Nadeau v. Imtec, Inc.

NADEAU_V_IMTEC_INC.94-373; 164 Vt 471; 670 A.2d 841

[Filed 22-Nov-1995]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                 No. 94-373


Bryan Nadeau                                      Supreme Court

                                                  On Appeal from
     v.                                           Windham Superior Court

Imtec, Inc. and                                   September Term, 1995
Michael Hilgert



Richard W. Norton, J.

       Gwendolyn W. Harris of Kiewel & Harris, P.C., Brattleboro, for
  plaintiff-appellee

       J. Scott Cameron of Paterson & Walke, P.C., Montpelier, for
  defendants-appellants


PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.



       JOHNSON, J.  Defendants appeal from a jury verdict awarding plaintiff
  damages for wrongful discharge.  Defendants appeal the trial court's denial
  of motions for directed verdict and for judgment notwithstanding the
  verdict, arguing that they are entitled to judgment as a matter of law on
  four grounds: (1) that plaintiff was not terminated, but resigned
  voluntarily; (2) that plaintiff was an at-will employee; (3) that, if he
  were not an at-will employee, defendants had just cause to dismiss
  plaintiff; and (4) that the after-acquired-evidence doctrine bars any
  recovery by the plaintiff.  We reverse, holding that defendants had just
  cause as a matter of law to terminate plaintiff's employment, and that the
  trial court erred in denying the motion for a directed verdict.(FN1)

 

                                I.

       The material facts in this case are undisputed.  Defendant Imtec, Inc.
  hired plaintiff as service technician in January 1990.  At that time,
  plaintiff signed an employment agreement setting out the terms of his
  employment.  A year later, in January 1991, plaintiff began a consensual
  romantic affair with a married co-worker.  This relationship lasted until
  May of the same year.  Plaintiff claims that the relationship ended by
  mutual decision, while the co-worker testified that she ended the
  relationship.  A short time after the relationship ended, plaintiff was
  promoted to manager.  While he did not directly supervise the co-worker,
  the trial court found that he occupied a superior position, and had the
  ability to control or influence her work activities.  Both the co-worker
  and another Imtec employee testified that plaintiff refused to accept the
  end of the relationship, professing his love for the co-worker and
  repeatedly asking her to have sex with him.  Plaintiff himself admitted
  asking the co-worker to have sex after their relationship had ended.

       In August of 1991, the co-worker attempted to return to plaintiff the
  letters and gifts he had given her.  Plaintiff refused to accept the items. 
  Later that day, plaintiff wrote a letter to the co-worker on work time and
  left it in her car, which was parked in the company lot.  The co-worker's
  husband, who came to pick up their child's car seat, discovered the letter
  and learned of the affair.  The co-worker, who was quite upset, missed work
  the following Monday, and on Tuesday informed her supervisor, defendant
  Michael Hilgert, that her husband wanted her to resign.  When questioned,
  she explained her problems with plaintiff.  She and Hilgert agreed that
  plaintiff's supervisors would speak to him and ensure that his personal
  attentions toward her stopped.

       Hilgert spoke to plaintiff, who admitted the incident but maintained
  that the co-worker continued to approach him in a personal manner.  Hilgert
  concluded that plaintiff's actions

 

  constituted sexual harassment and scheduled another meeting with
  plaintiff.  At this meeting, Hilgert informed plaintiff of Imtec's policy
  on sexual harassment and told him that Imtec would not tolerate such
  conduct.  Hilgert gave plaintiff a written warning, which specifically
  stated that "any future valid complaints of harassment would result in
  termination" and required plaintiff to "limit his contact with [the
  co-worker] to work related tasks."

       After receiving this written warning, plaintiff continued to involve
  himself in the co-worker's personal life.  In one incident, plaintiff
  sought out the co-worker, found her taking a cigarette break, and
  criticized her for smoking.  Although plaintiff testified that he sought
  out the co-worker because he needed help with a customer, he also admitted
  that he mentioned his own personal problem with the co-worker's smoking
  habit.  At this time, Hilgert again told plaintiff to limit his contact
  with the co-worker to work-related tasks.  Another Imtec employee testified
  that plaintiff sought her help in convincing the co-worker to leave her
  husband. Plaintiff testified that the co-worker refused to accept several
  gifts from him during this period, including a fake diamond, lingerie, and
  a Christmas present.

       On December 18, plaintiff gave the co-worker a letter, at work, which
  began, "I'm sorry but I can't accept `no' right now," and went on to
  discuss his feelings for her.  The letter upset the co-worker, who tore it
  up.  Another employee noticed that she was crying and informed Hilgert. 
  The co-worker taped the letter together, gave a copy to Hilgert, and told
  him of her continuing problems with plaintiff.

       After this meeting between Hilgert and the co-worker, Imtec's
  management team met, discussed the problem, consulted counsel, and
  considered several alternatives, such as transferring plaintiff. 
  Management decided that, if the allegations were true, terminating
  plaintiff's employment was their only option, although they did decide to
  offer plaintiff the opportunity to resign.  The next day, Hilgert called
  plaintiff, who was on vacation, and asked him to come to the office for a
  meeting that afternoon.

       At the meeting with Hilgert and another member of Imtec management,
  plaintiff first

 

  denied having disobeyed the order to limit his contact with the
  co-worker to work-related tasks. When confronted with the December 18
  letter, however, plaintiff admitted that he had written the letter and
  given it to the co-worker.

       Hilgert then offered plaintiff a choice:  he could either resign, and
  receive certain benefits, such as a reference and severance pay, or he
  would be terminated.  Plaintiff chose to resign, and signed a resignation
  letter, effective that day.  Plaintiff later wrote two letters of apology,
  one to the co-worker and one addressed to several Imtec managers.  Although
  in the letter to the co-worker plaintiff stated that he had "no defense"
  for his actions, and expressed contrition and regret for his behavior, he
  later testified that he had lied in the letter in hopes of gaining the
  co-worker's help in getting his job back.

       In April 1992, plaintiff filed a four-count complaint against
  defendants, alleging defamation, sex discrimination, breach of employment
  contract (wrongful discharge), and intentional infliction of emotional
  distress.  Defendants moved for summary judgment, which was granted with
  respect to defendant Hilgert on the sex discrimination count, but denied on
  all other counts.  Defendants then moved for directed verdict at the close
  of plaintiff's case, and renewed the motion at the close of all the
  evidence.  Plaintiff withdrew the defamation and intentional infliction of
  emotional distress counts, and the trial court denied the motion for
  directed verdict on the wrongful discharge and sex discrimination claims.

       The jury, which had been instructed that plaintiff could be discharged
  only for just cause, found for defendants on the sex discrimination count,
  but awarded plaintiff $175,000 damages on the wrongful discharge claim. 
  Defendants made several post-judgment motions, including a motion for
  judgment notwithstanding the verdict, which were denied.  This appeal
  followed.

                                II.

       Review of both a motion for directed verdict and a motion for judgment
  notwithstanding the verdict raises the same question, namely "whether the
  result reached by the jury is sound in

 
  
  law on the evidence produced."  Foote v. Simmonds Precision Products
  Co., 158 Vt. 566, 570, 613 A.2d 1277, 1279 (1992).  On appeal, we consider
  the evidence "in the light most favorable to the nonmoving party and
  exclude the effect of any modifying evidence."  Id.  "If any evidence
  fairly or reasonably supported a lawful theory of the plaintiff," then we
  must uphold the trial court's denial of the motion for directed verdict. 
  Id.

       The trial court concluded as a matter of law that defendants could
  discharge plaintiff only for just cause.  Defendants contend that plaintiff
  was an at-will employee, who could be discharged at any time, for any
  reason.  We need not reach this issue.  Under his own theory of the case,
  plaintiff could be discharged only for just cause.  Because we hold that
  defendants had just cause as a matter of law for plaintiff's discharge, we
  do not resolve the conflict about the applicable standard.

       Our precedents define just cause for termination of employment as
  "some substantial shortcoming detrimental to the employer's interests,
  which the law and a sound public opinion recognize as a good cause" for
  dismissal.  In re Brooks, 135 Vt. 563, 568, 382 A.2d 204, 207 (1977);
  accord In re Gorruso, 150 Vt. 139, 147, 549 A.2d 631, 636 (1988).  To be
  upheld, a discharge for just cause must meet two criteria: first, that the
  employee's conduct was egregious enough that the discharge was reasonable,
  and second, that the employee had fair notice, express or implied, that
  such conduct could result in discharge.  Gorruso, 150 Vt. at 146, 549 A.2d 
  at 636; Brooks, 135 Vt. at 568, 382 A.2d  at 207-08.

       Plaintiff does not deny committing any of the acts for which his
  employment was terminated.  Nor does plaintiff argue that the reason given
  for his discharge was a mere pretext for some other impermissible or
  illegal reason.  See Ainsworth v. Franklin County Cheese Corp., 156 Vt.
  325, 330-31, 592 A.2d 871, 874 (1991) (sufficient evidence for jury finding
  that reason given for termination was pretext to avoid severance
  allowance).  His only claim is that his attentions toward the co-worker
  were welcome, and therefore cannot be characterized as sexual harassment. 
  This claim is inconsistent with plaintiff's own testimony (for example,

 

  plaintiff admits that the co-worker rejected his gifts), and
  contradicted by other undisputed evidence, including the wording of the
  December letter ("I can't accept `no' right now" (emphasis added)). 
  Moreover, plaintiff produced no evidence other than his own testimony to
  support this claim.  We are not persuaded that, on these facts, plaintiff's
  unsupported allegation that his attentions were welcome is sufficient to
  "fairly or reasonably support" his claim that he did not sexually harass
  his co-worker.

       Regardless of plaintiff's interpretation of the legal significance of
  his conduct, the undisputed facts in this case establish that defendants
  had just cause to terminate plaintiff's employment.  Defendants, concerned
  at the very least about a disruptive affair in the workplace with the
  looming possibility of sexual harassment, gave plaintiff a specific,
  written order to limit his contact with a particular co-worker to
  work-related tasks.  The order was a reasonable attempt to prevent present
  unrest and any future conduct that might be construed as sexual harassment
  (and might expose defendants to liability under Title VII of the Civil
  Rights Act of 1964, 42 U.S.C. §§ 2000e to 2000e-17, or Vermont's Fair
  Employment Practices Act, 21 V.S.A. §§ 495).  Plaintiff admits that he
  disobeyed this order on more than one occasion. Disobedience of such an
  order is unquestionably substantially detrimental to defendants' interests
  in maintaining a workplace free of discrimination and in avoiding financial
  liability.  The United States Supreme Court has recently reaffirmed an
  employer's obligation to prevent sexually harassing conduct that results in
  a hostile or abusive work environment.  See Harris v. Forklift Systems,
  Inc., 114 S. Ct. 367, 371 (1993) (holding that sexually harassing conduct in
  workplace violates Title VII where it would reasonably be perceived, and is
  perceived, as abusive);  see also Gorruso, 150 Vt. at 147, 549 A.2d  at 636
  (grievant's repeated sexual harassment clearly a "substantial shortcoming
  detrimental to the State's interest").

       Even if we viewed plaintiff's theory of the case as plausible, his
  admitted disobedience of a reasonable order aimed at preventing sexually
  harassing behavior was sufficiently egregious, as a matter of law, to serve
  as grounds for discharge.  A different result would undermine the

 

  strong public policy supporting, and even requiring, attempts by
  employers to prevent sexual harassment.  The first criteria for just cause
  is met, leaving only the question of whether plaintiff had fair notice that
  the conduct would result in discharge.

       Again, the undisputed evidence indicates that plaintiff had notice
  that disobeying the order to limit his conduct with the co-worker to
  work-related tasks might result in discharge.  The memorandum that
  contained the order also characterized plaintiff's meeting with Hilgert as
  a "major warning," and stated that "future valid complaints of harassment
  would result in termination."(FN2)  Plaintiff himself testified that Hilgert
  told him after the smoking incident that plaintiff would be fired if he was
  unable to act professionally.  Plaintiff cannot reasonably maintain that he
  was unaware that conduct such as writing a personal letter to the co-worker
  and giving it to her at work would result in discharge.

       Plaintiff argues that, because defendants told plaintiff he was being
  fired for sexually harassing a co-worker, defendants altered the terms of
  plaintiff's employment contract such that plaintiff could be fired only for
  sexual harassment.  Following this reasoning, if plaintiff's conduct did
  not amount to sexual harassment, he could not be fired, even though his
  conduct was just cause for discharge.  We see no merit in this argument.  A
  contract is not created or modified when an employer states a reason for an
  employee's discharge.  Adopting this reasoning would discourage employers
  from explaining their reasons for discharging employees,

 

   a result which is inconsistent with sound public policy.

          Reversed.


                              FOR THE COURT:



                              _______________________________________
                              Associate Justice



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                                  Footnotes


FN1.  Defendants raise a number of issues on appeal, any one of which
  could be dispositive.  For the purposes of this opinion, we assume without
  deciding that defendants discharged plaintiff. Because we reverse the
  judgment below, we need not reach defendants' after-acquired-evidence
  argument.  We also need not reach defendants' additional claims with
  respect to the jury instruction on mental anguish and the qualification of
  plaintiff's financial expert. 


FN2.  Plaintiff contends that there were no valid complaints of sexual
  harassment.  The written warning and plaintiff's own testimony indicate,
  however, that defendants believed that plaintiff's past conduct constituted
  sexual harassment, and that future nonwork-related contact with the co-
  worker during work hours would also constitute sexual harassment. 
  Plaintiff testified that he was aware, after the August meeting and
  warning, of defendants' position on sexual harassment. On these facts,
  plaintiff had notice that disobeying the order to limit his contact with
  the co-worker to work-related tasks could result in discharge.