Coman v. Thomas Mfg. Co., Inc., 8822SC218

• Citation: 371 S.E.2d 731,91 N.C.App. 327
• Decision Date: 20 September 1988
• Docket Number: No. 8822SC218,8822SC218
• Parties: , 3 IER Cases 1364 Mark R. COMAN, Plaintiff-Appellant, v. THOMAS MANUFACTURING CO., INC., Defendant-Appellee.
• Court: Court of Appeal of North Carolina (US)

Page 731

371 S.E.2d 731

91 N.C.App. 327, 3 IER Cases 1364

Mark R. COMAN, Plaintiff-Appellant, v. THOMAS MANUFACTURING CO., INC., Defendant-Appellee.

No. 8822SC218.

Court of Appeals of North Carolina.

Sept. 20, 1988.

Larry L. Eubanks, and David F. Tamer, Winston-Salem, for plaintiff-appellant.

Petree, Stockton & Robinson by W.R. Loftis, Jr. and Penni P. Bradshaw, Winston-Salem, for defendant-appellee.

ARNOLD, Judge.

Plaintiff contends that the trial court erred in dismissing his complaint for failure to state a claim on which relief can be granted. As the defendant made the motion pursuant to G.S. 1A-1, Rule 12(b)(6) for failure to state a claim on which relief can be granted, the allegations of the complaint set forth above must be taken as true for purposes of this appeal. Smith v. Ford Motor Co., 289 N.C. 71, 80, 221 S.E.2d 282, 288, 79 A.L.R.3d 651, 659 (1976). Facts as presented by the complaint raise this question for appeal: Does an employee whose contract is not for a definite term state a tort cause of action for wrongful discharge against his employer when he claims that the sole reason for his discharge is his refusal to violate federal Department of Transportation regulations? For the reasons set out below we find that there is no such cause of action. We affirm the ruling of the trial court.

We note at the outset that the Federal regulations in question are part of a statutory scheme to promote safe roads and include "whistleblower protections." See 49 U.S.C.A.App. § 2305 (1988). Thus, were we to create a state tort remedy for the violation of the Department of Transportation regulations it would be in addition to an existing federal remedy.

I. The "At Will" Doctrine in North Carolina

Plaintiff makes no claim to being other than an "at will" employee. The "at will" doctrine has been explained by the N.C. Supreme Court in this way: "[w]here a contract of employment does not fix a definite term, it is terminable at the will of either party, with or without cause, except in those instances in which the employee is protected by a statute." Smith v. Ford Motor Co., 289 N.C. 71, 80, 221 S.E.2d 282, 288 (1976) (citations omitted); accord, Presnell v. Pell, 298 N.C. 715, 260 S.E.2d 611 (1979). The "at will" doctrine in North Carolina is a departure from the English Common Law which presumed a hiring for one year. Leonard, A New Common Law of Employment Termination, 66 N.C.L.Rev. 631, 640 (1988); Parker, The Uses of the Past: The Surprising History of Terminable-at-Will Employment in North Carolina, 22 Wake Forest L.Rev. 167, 176 (1987). In 1877 the English Common Law presumption was firmly supplanted by an American Rule announced in the 1877 treatise of Horace Gray Wood: "[w]ith us the rule is inflexible, that a general or indefinite hiring is prima facie a hiring at will ... [It] is an indefinite hiring and is determinable at the will of either party." H. Wood, A Treatise on the Law of Master and Servant § 134, at 272 (1877). The rule reflects a nineteenth century view which strongly supported complete freedom of contract. It allows employers freedom to hire and fire freely according to production and other economic needs. Leonard, 66 N.C.L.Rev. 631, 641.

In his brief plaintiff admits that he is an "at will" employee but asserts that a North Carolina employer is not free to discharge an "at will" employee in bad faith and cites Haskins v. Royster, 70 N.C. 601 (1874), and the more recent case, Sides v. Duke University, 74 N.C.App. 331, 328 S.E.2d 818, disc. rev. denied, 314 N.C. 331, 333 S.E.2d 490 (1985), in support of his argument.

Haskins concerned a third party's interference with an employment contract. The plaintiff employer sued the defendant for luring two sharecroppers away from his employ. In his defense the defendant claimed that the contract between the plaintiff and the employee sharecroppers was unlawful. The court did not find an unlawful contract and found the defendant liable for unlawful interference of a contract.

Coman, plaintiff in the present case, asks us to rely on dictum in Haskins to find a bad faith exception to the "at will" doctrine. Subsequent to its finding that the defendant Royster was liable the Haskins court stated:

It is not necessary to decide what would be the effect of such a stipulation in an action on the contract between the parties to it. But as there seems to be some misconception of the law of such a case ... a few observations will more conveniently lead us to the question actually presented.

Haskins at 608. With that introduction the court then reviews some case law and concludes that the contract between the plaintiff Royster and his sharecroppers was lawful. In conclusion the Haskins court stated:

It is important however to notice, that none of these authorities goes to the length of holding, that if after the contractors had duly performed all or part of the work, the plaintiff had mala fide, or without lawful cause, discharged them, they could not recover on the contract.

Haskins at 610. We do not agree with plaintiff that the above-quoted passage is central to the holding in Haskins and therefore, we are unable to rely on it to find an exception to the well-established employment "at will" doctrine in North Carolina.

Smith v. Ford Motor Co., 289 N.C. 71, 221 S.E.2d 282, 79 A.L.R.3d 651 (1976), is a more recent example of the N.C. Supreme Court's application of the "at will" doctrine, and is an instructive comparison to Haskins as it also concerns interference of a third party with an employment contract. In Smith, the plaintiff had been president and stockholder of Cloverdale, a Ford automobile dealership. Plaintiff became involved in a dealer's alliance which Ford Motor Company disapproved of, and, as a result, Ford successfully influenced Cloverdale to terminate the plaintiff's employment by threatening to terminate Cloverdale's franchise. Id. at 88, 221 S.E.2d at 293. The Court found that Smith had a cause of action for wrongful interference of his contract rights against Ford Motor Co., but held that because he was an "at will" employee he had absolutely no recourse against his employer, Cloverdale. The court states, "Cloverdale committed no breach of its contract even if, as the plaintiff alleges, there was not 'just cause' for such termination." Id. at 80-81, 221 S.E.2d at 288. This was so even though Cloverdale had allowed itself to be influenced by the wrongful behavior of Ford, and even though there could have been no wrong accomplished against Smith without the help of Cloverdale. The Court screened the employer from liability despite its acquiescence in Ford's alleged malicious interference in the employment contract. Id. at 85, 221 S.E.2d at 290.

Though we recognize that Cloverdale's privilege to discharge Smith for "no just cause" can be distinguished from a dismissal based on an employee's refusal to violate federal regulations or, that is, a dismissal for "bad cause," our research reveals that North Carolina has loyally supported a virtually unqualified privilege regarding the hiring and firing of employees. Nantz v. Employment Sec. Comm'n, 290 N.C. 473, 226 S.E.2d 340 (1976) (labor market analyst alleged wrongful discharge based upon lack of evidence to support her termination); Still v. Lance, 279 N.C. 254, 182 S.E.2d 403 (1971) (schoolteacher alleged wrongful discharge based on discharge being arbitrary and without cause); Tuttle v. Kernersville Lumber Co., 263 N.C. 216, 139 S.E.2d 249 (1964) (lumber company manager alleged wrongful discharge in breach of employer's promise of permanent job for so long as manager's work was satisfactory); Willard v. Huffman, 247 N.C. 523, 101 S.E.2d 373 (1958) (court recognized employee stated cause of action for wrongful discharge if motivating reason for dismissal was retaliation for unionizing activities); Scott v. Burlington Mills Corp., 245 N.C. 100, 95 S.E.2d 273 (1956) (weaver alleged wrongful discharge following manufacturer's decision to make example of weaver by firing him and thus coerce other weavers whose records were poorer than that of fired weaver); Malever v. Kay Jewelry Co., 223 N.C. 148, 25 S.E.2d 436 (1943) (jewelry store salesman alleged wrongful discharge after employer induced salesman to leave former job with promises of permanent employment); Elmore v. Atlantic Coast Line R.R., 191 N.C. 182, 131 S.E. 633, 43 A.L.R. 1072 (1926) (railroad conductor alleged wrongful discharge when railroad had relied on what later turned out to be false and malicious allegations of conductor's dishonesty as basis for discharge).

II. Exceptions to the "At Will" Doctrine

Plaintiff in his brief asks us to consider the following language in Sides v. Duke Hospital in support of his argument that this Court recognize a cause of action for wrongful discharge in his case:

Thus, while there may be a right to terminate a contract at will for no reason, there can be no right to terminate such a contract for an unlawful reason or purpose that contravenes public policy. A different interpretation would encourage and sanction lawlessness, which law by its very nature is designed to encourage and prevent. We hold, therefore, that no employer in the State, notwithstanding that an employment is at will, has the right to discharge an employee and deprive him of his livelihood without civil liability because he refuses to testify untruthfully or incompletely in a court case, as plaintiff alleges happened here.

Sides v. Duke University, 74 N.C.App. 331, 342, 328 S.E.2d 818, 826, disc. rev. denied, 314 N.C. 331, 333 S.E.2d 490 (1985). Plaintiff in his brief recognizes, but dismisses without explanation, cases subsequent to Sides in which this Court has maintained that Sides is to be read narrowly, its significance limited specifically to the issue of perjury in legal proceedings. See Trought v. Richardson, 78 N.C.App. 758, 762, 338 S.E.2d 617, 619 (1986); accord, Williams v. Hillhaven...