for his termination was poor work performance due to his disability. The law firm claimed that the plaintiff’s thinking was not as “crisp” as it needed to be. After being terminated, the plaintiff applied for and received disability benefits from a law firm insurance policy, stating that he was “unable to work long hours in a stressful job; [and] need[ed a] flexible work schedule.” As a result of being terminated, the plaintiff became very depressed and sought therapy. Soon after his termination, he began consulting for a hospital in the greater Boston area. By the fall of 1993, the plaintiff was enrolled in a doctoral program at Boston University, taking classes and teaching. 2. Estoppel. The law firm claims that the plaintiff is estopped from pursuing this discrimination claim because he sought disability benefits after being terminated by the law firm. The law firm asserts that a plaintiff claiming disability benefits admits that he is totally disabled and is unable to perform his job. Therefore, the plaintiff is not a “qualified handicapped person.” A majority of courts have rejected a defendant’s claim that seeking benefits automatically disqualifies a plaintiff from pursuing a handicap discrimination claim. Courts are wary of allowing plaintiffs to play “fast and loose with the courts” by claiming to be too disabled to perform the functions of a job and also claiming that they were terminated from their positions despite being able to perform those same functions. See McNemar v. Disney Store, Inc., 91 F.3d 610, 618 (3d Cir. 1996), cert denied, 117 S. Ct. 958 (1997). However, if the evidence creates a disputed issue of fact whether the handicapped person can perform the essential functions of the job, then estoppel is not appropriate. See Pegues v. Emerson Elec. Co., 913 F. Supp. 976, 980-981 (N.D. Miss. 1996) (application for disability benefits does not “necessarily foreclose” a claim of handicap discrimination); Parisi v. Jenkins, 236 Ill. App. 3d 42 (1992); Department of Transp. v. Grawe, 113 Ill. App. 3d 336 (1983); Jishi v. General Motors Corp., 207 Mich. App. 429 (1994); Paschke v. Retool Indus., 445 Mich. 502 (1994) . Only one court has explicitly adopted a strict rule maintaining that a person filing for disability benefits is estopped from pursuing any claim for discrimination, solely because that person sought and received disability benefits. See Garcia-Paz v. Swift Textiles, Inc., 873 F. Supp. 547, 557 (D. Kan. 1995). Other “courts [applying estoppel] did not find it dispositive that the plaintiff had made representations of disability in order to receive benefits. Rather, some of the courts considered such representations as factors to be weighed in determining whether a fact question existed.” Morton v. GTE North, Inc., 922 F. Supp. 1169, 1182 (N.D. Tex. 1996) (rejecting the notion that cases other than Garcia-Paz, supra, apply estoppel based solely on a claim for disability benefits). Relying on Beal v. Selectmen of Hingham, 419 Mass. 535 (1995) , and August v. Offices Unlimited, Inc., 981 F.2d 576 (1st Cir. 1992), the law firm asserts that the plaintiff should be estopped from pursuing this action. We do not agree. In Beal, a police officer was on paid disability leave for two years after suffering severe injuries sustained in a head-on automobile collision while on duty. When ordered to return to duty, the officer claimed that she was “permanently and totally disabled.” Beal, supra at 543. The officer was terminated and thereafter claimed handicap discrimination. Id. at 537. We concluded that her declaration of total disability on being asked to return to work was proof that she could not have performed the essential functions of the position. Id. at 539-543. We also noted that a police officer’s job, even a desk job, necessitated the ability to react quickly in emergency situations and that the plaintiff’s propensity to blackouts in stressful situations made her unable to perform the essential functions of the job. Id. at 542-543. These factors together eliminated any dispute as to whether the plaintiff could perform the essential functions of the job. Similarly, in August, the plaintiff, a salesman, had taken a continuous leave of absence due to clinical depression. His six-week leave began on March 27, 1989, and was later extended an additional two weeks to end on May 22, 1989. At a May 11 meeting, August expressed his concern over his ability to perform on a full-time basis and was told that a part-time schedule was inappropriate. Unsure of his ability to return to work, the plaintiff filed for disability benefits on May 12, 1989. August, supra at 578-579. On May 25, 1989, August was terminated because “it [was] certainly unclear when and if [August would] be able to return to work.” Id. at 579. He sought and received disability benefits for the rest of the year and renewed his claim in December, 1989; February, 1990; April, 1990; and June, 1990, on the basis that he was totally and continuously disabled. The application for benefits included a statement from the plaintiff’s doctor that the plaintiff had been “totally disabled” since March, 1989. August brought suit claiming handicap discrimination. The court denied August relief because it stated that his declaration that he was “totally disabled” was an admission that he was unable to perform the essential functions of the job, even given reasonable accommodation. Id. at 581-583. He failed to provide evidence that he could perform the essential functions of the job given reasonable accommodation. Id. Thus, when the request for accommodations was made, August already had admitted to being “totally disabled” and not a qualified handicapped person. The plaintiff points to D’Aprile v. Fleet Servs. Corp., 92 F.3d 1 (1st Cir. 1996), as the analysis we should follow because it is the closest to his case. We agree. D’Aprile, a senior systems support analyst with multiple sclerosis, worked for two months on a flexible part-time schedule, using her vacation time to create a de facto accommodation. The plaintiff performed the essential functions of her job at a high level when allowed to use this schedule. When her vacation time elapsed, the employer denied her the opportunity to maintain the flexible schedule. She was terminated because she could not work a full-time weekly schedule and immediately filed for disability benefits. The employer argued that, based on the authority of August, the filing for disability benefits precluded the plaintiff from suing on the basis of handicap discrimination. The court disagreed. The court noted that D’Aprile never claimed to be totally disabled during the time in which she requested her accommodation. D’Aprile, supra at 4. Her application for disability benefits came only after her requests for accommodation were ignored. Unlike August, who had claimed “total disability” while seeking accommodation, D’Aprile did not seek disability benefits until after she had been terminated. Therefore, the court reasoned that, because “D’Aprile never claimed to have been totally disabled during the time she requested her accommodation, and demonstrated her ability to work with the accommodation she requested,” the mere fact that she sought disability benefits did not preclude her from bringing a claim of handicap discrimination. Id. at 5. The law firm asserts that “neither [the plaintiff] nor his doctors ever qualified their numerous statements to [the insurer].” This assertion is incorrect. On the form on which the plaintiff filed his claim for benefits, he stated that he was in need of a flexible work schedule. This request for accommodation, never considered by the law firm, was evidence that the plaintiff was not claiming to be totally disabled. See Ward v. Westvaco Corp., 859 F. Supp. 608, 615 (D. Mass. 1994) (plaintiff’s statement on an application for disability benefits indicating that accommodation was necessary made estoppel inappropriate). Further, unlike August where no disputed factual issue existed as to whether the plaintiff was a “qualified handicapped person” based on a claim of total disability, the case at bar presented a contestable claim based on disputed issues of fact. In sum, there was evidence to show that the plaintiff was capable of working a fifty-five hour week when allowed to utilize a flexible schedule and when his expected amount of walking was limited. He did so at Boston University after being terminated by the law firm. The person who filled his job at the law firm before and after the plaintiff devoted less time to the functions of the position of executive director than the plaintiff devotes to his current position. There was evidence that the plaintiff could have handled the time requirements necessary to perform the essential functions. The plaintiff’s evidence was that he was disabled to perform the job without reasonable accommodation, but quite able to perform the job given some reasonable accommodation. The plaintiff sought an office near the elevators and flexible working hours. In these circumstances, estoppel is inappropriate. See, e.g., D’Aprile, supra at 4-5; Mohamed v. Marriott Int’l, Inc., 944 F. Supp. 277 (S.D.N.Y. 1996). We conclude that the judge did not err in denying the law firm’s claim that the plaintiff was estopped from pursuing a claim under G. L. c. 151B, § 4, by filing for disability benefits. 3. Sufficiency of evidence. The jury concluded that the law firm terminated the plaintiff, a qualified handicapped person, solely because of his handicap. We start with the proposition that taking the question out of the jury’s hands is disfavored in the context of discrimination cases based on disparate treatment because the ultimate issue is often that of intent, and is a factual question. Blare v. Husky Injection Molding Sys. Boston, Inc., 419 Mass. 437 (1995), citing Brunner v. Stone & Webster Eng’g Corp., 413 Mass. 698, 705 (1992). See Flesner v. Technical Communication Corp., 410 Mass. 805, 809 (1991) (“where motive, intent, or other state of mind questions are at issue, summary judgment is often inappropriate”). Noting this preference for submitting the question to the jury, when we review the entry of a judgment notwithstanding the verdict, we view the evidence in the light most favorable to the plaintiff and disregard evidence favorable to the law firm. Cimino v. Milford Keg, Inc., 385 Mass. 323, 326 (1982); Poirier v. Plymouth, 374 Mass. 206, 212 (1978). A jury verdict must be sustained if a plaintiff has presented any evidence from which the jury reasonably could have arrived at that verdict. 4. Three-stage order of proof in discrimination cases. General Laws c. 151B, § 4, provides in relevant part: “It shall be an unlawful practice . . . [f]or any employer, personally or through an agent, to dismiss from employment ... or otherwise discriminate against, because of his handicap, any person alleging to be a qualified handicapped person, capable of performing the essential functions of the position involved with reasonable accommodation, unless the employer can demonstrate that the accommodation required to be made to the physical or mental limitations of the person would impose an undue hardship to the employer’s business.” In disparate treatment cases, there is a three-stage order of proof, Blare, supra at 440-445, adopted from the approach taken by the Federal courts based on an analogous statute. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973). In the first stage, the burden is placed on the plaintiff to show by a preponderance of the evidence a prima facie case of discrimination. Blare, supra at 440-445. Massachusetts has adopted a flexible approach to this framework, acknowledging that “the facts necessary to establish prima facie case of discrimination will vary depending on [the] situation.” Beal v. Selectmen of Hingham, 419 Mass. 535, 544 (1995). To establish the prima facie case of unlawful employment discrimination on the basis of handicap pursuant to G. L. c. 151B, a plaintiff who has been terminated from employment must show that: (1) he suffers from a handicap; (2) he is a “qualified handicapped person”; and (3) he was fired solely because of his handicap. Garrity v. United Airlines, Inc., 421 Mass. 55, 60 (1995); Cox v. New England Tel. & Tel. Co., 414 Mass. 375, 383 (1993). Once a prima facie case is made, the burden shifts to the law firm to offer a legitimate nondiscriminatory reason for its action. A plaintiff could still prevail by showing that the reason given by the employer is merely a pretext for discrimination. The law firm consolidates the steps by offering that its reason for termination was that the plaintiff’s disability made him unable to perform the essential functions of the job. A “qualified handicapped person” is someone who can perform the “essential functions” of the job in question, provided that the employer makes “reasonable accommodation” for that employee. See School Bd. of Nassau County v. Arline, 480 U.S. 273, 287 n.17 (1987); Garrity, supra at 61-62. The law firm argues that the plaintiff is not a “qualified handicapped person.” While the law firm presented some evidence to the contrary, the evidence and the inferences in the light most favorable to the plaintiff support the conclusion that the plaintiff could perform the essential functions of the job with reasonable accommodation. No official job description for the position of executive director was offered in evidence. The la
MEAGHER v WAYNE STATE UNIVERSITY Docket Nos. 177139, 183282. Submitted September 3, 1996, at Detroit. Decided April 15, 1997, at 9:00 A.M. Leave to appeal sought. Suzanne Meagher brought an action in the Wayne Circuit Court against Wayne State University and several university employees, individually and as agents of the university, alleging age discrimination under the Civil Rights Act, MCL 37.2101 et seq.-, MSA 3.548(101) et seq., and violation of due process under 42 USC 1983, after her employment as a research assistant supervising graduate students was terminated and a younger person was hired to replace her. The court, William Leo Cahalan, J., denied a motion by the defendants for summary disposition of the due process claim. Judge Robert L. Ziolkowski succeeded Judge Cahalan and granted the defendants summary disposition of the due process claim, ruling that the written contract of employment' had provided for employment that was terminable at will, and directed a jury verdict of no cause of action on the age discrimination claim, ruling that age had not been a factor in the decision to terminate employment. The court also awarded the defendants costs and attorney fees pursuant to MCL 600.2591(3)(a); MSA 27A.2591(3)(a), finding that the plaintiff’s due process claim and the claim against three individual defendants had been frivolous. The plaintiff filed two appeals, and the defendants cross appealed. The appeals were consolidated. The Court of Appeals held,-. 1. The trial court did not err in directing a verdict of no cause of action with respect to the age discrimination claim. Although the plaintiff established a prima facie case of age discrimination by presenting evidence of membership in the protected .class, discharge, qualification for the position, and replacement by a younger person, the plaintiff failed to prove by a preponderance of the evidence that the legitimate nondiscriminatoiy reasons for termination (poor supervision of a graduate student and poor handling of a research case) offered by the defendants were a mere pretext. The plaintiff failed to establish a prima facie case of disparate treatment because she did not show sufficiently that she was treated differently from employees of a different class for the same or similar conduct. With regard to the plaintiff’s claim on appeal that the trial court improperly used the reduction in force standard to determine whether the plaintiff had been discharged on the basis of her age, the trial court granted a directed verdict because it found no evidence that age was a factor in the decision to discharge, not because the plaintiff failed to make the additional proofs required in a case involving a reduction in work force. 2. The original judge’s denial of the defendants’ motion for summary disposition of the due process claim was not dispositive of the issue because the successor judge, under MCR 2.604, had the power to modify any order entered before the final judgment. The successor judge correctly granted summary disposition of the due process claim on the ground that employment had been terminable at will under the terms of the written employment contract. A public employee does not have a property right in continued employment where, as here, the position is held at the will of the employee’s superiors and the employee has not been promised termination only for cause. 3. The plaintiff failed to preserve for appellate review the claim that certain records were improperly admitted into evidence under the hearsay exception for business records by not objecting at trial on the ground asserted on appeal. 4. The plaintiff’s claim that the chief judge of the circuit court abused his discretion in upholding the trial judge’s denial of the plaintiff’s motion for disqualification of the trial judge cannot be considered because the plaintiff failed to provide a transcript of the chief judge’s ruling. No error is apparent from the record of the trial judge’s ruling on the motion, and disqualification for due process is not supported by evidence of a probability of actual bias that was too high to be tolerable under the Due Process Clause'of the constitution. 5. The record does not support the plaintiff’s claim that the trial judge was biased against her. 6. The trial court did not clearly, err in finding that the plaintiff’s due process claim and claim against three individual defendants were devoid of arguable legal merit so as to justify an award of costs and attorney fees to the defendants under MCL 600.2591(3)(a); MSA 27A.2591(3)(a). The trial court’s finding with respect to the due process claim is not clearly erroneous in light of the plaintiff’s written contract of employment providing for termination at will, and the finding with respect to the individual defendants is not clearly erroneous in the absence of a showing by the plaintiff of any factual or legal basis for the claims against those defendants. 7. The trial court did not have to await the 'outcome of the plaintiffs appeal of the grant of a directed verdict before granting the defendants’ motion for costs and attorney fees. The defendants won on the entire record at trial and therefore were the prevailing party for purposes of MCL 600.2591; MSA 27A.2591. 8. The plaintiff’s appeal with regard to the due process claim was vexatious within the meaning of MCR 7.216(C)(1)(b) because the plaintiff’s appellate brief violated court rules in exceeding the fifty-page limit on briefs and grossly disregarded the requirement of a fair presentation of the claim to this Court. The case must be remanded for an award to the defendants under MCR 7.216(C)(2) of their actual damages- and expenses, including reasonable attorney fees incurred in defending against the plaintiff’s appeal of the dismissal of the due process claim. Affirmed and remanded. 1. Motions and Orders — Directed Verdicts — Appeal. A grant or denial of a motion for a directed verdict is reviewed de novo on appeal; the evidence is considered in the light most favorable to the nonmoving party; a directed verdict is appropriate only when no factual question exists upon which reasonable minds may differ. 2. Civil Rights Employment Discrimination — Age — Intentional Discrimination — Disparate Treatment. Intentional discrimination and disparate treatment in employment involve the same theory of discrimination but different methods of proof (MCL 37.2202[l][a]; MSA 3.548[202][l][a]). 3. Civil Rights — Employment Discrimination — Age — Discharge. A prima facie case and rebuttable presumption of age discrimination with respect to termination of employment is established by a plaintiff who shows that the plaintiff is a member of the protected class, was discharged, was qualified for the position, and was replaced by a younger person; once a prima facie case is made, the defendant must produce evidence of a legitimate, nondiscriminatory reason for termination; if the' defendant produces such evidence, the plaintiff must prove by a preponderance of the evidence that the reason offered by the defendant is a mere pretext (MCL 37.2202[l][a]; MSA 3.548[202][l][a]). 4. Master and Servant — Public Employment — Property Interest — Due Process. A public employee does not have a property interest in continued employment, and therefore does not have a cognizable claim under 42 USC 1983 upon termination of employment for deprivation of property without due process, where the position is held at the will of the employee’s superiors and the employee has not been promised termination only for just cause. 5. Costs — Attorney Fees — Frivolous Claims. A claim is frivolous and a trial court may tax costs on the claimant to reimburse the prevailing party for costs incurred in litigation where the claimant’s primary purpose in initiating the action or asserting a defense was to harass, embarrass, or injure the prevailing party, the claimant had no reasonable basis to believe that the underlying facts were true, or the claimant’s position was devoid of arguable legal merit; a trial court need not await the outcome of a claimant’s appeal before awarding costs and attorney fees to a prevailing party (MCL 600.2591[3][a]; MSA 27A.2591[3][a]). Mary Anne M. Helveston, for the plaintiff. . Einheuser and Associates (by Michael Einheuser and Jonathan A. Green), for the defendants. Before: Young, P.J., and Taylor and R. C. Livo, JJ. Circuit judge, sitting on the Court of Appeals by assignment. Taylor, J. This case arises out of the termination of plaintiffs employment at Wayne State University in 1991. In Docket No. 177139, plaintiff appeals as of right from a judgment of no cause of action resulting from a directed verdict, granted after a jury heard nine days of proofs, on her age discrimination claim, and the trial court’s pretrial grant of summary disposition of her due process claim under 42 USC 1983. Defendants have filed a cross appeal, but limit their arguments to plaintiff’s issues. In Docket No. 183282, plaintiff appeals as of right from the trial court’s post-trial order awarding costs and attorney fees pursuant to MCL 600.2591; MSA 27A.2591. We affirm and remand for imposition of sanctions pursuant to MCR 7.216(C) (vexatious appeal). i Plaintiff commenced this action on July 1, 1992, seeking damages and reinstatement to her former position as a research assistant for the Parents and Children Together (pact) Project in the Department of Sociology of the College of Liberal Arts at Wayne State University. Pact is funded pursuant to a contract between the university and the former Department of Social Services (dss). Pact studies families (e.g., the characteristics of families having children in foster care) and provides services to families referred by the dss. Pact’s goal was to return children to families, although, in some cases, the children stayed in the family home rather than in foster care when the family was referred by the dss to pact. Graduate students are hired by pact to serve as caseworkers for its in-home project for those families referred by the dss to pact. In addition to providing services, the graduate students were required to file regular reports on their assigned families. Mary Jane Van Meter was the principal investigator for pact at the time of plaintiff’s discharge. Van Meter was ultimately responsible for everything that happened in pact. Although Van Meter - supervised the pact research, there were several levels of supervision between Van Meter and the graduate students who were employed by PACT as caseworkers. As a research assistant in pact, plaintiff was one of the direct súpervisors of the graduate students. Plaintiff started working at PACT in 1977. For each of her fourteen years of employment, plaintiff executed written contracts setting forth the terms of her appointment as a research assistant. The contract language was modified over the years as new contracts were executed. The last contract executed by plaintiff specified: [R]enewal is to begin on.October 1, 1990. This is a non-tenure track assignment and carries no presumption of cpn.tinuing tenure. This renewal is subject to the pleasure of. the President or his/her designee and contingent on the availability of funding... . The terms of this agreement may not be modified or altered by any oral statements or representations. This agreement may only be modified in writing, signed by a University official as authorized by Executive Order 85-1. . . . The continuation of the assignment is dependent upon your satisfactory performance and upon continuation of funding. Plaintiff was discharged by Van Meter in May of 1991. Van Meter, who indicated that she was older than plaintiff, cited plaintiffs inadequate handling of a case in the in-home project (hereafter referred to as the Doe case) as grounds for the termination. The Doe case was being serviced by a graduate student subject to plaintiffs direct supervision. The Doe case was referred by the dss to pact on February 28, 1991. A graduate student was then assigned to provide in-home services for the family, which had one child residing outside the home as a temporary ward of the court and other children residing in the home with the mother. Among the stated goals set forth in the referral document was one to “improve mother’s parenting skills and discipline technique. Help entire family deal with issues around sexual abuse. Help to become more - secure when returning home transition.” It was undisputed that the graduate student assigned to the Doe case was experiencing personal difficulties during May of 1991, which, according to plaintiff’s own trial testimony, could probably be described as burnout. There was also trial evidence presented by the defense that information was acquired during pact’s handling of the case that should have been reported to the dss so that an investigation could be made by the DSS regarding whether children in the home were at risk for sexual abuse. On May 16, 1991, Van Meter was confronted by the mother in the Doe case about one of her daughters running away and Van Meter discussed this matter with the plaintiff. On May 21, 1991, Van Meter informed plaintiff that her employment was being terminated. After plaintiff was discharged, other supervisors of PACT shared plaintiff’s former responsibilities. Plaintiff, who was forty-eight years old, was temporarily replaced with an individual of similar age. Finally, after posting and rewriting the qualifications for the position to require that the applicant have a master’s degree in social work, a person significantly younger than the plaintiff was hired to permanently replace plaintiff. Plaintiff’s amended complaint alleged age discrimination under the Civil Rights Act, MCL 37.2101 et seq.; MSA 3.548(101) et seq., and' denial of due process under 42 USC 1983. The complaint named Wayne State University and four individual defendants: David Adamany in his individual capacity and as president of Wayne State University; John Oliver in his individual capacity and as dean of the College of Liberal Arts; David Britt in his individual' capacity and as the chairperson of the Department of Sociology; and Van Meter in her individual capacity and as an associate professor of sociology and principal investigator for PACT. In ruling on pretrial motions, the court determined that the due process claim should be dismissed because plaintiff’s employment was terminable at will. The case proceeded to trial solely on plaintiff’s age discrimination claim. n Defendants moved for a directed verdict at the close of plaintiff’s proofs. The court took the matter under advisement. After the close of defendants’ proofs, the court granted a directed verdict in favor of defendants because there was no evidence that age was a factor in the decision to terminate plaintiff’s employment. Plaintiff first contends that the trial court erred in granting a directed verdict on her age discrimination claim. Plaintiff asserts that the trial court applied the wrong standard when directing a verdict against her by utilizing a “reduction in force” standard. We find no error. At the outset, we note some conflict in the case law regarding the standard of review that we are to apply. One line of authority holds that we should review a trial court’s granting of a directed verdict under the deferential “abuse of discretion” standard. See, e.g., Rasmussen v Louisville Ladder Co, Inc, 211 Mich App 541, 545; 536 NW2d 221 (1995); Michigan Microtech, Inc v Federated Publications, Inc, 187 Mich App 178, 186-187; 466 NW2d 717 (1991). Another line of authority holds that we should utilize the same test as the trial court, which implies review de novo. See, e.g., Matras v Amoco Oil Co, 424 Mich 675, 681-682; 385 NW2d 586 (1986); Haberkorn v Chrysler Corp, 210 Mich App 354, 364; 533 NW2d 373 (1995); Dep’t of Transportation v McNabb, 204 Mich App 674, 676; 516 NW2d 83 (1994); Berryman v K mart Corp, 193 Mich App 88, 91; 483 NW2d 642 (1992). Because we have found no Michigan Supreme Court opinion holding that a directed verdict is reviewed for an abuse of discretion, and because Matras, supra, indicates that an appellate court is to apply the same test that the trial court applies, we review the trial court’s decision de novo and reject the cases that hold that we. should review the trial court’s decision for an abuse of discretion.. When evaluating a motion for a directed verdict, a court must consider the evidence in the light most favorable to the nonmoving party, making all reasonable inferences in favor of the nonmoving party. Locke v Pachtman, 446 Mich 216, 223; 521 NW2d 786 (1994). Directed verdicts are appropriate only when no factual question exists upon which reasonable minds may differ. Brisboy v Fibreboard Corp, 429 Mich 540, 549; 418 NW2d 650 (1988). Plaintiff’s age discrimination claim is based upon that portion of the Civil Rights Act that provides that an “employer” shall not [f]ail or refuse to hire or recruit, discharge, or otherwise discriminate against an individual with respect to employment, compensation, or a term, condition, or privilege of employment, because of . . . age. [MCL 37.2202(1)(a); MSA 3.548(202)(1)(a).] A plaintiff may attempt to prove age discrimination using different methods. Wolff v Automobile Club of Michigan, 194 Mich App 6, 11; 486 NW2d 75 (1992). As explained in Reisman v Regents of Wayne State Univ, 188 Mich App 526, 538-539; 470 NW2d 678 (1991): To prove intentional discrimination, the plaintiff must show that he was a member of the affected class, that he • was discharged, and that the person who discharged him was predisposed to discriminate against persons in the affected class and actually acted on that disposition in dis-' charging him. To prove disparate treatment, the plaintiff must show that the plaintiff was a member of the class entitled to protection under the act and that he was treated differently than persons of a different class for the same or similar conduct. A prima facie case of discrimination can also be made by showing a disparate effect. This theory requires a showing that a facially neutral employment practice burdens a protected class of persons more harshly than others. [Citations omitted.] This quote from Reisman seems to suggest that intentional discrimination is different from disparate treatment. That is not the case. As noted in Lytle v Malady, 209 Mich App 179, 185, n 1; 530 NW2d 135 (1995), lv gtd 451 Mich 920 (1996), many decisions have confused these two theories of discrimination with the differing methods of proving each theory. Intentional discrimination is not a separate theory, but rather another name for the disparate treatment theory. Id. Or, as stated in Brewster v Martin Marietta Aluminum Sales, Inc, 145 Mich App 641, 654; 378 NW2d 558 (1985), an alternative method of proving disparate treatment has been labeled as “intentional discrimination.” This is confirmed by the fact that the jury instruction for disparate treatment provides “the discrimination must have been intentional.” SJI2d 105.02. The general rule in an age discrimination case is that, to survive a motion for a directed verdict, the plaintiff must present evidence that, when viewed in a light most favorable to the plaintiff, would permit a reasonable jury to find that the plaintiff was discharged because of age. Matras, supra at 682. When it is asserted that the plaintiff was discharged because of age, the individual’s age need not be the only reason or main reason for discharge but must be one of the reasons that made a difference in determining whether to discharge the person. SJI2d 105.04. The question is whether age was a determining factor in the discharge. Barnell v Taubman Co, Inc, 203 Mich App 110, 121; 512 NW2d 13 (1993). Although the inquiry is always the same, i.e., was the discharge “because of age,” different approaches may be used to meet this burden of pro
ALLEN v COMPREHENSIVE HEALTH SERVICES Docket No. 187357. Submitted November 6, 1996, at Detroit. Decided March 25, 1997, at 9:05 A.M. Leave to appeal sought. Robert Allen brought an action in the Wayne Circuit Court against Comprehensive Health Services pursuant to the Civil Rights Act, alleging that he had been denied opportunities for advancement, increased responsibilities, and greater earning capacity as a result of the defendant’s discrimination against him on the bases of race and gender. The complaint did not allege and discovery did not uncover any direct evidence of discriminatory intent on the part of the defendant. Following discovery, the court, Michael J. Callahan, J., granted summary disposition for the defendant on the basis that there was no genuine issue of disputed fact. The plaintiff appealed the court’s order as it pertained to the claim of gender discrimination. The Court of Appeals held: 1. A prima facie claim by a male employee bringing a gender discrimination claim against his employer under § 202(1) of the Civil Rights Act, MCL 37.2202(1); MSA 3.548(202)(1), for discrimination with respect to a promotion decision where there is no direct evidence of the employer’s discriminatory intent requires a showing that there are background circumstances supporting the suspicion that the employer is that unusual employer who discriminates against males, that the plaintiff applied and was qualified for an available promotion, that the plaintiff was not promoted, and that a female employee of similar qualifications was promoted. Under such a showing, there arises a rebuttable presumption of discriminatory intent by the employer. Absent such a showing, a male employee may not proceed with a gender discrimination claim in the absence of direct evidence of the employer’s discriminatory intent. 2. The plaintiff failed to come forward with any evidence to suggest that the defendant is that unusual employer who discriminates against males. For that reason alone, the trial court properly held that the plaintiff had failed to establish a prima facie claim of gender discrimination. Further, the plaintiff failed to show that any promotion for which he was qualified was given to a woman. Accordingly, the trial court did not err in granting summary disposition for the defendant. Affirmed. Civil Rights — Gender Discrimination — Employment Discrimination — Discrimination Against Males — Promotions — Prima Facie Case. A prima facie claim by a male employee bringing a gender discrimination claim against the employer under the Civil Rights Act for discrimination with respect to a promotion decision where there is no direct evidence of the employer’s discriminatory intent requires a showing that there are background circumstances supporting the suspicion that the employer is that unusual employer who discriminates against males, that the plaintiff applied and was qualified for an available promotion, that the plaintiff was not promoted, and that a female employee of similar qualifications was promoted; under such a showing, there arises a rebuttable presumption of discriminatory intent by the employer; absent such a showing, a male employee may not proceed with a gender discrimination claim in the absence of direct evidence of the employer’s discriminatory intent (MCL 37.2202[1]; MSA 3.548[202][1]). Robert Van Cleef, P.C. (by Robert Van Cleef), for the plaintiff. Dara M. Hom-Taylor, for the defendant. Before: Bandstra, P.J., and Neff and M. E. Dodge , JJ. Circuit judge, sitting on the Court of Appeals by assignment. Bandstra, P.J. Plaintiff appeals as of right from an order granting summary disposition pursuant to MCR 2.116(C)(10) (no genuine issue of material fact) in favor of defendant in this gender discrimination case. We affirm. Defendant hired plaintiff as a part-time data entry clerk in 1988. Following his annual reviews in 1989 and 1990, plaintiff was rated as competent or highly competent and provided salary increases. In June of 1990, plaintiff was promoted to information control clerk. Further reviews of plaintiffs job performance in 1990, 1991, and 1992 resulted in additional pay increases. In 1993, plaintiff filed an internal complaint alleging that defendant discriminated against him by rating him below individuals whom he had outperformed on the job. Although defendant did not concede that plaintiffs allegations had any merit, his position was reclassified to a higher salary level and a different title, data entry coordinator. Plaintiff was not satisfied with this response or other efforts to resolve the dispute. He filed this action alleging that he had been discriminated against in violation of the Civil Rights Act, MCL 37.2101 et seq.; MSA 3.548(101) el seq. Specifically, plaintiff complained that he had been denied opportunities for advancement, increased responsibilities, and a greater earning capacity. The complaint and ensuing discovery did not allege or uncover any direct evidence of discriminatory intent on the part of defendant. Following discovery, defendant moved for summary disposition pursuant to MCR 2.116(C)(10), arguing that plaintiff had failed to come forward with sufficient evidence to proceed with his claim under the Civil Rights Act. The trial court agreed and dismissed plaintiffs complaint. This appeal raises two issues. First, in the absence of direct evidence of discriminatory intent, what must plaintiff show to establish a prima facie case of reverse discrimination in violation of the Civil Rights Act? Second, did plaintiff come forward with sufficient evidence to establish a prima facie case? ELEMENTS OF a “REVERSE DISCRIMINATION” CLAIM UNDER THE CIVIL RIGHTS ACT Under § 202(1) of the Civil Rights Act, MCL 37.2202(1); MSA 3.548(202)(1), an employer may not: (a) Fail or refuse to hire or recruit, discharge, or otherwise discriminate against an individual with respect to employment, compensation, or a term, condition, or privilege of employment, because of religion, race, color, national origin, age, sex, height, weight, or marital status. (b) Limit, segregate, or classify an employee or applicant for employment in a way that deprives or tends to deprive the employee or applicant of an employment opportunity, or otherwise adversely affects the status of an employee or applicant because of religion, race, color, national origin, age, sex, height, weight, or marital status. (c) Segregate, classify, or otherwise discriminate against a person on the basis of sex with respect to a term, condition, or privilege of employment, including, but not limited to, a benefit plan or system. On appeal, defendant argues, as it did below, that because this is a “reverse discrimination” case, plaintiffs burden of proof is different from that applicable to a claim under the Civil Rights Act brought by a member of a protected class. This is a question of first impression in Michigan. Because title VII of the United States Civil Rights Act provides protection and a cause of action in language similar to the Civil Rights Act, we turn to federal precedents for guidance. Radtke v Everett, 442 Mich 368, 381-382; 501 NW2d 155 (1993). In McDonnell Douglas Corp v Green, 411 US 792, 802; 93 S Ct 1817; 36 L Ed 2d 668 (1973), the Supreme Court stated the burden of proof that must be shouldered by a person alleging race discrimination in a hiring decision to establish a prima facie title VII case: The complainant in a Title VII trial must carry the initial burden under the statute of establishing a prima facie case of racial discrimination. This may be done by showing (i) that he belongs to a racial minority; (ii) that he applied and was qualified for a job for which the employer was seeking applicants; (iii) that, despite his qualifications, he was rejected; and (iv) that, after his rejection, the position remained open and the employer continued to seek applicants from persons of complainant’s qualifications. These elements give rise to a presumption that the adverse action by an employer resulted from an illegal discriminatory intent, a presumption that the employer may rebut by “articulating] some legitimate, nondiscriminatory reason for” the adverse action. Id. In response, a plaintiff may show that the employer’s articulated reason is, in fact, a “pretext.” Id. at 804. Recognizing that “[t]he facts necessarily will vary in Title VII cases,” the McDonnell Douglas Court noted that its specification of the prima facie burden of proof “is not necessarily applicable in every respect to differing factual situations.” Id. at 802, n 13. The District of Columbia Circuit Court of Appeals accepted this invitation to modify the McDonnell Douglas test for purposes of a “reverse discrimination” claim in Parker v Baltimore & O R Co, 209 US App DC 215; 652 F2d 1012 (1981). The court noted that the McDonnell Douglas test allows a plaintiff “to establish a prima facie case without direct evidence of discriminatory motive” but reasoned that this does not constitute “an arbitrary lightening of the plaintiffs burden.” Id. at 219-220. Instead, the McDonnell Douglas test is “a procedural embodiment of the recognition that our nation has not yet freed itself from a legacy of hostile discrimination.” Id. at 220. The Supreme Court has explained this standard “as a sensible, orderly way to evaluate the evidence in light of common experience as it bears on the critical question of discrimination. A prima facie case under McDonnell Douglas raises an inference of discrimination only because we presume these acts, if otherwise unexplained, are more likely than not based on the consideration of impermissible factors.” [Id., quoting Furnco Constr Corp v Waters, 438 US 567, 577; 98 S Ct 2943; 57 L Ed 2d 957 (1978).] The Parker court further reasoned that, accordingly, the McDonnell Douglas test had to be modified for use in a reverse discrimination case: The original McDonnell Douglas standard required the plaintiff to show “that he belongs to a racial minority.” Membership in a socially disfavored group was the assumption on which the entire McDonnell Douglas analysis was predicated, for only in that context can it be stated as a general rule that the “light of common experience” would lead a factfinder to infer discriminatory motive from the unexplained hiring of an outsider rather than a group member. Whites are also a protected group under Title VII, but it defies common sense to suggest that the promotion of a black employee justifies an inference of prejudice against white co-workers in our present society. [Id. ] The Parker court held that majority plaintiffs can rely on the McDonnell Douglas criteria to prove a prima facie case of intentionally disparate treatment only “when background circumstances support the suspicion that the defendant is that unusual employer who discriminates against the majority.” Id. The Parker analysis has been followed by appellate courts in at least three other federal circuits. Reynolds v School Dist No 1, Denver, Colorado, 69 F3d 1523, 1534 (CA 10, 1995); Pierce v Commonwealth Life Ins Co, 40 F3d 796, 801 (CA 6, 1994); Notari v Denver Water Dep’t, 971 F2d 585, 588-589 (CA 10, 1992); Boger v Wayne Co, 950 F2d 316, 324-325 (CA 6, 1991); Murray v Thistledown Racing Club, Inc, 770 F2d 63, 66-68 (CA 6, 1985); Christensen v Equitable Life Assurance Society of the United States, 767 F2d 340, 343 (CA 7, 1985); Jasany v United States Postal Service, 755 F2d 1244, 1252 (CA 6, 1985). With these courts, we conclude that Parker appropriately modified the McDonnell Douglas test for application to a reverse discrimination claim brought under title VII. Further, recognizing that these precedents are not binding upon us in interpreting Michigan’s Civil Rights Act, we nonetheless are convinced by the Parker analysis and adopt its approach for purposes of this statute as well. See Sumner v Goodyear Tire & Rubber Co, 427 Mich 505, 525; 398 NW2d 368 (1986). Accordingly, we hold that a reverse discrimination plaintiff who has no direct evidence of discriminatory intent may establish a prima facie claim of gender discrimination under the Civil Rights Act with respect to a promotion decision by showing (i) background circumstances supporting the suspicion that the defendant is that unusual employer who discriminates against men; (ii) that the plaintiff applied and was qualified for an available promotion; (iii) that, despite plaintiffs qualifications, he was not promoted; and (iv) that a female employee of similar qualifications was promoted. Upon this showing, a “presumption” of discriminatory intent is established for possible rebuttal by the employer. Absent this showing, a reverse discrimination plaintiff who has no direct evidence of discriminatory intent cannot proceed. SUFFICIENCY OF PLAINTIFF’S EVIDENCE On appeal, an order granting or denying summary disposition is reviewed de novo. Pinckney Community Schools v Continental Casualty Co, 213 Mich App 521, 525; 540 NW2d 748 (1995). The party opposing a motion for summary disposition under MCR 2.116(C)(10) has the burden of establishing, by evidentiary materials, that a genuine issue of disputed fact exists. Skinner v Square D Co, 445 Mich 153, 160; 516 NW2d 475 (1994). The opposing party may not rest upon mere allegations or denials in the pleadings but must, by affidavit or other documentary evidence, set forth specific facts showing that there is a genuine issue for trial. MCR 2.116(G)(4); Johnson v Wayne Co, 213 Mich App 143, 149; 540 NW2d 66 (1995). With these principles in mind, we conclude that plaintiff failed to establish a prima facie case of gender discrimination as outlined above. With respect to the first element, plaintiff came forward with absolutely no evidence to suggest that defendant is “that unusual employer who discriminates against men.” For that reason alone, we conclude that the summary disposition granted to defendant was appropriate. In addition, we conclude that plaintiff has not shown that a promotion for which he was qualified was given to a female employee instead. Although plaintiff argues that he was denied certain promotions, he did receive other promotions and regular salary increases during his employment with defendant. With respect to promotional opportunities that he did not realize, plaintiff has come forward with no evidence suggesting that defendant incorrectly determined that he did not meet the stated minimum requirements or that defendant is wrong in contending that the positions plaintiff sought were, in fact, lateral transfers rather than promotions. Finally, plaintiff admitted at his deposition that none of the women he complained about have achieved promotional levels higher than his. In sum, we agree with the trial court that the available evidence indicates only that “personality disputes” between plaintiff and supervisory personnel are at issue here; plaintiff has not shown a prima facie case of gender discrimination in violation of the Civil Rights Act. We affirm. No taxable costs pursuant to MCR 7.219, a question of public policy being involved. Plaintiff’s complaint also alleged race discrimination, but he is not contesting the dismissal of this claim. In pertinent part, 42 USC 2000e-2(a)(1) provides: “It shall be an unlawful employment practice for an employer — ... to discriminate against any individual with respect to . . . compensation, terms, conditions, or privileges of employment, because of such individual’s . . . sex . . . .” McDonnell Douglas establishes an “inferential test” that can be employed by a plaintiff who has “no direct evidence of discrimination.” Pierce v Commonwealth Life Ins Co, 40 F3d 796, 801, n 6 (CA 6, 1994). See, also, Int’l Brotherhood of Teamsters v United States, 431 US 324, 335, n 15; 97 S Ct 1843; 52 L Ed 2d 396 (1977). A plaintiff need not establish the McDonnell Douglas presumption if there is “direct proof of discriminatory intent.” Notari v Denver Water Dep’t, 971 F2d 585, 589 (CA 10, 1992). Apparently, only the Court of Appeals for the Eleventh Circuit has rejected the Parker approach. See Wilson v Bailey, 934 F2d 301, 304 (CA 11, 1991) (without analysis, allowing any plaintiff who “belongs to a class” to bring a reverse discrimination claim). In addition to restating the first of the McDonnell Douglas elements on the basis of Parker and its progeny, we have modified the elements as needed to fit this case involving an allegedly gender-based failure to promote. See McDonnell Douglas, supra at 802, n 13. Our restatement of the fourth element is similar to that used in Bundy v Jackson, 205 US App DC 444, 461; 641 F2d 934 (1981). For cases in which plaintiffs did establish this first element of their reverse discrimination cases, see, e.g., Reynolds, supra at 1535 (the plaintiff was the only white employee in an otherwise all-Hispanic department and Hispanic supervisors made most employment decisions); Bishopp v District of Columbia, 252 US App DC 156, 163-164; 788 F2d 781 (1986) (the defendant promoted less qualified minority employee; use of subjective, rather than objective criteria; internal and external pressure to favor minorities); Lanphear v Prokop, 227 US App DC 89, 93; 703 F2d 1311 (1983) (qualified white passed over for black whose qualifications were not fully checked; pressure to increase minority percentages). We offer no opinion whether the evidence found sufficient in these title VII cases would also be sufficient for a claim brought under the Civil Rights Act but cite them to illustrate the kind of evidence plaintiff might have brought forward, had it been available, to satisfy the first element of his prima facie case. The trial court did not apply the same analysis we employ in deciding the motion for summary disposition and, in fact, apparently specifically rejected use of the Parker approach. Nonetheless, we will not reverse an order of summary disposition properly granted albeit for wrong, or incomplete, reasons. Holland Home v Grand Rapids, 219 Mich App 384, 400; 557 NW2d 118 (1996). At the hearing on the motion for summary disposition, plaintiffs counsel stipulated that this is a “lack of promotion or advancement case . . . based upon reverse discrimination.” On appeal, plaintiff argues that summary disposition was improperly granted on the basis of his allegations that female employees were treated differently with regard to defendant’s policies concerning smoking, the use of televisions and radios at work, use of work telephones, and entertaining visitors on the job. We do not consider these matters to be preserved for appeal, but, even if they were, conclude they were not sufficiently proved to resist summary disposition. Plaintiff came forward with no objective evidence to support these contentions, which are nothing more than plaintiffs own personal feelings about his mistreatment. See Johnson, supra. Further, assuming that fellow employees broke the employer’s rules in these regards, plaintiff claims he never did so and thus can only argue hypothetically that his violation of the rules would have resulted in disparate treatment. Plaintiff also argues that, although he was more productive than his fellow workers, they received better reviews and higher salaries. However, again, this is nothing more than plaintiff’s opinion of relative productivity, and it is apparently based on his improper review of work performance evaluations of other employees.
Josephine Mugnano-Bornstein vs. Robert Crowell & another. No. 96-P-204. Essex. January 9, 1997. - March 21, 1997. Present: Warner, C.J., Kaplan, & Ireland, JJ. Arbitration, Confirmation of award, Scope of arbitration, Waiver. Federal Arbitration Act. Contract, Arbitration, Employment. Employment, Sexual harassment. The broad language of a valid arbitration agreement in an employment contract (“any controversy arising out of or in connection with . . . employment or termination of employment”) put an employee on notice that she was agreeing to submit to arbitration any sexual harassment and gender discrimination claims against her employer, thereby waiving her statutory right to a jury trial on such claims. [351-353] Civil action commenced in the Superior Court Department on November 6, 1992. Motions to vacate a stay of proceedings and restore the case to the trial list, to confirm an arbitration award, and for sanctions were heard by Charles M. Graban, J. Christopher P. Litterio for the defendants. Joseph J. Machera (Dana A. Curhan with him) for the plaintiff. Shearson Lehman Hutton. Warner, C.J. The defendants, Robert Crowell and Shear-son Lehman Hutton, appeal from a Superior Court order denying their motion to confirm an arbitration award and allowing the plaintiffs motion to vacate the stay of judicial proceedings previously imposed and restore the case to the jury trial list. On November 20, 1989, the plaintiff, Josephine Mugnano-Bomstein, completed and signed an employment application containing an agreement to arbitrate any “controversy arising out of or in connection with [her] compensation, employment or termination of employment” with Shearson. She was subsequently hired as a wire operator and worked in that capacity until being fired for insubordination in November, 1990. The plaintiff commenced this action in the Superior Court on November 6, 1992, alleging sexual harassment and gender discrimination in violation of G. L. c. 93 and c. 15 IB, and common law claims for intentional infliction of emotional distress and defamation. In her complaint, she claimed that Crowell, her supervisor at Shearson, continually berated and harassed her after she became pregnant and experienced complications that caused her frequently to be absent from work. She further alleged that Crowell subjected her to additional harassment and humiliation in front of coworkers after she reported the situation to Shearson’s human resources office. Finally, she claimed that Shearson failed to take adequate steps to remedy the situation and also that it was vicariously liable for Crowell’s actions. The defendants responded to the plaintiff’s complaint by filing a motion to compel arbitration under the terms of the employment application and requesting a stay of the court proceedings pending arbitration. The judge allowed the motion, ruling that the agreement to arbitrate contained in the application for employment was enforceable. The plaintiff filed a petition requesting leave to take an interlocutory appeal, which was denied by a single justice of this court. On November 4 and 21, 1994, hearings were held before a three-member arbitration panel of the American Stock Exchange. By unanimous decision dated December 28, 1994, the plaintiffs claims were denied and the case was dismissed. Shearson, however, was ordered to pay the plaintiffs costs of arbitration. The plaintiff subsequently filed a motion in the Superior Court requesting that the previously imposed stay be vacated and the case restored to the jury trial list. The defendants opposed the motion and moved for confirmation of the arbitration award and dismissal of the case. Both parties filed memoranda supporting their positions. The judge denied the defendants’ motion, vacated the stay and restored the case to the trial fist. Citing Prudential Ins. Co. v. Lai, 42 F.3d 1299 (9th Cir. 1994), cert, denied, 516 U.S. 812 (1995), decided after the original order compelling arbitration, the judge ruled that “an employee must knowingly agree to arbitrate discrimination claims under G. L. c. 15IB in order to waive her right to trial,” and that the plaintiff “could not have known that she was waiving her statutory right to a trial on her sexual harassment and discrimination claims” when she signed the application for employment containing the arbitration agreement. On appeal, Crowell and Shearson maintain that the judge erred by refusing to confirm the arbitration award in the absence of a motion to vacate, modify or correct the award. They further argue that the judge’s reliance on Lai was misplaced, first, because the requirement of a knowing waiver of the statutory remedies afforded by Title VII and analogous State statutes has not been adopted in other jurisdictions and second, because the arbitration clause at issue here is far more specific than the agreement considered in Lai. The Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 et seq. (1988), created a “body of federal substantive law of arbitra-bility, applicable to any arbitration agreement within [its] coverage.” Martin v. Norwood, 395 Mass. 159, 161-162 (1985), quoting from Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983). Where an arbitration agreement falls within the purview of the FAA, the act governs the arbitrability of the dispute in State or Federal court. See Carpenter v. Pomerantz, 36 Mass. App. Ct. 627, 628 n.3 (1994), citing Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. at 24. Section 2 of the FAA “provides that a dispute is arbitrable if it falls within the scope of a written arbitration agreement that is otherwise valid and enforceable.” Carpenter v. Pomerantz, 36 Mass. App. Ct. at 628. Whether a particular agreement calls for arbitration is to be determined by applying general principles of contract law. See Mobil Oil Corp. v. Local 8-766, Oil, Chemical & Atomic Workers Intl. Union, 600 F.2d 322, 325 (1st Cir. 1979). “[A] party cannot be required to submit to arbitration any dispute which he has not agreed ... to submit.” Local 285, Serv. Employees Inti. Union, AFL-CIO v. Nonotuck Resource Assocs., Inc., 64 F.3d 735, 738 (1st Cir. 1995). “[(Questions of arbitrability, [however,] must be addressed with a healthy regard for the federal policy favoring arbitration” as an alternative over litigation. Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. at 24. Moreover, under the FAA, any doubts regarding arbitrability should be resolved in favor of coverage “ ‘unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.’ ” Peerless Pressed Metal Corp. v. International Union of Elec., Radio and Mach. Workers, AFL-CIO, 451 F.2d 19, 20 (1st Cir. 1971), cert denied, 414 U.S. 1022 (1973), quoting from United Steelworkers of America v. Warrier & Gulf Nav. Co., 363 U.S. 574, 582-583 (1960). Commercial Union Ins. Co. v. Gilbane Bldg. Co., 992 F.2d 386, 388 (1st Cir. 1993). See Barnstead v. Ridder, 39 Mass. App. Ct. 934, 935 (1996). This policy obtains whether the issue being considered involves “the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” Commercial Union Ins. Co. v. Gilbane Bldg. Co., supra, quoting from Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. at 25. Pursuant to the FAA, statutory claims may be the subject of an enforceable arbitration agreement. Gilmer v. Interstate/ Johnson Lane Corp., 500 U.S. 20, 26 (1991). In Gilmer, the Supreme Court decided that a claim under the Age Discrimination in Employment Act of 1967 (ADEA) was subject to compulsory arbitration pursuant to a valid arbitration agreement. Id. at 35. Several Federal Courts have agreed that employees may waive the remedies afforded under Title VII and analogous State anti-discrimination statutes pursuant to a valid arbitration agreement. See, e.g., Alford v. Dean Witter Reynolds, Inc., 939 F.2d 229 (5th Cir. 1991); Willis v. Dean Witter Reynolds, Inc., 948 F.2d 305 (6th Cir. 1991); Mago v. Shearson Lehman Hutton, Inc., 956 F.2d 932 (9th Cir. 1992); Bender v. A.G. Edwards & Sons, Inc., 971 F.2d 698 (11th Cir. 1992). See also Scott v. Farm Family Life Ins. Co., 827 F. Supp. 76 (D. Mass. 1993). The plaintiff here concedes that the reasoning of Gilmer is generally applicable to claims brought pursuant to Title VII and G. L. c. 15IB. She urges us to adopt the reasoning of Prudential Ins. Co. v. Lai, however, and maintains that the arbitration agreement she signed cannot be characterized as a knowing waiver of the statutory right to a jury trial of her sexual harassment and gender discrimination claims because it is unclear as to whether such claims are subject to arbitration. The plaintiff agreed to arbitrate “any controversy arising out of or in connection with [her] employment or termination of employment . . . .” She argues that the clause is vague and ambiguous because it does not specifically refer to sexual harassment or gender discrimination claims. We are not persuaded. There can be no doubt that the plaintiff’s dispute with Crowell and Shearson arose out of her employment and subsequent termination from Shearson. In her complaint, she alleged that the defendants sexually harassed and discriminated against her, inflicted emotional distress upon her and defamed her in the workplace, all because she was frequently absent as a result of her pregnancy. Moreover, the fact that an arbitration agreement is comprehensive in scope does not render it invalid. Rather, where an arbitration clause is as broad as the one at issue here, “there is a strong presumption of arbitrability.” Carpenter v. Pomerantz, 36 Mass. App. Ct. at 630, citing AT & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 650 (1986). Even if we were to adopt the reasoning of Lai and impose a requirement that any waiver of the statutory remedies afforded to plaintiffs under G. L. c. 15IB must be made knowingly, we think the arbitration clause at issue here would pass muster. Unlike the clause considered in Lai, the agreement signed by the plaintiff specifically referred to employment disputes, thereby putting her on notice that she was agreeing to submit her sexual harassment and gender discrimination claims to arbitration. Moreover, although the Ninth Circuit invalidated the specific clause under consideration in Lai, it also cited Mago v. Shearson Lehman Hutton Inc., 956 F.2d at 934, in which an agreement providing for arbitration of “any controversy concerning compensation, employment or termination of employment” was found to be binding on a Title VII plaintiff, as an example of a valid agreement to arbitrate. Finally, we are not aware of any rule that requires an arbitration agreement to contain a list of the specific claims or causes of action which are subject to arbitration in order to be enforceable. Indeed, such a requirement would be unreasonable and impractical. The plaintiff also argues that the Supreme Judicial Court’s recent decision in Dalis v. Buyer Advertising, Inc., 418 Mass. 220 (1994), further supports her position. In Dalis, the court held that under art. 15 of the Massachusetts Declaration of Rights, a plaintiff asserting claims of employment discrimination based on gender under G. L. c. 15IB is constitutionally entitled to a jury trial. 418 Mass, at 226. The fact that one’s right to a jury trial is constitutionally preserved in certain types of civil cases, however, does not mean that that right cannot be waived. Chase Commercial Corp. v. Owen, 32 Mass. App. Ct. 248, 251-252 (1992). Indeed, courts have upheld contractual waivers of constitutionally guaranteed rights even broader than the one involved here. Ibid. See, e.g., D.H. Over-myer Co. v. Frick Co., 405 U.S. 174, 185-186 (1972) (upholding a contractual waiver of due process rights to prejudgment notice and hearing). We hold that the arbitration agreement contained in the plaintiff’s employment application is binding with respect to those claims asserted under G. L. c. 151B. Accordingly, we remand the case to the Superior Court for the entry of a judgment confirming the arbitration award and dismissing the complaint. So ordered. The Superior Court proceedings have been stayed pending this appeal. The entire clause provides: “I hereby agree that any controversy arising out of or in connection with my compensation, employment or termination of employment shall be submitted to arbitration before the National Association of Securities Dealers, Inc., the New York Stock Exchange, Inc., or the American Stock Exchange, Inc., and be resolved in accordance with the rules then in effect, of such entities. Judgment upon any award rendered by the arbitrators may be entered in any court having jurisdiction thereof. In the event I fail to abide by these terms, this section shall in no way limit or impair the Company’s other legal rights, including the right to enforce said provisions in a court of competent jurisdiction.” The plaintiff filed similar claims with the Massachusetts Commission Against Discrimination and the Federal Equal Employment Opportunity Commission on or about April 5, 1991. It does not appear that either agency took action on the complaints. Piior to the hearings, the plaintiff executed a Uniform Submission Agreement in which she agreed “to abide by and perform any award(s) rendered pursuant to this Submission Agreement and further agree[d] that a judgment and any interest due thereon, may be entered upon such award(s).” Prudential Ins. Co. v. Lai involved an agreement to arbitrate discrimination claims brought under California’s antidiscrimination laws, which are analogous to Title VII of the Civil Rights Act of 1964. 42 U.S.C. §§ 2000e et seq. (1994). 42 F.3d at 1303 n.l. Title VII created “an array of substantive protections and remedies” with respect to claims of employment discrimination. Kremer v. Chemical Constr. Corp., 456 U.S. 461, 463 (1982). In addition to providing State remedies for discriminatory employment practices, G. L. c. 151B, the Massachusetts antidiscrimination statute, and analogous State laws such as the ones at issue in Lai, are explicitly made part of Title VH’s enforcement scheme. Id. at 477-478. The Superior Court judge ruled that the arbitration clause at issue here is subject to the provisions of the FAA, and assumed, without deciding, that the Massachusetts Arbitration Act (MAA), G. L. c. 251, §§ 1-19, would also apply. Neither party has challenged this ruling, although the defendants correctly maintain that where the FAA and the MAA conflict, the FAA governs. See Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. at 24 (“Section 2 [of the FAA] is a congressional declaration of a liberal federal policy favoring arbitration agreements, notwithstanding any state . . . policies to the contrary”). The FAA has the same application to claims asserted under c. 151B as it does to Title VII claims. See Prudential Ins. Co. v. Lai, 42 F.3d at 1303 n.l. On appeal, the plaintiffs sole challenge to the validity of the arbitration clause concerns the specificity with which it describes those claims that are subject to arbitration, a question that we discuss later in this opinion. The First Circuit has yet to extend the reasoning of Gilmer to employment discrimination claims brought under either Title VII or G. L. c. 15 IB. The clause considered in Lai did not even mention employment disputes or otherwise describe the types of disputes that would be subject to arbitration. 42 F.3d at 1305. Moreover, the plaintiffs in that case had signed “U-4 forms containing agreements ‘to arbitrate any dispute, claim or controversy that ... is required to be arbitrated under the rules, constitutions or bylaws of the organizations with which I register.’ ” Id. at 1301. The plaintiffs also claimed that they were told they were only applying to take an employment test, and were not given an adequate opportunity to read the forms. Ibid. No such evidence was offered in this case.
REBECCA BEAUCHESNE, Petitioner v. UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL, Respondent No. COA95-914 (Filed 4 March 1997) 1. Public Officers and Employees § 53 (NCI4th)— exhaustion of leave time — dismissal—applicable administrative code In an action arising from the dismissal of an employee who was unable to return to work after she had exhausted her leave time, the State Personnel Commission committed no error of law in determining 25 NCAC 1D.0519 to be applicable, and in determining that consideration of the factors set out in 25 NCAC IE. 1104 was neither necessary nor appropriate because 25 NCAC 1D.0519 covers circumstances wherein an employee is presently absent from work, has no leave time to cover the absence, and is therefore subject to separation. 25 NCAC IE. 1104 governs requests for unpaid leave at some futuré date, regardless of whether the employee has available leave time. Am Jur 2d, Job Discrimination § 1067; Wrongful Discharge § 190. 2. Public Officers and Employees § 53 (NCI4th)— exhaustion of leave — application for leave without pay — not an alternative proposal In an action arising from petitioner’s discharge from a secretarial position at the Ackland Museum at the University of North Carolina at Chapel Hill after exhausting her sick and vacation leave, her application for unpaid leave did not qualify as an alternative proposal under 25 NCAC lD.0519(b) because it is evident that the accommodations anticipated in that provision do not include leave without pay, but rather such alternatives as reduction in hours from full to part-time, or alteration of the work schedule to make the employee available to perform critical work. Am Jur 2d, Job Discrimination § 1067; Wrongful Discharge § 190. 3. Public Officers and Employees § 53 (NCI4th)— leave exhausted — employee terminated — State Personnel Commission review — whole record test The trial court did not err in an action arising from petitioner’s discharge as a secretary for the Ackland Museum at the University of North Carolina at Chapel Hill by upholding the State Personnel Commission’s ruling as neither arbitrary nor capricious where a review of the whole record revealed substantial evidence to support the Commission findings that petitioner was properly terminated under applicable provisions of 25 NCAC 1D.0519 and petitioner presented no evidence of when, if ever, she would return to work. Am Jur 2d, Administrative Law §§ 529-532. 4. Public Officers and Employees § 53 (NCI4th)— shared leave application — failure to process — no agency action— not a contested case The State Personnel Commission properly ruled that petitioner did not have a right of appeal regarding the failure to process in a timely manner a shared leave application. The failure to process petitioner’s application did not involve a disciplinary action, petitioner has proffered no allegations of discrimination, and there is no provision in the State Personnel Act indicating that agency action on a request for shared leave gives rise to a contested case. Am Jur 2d, Administrative Law §§ 498, 499. Judge Greene concurring in the result. Appeal by petitioner from order entered 17 April 1995 by Judge Osmond Smith in Alamance County Superior Court. Heard in the Court of Appeals 19 April 1996. North State Legal Services, Inc., by Garlene McNulty, for petitioner-appellant. Attorney General Michael F. Easley, by Associate Attorney General M. A. Kelly Chambers and Assistant Attorney General Anne J. Brown, for defendant-appellee. JOHN, Judge. Petitioner Rebecca Beauchesne argues the trial court erred by affirming the State Personnel Commission’s [SPC] decision that she was not unfairly denied leave without pay and that she could not pursue an appeal based on her application for shared leave. We conclude petitioner’s contentions are unavailing. Petitioner was employed by the Ackland Art Museum (the museum) at the University of North Carolina at Chapel Hill (the University) from 9 September 1987 until she was terminated 29 May 1992. At the time of her discharge, petitioner’s position, classified Secretary IV, was the only secretarial position in the museum. Petitioner was responsible for seventy-five percent of the correspondence processed by the museum, serving in addition as receptionist and telephone operator. Her duties also included managing the museum payroll, circulating mail, and filing. Petitioner left work early on 13 April 1992 due to a migraine headache and was subsequently hospitalized. Petitioner informed her employer that she would be unable to return to work for the remainder of the week. In letters to the museum dated 22 April and 28 April 1992, Dr. Xaver Hertle (Dr. Hertle) explained that petitioner had been hospitalized and that he was unsure when she would be able to return to work. Dr. Hertle’s 28 April letter requested that petitioner be considered for shared leave, a process by which an employee might utilize accumulated leave voluntarily donated by another employee, see N.C. Admin. Code tit. 25, r. IE. 1301 et seq. (effective 1 May 1990), and included petitioner’s application for such leave. Petitioner’s 6 May letter to museum director Dr. Charles Millard (director Millard) also referred to her request for shared leave. However, director Millard neither affixed his signature in the designated space on the request form, nor forwarded it for approval to the University’s shared leave coordinator in the Department of Human Resources. Before receiving Dr. Hertle’s 28 April letter, director Millard sent petitioner correspondence dated 30 April 1992, indicating she had exhausted her available sick and vacation leave and in fact was 42 hours overdrawn on allotted leave time. In this letter, director Millard stated the museum had processed the paperwork to place petitioner on leave without pay retroactive to 6 April 1992, pending a final decision concerning her position at the museum. In an 8 May letter to petitioner, director Millard reported he would be unable to grant additional unpaid leave, citing the importance of petitioner’s position to the museum, the inadequacy of temporary help, and budget constraints. He further indicated she must either return to work full time by 18 May 1992 or submit alternative proposals for accommodating the museum’s needs as well as her own. On 13 May 1992, Dr. Hertle wrote director Millard that petitioner was unable to return to work for the foreseeable future. Dr. Hertle requested that petitioner be placed on short term disability, and that director Millard forward the necessary forms. Director Millard replied 18 May 1992, indicating he had received no alternative proposals from petitioner concerning accommodation of the museum’s needs, but extending the deadline for such proposals to 25 May. Director Millard also provided petitioner with the appropriate contact to apply for short term medical disability. See N.C.G.S. § 135-100 el seq. (1995). Petitioner’s application for short term disability of one year beginning 13 June 1992 was approved following her termination and was subsequently extended for an additional year. Petitioner’s 21 May reply to director Millard contained no alternative proposal. In a letter dated 28 May 1992, director Millard notified petitioner she would be separated effective 29 May 1992 due to “unavailability when leave is exhausted.” Petitioner appealed through the grievance process of the University, her discharge ultimately being upheld by University Chancellor Paul Hardin (Hardin). Hardin nonetheless recommended that petitioner’s shared leave application be processed, and that she be allowed an extension of time to receive donated leave. Petitioner testified she eventually obtained donated leave satisfying all but thirty-two hours of her shared leave request. Petitioner filed a request for a contested case hearing before the Office of Administrative Hearings (OAH) on 16 December 1992. She alleged the University had “acted erroneously; arbitrarily or capriciously; failed to act as required by law or rule; and/or failed to use proper procedure.” The matter was heard 21 June 1993 before Administrative Law Judge Brenda B. Becton (the ALJ), who rendered a recommended decision in petitioner’s favor 1 October 1993. In making her decision, the AU analyzed petitioner’s termination under the factors set forth in N.C. Admin. Code tit. 25, r. 1E.1104 (November 1990) (25 NCAC IE. 1104). However, in a 15 August 1994 decision containing its own findings of fact and conclusions of law, the SPC upheld Hardin’s action. The SPC concluded as a matter of law that petitioner’s application for leave without pay was subject to review under N.C. Admin. Code tit. 25, r. 1D.0519 (November 1989) (25 NCAC 1D.0519), and that substantial evidence supported her discharge thereunder. With respect to petitioner’s request for voluntary shared leave, the SPC concluded: The State Personnel Act does not provide a right to challenge the denial of such leave. Therefore, the State Personnel Commission has no jurisdiction over this issue. On 15 September 1994, petitioner sought judicial review in the trial court. The matter was heard 27 March 1995 and, “[a]fter reviewing the whole record,” the court affirmed the decision of the SPC in an order filed 17 April 1995. Petitioner appeals. Petitioner first argues the SPC failed to address whether the University, in denying her leave without pay, considered factors such as petitioner’s needs, the likelihood of her returning to duty, and the ability of the University to reinstate her to a position of like status and pay upon her return. See 25 NCAC 1E.1104. She further contends the SPC’s findings of fact were not supported by substantial evidence, and that its failure to adopt the AU’s recommended findings was arbitrary and capricious. Petitioner’s contentions cannot be sustained. Judicial review of an administrative decision is governed by the North Carolina Administrative Procedure Act (the APA). N.C.G.S. § 150B-1 et seq. (1995). Under the APA, the court reviewing a final agency decision may affirm the agency, remand for further proceedings, or it may reverse or modify the decision if the substantial rights of the petitioners may have been prejudiced because the agency’s findings, inferences, conclusions, or decisions are: (4) Affected by other error of law; (5) Unsupported by substantial evidence ... in view of the entire record as submitted; or (6) Arbitrary or capricious. G.S. § 150B-51(b). On appeal from the trial court to this Court, our task is twofold: (1) determining whether the trial court exercised the appropriate scope of review and, if appropriate, (2) deciding whether the court did so properly. Haynes v. N.C. Dept. of Human Resources, 121 N.C. App. 513, 515, 470 S.E.2d 56, 57 (1996); Gray v. Orange County Health Dept., 119 N.C. App. 62, 73, 457 S.E.2d 892, 900, disc. review denied, 341 N.C. 649, 462 S.E.2d 511 (1995); In re Appeal of Harper, 118 N.C. App. 698, 701, 456 S.E.2d 878, 880, disc. review denied, 340 N.C. 567, 460 S.E.2d 317 (1995); Friends of Hatteras Island v. Coastal Resources Comm., 117 N.C. App. 556, 566-67, 452 S.E.2d 337, 344 (1995). However, we need consider only “those grounds for reversal or modification argued by the petitioner before the superior court, and properly assigned as error on appeal to this Court.” Professional Food Services Mgmt. v. N.C. Dept. of Admin., 109 N.C. App. 265, 268, 426 S.E.2d 447, 449 (1993). Petitioner’s argument the SPC erroneously failed to address the factors set out in 25 NCAC IE.1104 in approving her termination is tantamount to assertion of an error of law. See Amanini, 114 N.C. App. at 678, 443 S.E.2d at 120 (“rules, regulations and policies promulgated by the [SPC under statutory authority] have the force and effect of law,” and erroneous interpretation thereof by agency constitutes an error of law). Accordingly, our de novo review of this contention is required. See In re Appeal by McCrary, 112 N.C. App. 161, 165, 435 S.E.2d 359, 363 (1993). De novo review compels a court to consider a question anew, as if not considered or decided below. Friends of Hatteras Island, 117 N.C. App. at 567, 452 S.E.2d at 344. The SPC determined petitioner was properly terminated on grounds of “unavailability” pursuant to 25 NCAC 1D.0519. Relevant portions of the regulation state: .0519 UNAVAILABILITY WHEN LEAVE IS EXHAUSTED (a) An employee may be separated on the basis of unavailability when the employee becomes or remains unavailable for work after all applicable leave credits and benefits have been exhausted and agency management does not grant a leave without pay for reasons deemed sufficient by the agency. Such reasons include, but are not limited to, lack of suitable temporary assistance, criticality of the position, budgetary constraints, etc. Such a separation is an involuntary separation, and not a disciplinary dismissal.... (b) Prior to separation, the employing agency shall meet with or at least notify the employee in writing, of the proposed separation, the efforts undertaken to avoid separation and why the efforts were unsuccessful. The employee shall have the opportunity in this meeting or in writing to propose alternative methods of accommodation. If the proposed accommodations are not possible, the agency must notify the employee of that fact and the proposed date of separation. . . . (c) Involuntary separation pursuant to this Rule may be grieved or appealed. The employing agency must also give the employee a letter of separation stating the specific reasons for the separation and setting forth the employee’s right of appeal. The burden of proof on the agency in the event of a grievance is not just cause as that term exists in G.S. 126-35. Rather, the agency’s burden is to prove that the employee was unavailable and that the agency considered the employee’s proposed accommodations for his unavailability and was unable to make the proposed accommodations or other reasonable accommodations. Petitioner maintains director Millard, when reviewing her application for unpaid leave, should have considered the factors listed in 25 NCAC 1E.1104 in addition to those set out in subsection (a) above. 25 NCAC IE. 1104 reads as follows: .1104 AGENCY RESPONSIBILITY The decision to grant leave without pay is an administrative one for which the agency head must assume full responsibility. Factors to consider are needs of the employee requesting leave, workload, need for filling employee’s job, chances of employee returning to duty, and the obligation of the agency to reinstate employee to a position of like status and pay. It is the responsibility of the agency to administer leave without pay in a manner that is equitable to all of its employees. Reinstatement to the same position or one of like seniority, status and pay must be made upon the employee’s return to work unless other arrangements are agreed to in writing. If it is necessary to fill a position which is vacant by leave without pay, the position may be filled by a temporary or time-limited permanent appointment, whichever is appropriate. Petitioner misapprehends the purport of the two regulations. The foregoing sections governing unpaid leave apply in different situations. 25 NCAC 1D.0519 is contained in that portion of Title 25 labelled “SECTION .0500 — SEPARATION,” which also includes regulations dealing with resignation and retirement. Statutory authority for its enactment is derived specifically from N.C.G.S. § 126-4(7a) (1993), which provides that “the State Personnel Commission shall establish policies and rules governing . . . [t]he separation of employees,” and N.C.G.S. § 126-35 (1993), which dictates procedures to be used in disciplinary actions against state employees. By contrast, 25 NCAC 1E.1104 is situated in the segment of Title 25 denominated “SECTION .1100 — OTHER LEAVES WITHOUT PAY;” leave under this section may be granted for “educational purposes, vacation, or for any other reasons deemed justified by the agency head and the State Personnel Director,” 25 NCAC IE. 1101. Statutory authority for 25 NCAC 1E.1104 is listed as being derived from N.C.G.S. § 126-4, the section setting forth powers and duties of the SPC, as a whole. 25 NCAC ID.0519 covers circumstances wherein an employee is presently absent from work, has no leave time to cover the absence, and is therefore subject to separation. On the other hand, 25 NCAC IE. 1104 governs requests for unpaid leave at some future date, regardless of whether the employee has available leave time. In the former situation, because the employee is immediately absent from work, there may be a need for swift agency action; 25 NCAC 1D.0519 thus allows an agency to deny leave without pay “for reasons deemed sufficient by the agency.” By contrast, 25 NCAC 1E.1104 requires that certain factors be considered by the agency in deciding whether to grant leave without pay, such as the “needs of the employee” and the “obligation [i.e., ability] of the agency to reinstate employee to a position of like status and pay” when he or she returns. Obviously, consideration of such factors is more easily accomplished when the agency has advance notice of the employee’s desire for leave time. Under the circumstances sub judice, we conclude the SPC committed no error of law in determining 25 NCAC ID.0519 to be applicable to its review of petitioner’s termination upon denial of her application for unpaid leave, and that consideration of the factors set out in 25 NCAC IE. 1104 was neither necessary nor appropriate. Notwithstanding, petitioner points to the requirement of 25 NCAC lD.0519(b) that the agency consider alternative proposals to separation put forward by the employee. Petitioner insists her application for unpaid leave qualified as an alternative proposal which was not properly considered by director Millard. However, when 25 NCAC ID.0519(a) and (b) are read together, it is evident the accommodations anticipated in the latter section do not include leave without pay, but rather such alternatives as reduction in hours from full to part-time, or alteration of work schedule to make the employee available to perform critical work. Indeed, inclusion of unpaid leave as an accommodation under 25 NCAC lD.0519(b) would render the discussion of unpaid leave in 25 NCAC lD.0519(a) redundant. When possible, a regulation is to be construed to give all parts meaning. Cf. Utilities Comm. v. Electric Membership Corp., 275 N.C. 250, 260, 166 S.E.2d 663, 670 (1969) (statutory provisions dealing with same subject matter should be construed to give meaning to each provision). Petitioner’s contention that her request for unpaid leave constituted a proposed accommodation is therefore unfounded. Regarding petitioner’s claim that the SPC’s decision was not supported by substantial evidence and was arbitrary or capricious, the “whole record” test must be employed. See Friends of Hatteras Island, 117 N.C. App. at 567, 452 S.E.2d at 344. In applying the “whole record” test, the reviewing court must examine all competent evidence, including that which contradicts the agency’s findings, to determine if the agency decision is possessed of a rational basis in the evidence. Henderson v. N.C. Dept. of Human Resources, 91 N.C. App. 527, 530-31, 372 S.E.2d 887, 889-90 (1988). However, the “whole record” test does not allow the reviewing court to replace the [agency’s] judgment as between two reasonable conflicting views, even though the court could justifiably have reached a different result had the matter been before it de novo. Thompson v. Board of Education, 292 N.C. 406, 410, 233 S.E.2d 538, 541 (1977). Further, the court may not “disturb an agency’s assess-merit of the credibility of the witnesses and the weight and sufficiency” to be given the evidence. Teague v. Western Carolina University, 108 N.C. App. 689, 692, 424 S.E.2d 684, 686, disc. review denied, 333 N.C. 466, 427 S.E.2d 627 (1
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.
HOSTE v SHANTY CREEK MANAGEMENT, INC Docket No. 185014. Submitted September 18, 1996, at Detroit. Decided January 21, 1997, at 9:05 A.M. Leave to appeal sought. Lawrence J. Hoste sought worker’s disability compensation benefits from Shanty Creek Management, Inc., and its insurer, Hartford Insurance Group, and from the Second Injury Fund for injuries suffered while skiing a course at Schuss Mountain for the purpose of establishing the route for a ski competition and for assuring that the course was safe. Hoste, a member of the National Ski Patrol, had been asked by the ski school director to forerun the course. National Ski Patrol members were given ski passes and discounts on food and beverages. When no National Sid Patrol member was available to malee runs such as the one Hoste was making when he was injured, Shanty Creek would hire a paid professional ski patroller to carry out such duties. A magistrate, following extensive hearings, held that Hoste was an employee of Shanty Creek, that the benefits expended to Hoste constituted wages, that Hoste had other wages as an electrician with Hoste Brothers, Inc., that Hoste was permanently and totally disabled and entitled to benefits, and that the Second Injury Fund was liable for 91.6 percent of the award. The Worker’s Compensation Appellate Commission reversed the magistrate’s award, finding the relationship between Hoste and Shanty Creek to be one of accommodation. The plaintiff appealed by leave granted. The Court of Appeals held: 1. The appellate commission erred in its application of the economic reality test. The work undertaken by Hoste was clearly an essential and integral part of the operation of the resort, Hoste received benefits as the result of his position that constituted compensation, it was established that in the absence of a volunteer ski patroller a paid professional patroller was hired, it is clear that Hoste did not hold himself out as an independent contractor of ski patrol services, and it is unclear whether the position he was filling was customarily held by an independent contractor. Under the circumstances, the appellate commission erred in concluding that no employee-employer relationship existed. 2. Because the appellate commission did not reach the questions relating to the allocation of liability, the matter must be remanded to the appellate commission for consideration of those questions. Remanded. Worker’s Compensation — Employees — National Ski Patrol Members. A member of the National Ski Patrol who performs services for a ski resort in exchange for a ski pass and discounts on food and beverages is an employee of the ski resort when performing at the request of the resort a service that is integral to the operation of the resort and, in the absence of the availability of a member of the National Ski Patrol, would have been performed by a paid professional patroller (MCL 418.161[l][b]; MSA 17.237[161][l][b]). Moceri, Hoste and Bejín, P.C. (by Douglas W. Hoste) (Daryl Royal, of Counsel), for the plaintiff. Cox, Hodgman & Giarmarco (by Marsha M. Woods), for Shanty Creek Management, Inc., and Hartford Insurance Group. Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, and Angelita Espino, Assistant Attorney General, for the Second Injury Fund. Before: Wahls, P.J., and Fitzgerald and L. P. Bor-RELLO, JJ. Circuit judge, sitting on the Court of Appeals by assignment. Wahls, P.J. Plaintiff appeals by leave granted the opinion and order of the Worker’s Compensation Appellate Commission reversing the magistrate’s award of disability benefits. We remand this matter to the commission to reinstate the magistrate’s award. On January 27, 1990, Schuss Mountain hosted a Plymouth Challenge Ski Race. Plaintiff, a member of the National Ski Patrol, was asked by the ski school director for Schuss Mountain to foreran the course, establishing the route for the competitors and assuring that the course was safe. Forerunning the course required plaintiff to ski aggressively. As plaintiff approached the bottom of the hill, he misjudged a gate and fell. He sustained a fracture of the C7 vertebra, causing paralysis from which he is unlikely to recover. After defendants stopped their voluntary payment of worker’s compensation benefits, plaintiff filed an application for hearing or mediation, and extensive hearings were conducted before the magistrate. The Second Injury Fund was added as a defendant on the basis of plaintiff’s other employment as an electrician with Hoste Brothers, Inc. The central questions litigated were whether plaintiff was an employee of Shanty Creek Management, Inc., and whether his primary employment as an electrician constituted dual employment for which he should be compensated under § 372 of the Worker’s Disability Compensation Act, MCL 418.372; MSA 17.237(372). The magistrate concluded that although plaintiff did not receive any wages from Shanty Creek, he received benefits in the form of a ski pass and discounts on food and beverages that did constitute income. Compensation does not have to be in the form of wages to entitle an employee to disability benefits. Plaintiff did qualify as an employee of Shanty Creek under § 161(l)(b) of the WDCA, MCL 418.161(l)(b); MSA 17.237(161)(l)(b), because he rendered services to it. The magistrate found it compelling that Shanty Creek hired a professional to perform ski patrol duties during the week when National Ski Patrol members were unavailable. The magistrate concluded that plaintiff was an employee subject to the act and that his wages from Shanty Creek were $89 a week. Plaintiffs wages from Hoste Brothers were $966 a week. Plaintiff was totally and permanently disabled, and the resulting benefit was $427 a week, with the Second Injury Fund liable for 91.6 percent of the award. Both Shanty Creek and the Second Injury Fund appealed to the Worker’s Compensation Appellate Commission. The commission reversed the magistrate’s award, characterizing the relationship between plaintiff and the ski resort as one of accommodation. It concluded that plaintiff was no different than any other skier using a complimentary lift ticket. Relying on this Court’s opinion in Amerisure Ins Cos v Time Auto Transportation, Inc, 196 Mich App 569; 493 NW2d 482 (1992), the commission applied the common-law economic reality test to determine plaintiff’s employment status. The commission found that none of the eight principles identified in McKissic v Bodine, 42 Mich App 203; 201 NW2d 333 (1972), supported a conclusion that plaintiff was an employee. This Court must affirm the findings of fact of the commission if they are supported by any competent evidence. Holden v Ford Motor Co, 439 Mich 257, 267-269; 484 NW2d 227 (1992). A decision of the commission is subject to reversal if the commission operated within the wrong legal framework or if the decision was based on erroneous legal reasoning. O’Connor v Binney Auto Parts, 203 Mich App 522, 527; 513 NW2d 818 (1994). Here, the commission erred as a matter of law in its application of the economic reality test and in its characterization of plaintiff’s employment as an accommodation relationship. At the time of plaintiff’s injury, § 161(1) provided the statutory definition of an employee: (1) As used in this act, “employee” means: * * * (d) Every person performing service in the course of the trade, business, profession, or occupation of an employer at the time of the injury, provided the person in relation to this service does not maintain a separate business, does not hold himself or herself out to and render service to the public, and is not an employer subject to this act. [MCL 418.161(l)(d); MSA 17.237(161)(l)(d)]. In Amerisure, supra, this Court held that all three provisions of § 161(l)(d) must be satisfied in order to find an individual an employee. The claimant must establish that he does not maintain a separate business, does not hold himself out to and render service to the public, and is not an employer subject to the act. Id., 574. When there is a question concerning whether the individual is an independent contractor, the terms of the statute must be construed in conjunction with the economic reality test. Id., 573. Our review of the record shows that plaintiff met the three requirements of § 161(l)(d). The testimony of the owner of the ski resort established that use of members of the National Ski Patrol was an integral part of the operation of the resort. When members of the National Ski Patrol were unavailable, the resort hired a paid, professional ski patroller to service the resort. Plaintiff was performing service in the course of the business of an employer at the time of the injury. He was compensated for his services through benefits received from the resort. Compensation does not have to be in the form of money to qualify an employee for coverage under the act. Betts v Ann Arbor Public Schools, 403 Mich 507, 515; 271 NW2d 498 (1978). Plaintiff did not maintain a separate business as a ski patroller, did not hold himself out independently as a person providing such service to the public, and was not an employer subject to the act. The commission erred in its analysis of the individual factors of the economic reality test. The economic reality test involves four basic factors: (1) control of the worker’s duties; (2) payment of wages; (3) the right to hire, fire, and discipline; and (4) performance of the duties toward the accomplishment of a common goal. Williams v Cleveland Cliffs Iron Co, 190 Mich App 624, 627; 476 NW2d 414 (1991). In applying these factors, the totality of the circumstances surrounding the work must be examined, with no single factor controlling. Tucker v Newaygo Co, 189 Mich App 637, 639-640; 473 NW2d 706 (1991). The economic reality test has also been expressed as eight principles detailed in McKissic, supra, which the commission applied. The tests are basically the same, and each provides a rational framework for review. Williams, supra, 627. The McKissic factors are: First, what liability, if any does the employer incur in the event of the termination of the relationship at will? Second, is the work being performed an integral part of the employer’s business which contributes to the accomplishment of a common objective? Third, is the position or job of such a nature that the employee primarily depends upon the emolument for payment of his living expenses? Fourth, does the employee furnish his own equipment and materials? Fifth, does the individual seeking employment hold himself out to the public as one ready and able to perform taste of a given nature? Sixth, is the work or the undertaking in question customarily performed by an individual as an independent contractor? Seventh, control, although abandoned as an exclusive criterion upon which the relationship can be determined, is a factor to be considered along with payment of wages, maintenance of discipline and the right to engage or discharge employees. Eighth, weight should be given to those factors which will most favorably effectuate the objectives of the statute. [.McKissic, supra, 208-209.] The application of the economic reality test does not alter the result required by the statute. The first factor, potential liability of the employer on termination of the relationship, is neutral. There was no formal contract of employment, and either side could end the relationship at will. The relationship was closer to at-will employment than a contractual obligation. Rood v General Dynamics Corp, 444 Mich 107; 507 NW2d 591 (1993). The commission clearly erred in its analysis of the second factor, whether the work is an integral part of the employer’s business that contributes to a common objective. While the commission stated that the resort could operate without a ski patrol, this ignores the testimony of the president of the resort and its director of skiing that the resort would never operate without some form of ski patrol and that the ski patrol was an essential and integral part of the operation. Given this testimony from defendant’s employees, the conclusion of the commission is totally unsupported by the record. Plaintiff’s work was an integral part of the business. The commission’s finding with respect to the third factor, that plaintiff did not depend on the position for living expenses, is correct. Plaintiff did receive benefits from his position that constituted compensation. The fourth factor, furnishing of equipment and materials is split between the parties. Plaintiff furnished his own ski equipment, clothing, and first-aid pack, but the resort furnished a patrol room, snowmobiles, and toboggans and it replenished supplies. Contrary to the commission’s conclusion, plaintiff supplied only a part of his equipment and supplies, and this factor does not weigh in favor of either side. The commission also erred in its analysis of the fifth factor, whether the individual holds himself out to the public as one ready and able to perform certain tasks. While plaintiff did hold himself out as a person performing ski patrol duties, this was under the auspices of the resort. Plaintiff was not a free-lance ski patroller and only performed those duties at Schuss Mountain. He did not offer his services outside his regular weekend responsibilities at the hill. Unlike an independent contractor, he was not available for other assignments as a ski patroller. The sixth factor, whether the work is customarily performed by an independent contractor, is not susceptible to a clear application in this context. There are no published Michigan worker’s compensation cases involving a ski patrol member. Review of case law from other states reveals mixed results. In Cardello v Mt Herman Ski Area, 372 A2d 579 (Me, 1977), the Maine Supreme Court found that a volunteer ski patroller was not entitled to worker’s compensation benefits as an employee, while in Aspen Highlands Skiing Corp v Apostoulou, 866 P2d 1384 (Colo, 1994), the Colorado Supreme Court concluded that a ski patroller was an employee of the ski resort for worker’s compensation purposes. Statutory provisions of other states are more enlightening. A number of states have specific statutes that exclude ski patrol members from the statutory definition of employee. See, e.g., Colorado, Colo Rev Stat 8-41-301(4) (1993 Supp); Nevada, Nev Rev Stat 616A.110(5); Idaho, Idaho Code 72-212; and Montana, Mont Code Ann 39-71-118. These statutes suggest that but for the specific exclusion, volunteer ski patrollers would otherwise be considered employees eligible for worker’s compensation benefits. Michigan has no such legislative exclusion. This factor is inconclusive. Although most states that have specifically considered ski patrollers have excluded them from worker’s compensation coverage, this may also indicate that but for the specific exclusion, ski patrollers would be considered employees rather than independent contractors. The Legislature retains the option to specifically exclude ski patrollers from the statutory definition of employee. The seventh factor, control, maintenance of discipline, and right to engage or discharge employees, is also inconclusive. Although the commission characterized the ski patrol as a self-governing operation independent of the ski resort, this fails to account for the evidence presented. The ski patrol director testified that although the members elected the director, the nominations for director must be approved by ski area management. The resort had the final say concerning whether a person could serve as a patroller. The director acknowledged that the management would dictate the patrol’s activities. There is no showing that the resort exercised any less control over members of the National Ski Patrol than that it used over its own paid weekday ski patroller, who is also a member of the National Ski Patrol. Under the eighth factor, weight should be given to those factors that will most favorably effectuate the objectives of the statute. The commission did not err in failing to give weight to any one factor, but it did err in finding that none of the factors support plaintiff’s claim. Plaintiff’s satisfaction of the statutory requirements of § 161(l)(d), along with the application of the economic reality test, mandates that he be found an employee of defendant resort under the statute. The majority of the test factors indicate that plaintiff was not an independent contractor. Contrary to the commission’s conclusion, plaintiff was more than a volunteer engaged in an undefined accommodation relationship with the ski resort. There is no support in the statute or the case law for creating a new category of employment relationship short of employee-employer. Plaintiff received significant benefits for himself and his family in rendering service as an integral part of the resort’s operation. In light of its conclusion concerning plaintiff’s employment status, the commission did not reach defendants’ arguments regarding the proportion of liability. Therefore, this matter is remanded to the commission to reinstate benefits awarded by the magistrate and to address the remaining issues that were not decided in its initial opinion.
JENNIE S. ROBERTS, Plaintiff v. FIRST-CITIZENS BANK AND TRUST COMPANY, Defendant No. COA95-1369 (Filed 17 December 1996) 1. Appeal and Error § 426 (NCI4th)— cost of printing — violation of rules — taxed against defendant’s attorney The cost of printing defendant’s brief was taxed to defendant’s attorney where the brief clearly violated N.C. R. App. R 26 and N.C. R. App. P. 28. The violations allowed the defendant to gain additional pages of text. Am Jur 2d, Appellate Review § 578. 2. Secured Transactions § 119 (NCI4th)— CD — security for loan — default—notice to debtor Where a certificate of deposit was used as collateral to secure a loan, the Court of Appeals held that pursuant to N.C.G.S § 25-9-504(3), upon default, notice to the debtor is required before payment on an instrument is demanded by the secured party as provided by N.C.G.S. § 25-9-502. The Court’s ruling does not address whether other forms of collateral subject to N.C.G.S. § 25-9-502 are covered by N.C.G.S. § 25-9-504. Am Jur 2d, Secured Transactions §§ 652-680. Sufficiency of secured party’s notification of sale or other intended disposition of collateral under UCC § 9-504(3). 11 ALR4th 241. 3. Labor and Employment § 77 (NCI4th)— bank employee— discharge for refusal to violate statutes — employment at will — public policy exception The trial court correctly denied defendant’s motions for directed verdict and JNOV in a wrongful discharge case where the plaintiff bank employee was terminated for refusing to cash out, without notice, a certificate of deposit which was being held as collateral by the defendant employer. The defendant employer’s instructions to the plaintiff violated N.C.G.S. § 25-9-502 and N.C.G.S. § 25-9-504; therefore the plaintiff’s firing constituted a public policy exception to the employment-at-will doctrine. Am Jur 2d, Wrongful Discharge §§ 44-54. Liability for discharging at-will employee for refusing • to participate in, or for disclosing, unlawful or unethical acts of employer or coemployees. 9 ALR4th 329. 4. Trial § 538 (NCI4th)— violation of statutes — discharge— employee — wrongful discharge There was no abuse of discretion on the part of the trial judge in denying defendant’s Rule 59 motion for a new trial in a wrongful discharge case where the plaintiff alleged that she was fired because she refused to follow defendant employer’s instructions, and the employer’s instructions violated North Carolina statutes. N.C.G.S. § 1A-1, Rule 59. Am Jur 2d, New Trial §§ 1 et seq. Judge Martin (Mark D.) concurring. Appeal by defendant from judgment entered 5 November 1993 and order entered 2 August 1995 by Judge Coy E. Brewer, Jr. in Wake County Superior Court. Heard in the Court of Appeals 11 September 1996. Kennedy, Kennedy, Kennedy and Kennedy, L.L.P., by Harold L. Kennedy, III, Harvey L. Kennedy, Annie Brown Kennedy and Lauren Michelle Collins, for plaintiff-appellee. Ward and Smith, P.A., by William Joseph Austin, Jr. and Anne D. Edwards, for defendant-appellant. LEWIS, Judge. The issue before us is whether plaintiff was wrongfully discharged from her employment with defendant. A jury determined that she was and awarded her $300,000 in compensatory damages and $1,000,000 in punitive damages. Defendant moved for judgment notwithstanding the verdict (“JNOV”) and alternatively, for a new trial. Both motions were denied. Defendant appeals from the final judgment and from the order denying its motions. We first note defendant’s violation of N.C.R. App. P. 26(g). This rule requires papers filed with this Court to be double-spaced and printed in 11 point type. N.C.R. App. P. 26(g) (1996). In Lewis v. Craven Regional Medical Center, 122 N.C. App. 143, 468 S.E.2d 269 (1996), this Court explicitly set out the requirements of this rule. The Court stated, “A brief presented in eleven point type will contain no more than three lines of double-spaced text in a single, vertical inch, or twenty-seven (27) lines of double-spaced text on a properly formatted 8.5 by 11 inch page.” Lewis, 122 N.C. App. at 147, 468 S.E.2d at 273. Additionally, the Court explained that documents should have ten characters per inch and no more than 65 characters per line. Id. Defendant’s brief contains 30 lines of type on each page and approximately 72 characters per line. This is a clear violation of Rule 26. Additionally, since the text of defendant’s brief extends to the bottom of the thirty-fifth page, this violation enabled defendant to gain the equivalent of several extra pages of text in violation of N.C.R. App. P. 28. Consequently, we could dismiss defendant’s appeal, Miller v. Miller, see 92 N.C. App. 351, 353, 374 S.E.2d 467, 468 (1988), or could choose not to consider its brief, see Lewis, 122 N.C. App. at 147, 468 S.E.2d at 273. However, since the brief was filed two months prior to our decision in Lewis, we choose not to impose either of these sanctions. The rule, nevertheless, was in effect and clear, and therefore, in our discretion under N.C.R. App. P. 2, we tax the cost of printing defendant’s brief to defendant’s attorneys. At trial, plaintiff testified that she began working for defendant First-Citizens Bank and Trust Company (“First-Citizens”) at their Sparta office in 1974. In 1988, she was promoted to the position of commercial loan officer. Just before and subsequent to her promotion, Ms. Roberts received favorable performance reviews from two different supervisors. In 1989, Gary Fulbright became the city executive at the Sparta office and plaintiff’s supervisor. During the summer of 1990, after an internal audit at First-Citizens, concern arose about a loan taken out by James Church, a local farmer whose family was a longtime customer of First-Citizens. The $4,500.00 loan was secured by a $10,000.00 certificate of deposit (“CD”) owned by Viola Church, James’ mother. The CD also acted as security for a loan to Harold Church, James’ brother. James’ loan had been renewed every six months for approximately ten years. The auditors suggested breaking James’ loan into 24 monthly payments or requiring it to be paid off when it became due in November 1990. In August 1990, an interest payment was due on James Church’s loan. Mr. Fulbright asked Ms. Roberts to call Mr. Church to remind him about this payment. Mr. Church explained that he was in the middle of harvesting his tobacco and would be in to pay as soon as possible. Mr. Fulbright told Ms. Roberts that if Mr. Church did not have the money to pay off his loan when he came in, she was to cash out the CD immediately. Ms. Roberts testified that she told Mr. Fulbright she could not do that without providing notice and reminded him that such action would leave Harold Church’s loan unsecured. Ms. Roberts later spoke with Lucy Smith, a commercial loan administrator at First-Citizens’ headquarters in Raleigh. Ms. Smith agreed that the CD could not be cashed out in the manner Mr. Fulbright requested. On or around 9 September 1990, James Church came into the bank and made his interest payment. He assured Ms. Roberts that he would pay the entire loan when it became due in November. Ms. Roberts did not demand payment of the entire loan at that time, nor did she cash out the CD. Upon learning that Ms. Roberts did not follow his instructions, Mr. Fulbright became hostile and angry to her. On 18 September 1990, Mr. Fulbright gave Ms. Roberts a written reprimand for failing to obey his orders regarding the Church loan. Ms. Roberts and several First-Citizens’ employees testified that thereafter, Mr. Fulbright was disrespectful of Ms. Roberts and harassed her. In November 1990, Ms. Roberts received her second reprimand from Mr. Fulbright, in which he threatened to terminate her employment. She testified that the allegations in the reprimand were all false. The next month, Mr. Fulbright gave her a “below expected level” evaluation, her first during her employment with First-Citizens. In March 1991, plaintiffs job was terminated, allegedly due to decreased loan volume. She was told that the bank was experiencing a state-wide layoff of loan officers. Plaintiff was offered a Teller I job, the starting position at the bank, but she declined. Prior to leaving the bank, plaintiff learned that loan volume had not decreased as she had been told; it had actually increased over the past year. Defendant first assigns error to the trial court’s denial of its motions for a directed verdict and JNOV. Our standard for reviewing the trial court’s ruling on a directed verdict is the same as that for JNOV. Poore v. Swan Quarter Farms, 94 N.C. App. 530, 532, 380 S.E.2d 577, 578, modified on other grounds, 95 N.C. App. 449, 382 S.E.2d 835 (1989), disc. review denied, 326 N.C. 50, 389 S.E.2d 93 (1990). A motion for a directed verdict or a JNOV must be granted if the evidence when taken in the light most favorable to the non-movant is insufficient as a matter of law to support a verdict in favor of the non-movant. The evidence is sufficient to withstand either motion if there is more than a scintilla of evidence supporting each element of the non-movant’s case. Id. at 532-33, 380 S.E.2d at 578 (citations omitted). Defendant argues that plaintiff’s allegations cannot, as a matter of law, constitute a public policy exception to the employment-at-will doctrine. Plaintiff argues that because she was fired for her refusal to act in violation of N.C. Gen. Stat. section 25-9-505(2), a provision of the North Carolina Uniform Commercial Code (“UCC”), the public policy exception applies. We first address defendant’s contention that the terms of the UCC do not apply because it was entitled to set-off the value of the CD against the debt in default. The common law right of set-off allows banks, as debtors of their general depositors, to set-off against the deposits any matured debts the depositors owe them. State ex rel Eure v. Lawrence, 93 N.C. App. 446, 449, 378 S.E.2d 207, 208 (1989). However, this right to set-off may be waived. See id. at 450-451, 378 S.E. 2d at 209-10 (recognizing the possibility of waiver but not finding waiver under the facts of that case). In the present case, we hold that First-Citizens waived any right of set-off it may have had in regard to Mrs. Church’s CD. In the assignment agreement, First-Citizens, through its agent, acknowledged the assignment of the CD as collateral for Mr. Church’s loan and agreed that it had “no claim or interest in or right of offset against said account(s).” Accordingly, there is no right of set-off and the terms of the UCC apply. Defendant argues that, even if the UCC applies, the trial court nevertheless erred in ruling that G.S. 25-9-505(2) is relevant to the facts of this case and requires First-Citizens to provide notice to Mrs. Church prior to cashing in her CD. First-Citizens argues instead that N.C. Gen. Stat. section 25-9-502 alone applies and allows for collection without any notice to the debtor. G.S. 25-9-502 allows a secured party “to notify . . . the obligor on an instrument to make payment to him” in the event of default. G.S. § 25-9-502(1) (1995). Since a CD is an instrument, see N.C. Gen. Stat. § 25-3-104Q) (1995), the terms of G.S. 25-9-502 are clearly applicable to this case. Upon default, First-Citizens undoubtedly had the right to notify the issuer of the CD to pay to First-Citizens the amount of the CD. However, the question before us is whether First-Citizens was also required under statutory authority to notify the debtor of the default and its intention to cash in the CD. G.S. 25-9-502 is silent on the issue of notice to the debtor in such instances. This appears to be a case of first impression in North Carolina. Plaintiff argues that G.S. 25-9-505(2) applies and requires notice to the debtor. We note that under the UCC, Mrs. Church, as owner of the CD, is considered a “debtor” in any provision dealing with the collateral. See N.C. Gen. Stat. § 25-9-105(d) (1995). G.S 25-9-505 provides in relevant part: In any other case involving consumer goods or any other collateral a secured party in possession may, after default, propose to retain the collateral in satisfaction of the obligation. Written notice of such proposal shall be sent to the debtor if he has not signed after default a statement renouncing or modifying his rights under this subsection. G.S. § 25-9-505(2) (1995). The phrase “any other collateral” clearly contemplates that this provision is potentially applicable to all types of collateral, even instruments. The key determination to be made is what the General Assembly meant by “retain,” a term not defined in the Chapter. “It is a basic rale of statutory construction that where a statute contains no definition of words used therein, the words of the statute are to be given their natural and ordinary meaning.” Southminster, Inc. v. Justus, 119 N.C. App. 669, 673, 459 S.E.2d 793, 796 (1995). “Retain” is defined as “[t]o continue to hold, have, use, recognize, etc., and to keep.” Black’s .Law Dictionary 1316 (1990). Based on this definition, we agree with defendant that a secured party who has cashed in an instrument has not retained it as contemplated by G.S. 25-9-505. Defendant did not intend to simply keep or hold the CD. It intended to cash it in, since an instrument has no value aside from the right of payment it represents. We hold that G.S. 25-9-505(2) does not apply where the collateral involved is an instrument which the secured party intends to cash in. However, we make no judgment about situations where the secured party intends to continue to hold a CD or similar instrument in order to gain interest on it. Although the trial court incorrectly relied upon G.S. 25-9-505, its conclusion that notice was required is nonetheless correct since. notice is mandated by G.S. 25-9-504, which states in part: A secured party after default may sell, lease or otherwise dispose of any or all of the collateral in its then condition or following any commercially reasonable preparation or processing. . . . Unless collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, reasonable notification of . . . the time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor, if he has not signed after default a statement renouncing or modifying his right to notification of sale. G.S. § 25-9-504(1),(3) (1995). The definition of “dispose of’ is not in the Chapter. However, it has been defined as “to transfer into new hands or to the control of someone else: relinquish.” Webster’s Third New International Dictionary 654 (1968). In our view, this definition certainly encompasses cashing in a CD. Furthermore, the present case does not fit the exceptions where notice is not required. A CD is not perishable, nor does it threaten to speedily decline in value. A CD is also not customarily sold on a recognized market. See Smith v. Mark Twain Nat. Bank, 805 F.2d 278, 289 (8th Cir. 1986). Therefore, First-Citizens was required by statute to provide notice prior to cashing in Mrs. Church’s CD. In summary, because G.S. 25-9-502 is silent as to notice to the debtor, cashing in a CD is a disposal under G.S. 25-9-504 and we are to give effect to both statutes if possible, see Campos v. Flaherty, 93 N.C. App. 219, 222, 377 S.E.2d 282, 283, disc. review denied, 324 N.C. 577, 381 S.E.2d 772 (1989), we hold that notice is required under G.S. 25-9-504(3) to debtors who provide instruments as collateral before the secured party collects under those instruments upon default. However, our holding is very narrow. We do not address whether other forms of collateral also subject to G.S. 25-9-502 are covered by G.S. 25-9-504 as well. Our holding is also supported by the general policies inherent in the UCC. Interpreting the UCC to allow secured parties to cash in instruments without debtor notification would thwart one of the basic principles present throughout the UCC: the exercise of good faith in commercial transactions. See N.C. Gen. Stat. § 25-1-203 (1995). “ ‘Good faith’ means honesty in fact in the conduct or transaction concerned.” N.C. Gen. Stat. § 25-1-201(19) (1995). Honesty is defined as “fairness and straightforwardness of conduct: integrity.” Websters Third New International Dictionary 1086 (1968). These principles are evident in the requirements that a secured party give notice to the debtor before selling collateral, see G.S. § 25-9-504, and before retaining it, see G.S. § 25-9-505, in satisfaction of a debt. Defendant’s argument that notice is not required under the UCC when the collateral is an instrument is at odds with the UCC’s commitment to fairness and good faith. The debtors in such instances would be deprived of the opportunity to protect their rights. Notice enables the debtor to exercise his rights under N.C. Gen. Stat. section 25-9-506 to redeem the collateral. G.S. 25-9-506 reads: At any time before the secured party has disposed of collateral ... or before the obligation has been discharged under G.S. 25-9-505(2) the debtor ... may unless otherwise agreed in writing after default redeem the collateral by tendering fulfillment of all obligations .... G.S. 25-9-506 (1995). A debtor who secures a debt with an instrument should have the same opportunity to redeem that collateral as any debtor who pledges another type of collateral. This is especially true in cases like the one at hand where the instrument belongs to someone else and secures another’s obligation. Mrs. Church would probably not know default had occurred. The CD, if cashed before its maturation date, would incur a loss of interest and a substantial penalty which the owner might well avoid if notified of default. We hold that under G.S 25-9-504(3), upon default, notice to the debtor is required before payment on an instrument is demanded by the secured party as provided by G.S. 25-9-502. We next determine whether plaintiffs allegations are sufficient to constitute a public policy exception to the employment-at-will doctrine. “Ordinarily, an employee without a definite term of employment is an employee-at-will and may be discharged for any reason.” Vereen v. Holden, 121 N.C. App. 779, 783, 468 S.E.2d 471, 474 (1996). However, even an employee-at-will cannot be terminated for “ ‘an unlawful reason or purpose that contravenes public policy.’ ” Coman v. Thomas Manufacturing Co., 325 N.C. 172, 175, 381 S.E.2d 445, 447 (1989) (quoting Sides v. Duke University, 74 N.C. App. 331, 342, 328 S.E.2d 818, 826, disc. review denied, 314 N.C. 331, 333 S.E.2d 490 (1985)). Our Supreme Court has stated, “at the very least public policy is violated when an employee is fired in contravention of express policy declarations contained in the North Carolina General Statutes.” Amos v. Oakdale Knitting Co., 331 N.C. 348, 353, 416 S.E.2d 166, 169 (1992). The public policy exception to the employment-at-will doctrine is a “narrow exception.” Williams v. Hillhaven Corp., 91 N.C. App. 35, 39, 370 S.E.2d 423, 425 (1988). However, appellate courts of this State have found a claim for wrongful termination when an employee alleges that he or she was fired due to political affiliation, Vereen, 121 N.C. App. at 784, 468 S.E.2d at 474-75, refuses to violate the Department of Transportation’s regulations restricting truck drivers’ driving time, Coman, 325 N.C. at 175, 381 S.E.2d at 447, refuses to testify untruthfully or incompletely in a court action, Sides, 74 N.C. App. at 343, 328 S.E.2d at 826- 27, and testifies at an Employment Security Act proceeding. Williams, 91 N.C. App. at 41-42, 370 S.E.2d at 426. Turning to the present allegations, we find they encompass precisely the type of behavior by employers which is prohibited in the above cases. G.S. 25-9-504 requires notice to be given before a secured party disposes of collateral to satisfy a defaulted obligation, unless the debtor has renounced this right. G.S. § 25-9-504(3)
William F. King vs. Robert F. Driscoll & others. Middlesex. December 6, 1995. December 12, 1996. Present: Wilkins, C.J., O’Connor, Greaney, & Fried, JJ. Employment, Termination. Contract, Employment, Implied covenant of good faith and fair dealing, Damages. Corporation, Stockholder. Law of the Case. A judge of the Superior Court correctly dismissed a claim for breach of the implied covenant of good faith and fair dealing implied in a terminable at-will employment contract, where the plaintiff had offered no evidence that he had been denied compensation for work performed for the employer. [5-7] This court declined to reconsider an issue decided upon an earlier appeal in the same case. [7-8] A Superior Court judge improperly, on remand, undertook to recalculate damages on a certain civil claim and the plaintiff was entitled to the damages assessed by the judge prior to remand plus interest and attorney’s fees. [8] Civil action commenced in the Superior Court Department on June 28, 1990. Following review by this court, 418 Mass. 576 (1994), further proceedings were had before Vieri Volterra, J. The Supreme Judicial Court granted an application for direct appellate review. Morris M. Goldings (John F. Aylmer, Jr., with him) for the plaintiff. Richard L. Neumeier for Robert F. Driscoll & others. Albert Marchant and F.S. Payne Co. O’Connor, J. This case is here on appeal for the second time. See King v. Driscoll, 418 Mass. 576 (1994) (King I). King’s complaint contains four counts. Count I is directed solely at the defendant F.S. Payne Co. (Payne) and sets forth two theories of liability. King alleges that he, as employee, and Payne, as employer, were parties to a terminable at-will employment contract. One theory is that the contract as a matter of law included a covenant of good faith and fair dealing which Payne breached by terminating King’s employment. The other theory is that Payne’s termination of King’s employment violated public policy and for that reason King is entitled to damages from Payne. In count II, King claims that the defendants Robert F. Driscoll and Albert Marchant, as well as two other individuals who are not parties to this appeal, intentionally interfered with King’s employment contract, thereby making them liable to him. Count III states that Driscoll, Marchant, and a third person who is not a party to this appeal, violated the duty of utmost good faith and loyalty they owed to King as their fellow shareholder in a close corporation. Finally, King alleges in count IV that Payne is liable to him because the corporation discharged him in violation of its by-laws. The case was tried jury waived in the Superior Court. A full statement of facts may be found in King I, supra at 577-580. We recite those of the judge’s findings that are most relevant to the issues presented by this appeal. At all relevant times Payne was a closely held Massachusetts corporation. Payne’s upper-level management positions were occupied by individuals who owned relatively large amounts of stock in that corporation until August, 1990, when all Payne’s stock was sold to Northern Elevator of Toronto. Beginning in 1954, Payne employees who purchased Payne stock were required to enter into a “buy-back” agreement that allowed Payne to repurchase the stock of such an employee at the end of his or her employment. King’s employment with Payne began in 1958 and continued until his termination in November, 1987, at which time he was vice-president of the manufacturing division. King was a Payne shareholder when his employment was terminated. His employment was terminated because of his participation in a derivative shareholder suit. The judge concluded that King was entitled to recover from Payne on count I on the two theories expressed therein, breach of the covenant of good faith and fair dealing and violation of public policy. With respect to count II, the judge found Driscoll and another defendant, Michael Martin, who is not involved in this appeal, liable for intentional interference with King’s contract of employment. The judge concluded as to count III that Driscoll and Marchant violated the duty of utmost good faith and loyalty they owed to King as their fellow shareholder in a close corporation and thus were liable to him. The judge determined that King was not entitled to recovery under count IV. The judge concluded that King was “entitled to both contract and tort damages under count I of the complaint against Payne; tort damages under count II which claims interference with a contractual relationship by Driscoll, Marchant and Martin; and tort and contract damages under count III which claims damages for breach of the implied covenant of good faith and [loyalty] against Driscoll and Marchant.” Pursuant to the judge’s order, a final judgment entered “[a]s to Counts I, II and III of the complaint... in behalf of the plaintiff William F. King against the defendants F.S. Payne Co., Robert F. Driscoll, Albert Marchant and Michael Martin, jointly and severally.” The final judgment set forth in detail the items taken into account by the judge in assessing damages, including the specific amount of money assigned to each item. The items included back pay, the monetary value of a company automobile perquisite, fringe benefits, the lost benefit of a company retirement plan, and King’s loss of stock profits that he would have realized from the sale of Payne stock to Northern Elevator of Toronto in August, 1990. The total assessment of damages against Payne, Driscoll, Marchant, and Martin “jointly and severally” as to counts I, II, and III was $528,800.89 plus interest and, in addition, attorney’s fees and costs in the sum of $133,485.81. The judge also assessed damages against Driscoll alone as to counts II and III in the sum of $23,516.64 plus interest. The judge found that Driscoll had realized a benefit of that amount from his wrongdoing. Additional damages in the sum of $2,936.28 were assessed against Martin under count II for the same reason. The defendants appealed, as did King with respect to the judge’s decision adverse to him on count IV. We dealt with those appeals in King I, supra. We held that the judge had erred in finding for King on count I based on King’s violation of public policy theory. Id. at 581-585. With respect to King’s other theory asserted in count I, however, the claim of breach of the covenant of good faith and fair dealing implied in terminable at-will employment contracts, we said, “The judge’s conclusions on each part of count I. . . were independent of each other. The defendants thoroughly argued on appeal their position as to the first part of count I, the public policy exception, but they did not argue the second part, the breach of the covenant described in Fortune [v. National Cash Register Co., 373 Mass. 96, 101 (1977)]. Thus, the issue of the breach of the covenant of good faith and fair dealing is not before us. Mass. R. A. P. 16 (a) (4), as amended, 367 Mass. 921 (1975). Our conclusion regarding the first part of count I does not affect the judge’s finding on the second part. . . . On remand, the judge should recalculate damages, if any, attributable to the breach of the covenant of good faith and fair dealing owed to King as an employee. See Fortune, supra at 104-105; Gram v. Liberty Mut. Ins. Co., 384 Mass. 659, 672 (1981), S.C., 391 Mass. 333 (1984)” (emphasis added). Id. at 585 n.8. Also, in King I, supra, we reversed the judge’s holding, favorable to King, on his claim of intentional interference with contractual relations set forth in count II, and, because the judge’s award of attorney’s fees was based on rulings in favor of King on his claims of wrongful termination of employment in violation of public policy (count I) and intentional interference with contractual relations (count II), which rulings we reversed, we also vacated the award of attorney’s fees .Id. at 588. The final paragraph of the court’s opinion in King I, supra, was this: “Conclusion. The portion of the judgment of the Superior Court finding the defendants hable for wrongful termination in violation of public policy is reversed. The portion of the judgment of the Superior Court finding the defendants hable for intentional interference with contractual relations also is reversed. The award of attorney’s fees is vacated. The remainder of the judgment is affirmed. The case is remanded for further proceedings, including recalculation of damages, in accordance with this opinion.” Id. at 589. Following the order of remand, the judge issued a “Memorandum And Final Order For Judgment After Rescript” in which he expressed his intention to recalculate damages “to reflect the reversal of [his earlier] decision on certain counts.” The judge focused on counts I and III. He dismissed count I on the ground that “the plaintiff has shown no damages.” His reasoning was that “although there was a violation of the implied covenant of good faith and fair dealing owed to an employee” and “[a] plaintiff may recover damages for the denial of earned compensation reflective of work performed prior to termination . . . plaintiff has offered no evidence that he was denied compensation for work performed.” The judge recalculated the damages as to count III by reducing them to $23,516.64 plus interest to be paid by Driscoll and $1,814.20 plus interest to be paid by Marchant. These sums were awarded “to disgorge [Driscoll and Marchant] from unlawful profits lawfully due the plaintiff.” Judgment as to count III was entered accordingly. Judgment entered dismissing the complaint as to counts I, II and IV. King, Driscoll and Marchant appealed. We granted King’s application for direct appellate review. The issues in this appeal relate only to counts I and III. King does not now contend that counts II and IV were improperly dismissed. In King I, supra, this court reversed the judgment that had been entered in the Superior Court as to count I insofar as it was based on a violation of public policy theory. However, in King I, supra, due to the absence of a challenge by the defendant Payne to King’s other theory of liability set forth in count I, that is, that Payne breached the covenant of good faith and fair dealing implied in terminable at-will employment contracts, we stated that that issue, which had been resolved in King’s favor by the judge, was not before us. King I, supra at 585 n.8. Nevertheless, because the appropriate measure of damages in connection with the two theories presented by count I was not the same, we advised, as we have noted above, that “[o]n remand, the judge should recalculate damages, if any, attributable to the breach of the covenant of good faith and fair dealing owed to King as an employee” (emphasis added). Id. In addition, in King I’s concluding paragraph, we remanded the case “for further proceedings, including recalculation of damages, in accordance with this opinion.” Id. at 589. On remand, the judge concluded with reference to the remaining viable claim under count I that King “offered no evidence that he was denied compensation for work performed and, therefore, Count I is to be dismissed.” After considering King’s arguments, we agree with the judge that no such evidence was offered. Therefore, in accordance with our cases discussed below, no breach of the implied covenant of good faith and fair dealing was proved. In Fortune v. National Cash Register Co., 373 Mass. 96, 101 (1977), we held that the defendant employer’s written contract with its employee “contain[ed] an implied covenant of good faith and fair dealing, and a termination not made in good faith constitutes a breach of the contract.” We stated that “[wjhere the principal seeks to deprive the agent of all compensation by terminating the contractual relationship when the agent is on the brink of successfully completing the sale, the principal has acted in bad faith and the ensuing transaction between the principal and the buyer is to be regarded as having been accomplished by the agent. . . . The same result obtains where the principal attempts to deprive the agent of any portion of a commission due the agent.” Id. at 104-105. Subsequently, in Gram v. Liberty Mut. Ins. Co., 384 Mass. 659, 672 (1981) (Gram I), we held that breach of the implied covenant of good faith and fair dealing occurs when, despite the employer’s good faith, the discharge of the terminable at-will employee nevertheless results in the employee’s loss of compensation already earned. We remanded the case “for a determination of damages, measured by the amount of renewal commissions Gram reasonably could have expected to receive, reduced to reflect the proportion of his time that would reasonably have been expected to have been devoted to the servicing of those renewal policies.” Id. at 673. Gram, we said, “has made no specific showing of his loss of any other identifiable, future benefit, such as pension rights, reflective of past services to Liberty” (emphasis added). Id. Consistent with our decisions in Fortune and Gram I, supra, the court held in Maddaloni v. Western Mass. Bus Lines, Inc., 386 Mass. 877, 884 (1982), involving a terminable at-will employment contract, that “the judge properly refused to instruct the jury on the issue of lost wages and fringe benefits unrelated to past services,” and in Kravetz v. Merchants Distribs., Inc., 387 Mass. 457, 463 (1982), we said, “We have implied an obligation of good faith and fair dealing in an employment contract terminable at will to prevent an employer from being unjustly enriched by depriving the employee of money that he had fairly earned and legitimately expected, but it was improper for the judge to instruct the jury here that they could consider lost wages if they found that the employment was terminable at will.” Finally, in Gram v. Liberty Mut. Ins. Co., 391 Mass. 333, 334-335 (1984) (Gram II), this court made the following observations: “It is important to recall that Gram served as an employee at will. He is not entitled to damages on the basis of a breach of a contract for life or for a term of years. The recovery allowed Gram in our earlier opinion pressed to the limit the recovery allowed to an at-will employee discharged without cause. . . . We must be careful not to approach allowance of contract damages as if Gram had a contract for life or for a term of years. Our goal is and has been simply to deny to Liberty any readily definable, financial windfall resulting from the denial to Gram of compensation for past services.” In keeping with the rationale of the cases referenced above, we agree that King has not satisfied his burden of proving a breach of the covenant of good faith and fair dealing implied in a terminable at-will employment contract because he has failed to present evidence that he was denied compensation for work performed. The defendant Payne, therefore, is entitled to judgment in its favor on count I. We turn now to count III, and we focus first on the defendants’ (Driscoll and Marchant) contention that we should reconsider our affirmance in King I, supra, of the judge’s determination of the defendant shareholders’ liability for violating the duty of good faith and loyalty they owed to their fellow shareholder in a close corporation. This we decline to do. The “law of the case” doctrine reflects this court’s reluctance “to reconsider questions decided upon an earlier appeal in the same case.” Peterson v. Hopson, 306 Mass. 597, 599 (1940). An issue “once decided, should not be reopened ‘unless the evidence on a subsequent trial was substantially different, controlling authority has since made a contrary decision of the law applicable to such issues, or the decision was clearly erroneous and would work a manifest injustice.’ White v. Murtha, 377 F.2d 428, 432 (5th Cir. 1967).” United States v. Rivera-Martinez, 931 F.2d 148, 151 (1st Cir.), cert. denied, 502 U.S. 862 (1991). None of those circumstances is present in this case. We come, then, to the question whether this court’s order in King I contemplated the judge’s recalculation of count III damages on remand. We answer that question in the negative. Quite clearly, the contemplated recalculation of damages was related only to the claim in count I that Payne, as King’s employer, violated the covenant of good faith and fair dealing implied in their employment contract. It must be remembered that two very different theories of recovery, implicating different measures of damages (contract and tort) were asserted in count I. For the purpose of assessing damages, the judge did not distinguish between the two theories, one of which we rejected in King I. It was necessary, therefore, that the judge reconsider the question of damages as it related to the remaining theory. Nothing in King I suggests, however, that, on remand, recalculation of damages as to count III would be appropriate. We affirmed the judgment as to count III, and we did so without discussion of damages or any intimation that the initial assessment was questionable. The remand order did not call for recalculation of all damages. Rather, it called for recalculation of damages “in accordance with this opinion,” which opinion discussed damages in connection with count I, see King I, supra at 585 n.8, but not otherwise. King is entitled to recover damages under count III from the defendants Driscoll and Marchant as assessed by the judge prior to remand plus interest and without attorney’s fees. Judgment for the defendants as to counts I, II, and IV is affirmed. So ordered.
COMMISSIONER OF LABOR OF NORTH CAROLINA, Plaintiff-Appellant v. HOUSE OF RAEFORD FARMS, INC., Defendant-Appellee No. COA95-1401 (Filed 5 November 1996) 1. Labor and Employment § 75 (NCX4th)— employee’s REDA complaint forwarded to employer — compliance with statute The trial court erred in its determination that the Commissioner of Labor failed to forward a copy of a dismissed employee’s Retaliatory Employment Discrimination Act (REDA) complaint to defendant employer within 20 days following receipt in accordance with N.C.G.S. § 95-242(a) where the evidence tended to show that, five days after the Department of Labor’s Right to Know Division received necessary information from the dismissed employee about the name and address of the employer, a person at defendant’s place of business signed the receipt for the letter sent by the director of plaintiff’s Right to Know Division informing defendant of the dismissed employee’s REDA complaint. Am Jur 2d, Wrongful Discharge § 10. 2. Labor and Employment § 75 (NCI4th)— REDA complaint— statutory time periods directory The trial court erred in dismissing plaintiff Commissioner of Labor’s REDA complaint on the ground that the Commissioner had exceeded the 90-day time period in N.C.G.S. § 95-242(a) for the Commissioner to make a determination as to the merit of a complaint, since the complaint processing time periods of the statute are directory and not jurisdictional, as the statute fails to provide a consequence for the Commissioner’s failure to comply with the 90-day period, and the statute is intended to spur the Commissioner to action, not limit the scope of his authority. Am Jur 2d, Wrongful Discharge § 10. Appeal by plaintiff from order entered 11 September 1995 by Judge E. Lynn Johnson in Hoke County Superior Court. Heard in the Court of Appeals 18 September 1996. Attorney General Michael F Easley, by Special Deputy Attorney General Hilda Bumett-Baker and Associate Attorney General Daniel D. Addison, for plaintiff-appellant. Jordan, Price, Wall, Gray & Jones, L.L.P., by Henry W. Jones, Jr. and A. Hope Derby, for defendant-appellee. JOHNSON, Judge. On 9 October 1992, Betty Jo Locklear (now Betty Jo Barton) was injured when she accidentally slipped and fell while working at a poultry plant owned and operated by defendant House of Raeford Farms, Inc. in Lumber Bridge, North Carolina. After being absent from work as a result of the 9 October incident, defendant terminated Ms. Barton’s employment on 26 October 1992. Thereafter, Ms. Barton wrote a letter to the North Carolina Department of Labor complaining that she was unfairly terminated and had not received workers’ compensation. However, Ms. Barton failed to indicate the name and address of her employer in this letter. Ms. Barton’s letter was received by the Department of Labor’s Right to Know Division on 11 November 1992. At that time, the Right to Know Division was responsible for investigating complaints alleging workplace retaliation in violation of North Carolina’s Retaliatory Employment Discrimination Act (REDA), N.C. Gen. Stat. § 95-240, et seq. However, as Ms. Barton’s letter did not contain the name and address of her employer, the Right to Know Division could not proceed with its investigation and, therefore, contacted Ms. Barton to request that she provide that information. Consequently, Ms. Barton responded by letter, received by the Right to Know Division on 16 December 1992, which noted the name and address of defendant as being her employer. Therein, she also noted that defendant’s personnel director had said that he would file a workers’ compensation claim for her, but that she had never received any information in reference to such a claim. On 18 December 1992, the Director of the Right to Know Division, Ann Wall, wrote a letter to defendant informing defendant corporation of Ms. Barton’s REDA complaint. Enclosed were copies of both of Ms. Barton’s complaint letters. Ms. Wall’s letter was sent by certified mail, return receipt requested, on that same date. On 21 December 1992, someone at defendant’s place of business signed the receipt for the letter. Notably, defendant’s personnel director, Erick Wowra, maintains that neither he nor anyone else at defendant’s place of business received Ms. Wall’s letter on that date. For a period of time, during which the Department of Labor’s Right to Know Division.was being realigned and reorganized, Ms. Barton’s claim remained open, but uninvestigated. Finally, on 11 April 1994, after the General Assembly provided permanent funding to a new division for the processing of REDA complaints, the Workplace Retaliatory Discrimination Division (WORD), Ms. Barton’s complaint was assigned to REDA investigator Joseph D. Turnham. As a consequence, on 12 April 1994, WORD sent a letter to defendant informing the corporation of Mr. Tumham’s assignment to the case. On 26 April 1994, Mr. Turnham visited defendant’s place of business and interviewed several of the personnel as a part of his investigation of Ms. Barton’s complaint. During this visit, defendant’s personnel director, Mr. Wowra, asked Mr. Turnham to supply him with a copy of the complaint. As a result, Mr. Turnham faxed a copy of the complaint to Mr. Wowra on 27 April 1994. Mr. Turnham completed his investigation of Ms. Barton’s complaint on 25 May 1994. On that date, Ms. Wall, on behalf of the Commissioner of Labor, determined that the allegations of Ms. Barton’s complaint were true and that the complaint was meritorious. Following this determination, efforts to conciliate the complaint were made, but were unsuccessful. Thus, on 6 February 1995, Ms. Wall, on behalf of the Commissioner of Labor, informed Ms. Barton and defendant that the Commissioner would file a civil action; and subsequently, on 27 April 1995, plaintiff instituted this action in Hoke County Superior Court, alleging that defendant had violated North Carolina REDA. Thereafter, on 30 June 1995, defendant filed a motion to dismiss pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. This motion came on for hearing before Judge E. Lynn Johnson at the 11 September 1995 civil session of Hoke County Superior Court. The evidence presented tended to show the following: Defendant’s personnel director, Mr. Wowra, questioned the authenticity of a doctor’s note that Ms. Barton had submitted to excuse her absence from work after her injury in October 1992. Mr. Wowra stated that he had spoken with Ms. Barton’s doctor, Dr. Peter Perryman, in October 1992, and that Dr. Perryman had indicated that he had given Ms. Barton a note to excuse her absence, but that the date on the note, on which Ms. Barton was to return to work had been altered by someone in the doctor’s office without his consent. During his investigation, Mr. Turnham had opportunity to speak with Dr. Perryman, and at that time, the doctor indicated that he had altered the date on the note himself. Significantly, Dr. Perryman died on 15 May 1995. After reviewing the evidence presented by both parties, Judge Johnson ruled upon defendant’s motion as one for summary judgment pursuant to Rule 56 of the North Carolina Rules of Civil Procedure, as both parties presented affidavits and other matters outside of the pleadings, concluding that defendant’s motion should be granted and dismissing plaintiff’s complaint. Plaintiff appeals. On appeal, plaintiff presents but one assignment of error: The court’s entry of summary judgment in favor of defendant was in error because plaintiff met the statutory investigatory prerequisites for bringing this action. We agree. Summary judgment is appropriately granted pursuant to North Carolina General Statutes section 1A-1, Rule 56(c) when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that any party to the action is entitled to a judgment as a matter of law. Davis v. Town of Southern Pines, 116 N.C. App. 663, 665, 449 S.E.2d 240, 242 (1994), disc. review denied, 339 N.C. 737, 454 S.E.2d 648 (1995); N.C. Gen. Stat. § 1A-1, Rule 56 (1990). It is the moving party who bears the burden of showing that lack of a triable issue. Once the moving party meets its burden, section (e) of Rule 56 provides that the burden then shifts to the non-moving party to present a forecast of evidence showing that the non-moving party will be able to make out at least a prima facie case at trial. Collingwood v. G.E. Real Estate Equities, 324 N.C. 63, 66, 376 S.E.2d 425, 427 (1989). For the reasons discussed herein, we find that defendant failed to show a lack of a genuine issue of material fact in this case, and therefore, we conclude that the trial court erroneously granted its motion for summary judgment. First, plaintiff argues that the trial court erred in its determination that it failed to forward a copy of Ms. Barton’s complaint to defendant within twenty (20) days following receipt, in accordance with section 95-242(a) of the General Statutes. Section 95-242(a) of North Carolina’s REDA provides that within twenty (20) days following receipt of a complaint, a copy of that complaint shall be forwarded to the employer who is alleged to have violated the law. N.C. Gen. Stat. § 95-242(a) (1993). In the instant action, Ms. Betty Jo Barton penned a letter to the Department of Labor’s Right to Know Division complaining of defendant’s alleged violations of REDA. However, the letter failed to indicate defendant’s name and address. Without this information, the Right to Know Division was unable to commence an investigation of Ms. Barton’s allegations. Moreover, the statutory period in which to begin an investigation of these allegations could not begin without the requisite information as to an employer’s name and address. Subsequently, the Right to Know Division contacted Ms. Barton and requested this information. Ms. Barton responded to this request by letter, which was received by the Right to Know Division on 16 December 1992. Consequently, on 18 December 1992, Ms. Wall, the Director of the Right to Know Division, wrote a letter to defendant informing it of Ms. Barton’s REDA complaint and enclosing copies of Ms. Barton’s letters. Although defendant’s personnel director, Mr. Worwa, contends otherwise, the evidence in the light most favorable to plaintiff, tends to show that a person at defendant’s place of business signed the receipt for Ms. Wall’s letter on 21 December 1992. Accordingly, we find that a copy of Ms. Barton’s complaint was forwarded to defendant and an investigation was commenced within twenty (20) days of receipt of the necessary information from Ms. Barton. Defendant’s arguments to the contrary fail. Plaintiff next argues that the complaint processing time periods in section 95-242(a) are directory, not jurisdictional in nature, and thus, the court erred in dismissing this action on the basis that plaintiff exceeded these time periods. We agree. Whether the time provisions of section 95-242(a) are jurisdictional in nature is dependent upon legislative intent — i.e., whether the legislature intended the language of section 95-242(a) to be mandatory or directory. State ex rel. Utilities Comm. v. Empire Power Co., 112 N.C. App. 265, 277, 435 S.E.2d 553, 559 (1993) (citing Art Society v. Bridges, State Auditor, 235 N.C. 125, 130, 69 S.E.2d 1, 5 (1952)), disc. review denied, 335 N.C. 564, 441 S.E.2d 125 (1994). Generally, “statutory time periods are . . . considered to be directory rather than mandatory unless the legislature expresses a consequence for failure to comply within the time period.” Id.(citing Meliezer v. Resolution Trust Co., 952 F.2d 879, 883 (5th Cir. 1992); Thomas v. Barry, 729 F.2d 1469, 1470 n.5 (D.C. Cir.1984)). Mandatory provisions are jurisdictional, while directory provisions are not. Section 95-242(a) provides: An employee allegedly aggrieved by a violation of G.S. 95-241 may file a written complaint with the Commissioner of Labor alleging the violation. The complaint shall be filed within 180 days of the alleged violation. Within 20 days following receipt of the complaint, the Commissioner shall forward a copy of the complaint to the person alleged to have committed the violation and shall initiate an investigation. If the Commissioner determines after the investigation that there is not reasonable cause to believe that the allegation is true, the Commissioner shall dismiss the complaint, promptly notify the employee and the respondent, and issue a right-to-sue letter to the employee that will enable the employee to bring a civil action pursuant to G.S. 95-243. If the Commissioner determines after investigation that there is reasonable cause to believe that the allegation is true, the Commissioner shall attempt to eliminate the alleged violation by informal methods which may consist of conference, conciliation, and persuasion. The Commissioner shall make a determination as soon as possible and, in any event, not later than 90 days after the filing of the complaint. N.C.G.S. § 95-242(a) (emphasis added). Significantly, the statute fails to provide a consequence for the Commissioner’s failure to comply with the 90-day period given to make a determination about a complaint. Plaintiff references our decision in Empire Power, 112 N.C. App. 265, 435 S.E.2d 553, in support of this argument. In Empire Power, our Court was called upon to interpret a statute much like the one in this case — section 62-82(a) of the General Statutes. Section 62-82(a) required the Utilities Commission to commence a hearing into an application for a certificate of public convenience and necessity not later than three months after the filing of the application. N.C. Gen. Stat. § 62-82(a) (1989). The Court, utilizing the canons of statutory construction, interpreted the statutory time period in that instance to be directory, rather than mandatory since the statute did not contain any consequences for the Utilities Commission’s failure to commence a hearing within the specified time period and did not divest the Commission of jurisdiction to do so. Empire Power, 112 N.C. App. 265, 435 S.E.2d 553. Accordingly, the Court held that the time period contained therein was directory and not jurisdictional, giving the Commission authority to commence the subject hearing after the three month period was past. Id. Defendant, however, references Spiers v. Davenport, 263 N.C. 56, 138 S.E.2d 762 (1964), andNCA Crossroads Residential Ctrs. v. N. C. Dept, of Human Res., 327 N.C. 573, 398 S.E.2d 466 (1990), in support of its position to the contrary. In Spiers, the North Carolina Supreme Court was called upon to interpret The Machinery Act, N.C. Gen. Stat. § 105-271 et seq., which required a county tax board to complete county property valuations “ ‘not later than the third Monday following its first meeting.’ ” 263 N.C. at 59, 138 S.E.2d at 763 (quoting N.C. Gen. Stat. § 105-327(e)). The Supreme Court held that the statute was mandatory, and therefore, the tax board lacked jurisdiction to revalue the plaintiffs property after the statutory time period had passed. The Court, however, particularly noted that “[t]he reason why the [board] is required to act within a fixed time is apparent.” Id. at 59, 138 S.E.2d at 764. It was paramount that property be valued within the statutory time period, so that the other time limits provided in the Act would also be met. Otherwise, the entire taxation process would be disrupted. Id. In HCA Crossroads, our Supreme Court interpreted section 131E-185 of the North Carolina General Statutes. Together, subsections 131E-185(al) and (c) provided a 150-day statutory time period within which the Department of Human Resources could review applications for certificates of need. N.C. Gen. Stat. § 131E-185 (al), (c) (1988). As this time period was jurisdictional in nature, the Supreme Court found that failure to act on an application within this time period, rendered any decision by the Department, other than an approval of the application, a nullity. HCA Crossroads, 327 N.C. 573, 398 S.E.2d 466. This Court, however, distinguished HCA Crossroads in Empire Power stating that the case was inapplicable to Empire Power because the statute in Empire Power (N.C.G.S. § 62-82(a)) did not contain the explicit language addressed in HCA Crossroads (N.C.G.S. § 131E-185). Empire Power, 112 N.C. App. at 278, 398 S.E.2d at 560. In the case sub judice, we find a statute similar to that of the one in Empire Power. North Carolina General Statutes section 95-242(a) requires that the Commissioner of Labor make a determination as to the merit of a complaint within 90 days, but fails to provide a result in the event that the Commissioner fails to do so. As this Court found in Empire Power, we find today that this statutory time period is of a directory, not jurisdictional nature. While defendant’s arguments of prejudice do not fall upon deaf ears, we are particularly persuaded in this case by the legislative history and circumstances surrounding the adoption of North Carolina’s REDA. The North Carolina General Assembly enacted REDA in response to the disastrous fire which occurred in September 1991 at Imperial Food Products in Hamlet, North Carolina. By enacting REDA, the General Assembly sought to remedy unsafe and unlawful workplace conditions, by providing employees with a mechanism to report these violations without being punished for doing so. It is doubtful, therefore, that the General Assembly wished to place such stringent restrictions on the investigatory time periods found in section 95-242(a), so as to deny an injured employee the right to seek redress through REDA. As did the United States Supreme Court in Brock v. Pierce County, we balance the equities in this case, and find that the statutory language in section 95-242(a) was intended to spur the Commissioner to action, not limit the scope of his authority. See Brock v. Pierce County, 476 U.S. 253, 90 L. Ed. 2d 248 (1986) (interpreting 29 U.S.C. § 816(b) (now repealed) and recognizing the importance of allowing agencies to go forward after procedural deadlines, when divesting the agency of jurisdiction would prejudice a private citizen seeking redress). Hence, we cannot say that as a matter of law the Commissioner was without jurisdiction to bring this matter to the court’s attention, and as such, we find that the trial court erred in dismissing this action on the basis that plaintiff had exceeded this statutory time period. As the trial court incorrectly interpreted the nature of the provisions of section 95-242(a), we find that there is indeed genuine issue of material fact in the instant case and that the trial court erred in granting defendant’s motion for summary judgment. Therefore, the trial court’s decision is reversed and the case is remanded. Reversed and remanded. Chief Judge ARNOLD and GREENE concur.
Patsy Allmon, Employee, Plaintiff v. Alcatel, Inc., Employer; Cigna Insurance Company, Carrier; Defendants No. COA94-1244 (Filed 5 November 1996) 1. Workers’ Compensation § 292 (NCI4th)— federal discrimination claim — settlement proceeds not wages — termination of workers’ compensation benefits error The Industrial Commission erred in holding that the settlement proceeds from plaintiffs federal handicap discrimination claim against defendant employer constituted “wages” and she therefore was not entitled to temporary total disability benefits, since the federal discrimination claim and the worker’s compensation claim were based on two separate and distinct injuries, and recovery for both would not give plaintiff double recovery for a single action. Am Jur 2d, Americans with Disabilities Act: Analysis and Implications §§ I, 257; Job Discrimination § 174; Workers’ Compensation §§ 381-384. 2. Workers’ Compensation § 301 (NCI4th)— refusal to pay benefits — assessment of penalty — appropriate time period The Industrial Commission erred in assessing a penalty against defendant under N.C.G.S. § 97-18(e) only for the period running from the date of the Commission’s first order to reinstate benefits to the date of the Commission’s approval of defendant’s Form 24 request, rather than from the date defendant unilaterally terminated plaintiff’s benefits until the date of plaintiff’s reinstatement, since the statute requires payment of the penalty from the date the benefits are due but not paid, and the Form 24 was effectively vacated by the Claims Examiner two months after its initial approval. Am Jur 2d, Workers’ Compensation § 477. Tort liability of worker’s compensation insurer for wrongful delay or refusal to make payments due. 8 ALR4th 902. On appeal from the opinion and award entered on 11 July 1994 by the North Carolina Industrial Commission. Heard in the Court of Appeals 24 August 1995. Monroe, Wyne & Lennon, P.A., by George W. Lennon, for plaintiff appellant. Cranfill, Sumner & Hartzog, L.L.P., by Patrick H. Flanagan, for defendant appellees. COZORT, Judge. In this case, plaintiff suffered a back injury compensable under the North Carolina Workers’ Compensation Act. Defendant resisted payment of workers’ compensation benefits due plaintiff, by cutting off benefits despite contrary direction by the Industrial Commission. During the pendency of this workers’ compensation dispute, plaintiff filed a separate federal claim alleging handicap discrimination. The federal discrimination claim was settled out of court in 1990, for a monetary remedy and reinstatement of plaintiff to her former position. The settlement reserved plaintiff’s rights to her workers’ compensation claims. Plaintiff requested a hearing with the Industrial Commission alleging she was due additional compensation because of defendant’s cessation of benefits; plaintiff also alleged that a penalty should be assessed against defendant for untimely payment of benefits. The Commission held that the settlement of the federal discrimination claim constituted “wages.” The Commission denied plaintiff’s claim for benefits. We find the Commission erred in classifying the settlement proceeds as “wages,” and we reverse. The facts and procedural history follow. The plaintiff, Patsy Alimón, suffered an injury on 26 July 1980 and an injury on 10 November 1980. The first injury occurred when plaintiff was hit by boxes falling from a forklift. The second injury, and the source of the present compensation controversy, resulted when a coworker tripped and hit plaintiff, knocking her down against a pallet. The second accident caused plaintiff severe injury, forcing her to undergo multiple surgical operations, including several spinal fusions. On 11 March 1987, plaintiff was released by her orthopedic surgeon, with a twenty-percent permanent impairment rating of the back. Due to plaintiffs impaired condition, she was medically restricted from jobs involving certain kinds of lifting. Plaintiff sought to return to work; however, she was told by defendant-employer, on or about 29 May 1987, that no jobs were available meeting her medical requirements. On 28 September 1987, defendant terminated plaintiffs temporary total disability benefits without the necessary Form 24 approval by the Industrial Commission (Commission). On 10 November 1987, the Commission ordered defendant to reinstate benefits, retroactive to the 28 September 1987 date of defendant’s unilateral suspension of benefits. On 18 November 1987, the Commission repeated its order. Defendant complied with neither order. Defendant submitted a Form 24 to the Commission on or about 11 April 1988, which was approved, and which operated to terminate defendant’s obligation to pay plaintiff temporary total disability. On 20 June 1988, the Commission’s Chief Claims Examiner (“Examiner”) ordered defendant to reinstate benefits withheld from plaintiff for the period during which defendant had no Form 24 Commission approval. The Examiner also vacated approval of the Form 24, nullifying its effect and reinstating plaintiff’s temporary total disability payments. The effective retroactive date for benefit reinstatement was not explicitly set forth in the Examiner’s order. However, the order directed defendant to pay benefits prospectively from the date of the order, until otherwise notified by the Commission. The record indicates no retroactive or prospective benefits were ever paid by defendant pursuant to the Examiner’s 20 June 1988 order. Plaintiff filed charges of federal handicap discrimination with the United States Department of Labor in September 1989. On 2 May 1990, plaintiff and defendant settled the federal claims through an agreement entitled “General Release and Settlement Agreement” (Agreement). This Agreement provided plaintiff with $51,235.20 in settlement proceeds and reinstatement to her former position with defendant. Plaintiff was reinstated on 4 May 1990. In the Agreement’s recitals, defendant states it “has agreed to this settlement solely to avoid future expense and inconvenience.” As well, defendant promised to pay plaintiff $51,235.20, “representing back pay from September 28, 1987 until May 4,1990 ....” Section two of the recitals, entitled “Reservation of Workers’ Compensation Claim,” states that the Agreement “does not constitute a waiver of any rights . . . which are compensable under applicable workers’ compensation laws.” Plaintiff, in recital section four, agreed specifically to withdraw her federal claim and to request termination of the Department of Labor’s discrimination investigation. On 17 March 1992, plaintiff filed a “Request That [a workers’ compensation] Claim Be Assigned For Hearing” (Request). Subsequently, a hearing was held before Industrial Commission Deputy Commissioner Charles Markham on 27 March 1992. Plaintiff’s claim before the Deputy Commissioner included, inter alia, a renewed request for temporary total disability running from defendant’s unilateral cessation of benefits on 28 September 1987 to 4 May 1990 (the date of plaintiff’s reinstatement pursuant to the settlement agreement); and, a penalty of ten percent for untimely payment of the aforementioned temporary total disability benefits per N.C. Gen. Stat. § 9748(e) (1991). Deputy Commissioner Markham entered an opinion and award denying plaintiff’s claim for additional disability compensation. On appeal, the Full Commission denied plaintiff’s claim for additional benefits. As part of its opinion and award filed 11 July 1994, the Full Commission reached two conclusions of law relevant to this appeal. First, the Full Commission declared that settlement proceeds from the discrimination claim were “wages” as a matter of law. The Full Commission then denied plaintiff’s request for temporary total disability benefits, holding that the effect of the May 4, 1990 agreement is that plaintiff was not disabled during [the 28 September 1984 to 4 May 1990 period] cited [in the Agreement] within the meaning of the Workers’ Compensation Act, because the lump sum payment replaced “wages” she would have been earning .... The Commission determined that a ten-percent penalty was due plaintiff, pursuant to N.C. Gen. Stat. § 97-18(e), but only for the period between 10 November 1987 (the date of the Commission’s first directive to defendant to pay benefits) until the date of the Form 24 approval on 26 April 1988. We disagree with the Commission’s conclusion that the settlement proceeds are “wages” as a matter of law. We also disagree with the peripd set by the Commission for assessment of the § 97-18(e) penalty. While the scope of this Court’s review of Commission findings is limited to a competent evidence standard, conclusions of law are entirely reviewable for error. Grant v. Burlington Industries, Inc., 77 N.C. App. 241, 247, 335 S.E.2d 327, 332 (1985). Defendant characterizes plaintiff’s discrimination claim as arising out of the same injury and set of facts as the claim for workers’ compensation. Allowing both, defendant claims, is tantamount to handing plaintiff a “double recovery” for a single injury, an action expressly prohibited by the workers’ compensation statute and case law. In Foster v. Western-Electric Co., 320 N.C. 113, 357 S.E.2d 670 (1987), our Supreme Court stated that the Workers’ Compensation Act “disfavors duplicative payments for the same disability.” Id. at 117, 357 S.E.2d at 673. For reasons which follow, we find Foster does not control the instant situation. As opposed to the plaintiff in Foster, the instant plaintiff has alleged two distinct, separately remedial injuries. Plaintiff’s first claim is based on the physical injury which led to the workers’ compensation claim. The second injury claimed by plaintiff arose from defendant’s alleged handicap discrimination. The Foster plaintiff sought two recoveries from a single injury: money from private disability income insurance paid for by the employer, and workers’ compensation. Foster, 320 N.C. at 114, 117 n.1, 357 S.E.2d at 671, 673 n.1. The Foster Court found that the private disability payout “function[ed] as a wage replacement program tantamount to workers’ compensation.” Id. at 117, 357 S.E.2d at 673. Since the private plan operated “in lieu” of workers’ compensation, payment under both was a double recovery and was barred by statute. Id.; and see N.C. Gen. Stat. § 97-31 (1991) (workers’ compensation “shall be paid for disability . . . and shall be in lieu of all other compensation.”) In Estes v. N.C. State University, 102 N.C. App. 52, 58, 401 S.E.2d 384, 387-88 (1991), an employer-defendant argued it was entitled to a credit against an award of temporary total disability benefits paid to its employee because the employer had also paid its disabled employee sick leave and vacation benefits. See also N.C. Gen. Stat. § 97-42 (1991) (credits allowed only when payments to employee were not due and payable under the Act when made by employer). The Estes Court determined that sick leave was often utilized for noninjury related purposes, such as a “family illness or death in the family.” Estes, 102 N.C. App. at 58, 401 S.E.2d at 387. The varying objectives of workers’ compensation and sick leave led the Estes Court to determine that “using sick leave is not tantamount ... to receiving workers’ compensation benefits.” Id. at 59, 401 S.E.2d at 387-88. Since the sick leave benefits had “nothing to do” with the Workers’ Compensation Act, they were “not analogous to payments under a disability and sickness plan.” Id. at 59, 401 S.E.2d at 388. Thus, the benefits were not duplicative, and no set-off was due. Id. The analysis of the Estes Court is instructive here, in that we do not find plaintiff’s recovery for discrimination “analogous to payments under a disability and sickness plan.” Id. The concepts of “workplace disability” and “handicap discrimination” are innately different, and the remedies for either necessarily distinct. The nature of the injuries are different: one is essentially physical, the other primarily based on prejudice or bias. See, e.g., Barber v. Minges, 223 N.C. 213, 216, 25 S.E.2d 837, 839 (1943) (purpose of the Act is to compel industry to take care of its injured workers); Teamsters v. United States, 431 U.S. 324, 358, 52 L.Ed.2d 396, 429 (1977) (Title VII addresses employment decisions based on illegal discriminatory criteria). The Workers’ Compensation Act and the federal civil rights laws address different ills and make up entirely separate bodies of law. The purpose of workers’ compensation is to provide an employee with “swift and sure compensation” for harm resulting from workplace injury. Rorie v. Holly Farms, 306 N.C. 706, 709, 295 S.E.2d 458, 460 (1982). On the other hand, civil rights laws have a more global goal: “to abolish the smallness of mind that clings to pernicious stereotypes founded not on fact but upon historical misconceptions and fear.” Freeman v. Kevinator, Inc., 469 F.Supp. 999, 1000 (E.D. Mich. 1979). Thus, federal laws against discrimination remedy injuries that often carry far-reaching social, political and economic implications. See, e.g., Memphis Community School District v. Stachura, 477 U.S. 299, 91 L.Ed.2d 249 (1986). Because Congress considers policy against discrimination to be of the highest priority, it has given the courts broad remedial power in the area of federal civil rights. Alexander v. Gardner-Denver Company, 415 U.S. 36, 44-46, 39 L.Ed.2d 147, 156-57 (1974). It appears manifest that Congress did not intend to force a worker to choose between remedies under workers’ compensation and those available under federal civil rights laws. Id. at 48, 39 L.Ed.2d at 158 (legislative history of the civil rights acts evinces “a congressional intent to allow an individual to pursue independently his rights under both Title VII and other applicable state and federal statutes.”) Another critical distinction betwéen plaintiff’s workplace injury and the discrimination-based injury is the distinct causal origin of both. Plaintiff’s back was injured first. Later, plaintiff filed a claim alleging defendant had made a discriminatorily based employment decision not to rehire her. Thus, the timing of the injuries was not concurrent. It is uncontradicted that defendant’s alleged discrimination was based on, and arose after, plaintiff’s back-related injury. Simply put, the two injuries are not the same. The settlement of a claim for federal civil rights violations is not, nor was it intended to be, a substitute for workers’ compensation benefits. The Agreement clearly reserved all rights to remedies available to plaintiff under the Workers’ Compensation Act. No set-off or credit is due defendant. The separate but connected issue of the late payment fee is resolvable by a plain reading of the applicable statute, N.C. Gen. Stat. § 97-18(e). In pertinent part, the statute reads: If any installment of compensation payable in accordance with the terms of an agreement approved by the Commission is not paid within 14 days after it becomes due . . . there shall be added to such unpaid installment an amount equal to ten per cen-tum (10%) thereof. . . unless such nonpayment is excused by the Commission after a showing by the employer that owing to conditions over which he had no control such installment could not be paid within the period prescribed for the payment. (Emphasis added.) As we have already concluded that plaintiff’s right to temporary total disability was not foreclosed by settlement of her discrimination claim, defendant’s exposure to the ten-percent § 97-18(e) penalty is evident. Defendant unilaterally suspended payment of temporary total disability to plaintiff on 28 September 1987, without Commission approval or submission of a Form 24. On 10 November 1987, the Commission ordered defendant to reinstate benefits, and to pay such benefits retroactively to the date of their initial suspension on 28 September 1987. Despite repeated orders by the Commission, defendant did not reinstate the benefits due plaintiff. In fact, the record indicates that no reinstated benefits have ever been paid plaintiff. Moreover, defendant did not comply with the Commission’s administrative rules which require submission and approval of a Form 24 prior to benefit termination. Industrial Commission Rule 404 (1996); and see Kisiah v. W. R. Kisiah Plumbing, 124 N.C. App. 72, 476 S.E.2d 434 (1996). The Full Commission, in its opinion and award, assessed a § 97-18(e) penalty against defendant, but only for the period running from 10 November 1987 (the date of the Commission’s first order to reinstate benefits), to 26 April 1988 (the date of the Commission’s approval of defendant’s Form 24 request). Establishment of this time frame for imposition of the penalty is error for two reasons. First, the Full Commission has failed to provide for a penalty from the date it became due, which was 28 September 1987 (the date defendant unilaterally terminated plaintiff’s benefits). This failure violates § 97-18(e)’s mandate to pay the penalty from the date the benefits were due, but not paid. Second, the Full Commission erred by using the approval date of the Form 24 as the termination date for the penalty, as that Form 24 was effectively vacated by the Claims Examiner on 20 June 1988. Failure to award the penalty for the full time period would run afoul of the long-settled policy of interpreting the Workers’ Compensation Act liberally, and in favor of the employee. Dayal v. Provident Life and Accident Ins. Co., 71 N.C. App. 131, 132, 321 S.E.2d 452, 453 (1984). By the mandate of § 97-18(e), defendant is responsible for the penalty from 28 September 1987 through plaintiff’s reinstatement date at Alcatel of 4 May 1990. In summary the Full Commission’s decision as to temporary total disability benefits due is reversed. The case is remanded to the Commission for entry of benefits and penalty consistent with this opinion. Reversed and remanded. Judge McGEE concurs. Judge WALKER concurs in the result.
LONG v CHELSEA COMMUNITY HOSPITAL Docket No. 182219. Submitted June 11, 1996, at Lansing. Decided October 25, 1996, at 9:15 a.m. Reuel S. Long, M.D., and his wife, Judith A. Long, brought an action in the Washtenaw Circuit Court against Chelsea Community Hospital and the members of the private hospital’s board of trustees, alleging breach of contract, promissory estoppel, loss of consortium, and liability under MCL 331.531; MSA 14.57(21) concerning the termination of Dr. Long’s employment by the hospital after he related various accusations of misconduct by the hospital’s president to the board of trustees. The court, William E Ager, J., granted summary disposition to the defendants. The plaintiffs appealed. The Court of Appeals held-. 1. MCL 331.531; MSA 14.57(21), which provides immunity from civil and criminal liability to a person, organization, or entity that acts without malice in the reporting to or by a peer review entity information relating to the physical or psychological condition of a person, the necessity, appropriateness, or quality of health care rendered to a person, or the qualifications, competence, or performance of a health-care provider, does not provide a private cause of action. The statute does not expressly create a private cause of action, nor must a cause of action be inferred on the basis that the statute does not provide adequate means to enforce its provisions. The statute was designed to protect persons and entities from liability, not to create a right of action for malicious reporting to or by a peer review entity. 2. Where, as here, no violation of civil rights or state statute is asserted along with the claim of breach of contract for the termination of a medical staff member’s employment by a private hospital, the private hospital’s decision to terminate employment is not subject to judicial review in Michigan. 3. The claim of promissory estoppel is akin to a contractual claim, and judicial review of the claim of promissory estoppel is precluded by judicial nonintervention with a private hospital’s decisions concerning medical staffing in the absence of an allegation of a violation of civil rights or state statute. 4. The claim of loss of consortium, being derivative of the primary claims, fails along with the primary claims in this case. Affirmed. 1. Health — Peer Review Entities — Immunity from Civil and Criminal Liability. The statute that provides immunity from civil and criminal liability to a person, organization, or entity that acts without malice in the reporting to or by a peer review entity information relating to the physical or psychological condition of a person, the necessity, appropriateness, or quality of health care rendered to a person, or the qualification, competence, or performance of a health-care provider does not provide a private cause of action for malicious reporting (MCL 331.531; MSA 14.57[21]). 2. Hospitals — Medical Staffing — Judicial Review. A claim of breach of contract relating to a decision concerning medical staffing by a private hospital, when not accompanied by a claim of a civil rights or statutory violation, is not subject to review by a Michigan court. Goodman, Eden, Millender & Bedrosian (by Richard A. Soble and Elizabeth A. Stafford), for the plaintiffs. Kitch, Drutchas, Wagner & Kenney, P.C. (by Susan Healy Zitterman and Brian R. Garres'), for the defendants. Before: Young, P.J., and Corrigan and M. J. Callahan JJ. Circuit judge, sitting on the Court of Appeals by assignment. Corrigan, J. In this action alleging that a private hospital revoked medical staff privileges with malice, plaintiffs appeal by right the order granting defendants’ motion for summary disposition under MCR 2.116(C)(8) and (C)(10). This case raises an issue of first impression: whether MCL 331.531; MSA 14.57(21) creates a private cause of action for malice. Because no such cause of action exists, we affirm. In 1979, plaintiff Reuel S. Long, M.D., accepted defendant Chelsea Community Hospital’s offer to become the Director of Anesthesia and Operating Room Services, a staff position. Defendant hospital is a nonprofit Michigan corporation and a private hospital. After Long joined the staff, he related various accusations to the hospital board (the individual defendants comprise the hospital’s board) about purported misconduct of defendant Willard H. Johnson, then the hospital’s president. In response, Johnson allegedly sought to have Long removed from the staff by changing the anesthesia services at the hospital. The board ultimately voted to award an exclusive contract for anesthesia services to Anesthesia Associates of Ann Arbor. Plaintiff was not associated with the Ann Arbor anesthesiologists. Following that award, the board voted to terminate plaintiff’s position in 1991. Plaintiff then sued the hospital for, among other things, wrongful discharge and breach of contract. While that litigation was pending, the board voted to terminate plaintiff’s staff privileges at the hospital. The hospital settled with plaintiff for $150,000; the settlement specifically excluded any claims arising from the termination of plaintiff’s staff privileges. Plaintiffs then filed a second action, alleging breach of contract, promissory estoppel, loss of consortium, and that defendants acted with malice under MCL 331.531; MSA 14.57(21) (hereinafter § 531). Defendants moved for summary disposition rather than answering plaintiffs’ complaint. The court determined that the statute upon which plaintiff relied did not give rise to a private cause of action for malice and noted that plaintiff had failed to support his allegation that defendants acted with malice. The court also declined to review plaintiff’s breach of contract and promissory estoppel claims because it would interfere with the hospital’s staffing decisions. The court granted defendants’ motion, and plaintiff appeals. Defendants brought their motion in part under MCR 2.116(C)(8). A summary disposition motion under MCR 2.116(C)(8) tests the legal sufficiency of the complaint on the pleadings alone. Simko v Blake, 448 Mich 648, 654; 532 NW2d 842 (1995). If no cause of action exists under the statute, then plaintiff has failed to state a claim for which relief may be granted, and summary disposition is appropriate because that count would be unenforceable as a matter of law and because no amount of factual development could possibly justify a right to recovery. Wade v Dep’t of Corrections, 439 Mich 158, 163; 483 NW2d 26 (1992). Plaintiff first asserts that defendants are not immune from liability because they acted with malice and contends that Michigan statutory law creates a private cause of action for malice under such circumstances. Whether a plaintiff has a cause of action under the statute presents a question of statutory interpretation. Grand Traverse Co v Michigan, 450 Mich 457, 463-464; 538 NW2d 1 (1995). Statutory interpretation is a question of law, which we review de novo. Dekoning v Dep’t of Treasury, 211 Mich App 359, 361; 536 NW2d 231 (1995). When coürts construe statutes, their primary goal is to ascertain and give effect to legislative intent. Farrington v Total Petroleum, Inc, 442 Mich 201, 212; 501 NW2d 76 (1993); State Treasurer v Schuster, 215 Mich App 347, 351; 547 NW2d 332 (1996). This Court should first look at the specific statutory language to determine the intent of the Legislature. House Speaker v State Administrative Bd, 441 Mich 547, 567; 495 NW2d 539 (1993). The Legislature is presumed to intend the meaning plainly expressed in the statute. In re Austin Estate, 218 Mich App 72; 553 NW2d 632 (1996). Judicial construction of a statute is not permitted 'where the plain and ordinary meaning of the language is clear. Id.; Dep’t of Treasury v Comerica Bank) 201 Mich App 318, 322; 506 NW2d 283 (1993). The statute át issue, MCL 331.531; MSA 14.57(21), provides: (1) A person, organization, or entity may provide to a review entity information or data relating to the physical or psychological condition of a person, the necessity, appropriateness, or quality of health care rendered to a person, or the qualifications, competence, or performance of a health care provider. (2) As used in this section, “review entity” means 1 of the following: (a) A duly appointed peer review committee of the state, of a state or county association of health care professionals, of an officially constituted health care facility, or of a health care association. * * * (3) A person, organization, or entity is not civilly or criminally liable: (a) For providing information or data pursuant to subsection (1). (b) For an act or communication within its scope as a review entity. (c) For releasing or publishing a record of the proceedings, or the reports, findings, or conclusions of a review entity, subject to [MCL 331.532; MSA 14.57(22) and MCL 331.533; MSA 14.57(23)]. (4) The immunity from liability provided under subsection (3) does not apply to a person, organization, or entity that acts with malice. Plaintiff argues that the statute creates a private right of action for malice under the present circumstances. The common law recognizes no cause of action for malice on these facts. If the common law provides no right to relief, and the right to such relief is instead provided by statute, then plaintiffs have no private cause of action for enforcement of the right unless-. (1) the statute expressly creates a private cause of action or (2) a cause of action can be inferred from the fact that the statute provides no adequate means of enforcement of its provisions. Bell v League Life Ins Co, 149 Mich App 481, 482-483; 387 NW2d 154 (1986). It follows that courts must dismiss a private cause of action under a statute creating a new right unless the statute expressly created the private cause of action or the cause of action may be inferred because the statute does not provide adequate means to enforce its provisions. Forster v Belton School Dist, 176 Mich App 582, 585; 440 NW2d 421 (1989). The statute does not expressly create a private cause of action for malice. Accordingly, the second condition is in question here: whether a private cause of action may be inferred because the statute does not provide adequate means to enforce its provisions. As evidenced by the statutory language, § 531 provides immunity to entities unless they act with malice. The statute’s implicit purpose is to protect the participants in the peer review process. Indeed, the statute offers immunity to entities for their actions involving peer review. The statute is not designed to provide a comprehensive scheme of enforcement of the rights and duties it creates for the simple reason that it creates no right of action for malice. The statute is designed to protect entities from liability, not to create a new right of a private cause of action for malice. Accordingly, whether the statute provides adequate means to enforce its provisions regarding malice is not at issue here. Moreover, recognition of a private cause of action for malice under the statute would frustrate and undermine the legislative propose of providing immunity. A court’s decision regarding private rights of action must be consistent with legislative intent while furthering the Legislature’s purpose in enacting the statute. Gardner v Wood, 429 Mich 290, 301; 414 NW2d 706 (1987). The Legislature plainly did not intend to create a private cause of action. Its intent to confer certain immunities would be frustrated if this Court distorted its careful choice of language by recognizing a private cause of action for malice. We decline to recognize such a private cause of action under the statute. Accordingly, plaintiff has no cause of action for malice, and the circuit court correctly granted summary disposition to defendants. Plaintiff next alleges that this Court previously has reviewed such malice claims, citing Veldhuis v Allan, 164 Mich App 131; 416 NW2d 347 (1987), and Regualos v Community Hosp, 140 Mich App 455; 364 NW2d 723 (1985). Plaintiff contends that those cases support the availability of private causes of action under § 531. Contrary to plaintiffs argument, neither case held that a private cause of action exists. In Veldhuis, this Court ruled that the plaintiff failed to present evidentiary support for the malice allegations. Veldhuis, supra at 137. Similarly, in Regualos, this Court found that the plaintiff had not provided clear and convincing proof needed to establish a genuine issue of material fact regarding actual malice. Regualos, supra at 462-463. The above rulings do not establish that the statute permits a private cause of action for malice. Accordingly, those cases do not constitute a basis for plaintiffs claim in this case. Plaintiffs reliance on BF Farnell Co v Monahan, 377 Mich 552; 141 NW2d 58 (1966), is likewise misplaced. Farnell applies to statutes that set forth criminal penalties; the statute at issue here does not invoke criminal penalties. Plaintiff next asserts that the court prematurely granted summary disposition to defendants under MCR 2.116(C)(10), contending that he was entitled to conduct discovery before the court granted the motion. Given the above reasoning, we need not address this issue. Plaintiff next asserts that the court did not accept his factual allegations as true. A review of the circuit court’s opinion, however, indicates that the court did accept plaintiff’s allegations as true. Plaintiff’s claim on this issue is thus without merit. Additionally, the court rule requires the moving party to substantiate its allegations. MCR 2.116(G). Therefore, the court correctly found that plaintiff’s “bald assertion” that defendants’ true motivation was to retaliate and to silence him was insufficient to survive defendants’ motion for summary disposition. Additionally, plaintiff states that defendants had a binding contractual obligation to hold a hearing and to find that plaintiff was incompetent before terminating his employment. In their motion for summary disposition, defendants produced the affidavit of defendant Johnson, who averred that the hospital is a private hospital. Courts may not review a private hospital’s staffing decisions. Sarin v Samaritan Health Center, 176 Mich App 790, 795; 440 NW2d 80 (1989); Regualos, supra at 461; Hoffman v Garden City Hosp, 115 Mich App 773; 321 NW2d 810 (1982); Muzquiz v WA Foote Memorial Hosp, Inc, 70 F3d 422, 430 (CA 6, 1995). A private hospital is empowered to appoint and remove its members at will without judicial intervention. Sarin, supra at 792-793; Hoffman, supra at 778. A private hospital has the right to exclude any doctor from practicing within it. Hoffman, supra at 778-779. The above law is limited to disputes that are contractual in nature. We decline to articulate a broad principle that a private hospital’s staffing decisions may never be judicially reviewed. Indeed, in doing so, we reiterate the proposition from Sarin that, under some circumstances, a court may consider a hospital’s decisions without violating the nonreviewability principle. Sarin, supra at 795. Private hospitals do not have carte blanche to violate the public policy of our state as contained in its laws. Had plaintiff in this case asserted that defendants violated state or federal law, we may have chosen to review his claim. In this case, however, plaintiff did not assert a violation of civil rights or a violation of a state statute. The same is true in some of the cited cases. Further, previous decisions support this reasoning. In Hoffman, supra, this Court quoted with approval the proposition that hospital authorities may refuse to appoint a physician to its medical staff, may decline to renew an expired contract, and may exclude a physician from practicing in the hospital — all without judicial review of those decisions. Hoffman, supra at 779. That principle does not, however, permit hospital authorities to act contrary to state or federal law. Moreover, although the Hoffman Court refused to review the hospital’s staffing decisions, the Court nonetheless examined the plaintiffs’ claims of restraint of trade under MCL 445.762; MSA 28.62. Id. at 779. Likewise, in Muzquiz, the Court refused to review the plaintiff’s breach of contract claim under the nonreviewability standard in Sarin, but separately reviewed his claims of discrimination contrary to state and federal law. Muzquiz, supra at 429-430. Plaintiff further argues that his claim is not a constitutional due process argument, but rather is based on a breach of defendants’ bylaws, and thus this Court should review it. Plaintiff’s claim on this issue fails in light of Sarin. A breach of contract and breach of bylaws claim would necessarily invoke a review of the hospital’s decision to terminate its employees. Sarin, supra at 794. This Court in Sarin determined that the review of such claims would intervene in a hospital’s decisions and would interfere with the peer review process. Thus, this Court refused to review the claims of the Sarin plaintiff, reiterating that judicial review of a private hospital’s decision to deny staff privileges to a physician was not available. Id. at 795. Plaintiff next argues that his circumstances fall within the exception outlined in Sarin: “[T]here may be some situations where a court should be able to consider a hospital’s action without violating the principle of nonreviewability . . . .’’Id. Because plaintiff failed to provide a copy of the bylaws required under MCR 2.113(F)(1), this Court has no way of reviewing whether the exception applies. This Court is limited to reviewing the record presented to the lower court. MCR 7.210(A); Amorello v Monsanto Corp, 186 Mich App 324, 330; 463 NW2d 487 (1990). Regarding plaintiff’s promissory estoppel claim, a claim of promissory estoppel is akin to a contract claim. State Bank of Standish v Curry, 442 Mich 76, 83-84; 500 NW2d 104 (1993). Therefore, the rules from Sarin, supra, and Hoffman, supra, where this Court has expressed its reluctance to review a private hospital’s staffing decisions, preclude review of this claim. Plaintiff finally claims that the circuit court should not have dismissed Judith Long’s loss of consortium claim. A derivative claim for loss of consortium stands or falls with the primary claims in the complaint. Moss v Pacquing, 183 Mich App 574, 583; 455 NW2d 339 (1990). Because plaintiff’s other claims failed, the loss of consortium claim must likewise fail. Affirmed. Because plaintiff Judith Long’s claims are derivative, “plaintiff” will refer to Reuel S. Long, M.D., only. Defendants are referred to collectively in this opinion unless otherwise noted. We note, however, that at oral argument, defendants’ counsel conceded that defendants had made an agreement with plaintiff not to advance discovery until after the court heard their motion under MCR 2.116(C)(8). In view of the parties’ agreement, plaintiff should not be faulted for not conducting discovery. For example, in Regualos, supra, the plaintiff asserted that the defendant hospital should not have terminated his staff privilege to interpret pulmonary function tests and argued that the hospital did not follow proper procedure in doing so. The plaintiff did not raise issues in addition to his contract claims. The Sarin plaintiff raised strictly breach of contract claims, alleging a violation of hospital bylaws, tortious interference with his contract, and tortious interference with advantageous business relationships. Sarin, supra at 791-792.
HARVILLE v STATE PLUMBING AND HEATING, INC Docket No. 175256. Submitted March 19, 1996, at Detroit. Decided August 16, 1996, at 9:10 A.M. Leave to appeal sought. Darren L. and Rena Harville brought an action in the Wayne Circuit Court against State Plumbing and Heating, Inc., alleging that the defendant, Mr. Harville’s employer, had discriminated against him on the basis of race in imposing disciplinary punishment and eventually terminating his employment. The court, Susan Bielke Neil-son, J., entered a judgment on a jury verdict in favor of the defendant. The plaintiffs appealed. The Court of Appeals held: 1. In claiming discriminatory effect, but not discriminatory intent, with respect to an alleged jury selection process in the trial court that systematically and substantially results in jury panels on which blacks number proportionally less than they do in the general population of Wayne County, the plaintiffs have failed to show a violation of equal protection, Const 1963, art 1, § 2. The state Equal Protection Clause and the federal Equal Protection Clause, US Const, Am XIV, § 1, are coextensive even though the state provision, in addition to language it shares with the federal provision to the effect that no person shall be denied the equal protection of the laws, also provides that no person shall be denied the enjoyment of civil or political rights or be discriminated against in the exercise thereof because of religion, race, color, or national origin. Because proof of discriminatory intent or purpose behind state action is required to show a violation of the federal Equal Protection Clause, similar proof is required to show a violation of the state Equal Protection Clause. 2. The trial court did not abuse its discretion in ruling that counsel for the defendant did not improperly use peremptory challenges to remove all the black jurors from the panel. A race-neutral rationale for excusing the black jurors was articulated, and the plaintiffs failed to carry the burden of proving purposeful discrimination. 3. The trial court did not abuse its discretion in refusing to disqualify for cause a juror that the defense claimed was biased. A review of the record does not indicate that the juror was biased or that the defendant demonstrated a desire to excuse another, subsequently summoned juror who was objectionable. 4. The trial court did not abuse its discretion in allowing evidence relating to the resolution of a grievance by Mr. Harville against the defendant after it had granted the plaintiffs’ motion in limine to preclude evidence relating to the grievance. The plaintiffs cannot now complain because it was their counsel who introduced evidence indicative of a grievance when cross-examining a witness and the plaintiffs’ counsel agreed with the trial court that the jury needed to be told of the outcome of the grievance. Affirmed. 1. Constitutional Law — Equal Protection — Discriminatory Intent. The Equal Protection Clauses of the federal constitution and the state constitution are coextensive; proof of discriminatory intent or purpose behind state action is required to show a violation of either provision; proof of discriminatory effect, alone, is insufficient to establish a violation of either provision (US Const, Am XIV, § 1; Const 1963, art 1, § 2). 2. Constitutional Law — Equal Protection — Discriminatory Purpose. Discriminatory purpose may often be inferred from the totality of the relevant facts, including the fact, if it is true, that the law bears more heavily on one group than another. 3. Constitutional Law — Equal Protection — Discriminatory Purpose. Discriminatory purpose implies more than intent as volition or intent as awareness of consequences; it implies that a decisionmaker selected or reaffirmed a particular course of action at least in part because of, not merely in spite of, its adverse effects upon an identifiable group. 4. Jury — Peremptory Challenges — Race-Based Exclusions — Appeal. Evaluation by a trial court of a claim by a civil litigant that the opposing party improperly used its peremptory challenges to remove prospective jurors on the basis of race involves a three-step process: the complaining litigant must make a prima facie showing of discrimination; the party exercising the peremptory challenges must articulate a race-neutral rationale for striking the jurors; and the court must determine whether the complaining litigant carried the burden of proving purposeful discrimination; an appellate court reviews a trial court’s ruling with regard to this issue for abuse of discretion, giving great deference to the trial court’s findings. 5. Jury — Challenges for Cause — Appeal. A trial court commits error requiring reversal in failing to exclude a juror challenged for cause where the record reveals that the court improperly denied a challenge for cause, the aggrieved party had exhausted all peremptory challenges, the party demonstrated a desire to excuse another, subsequently summoned juror, and the juror whom the party wished later to excuse was objectionable. Kelman, Loria, Downing, Schneider & Simpson (by Janet M. Tooley), for the plaintiffs. Thomas E. Marshall and Andrew J. Bean, for the defendant. Before: Bandstra, P.J., and Markman and M. D. Schwartz JJ. Circuit judge, sitting on the Court of Appeals by assignment. Markman, J. Plaintiffs appeal as of right an order of judgment for defendant in this race discrimination action. We affirm. In their complaint, plaintiffs alleged that defendant discriminated against plaintiff Darren L. Harville, a black employee of defendant, on the basis of race by punishing him for conduct for which white employees were not punished, and by terminating his employment. After a four-day trial, the jury found that defendant did not discriminate against plaintiff on the basis of his race in discharging him or laying him off. The trial court entered judgment in accordance with this verdict. Plaintiffs’ claims on appeal relate to the composition of the jury. Their first claim is that the jury was the product of a jury selection process that systematically and substantially underrepresented the black population of Wayne County. Specifically, they claim that the process resulted in juries that underrepresented black Wayne County residents because (1) Detroit residents who serve on city-wide juries are excused from serving on another jury panel for one year, (2) persons who were sent a 1993 jury questionnaire were not sent a 1994 questionnaire, and a lower percentage of Detroit residents than non-Detroit residents return jury questionnaires, and (3) a lower percentage of Detroit residents than non-Detroit residents appear for jury duty. They claim that the allegedly disparate effect of the jury selection process on black Wayne County residents violated Const 1963, art 1, § 2, Michigan’s equal protection provision. Because plaintiffs do not contend that the process was intentionally discriminatory, this appeal squarely raises the issue whether discriminatory effect alone violates art 1, § 2. Plaintiffs raised this issue during the impaneling of the jury and again in posttrial motions. The trial court had a jury administrator, Gary Wolfe, testify regarding the jury selection process on both occasions. The court, although not deciding whether disparate effect alone could constitute a violation of art 1, § 2, concluded that the jury at issue was selected pursuant to a “random selection process” that was not “constitutionally violative.” We begin our analysis by considering cases interpreting the federal Equal Protection Clause, US Const, Am XTV, § 1. As discussed more fully below, the Michigan Supreme Court has held that art 1, § 2 is coextensive with the federal Equal Protection Clause and, thus, understanding the latter is instructive in understanding the former. United States Supreme Court precedents consistently indicate that the United States Constitution’s Equal Protection Clause reaches only intentional or purposeful discrimination. Washington v Davis, 426 US 229; 96 S Ct 2040; 48 L Ed 2d 597 (1976), involved the alleged racially discriminatory effect of a written personnel test used by a police department. The Court of Appeals had focused on the disparate effect of the test rather than a possible discriminatory purpose. Id. at 238. The Washington Court held at 239: The central purpose of the Equal Protection Clause of the Fourteenth Amendment is the prevention of official conduct discriminating on the basis of race. It is also true that the Due Process Clause of the Fifth Amendment contains an equal protection component prohibiting the United States from invidiously discriminating between individuals or groups. But our cases have not embraced the proposition that a law or other official act, without regard to whether it reflects a racially discriminatory purpose, is unconstitutional solely because it has a racially disproportionate impact. [Citation omitted; emphasis in original.] It further discussed adherence to “the basic equal protection principle that the invidious quality of a law claimed to be racially discriminatory must ultimately be traced to a racially discriminatory purpose.” Id. at 240. The Washington Court continued at 242: Necessarily, an invidious discriminatory purpose may often be inferred from the totality of the relevant facts, including the fact, if it is true, that the law bears more heavily on one race than another. . . . Nevertheless, we have not held that a law, neutral on its face and serving ends otherwise within the power of government to pursue, is invalid under the Equal Protection Clause simply because it may affect a greater proportion of one race than of another. Disproportionate impact is not irrelevant, but it is not the sole touchstone of an invidious racial discrimination forbidden by the Constitution. Standing alone, it does not trigger the rule . . . that racial classifications are to be subjected to the strictest scrutiny and are justifiable only by the weightiest of considerations. [Citation omitted.] In Village of Arlington Heights v Metropolitan Housing Development Corp, 429 US 252, 265; 97 S Ct 555; 50 L Ed 2d 450 (1977), which involved a race discrimination claim arising out of the denial of a rezoning application, the Court held that “[pjroof of racially discriminatory intent or purpose is required to show a violation of the Equal Protection Clause.” Later, in City of Mobile, Alabama v Bolden, 446 US 55; 100 S Ct 1490; 64 L Ed 2d 47 (1980), involving a challenge to the city’s at-large electoral system for city commissioners as racially discriminatory, a majority of the Court confirmed the necessity of demonstrating discriminatory intent to establish an equal protection violation. The four-justice plurality opinion stated: A plaintiff must prove that the disputed plan was “conceived or operated as [a] purposeful devic[e] to further racial. . . discrimination.” This burden of proof is simply one aspect of the basic principle that only if there is purposeful discrimination can there be a violation of the Equal Protection Clause of the Fourteenth Amendment. [Citations omitted.] The ultimate question remains whether a discriminatory intent has been proved in a given case. [Id. at 66, 74.] In an opinion dissenting on other grounds, Justice White stated at 94-95 that the Court recognized in Washington, supra (in which he wrote the opinion of the Court), that “the Equal Protection Clause forbids only purposeful discrimination.” Recently, in Purkett v Elem, 514 US_; 115 S Ct 1769; 131 L Ed 2d 834 (1995), involving the allegedly racially discriminatory use of a peremptory challenge, the Court reiterated that the relevant inquiry under the Equal Protection Clause was whether there had been “discriminatory intent” or “purposeful” discrimination. 131 L Ed 2d 839. The Court has defined “discriminatory purpose” and articulated the role of disparate effect evidence in equal protection cases. In Personnel Administrator of Massachusetts v Feeney, 442 US 256; 99 S Ct 2282; 60 L Ed 2d 870 (1979), the Court considered a claim that a veterans preference in state employment resulted in sex discrimination. It stated that Washington and Arlington Heights “signaled no departure from the settled rule that the Fourteenth Amendment guarantees equal laws, not equal results.” 442 US 273. It held at 279: “Discriminatory purpose,” however, implies more than intent as volition or intent as awareness of consequences. It implies that the decisionmaker, in this case a state legislature, selected or reaffirmed a particular course of action at least in part “because of,” not merely “in spite of,” its adverse effects upon an identifiable group. Hernandez v New York, 500 US 352; 111 S Ct 1859; 114 L Ed 2d 395 (1991), involved a claim that a prosecutor used peremptory challenges to exclude Latino jurors because of uncertainty whether they would accept an interpreter’s translation of Spanish-speaking witnesses. A majority of the Court reiterated that disparate effect, alone, is insufficient to establish an equal protection violation. The four-justice plurality opinion stated at 362: [Disparate impact should be given appropriate weight in determining whether the prosecutor acted with a forbidden intent, but it will not be conclusive in the preliminary race-neutrality step of the Batson [v Kentucky, 476 US 79; 106 S Ct 1712; 90 L Ed 2d 69 (1986)] inquiry. An argument relating to the impact of a classification does not alone show its purpose. Equal protection analysis turns on the intended consequences of government classification. Unless the government actor adopted a criterion with the intent of causing the impact asserted, that impact itself does not violate the principle of race neutrality. [Citation omitted.] Justices O’Connor and Scalia concurred in a separate opinion, in which they stated at 372-373: An unwavering line of cases from this Court holds that a violation of the Equal Protection Clause requires state action motivated by discriminatory intent; the disproportionate effects of state action are not sufficient to establish such a violation. This clear precedent indicates that plaintiffs’ present claim, alleging only disparate effect, not discriminatory intent, would fail to state a violation had it been raised under the federal Equal Protection Clause. Plaintiffs nonetheless assert that their disparate effect claim states a violation of the Michigan Constitution’s equal protection provision, Const 1963, art 1, § 2. Michigan’s equal protection provision includes language not contained in the federal Equal Protection Clause. The federal provision states, “nor [shall any state] deny to any person within its jurisdiction the equal protection of the laws.” In contrast, Const 1963, art 1, § 2 states: No person shall be denied the equal protection of the laws; nor shall any person be denied the enjoyment of his civil or political rights or be discriminated against in the exercise thereof because of religion, race, color or national origin. Despite the differences in their language, the Michigan Supreme Court has found Michigan’s equal protection provision coextensive with the federal constitution’s Equal Protection Clause. Most recently, in Frame v Nehls, 452 Mich 171; 550 NW2d 739 (1996), a grandparent visitation action, the Court stated that “[t]he Michigan and federal Equal Protection Clauses offer similar protection.” Id. at 183. In Doe v Dep’t of Social Services, 439 Mich 650; 487 NW2d 166 (1992), the Court considered art 1, § 2 in the context of a challenge to legislation that prohibited the use of public funds for abortions. The Court found that “a review of the jurisprudence and constitutional history of this state suggests . . . that our equal protection clause was intended to duplicate the federal clause and to offer similar protection.” Doe at 670-671. It stated that the language of our Equal Protection Clause is “essentially the same” as that in the Fourteenth Amendment. Id. at 671-672. It noted that the Michigan Constitution has a second clause unlike the federal constitution, but stated at 672: [T]hat a separate clause to provide explicit protection for civil rights was adopted in the midst of the civil rights movement, does not, in and of itself, suggest any purpose on the part of the delegates to broaden the scope of the preceding Equal Protection Clause. The Court further stated at 673-674: Rather, we draw from a reading of the convention record the firm conclusion that the delegates intended to affirm and incorporate the basic notions of equal protection that prevailed at the time. Under these cases, plaintiffs are held to the same burden under art 1, § 2 as under the Fourteenth Amendment; i.e., they must demonstrate intentional or purposeful discrimination. Because plaintiffs do not allege any intentional discrimination in the jury selection procedure, their equal protection claim must fail. Further, the Michigan Supreme Court specifically addressed the issue of disparate effect evidence in equal protection cases in People v Ford, 417 Mich 66; 331 NW2d 878 (1982). In Ford, the defendant challenged his being charged with the felony of larceny in a building when the evidence also supported a misdemeanor general larceny charge. The defendant provided the court with statistical information comparing the racial breakdown of arrests for larceny-theft (twice as many whites as blacks) and the racial breakdown of Michigan’s prison composition (over fifty percent black). Id. at 102. The Ford Court stated that the defendant asked it “to take a quantum leap in equal protection analysis based on unproven assumptions and non-sequitur statistical inferences.” Id. at 103. It held at 103: In the absence of a purpose to cause racial discrimination, governmental action that has a disproportionate effect on a racial minority is not unconstitutional. Such an effect may permit an inference of an unlawful purpose, but, standing alone, it is not conclusive on the question whether governmental activity is racially discriminatory. [Emphasis in original.] The Court concluded that the prosecutor’s exercise of discretion in the cases before it did not per se violate the Equal Protection Clause under either the federal or the Michigan Constitution. Id. at 105. Ford, accordingly, also indicates that plaintiffs’ equal protection claim fails. Contrary to these precedents, a panel of this Court found that the disparate effect of an ordinance restricting use of city parks to city residents, without reference to discriminatory intent, was sufficient to constitute a violation of art 1, § 2 in Detroit Branch, NAACP v Dearborn, 173 Mich App 602; 434 NW2d 444 (1988). The NAACP Court almost exclusively relied on Berry v Benton Harbor School Dist, 467 F Supp 721 (WD Mich, 1978), for its conclusion that art 1, § 2 was intended to provide greater protection than that afforded by the Fourteenth Amendment and that discriminatory intent or purpose need not be proved in cases under art 1, § 2. NAACP at 615. Berry was a school desegregation action. The Berry Court held at 730: It is plainly evident that Article I, section 2, and Article VIII, section 2 [requiring provision for education without discrimination with regard to religion, creed, race, color or national origin] of the Michigan Constitution go beyond the limits of the Fourteenth Amendment by prohibiting all racial segregation, without regard to whether it was caused by a segregative purpose. The Berry Court stated that its holding was based on the plain wording of the provisions at issue, which prohibited “discrimination” — a word not found in the Fourteenth Amendment. Id. It noted that art 1, § 2 tracks the Fourteenth Amendment in part but adds an antidiscrimination clause. Id. It concluded at 730-731: This clearly indicates that discrimination and equal protection of the laws are two different concepts under the Mi
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Data sourced from public federal court records via CourtListener.com. Case outcomes extracted using AI analysis. This information is for educational purposes only and does not constitute legal advice. The classification of claim types is based on automated analysis and may not reflect the full scope of each case.