Halsell v. Kimberly-Clark Corp., LR-76-C-208.

• Decision Date: 24 July 1981
• Docket Number: No. LR-76-C-208.,LR-76-C-208.
• Citation: 518 F. Supp. 694
• Parties: Henry P. HALSELL, Plaintiff, v. KIMBERLY-CLARK CORPORATION, Defendant.
• Court: U.S. District Court — Eastern District of Arkansas

518 F. Supp. 694

Henry P. HALSELL, Plaintiff, v. KIMBERLY-CLARK CORPORATION, Defendant.

No. LR-76-C-208.

United States District Court, E. D. Arkansas, W. D.

July 24, 1981.

Bill R. Holloway, Lake Village, Ark., for plaintiff.

James M. McHaney, Little Rock, Ark., for defendant.

MEMORANDUM OPINION

WOODS, District Judge.

On April 28, 1976 plaintiff filed suit against defendant for damages resulting from an alleged wrongful discharge of plaintiff from his employment with the defendant. Plaintiff later filed a series of amended complaints adding a claim for age discrimination. Plaintiff presented no proof on the latter claim, and it was not submitted to the jury. After a three-day jury trial, the Court would have directed a verdict on behalf of the defendant. However, decision was reserved on motions for directed verdict, and the breach of contract issue was submitted to the jury in accordance with the suggestions of the Court of Appeals for this Circuit. See Hoppe v. Midwest Conveyor Co., 485 F.2d 1196, 1198 n. 1 (8th Cir. 1973) and Parker v. Seaboard Coastline R.R., 573 F.2d 1004, 1006, n. 3 (8th Cir. 1978).

Three interrogatories were propounded, and the answers of the jury were as follows:

INTERROGATORY NO. 1: Do you find from a preponderance of the evidence that Kimberly-Clark Corporation breached an employment contract it had with Henry Halsell?

ANSWER: Yes

INTERROGATORY NO. 2: Answer this interrogatory only if you answered "yes" to Interrogatory No. 1.

Do you find from a preponderance of the evidence that the employment contract between Kimberly-Clark Corporation and Henry Halsell was an oral contract for personal services which was not to be performed within one year?

ANSWER: Yes

INTERROGATORY NO. 3: Answer this interrogatory only if you answered "yes" to Interrogatory No. 1.

State the amount of any damages which you find from a preponderance of the evidence were sustained by Henry Halsell as a result of Kimberly-Clark Corporation's breach of contract.

ANSWER: $250,000.00

Notwithstanding these answers, judgment n.o.v. will now be entered for the defendant pursuant to its post-trial motion. Although the plaintiff contends that he had a contract with defendant for "permanent" employment to 65 years of age, there is an absence of evidence to support such a claim. In fact in plaintiff's own notes, made shortly after his termination, and verified by him on the witness stand, he wrote as follows: "I had bargained for higher pay, for pension rights and for an employment contract but without any success." The plaintiff was hired over the telephone to serve as project manager for a $50,000,000 paper mill expansion which defendant was constructing at Ozibaza, Mexico for its Mexican subsidiary, Kimberly-Clark de Mexico. Much of the evidence in the case was directed to the issue of whether defendant terminated plaintiff for good cause. The Court finds that the evidence preponderated in defendant's favor on this issue but was probably sufficient to send it to the jury.

However, defendant is entitled to judgment notwithstanding the answer to Interrogatory No. 1 because the contract of employment was not for a specified time, under the undisputed evidence in this case. It was, therefore, terminable at the will of either party. In this regard the law of Arkansas and of Wisconsin (where the plaintiff was hired) is the same. Wisconsin law was reviewed by the Seventh Circuit in Hanson v. B. & O. R. R. Co., 282 F.2d 758 (7th Cir. 1960):

Plaintiff alleges no consideration for his employment as a fireman other than the stipulated wage for his services as rendered. In such circumstances, where there is nothing to fix the duration of a contract, a contract for "permanent" employment is in effect a contract of general employment terminable at will .... In Wisconsin, an employment relation, in the absence of contractual limitation, continues at the will of either party. Saylor v. Marshall & Illsley Bank, 1937, 224 Wis. 511, 515, 272 N.W. 369; Brown v. Oenida Knitting Mills, 1938, 226 Wis. 662, 669, 277 N.W. 653. At 759-60.

This principle remains in effect in Wisconsin. Ward v. Frito-Lay, Inc., 95 Wis.2d 372, 290 N.W.2d 536 (1980); Goff v. Mass. Protective Ass'n, 46 Wis.2d 712, 176 N.W.2d 575 (1970); Forrer v. Sears, Roebuck & Co., 36 Wis.2d 388, 153 N.W.2d 587 (1967).

Arkansas law was reviewed by the Eighth Circuit in Tinnon v. Missouri Pacific R.R. Co., 282 F.2d 773 (8th Cir. 1960) in an opinion written by Justice Blackmun:

Arkansas law seems to be precise and definite. The Supreme Court of that state in a wrongful discharge case decided in 1897 held, one judge dissenting, that because the contract of employment contained no agreement by the employee to serve any specific length of time, there was no breach of contract in discharging him .... St. Louis I.M.& S.Ry. Co. v. Mathews, 64 Ark. 398, 42 S.W. 902, 903, 39 L.R.A. 467. In 1943, 46 years later, and again by a divided court, this holding was reaffirmed in another railroad discharge case, the court stating that this was "in harmony with the rule of mutuality of obligation." Petty v. Missouri & Arkansas Ry. Co., 205 Ark. 990, 167 S.W.2d 895, 897, certiorari denied 320 U.S. 738, 64 S.Ct. 37, 88 L.Ed. 457. At 776.

This principle was recently reaffirmed in M. B. M. Co., Inc. v. Counce, 268 Ark. 269, 596 S.W.2d 681, 684 (1980) when Chief Justice Fogleman wrote that "where no definite term of employment is specified in the contract of employment, and in the absence of other circumstances controlling the duration of employment, the contract is terminable at the will of either party." See also Miller v. Missouri Pac. Transportation Co., 225 Ark. 475, 283 S.W.2d 158 (1955), from which Judge Fogleman derived the above rule.

Based on the jury's answer to Interrogatory No. 2, which was supported by substantial evidence and conformed to plaintiff's own contentions, the defendant would also be entitled under Arkansas law to judgment notwithstanding its answer to the interrogatory. It is undisputed that the contract of employment was an oral contract. In fact, plaintiff's counsel frankly admitted this fact in his opening statement to the jury. Ark.Stat.Ann. § 38-101 provides in part:

No action shall be brought ... to charge any person upon any contract, promise, or agreement, that is not to be performed within one 1 year from the making thereof.

The Statute of Frauds applies to employment contracts. Swafford Ice Cream v. Sealtest, 252 Ark. 1181, 483 S.W.2d 202 (1972). "A parol contract for personal services for a longer period than one year is within the Statute of Frauds, and no action can be maintained on it; and if the employee enter upon its performance and is afterwards discharged, the employer is liable only for his wages for the time he served." Id. at 1187, 483 S.W.2d 202.

However, although the point was not raised by either party, the application of the statute of frauds may well be determined by Wisconsin law since the contract was made in that state. The preeminent conflict of laws scholar Robert A. Leflar points out that "the modern cases deal with it as substantive, though a number of the older cases treated some sections of the statute as procedural." Leflar, American Conflicts Law, § 125, p. 248 (3d Ed. 1977). The Arkansas statute quoted above contains wording similar to section four of the original English statute while the applicable Wisconsin section is more akin to original section...