Ross v. Times Mirror, Inc.

ROSS_V_TIMES_MIRROR_INC.94-224; 164 Vt 13; 665 A.2d 580

[Filed 07-Jul-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. 94-224


Edward H. Ross                                    Supreme Court

                                                  On Appeal from
    v.                                            Chittenden Superior Court

Times Mirror, Inc., Times Mirror                  February Term, 1995
Magazine, Inc. d/b/a Ski Magazine,
and George Bauer


Matthew I. Katz, J.

Edward H. Ross, pro se, Waterbury, plaintiff-appellant

Robert B. Hemley and Lucy T. Brown of Gravel and Shea, Burlington, for
defendants-appellees 


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


     ALLEN, C.J.    Plaintiff appeals from an order of the Chittenden
Superior Court granting defendants' summary judgment motion on plaintiff's
claims of wrongful discharge, age discrimination, and tortious interference
with an employment contract.  We affirm. 

     Plaintiff was employed by defendant Times Mirror, Inc. (TMI) in 1980 as
a sales representative for some of its magazines and worked out of the New
York office.  In 1984, plaintiff was promoted to New England sales manager of
SKI magazine and transferred to Burlington, Vermont. Shortly after arriving
in Vermont, difficulties arose between plaintiff and his new supervisor,
advertising manager Ellen McVickar.  McVickar complained to both plaintiff
and her supervisor, defendant George Bauer, that plaintiff's communication
with the New York office was inadequate.  In June 1988, McVickar issued a
written warning to plaintiff, which was placed in his personnel file.  Later
that same month, plaintiff received a letter from Bauer placing him on
probation, explaining that if he did not improve his communication, he could
be terminated.  Plaintiff's correspondence improved and he was taken off
probation in 

 

September 1988.

     Although plaintiff received a laudable annual review in May 1989, the
friction continued to plague plaintiff and McVickar's relationship. In June
1989, an important advertiser wrote a letter to Bauer which criticized
McVickar and praised plaintiff.  Convinced that plaintiff had enticed the
advertiser to write the letter, McVickar recommended to Bauer that he
terminate plaintiff.  Bauer then scheduled an August meeting with him in New
York.  When plaintiff did not attend the meeting, Bauer terminated plaintiff
by phone. 

     Plaintiff believed he was terminated without good cause and in
retaliation for the embarrassing letter.  He brought the present action
advancing three wrongful discharge theories: (1) breach of an oral contract
to employ him until his retirement, (2) promissory estoppel based on a
promise of permanent employment and promises implicit in TMI's employee
handbook and a progressive disciplinary policy and (3) breach of an implied
covenant of good faith and fair dealing. Plaintiff also claimed that his
termination constituted age discrimination and he accused defendant Bauer of
interference with his employment contract with TMI.   Defendants denied the
allegations, and after several months of discovery moved under V.R.C.P. 56
for summary judgment. 

     The court granted defendants' motion, concluding that permanent
employment status, even if a correct characterization, did not rebut the
presumption of at-will employment and that any promised employment until
retirement was barred by the Statute of Frauds.  It also concluded that a
disclaimer in TMI's personnel handbook negated any effect defendant's
disciplinary policy had on the at-will relationship. It rejected plaintiff's
implied covenant of good faith and fair dealing claim for lack of adequate
factual support on the element of bad faith. Finally, the court concluded
that plaintiff had not raised a genuine issue of fact with respect to either
age discrimination or contract interference. 

     In reviewing a grant of summary judgment, we apply the same standard as
the trial court, namely, that the motion should be granted when, taking all
allegations made by the nonmoving party as true, there are no genuine issues
of material fact and the movant is entitled to judgment 

 

as a matter of law.  Pierce v. Riggs, 149 Vt. 136, 139, 540 A.2d 655, 657
(1988).  Where the moving party does not bear the burden of persuasion at
trial, it may satisfy its burden of production by showing the court that
there is an absence of evidence in the record to support the nonmoving
party's case.  State v. G.S. Blodgett Co., ___ Vt. ___, ___ 656 A.2d 984,
988 (1995).  The burden then shifts to the nonmoving party to persuade the
court that there is a triable issue of fact.  Id. In the present action,
plaintiff has not met his burden on any of his claims. 

     Plaintiff argues that an oral contract for permanent employment was made
when he was hired by TMI.  Thus, it was his understanding that his employment
would be continuous until plaintiff's retirement, and terminable only for
just and sufficient cause.  Alternatively, plaintiff argues that he
detrimentally relied on TMI's oral representations that his employment would
be continuous until he reached retirement. 

     In Benoir v. Ethan Allen, Inc., 147 Vt. 268, 270, 514 A.2d 716, 717-18
(1986), we stated that "the term `permanent,' when used in an employment
contract with reference to a term of employment, normally means nothing more
than indefinite employment."  An employer must do something more than promise
continuous employment to take an employee out of an at-will status.  "`An
employment contract for an indefinite term is an "at-will" agreement,
terminable at any time, for any reason or for none at all.'" Larose v. Agway,
Inc., 147 Vt. 1, 3, 508 A.2d 1364, 1365-66 (1986) (quoting Sherman v. Rutland
Hospital, Inc., 146 Vt. 204, 207, 500 A.2d 230, 232 (1985)).  In addition,
there is no support in the record for plaintiff's allegations that any oral
representations for continuous employment was made to plaintiff at the time
of hiring or later.  See V.R.C.P. 56(e) (nonmoving party may not rest on
unsupported allegations). Plaintiff's deposition reveals that only salary and
sales territory were discussed at his hiring meeting. Moreover, he presented
no evidence of detrimental reliance. Plaintiff's contract and promissory
estoppel claims fail. 

     Plaintiff next claims that certain established employment policies
limited TMI's discretion to terminate him.  Specifically, plaintiff contends
that TMI's personnel handbook, which 

 

contained a list of conduct warranting discipline, created an enforceable
promise to terminate only for cause.  Plaintiff also maintains that defendant
had instituted a progressive three-step disciplinary procedure, upon which
TMI employees relied.  In plaintiff's view, these policies sufficiently rebut
the at-will presumption.  The trial court concluded that the disclaimer in
TMI's handbook effectively trumped any claim that the at-will relationship
had been unilaterally modified by either the handbook or disciplinary policy.
 Plaintiff initially presented this claim to the trial court under the rubric
of promissory estoppel.  The trial court addressed it as unilateral contract
modification claim.  On appeal, plaintiff challenges only the trial court's
contract modification analysis. While summary judgment was appropriate, we
disagree with the trial court's reasoning.  See Gochey v. Bombardier, Inc.,
153 Vt. 607, 613-14, 572 A.2d 921, 925 (1990) (supreme court is not bound by
reasoning of trial court). 

     The effectiveness of a disclaimer depends on the circumstances. See,
e.g., McGinnis v. Honeywell, Inc., 791 P.2d 452, 457 (N.M. 1990) (disclaimer
rebutted by evidence to contrary of parties' norms of conduct and
expectations).  Notably, in Benoir, 147 Vt. at 271, 514 A.2d  at 718, we
concluded that a written disciplinary procedure used whenever a possible
discharge arose altered the at-will relationship, despite the fact that the
employer had expressly reserved the right to bypass the disciplinary process.
 See also Foote v. Simmonds Precision Prods. Co., 158 Vt. 566, 568-72, 613 A.2d 1222, 1228-30 (1992) (defendant's handbook stating that employment
relationship could be terminated at any time did not defeat plaintiff's claim
of retaliatory discharge where employer promised not to retaliate for use of
grievance procedure). Without such a principle, an employer could have it
both ways -- enjoying the morale-enhancing benefits of fair procedures most
of the time, but relying on a handbook disclaimer whenever it chose to
jettison its procedures in a particular case.  See Liekvold v. Valley View
Community Hosp., 688 P.2d 170, 174 (Ariz. 1984) (employer cannot selectively
abide by or treat as illusory officially announced employment policies). 
Because the disclaimer is not dispositive, we must determine if plaintiff
raised a genuine issue of material fact as to whether defendant's handbook or
disciplinary procedure unilaterally modified plaintiff's at-will employment
agreement. 

 

     We have stated on numerous occasions that the presumption of an at-will
employment contract is a rule of contract construction that can be overcome
by evidence to the contrary. See, e.g., Taylor v. National Life Ins. Co., 161
Vt. 457, 462, 652 A.2d 466, 470 (1993).  An employer may limit its discretion
to terminate an employee at will by instituting company-wide personnel
policies.  See Thompson v. St. Regis Paper Co., 685 P.2d 1081, 1088 (Wash.
1984). To determine whether a particular policy modifies the at-will
relationship or creates an enforceable promise of specific treatment, we are
guided by our recent decision in Taylor, in which we held that provisions of
a personnel policy manual may unilaterally alter the at-will relationship. 
161 Vt. at 464, 652 A.2d  at 471.  Relying on Toussaint v. Blue Cross & Blue
Shield of Mich., 292 N.W.2d 880, 892 (Mich. 1980), we reasoned that: 

      [W]here an employer chooses to establish [personnel] policies and
      practices and makes them known to its employees, the employment
      relationship is presumably enhanced. . . .  It is enough that the
      employer chooses, presumably in its own interest, to create an
      environment in which the employee believes that, whatever the
      personnel policies and practices, they are established and official
      at any given time, purport to be fair, and are applied consistently
      and uniformly to each employee.  The employer has then created
      a situation "instinct with an obligation."

Taylor, 161 Vt. at 464-65, 652 A.2d  at 471.

     Employee manuals or policy statements do not automatically become
binding agreements. Continental Air Lines, Inc. v. Keenan, 731 P.2d 708, 711
(Colo. 1987).  Whether a particular policy is meant to be a unilateral offer
is an issue of proof.  See Pine River State Bank v. Mettille, 333 N.W.2d 622,
626 (Minn. 1983) (whether proposal is meant to be unilateral contract is
determined by outward manifestations of parties).  Only those policies which
are definitive in form, communicated to the employees, and demonstrate an
objective manifestation of the employer's intent to bind itself will be
enforced. Id.; Gilbert v. Durand Glass Mfg. Co., 609 A.2d 517, 522 (N.J.
Super. Ct. App. Div. 1992) (enforceable policies must constitute accurate
representation of the policies which the employer was authorized to make). 
General statements of policy will not meet the requirements of a unilateral
contract.  Pine River, 333 N.W.2d  at 626; see Thompson, 685 P.2d  at 1085
(employer's statements that terminations will 

 

be handled in a fair, just and equitable manner were general policy
statements and did not imply contract to discharge only for cause).  In
contrast, definitive policies, which expressly or impliedly include a promise
for specific treatment in specific situations, especially when the employer
expects the employee to abide by the same, may be enforceable in contract.
Thompson, 685 P.2d  at 1088.  We note that an employer may not always be bound
by statements if it conspicuously and effectively states that the policy is
not intended to be part of the employment relationship.  Id. 

     In the present case, plaintiff argues that the catalogue of reasons for
employee discipline was sufficient proof to imply a promise to terminate only
for cause or after using a progressive disciplinary procedure.  TMI's
handbook, which was circulated to all employees, identified specific conduct
that warranted discipline.  The list was preceded by the following
disclaimer: 

     While the Company expressly reserves the right to terminate the
     employment relationship at will, conduct such as, but not limited
     to, the examples below are causes for disciplinary action up to and
     including discharge: . . .

     The noninclusive list of actionable conduct is a general statement of
defendant's policy to discipline its employees.  No promise for just cause
termination or for specific treatment in a specific situation can be implied
from this statement.  See Martin v. Capital Cities Media, Inc., 511 A.2d 830,
838 (Pa. Super. Ct. 1986) (list of conduct requiring disciplinary action does
not imply just cause dismissal).  In fact, the policy expressly leaves the
disciplinary sanction to the employer's discretion.  Contrary to plaintiff's
assertion, defendant's handbook policy, by itself, does not create an
enforceable promise to terminate for cause or only after disciplinary action
had been taken. 

     Plaintiff also insists that TMI failed to use an established progressive
disciplinary procedure before terminating him.  According to plaintiff, the
procedure provided for an initial warning, then a probationary period if the
employee did not improve.  Both the warning and notification of probation
were communicated in writing to the employee and recorded in the employee's
personnel file.  At the end of the probationary period, the employee would be

 

reinstated or terminated.  Plaintiff contends this procedure implied a
promise to terminate for good cause and only after using the three-step
procedure.  Defendant TMI denies that the three- step procedure exists. No
written policy is in evidence. 

     As a threshold matter, we note that disciplinary procedures are not
inconsistent or in conflict with the at-will doctrine.  Sherman, 146 Vt. at
208, 500 A.2d  at 231.  They may, however, create an enforceable promise to
use those procedures.  Id.; see Continental Air Lines, 731 P.2d  at 711
(employee at-will may be able to enforce termination procedures under
unilateral contract modification theory); Suburban Hosp. v. Dwiggins, 596 A.2d 1069, 1074-75 (Md. 1991) (if employee is not afforded established job
termination procedures, employee may have breach of contract claim); Pine
River, 333 N.W.2d  at 631 (employer breached employment contract because it
did not use disciplinary procedure, had it done so, plaintiff might have
corrected deficiencies to employer's satisfaction).  While disciplinary
procedures do not necessarily limit the grounds for dismissal, they may limit
how a dismissal is carried out. Compare Taylor, 161 Vt. at 465-66, 652 A.2d 
at 471-72 (handbook disciplinary policy created just cause termination
requirement) with Suburban Hosp., 596 A.2d  at 1074-75 (disciplinary procedure
did not impose just cause termination, only procedural requirements).  The
critical inquiry is, of course, whether the procedure amounted to an
enforceable promise of specific treatment in a specific circumstance. 

     A proffered procedure or practice may be enforceable, if it is clearly
established and uniformly and consistently applied throughout the company. 
Toussaint, 292 N.W.2d  at 892; see Gilbert, 609 A.2d  at 522 (unwritten
disciplinary policy, publicized and implemented throughout company,
constituted enforceable promise to use procedure before terminating at-will
employee).  An employer's official statement does not have to be in writing
in order to be enforceable.  See Gilbert, 609 A.2d  at 522 (unwritten
disciplinary policy to sanction employees for lateness enforceable). 
Requiring such a formality, in this context, would favor form over substance.

     Considering the above parameters, the fact that a written policy is not
in evidence is not 

 

fatal to plaintiff's claim.  In addition, defendant's denial does not end the
matter.  See V.R.C.P. 56(e) (adverse party may not rest upon mere allegations
or denials of adverse party's pleadings). However, plaintiff has offered only
his own experience and hearsay statements regarding what "he had heard" about
other employees.  While his own experience is relevant, it does not, by
itself, suggest a definitive company-wide practice.  See Gilbert, 609 A.2d  at
518-22 (plaintiff established prima facie breach of contract claim by
submitting personnel records of employees who were subjected to unwritten
disciplinary policy and affidavits of managers who attested to using alleged
policy).  Further, plaintiff's recollection about what other employees had
told him is insufficient to support his opposition to summary judgment.  See
10A Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure 
2738, at 489-94 (1983) (hearsay statements contained in deposition not
supported by specific facts admissible in evidence are insufficient to raise
genuine issues).  In sum, plaintiff has failed to establish a prima facie
case that defendant's practice of disciplining employees constituted an
implied and enforceable promise to terminate an employee only after using the
progressive procedure. 

     Next, plaintiff argues that the court erred in concluding that no
genuine issue of material fact existed as to his claim that defendant
violated the implied covenant of good faith and fair dealing.  Relying on 
Carmichael v. Adirondack Bottled Gas Corp. of Vermont, 161 Vt. 200, 208, 635 A.2d 1211, 1216 (1993), the trial court ruled that such a covenant could
coexist with an at-will relationship, but concluded that plaintiff had made
an insufficient showing of bad faith to create a genuine issue of fact. 
Again, we agree that summary judgment was appropriate, but disagree with the
trial court's reasoning. 

     It is axiomatic that an at-will employee "may be discharged at any time
with or without cause, `unless there is a clear and compelling public policy
against the reason advanced for the discharge.'"  Payne v. Rozendaal, 147 Vt.
488, 491, 520 A.2d 586, 588 (1986) (quoting Jones v. Keogh, 137 Vt. 562, 564,
409 A.2d 581, 582 (1979) (emphasis in original) or unless the at- will
relationship has been modified, see, e.g., Taylor, 161 Vt. at 464-65, 652 A.2d  at 471 (handbook may modify at-will).  To imply a covenant as to tenure
in an unmodified at-will 

 

contract irreconcilably conflicts with the employment-at-will doctrine,
Murphy v. American Home Products, 448 N.E.2d 86, 91, 461 N.Y.S.2d 232, 237
(N.Y. 1983), and results in unreasonable judicial interference into what is a
private relationship.  Accord Spanier v. TCF Bank Savings FSB, 495 N.W.2d 18,
21 (Minn. Ct. App. 1993); Thompson, 685 P.2d  at 1086-87.  Further, implying
such a covenant "would subject each discharge to judicial incursions into the
amorphous concept of bad faith."  Parnar v. Americana Hotels, Inc., 652 P.2d 625, 629 (Haw. 1982).  Therefore, we decline to recognize the implied
covenant of good faith and fair dealing as means of recovery where the
employment relationship is unmodified and at-will and the employee is
challenging the dismissal based on a right to tenure. 

     In the present case, plaintiff believed that he was entitled to
permanent or continuous employment until defendant had just cause. Because
plaintiff's theory was based solely on an implied tenure, we do not decide
whether we would recognize such a covenant in the context of non-tenure terms
of at-will employment contracts, such as accrued benefits.  See, e.g.,
Fortune v. National Cash Register, 364 N.E.2d 1251, 1257 (Mass. 1977) (bad
faith termination to prevent salesperson from obtaining earned commission
actionable under breach of implied covenant of good faith and fair dealing). 

     In rejecting this theory, we note that at-will employees are not without
remedies for wrongful termination.  In addition to statutory protections such
as Vermont's Fair Employment Practices Act (VFEPA), 21 V.S.A.  495, relief
may be had under several common law theories.  See Taylor, 161 Vt. at 464-65,
652 A.2d  at 471 (employee handbook may unilaterally modify employment
relationship); Foote, 158 Vt. at 571, 613 A.2d  at 1279-80 (promissory
estoppel may modify employment contract otherwise terminable at-will); Payne,
147 Vt. at 491, 520 A.2d  at 588 (recognizing public policy exception to
at-will doctrine). 

     Plaintiff next asserts violations of VFEPA.  Specifically, he argues
that TMI unlawfully terminated him on the basis of age, unlawfully retaliated
against him, and subjected him to unlawful harassment.  In support of these
allegations, he points to a memorandum from McVickar to defendant Bauer in
which McVickar recommended terminating plaintiff.  She stated 

 

that she was unwilling to deal with plaintiff's uncooperative attitude until
he "decided to retire at 55" and recommending plaintiff's termination. 
Plaintiff suggests that the fact that his responsibilities were covered by
his former assistant, a much younger person, also indicates age
discrimination. 

     VFEPA prohibits employment discrimination on the basis of age.  21
V.S.A.  495(a). The Age Discrimination in Employment Act (ADEA), 29 U.S.C.
 621, and its precedent provide useful analytical tools.  To establish a
prima facie case, plaintiff must show that (1) he was within the protected
age group, (2) he was qualified for the position, (3) he was discharged, and
(4) the discharge occurred under circumstances giving rise to an inference of
age discrimination.  Viola v. Philips Medical Sys. of North America, 42 F.3d 712, 716 (2d Cir. 1994).  Plaintiff has not presented a prima facie case of
age discrimination. 

     The memorandum, read in full, simply supports defendant's proffered
reason for plaintiff's termination.  McVickar complained that plaintiff: 

     continues to flaunt authority and follow his own schedule in
     a most cavalier manner.  He has been warned, put on
     probation, reprimanded etc. on many occasions and
     frequently.  There is a limit to the acceptance of this
     behavior and the limit has arrived. . . .  I feel, as you do
     that we will not sit still with a situation where we are put
     in a position of waiting until Ted decides to leave SKI . .
     . .  I refer to Ted's monologue . . . where Ted [said he
     would] stay on a few more years . . . until he can retire at
     55 . . . . 

(Emphasis in original.)

     Defendant's decision to assign the only other person in SKI magazine's
two-person office to cover a portion of plaintiff's territory three months
after his termination strikes us as a reasonable stop-gap, rather than prima
facie evidence of age discrimination. Plaintiff has failed to present
sufficient evidence to reasonably indicate that his termination was motivated
by his age. 

     Plaintiff's allegations of retaliation must also fail.  VFEPA prohibits
retaliation when an employee "has lodged a complaint  . . . or has cooperated
with the attorney general or a state's attorney in an investigation of"
discriminatory practices, or an "employer believes that an employee may lodge
a complaint or cooperate with [the authorities]."  21 V.S.A.  495(a)(5). 

 

Plaintiff has presented no evidence that he engaged in any activity protected
by the statute, therefore he may not rely on this remedy. 

     Finally, the claims of tortious interference against defendant George
Bauer are meritless. Bauer is not a third party, but an employee of TMI, and
plaintiff has not explained how Vermont law provides a remedy in such
circumstances.  See Giroux v. Lussier, 126 Vt. 555, 561-62, 238 A.2d 63, 67
(1968) (outsider has no legal right to deceptively invade area of another's
agreement).  In addition, plaintiff's brief describes what is, at most,
personal differences with Bauer, falling short of stating a cause of action. 
There was no error in granting defendant's motion for summary judgment. 

     Affirmed.
                              FOR THE COURT:


                              _______________________________________
                              Chief Justice