Lytle v. Malady

• Decision Date: 01 July 1998
• Docket Number: Docket No. 102515,No. 11,11
• Citation: 458 Mich. 153,579 N.W.2d 906
• Parties: , 73 Empl. Prac. Dec. P 45,430 Nancy LYTLE, Plaintiff-Appellee, v. Michael MALADY and Howmet Corporation, a Delaware Corporation, Defendant-Appellant.(On Rehearing) Calendar
• Court: Michigan Supreme Court

Page 906

579 N.W.2d 906

458 Mich. 153, 73 Empl. Prac. Dec. P 45,430

Nancy LYTLE, Plaintiff-Appellee, v. Michael MALADY and Howmet Corporation, a Delaware

Corporation, Defendant-Appellant.(On Rehearing)

Docket No. 102515.

Calendar No. 11.

Supreme Court of Michigan.

Argued Jan. 6, 1998.

Decided July 1, 1998.

Bott & Spencer, P.C. by Timothy J. Bott and Karen M. Spencer, Muskegon, for Plaintiff-Appellee.

Varnum, Riddering, Schmidt & Howlett, L.L.P. by Joseph J. Vogan and Paul M. Kara, Grand Rapids, for Defendant-Appellant.

Miller, Canfield, Paddock & Stone by Charles S. Mishkind, Grand Rapids, amicus curiae, for Michigan Chamber of Commerce.

ON REHEARING

Opinion

WEAVER, Justice.

We granted rehearing in this case to clarify the evidentiary standard that plaintiff, alleging age and gender discrimination, must satisfy to survive summary disposition under MCR 2.116(C)(10). We hold that even when an employer's decision to reduce its work force is deemed bona fide, a plaintiff may survive a motion for summary disposition by presenting sufficient admissible evidence to create a reasonable factual dispute that the employer's proffered reason was a mere pretext and that age or gender discrimination was a true motivation behind plaintiff's discharge. In this case, we find that plaintiff failed to provide sufficient evidence, direct or circumstantial, to allow a reasonable trier of fact to find in this case that the Howmet Corporation's (defendant-employer's), reduction in work force (RIF) was a mere pretext for discriminatory animus.

We also granted rehearing to decide whether the employer's policy handbook provisions could reasonably have created a legitimate expectation of just-cause employment. We hold that plaintiff cannot assert a legitimate expectation of just-cause employment based on the employer's policy to terminate only for cause, particularly where the handbook specifically disclaims any intent to create contractual or binding obligations to employees. Moreover, we reject plaintiff's claim that her supervisor's assurances regarding secure employment were sufficient to allow a reasonable juror to find just-cause employment.

Accordingly, we reverse the decision of the Court of Appeals with regard to defendant-employer, ¹ and affirm the trial court's grant of summary disposition for the employer with regard to plaintiff's wrongful discharge claim and her age and gender discrimination claims.

I

A

On January 29, 1973, plaintiff Lytle was hired by the employer as a general clerk in the human resources department at its Whitehall site. Plaintiff's first immediate supervisor was John Ozar. While plaintiff worked with Ozar, she received several favorable performance evaluations and two promotions, one in 1976 and another in 1979, when she was promoted to manager of the entire Whitehall human resources department.

About this time, Ozar hired Walter Boczkaja as plaintiff's subordinate trainee, a position he held for ten years until 1989, when he assumed plaintiff's position as department manager. Boczkaja received a series of departmental promotions during his first two years of employment while working under plaintiff's direction.

During 1984-85, Ozar retired and was replaced by William Roof, who then decided to decentralize the department, thereby allowing the Whitehall division to have its own human resources representative. Roof also hired defendant Malady as head of the Whitehall Machine Products Division and, therefore, as plaintiff's new supervisor.

Plaintiff and her new supervisor, Malady, developed a personality conflict. Plaintiff claimed the conflict stemmed from a September 1987 incident when she refused to wear a dress to a company "open house." Plaintiff alleged that Malady told her all the "girls" should wear dresses to this company picnic event. Shortly thereafter, Malady gave her an unfavorable job evaluation, her first in her time with the company. ² Plaintiff claimed other similar incidents followed. ³ Plaintiff received her second critical performance evaluation in September 1987. Two years later, in January 1989, Malady recommended, and Roof approved, a change in plaintiff's job title. ⁴ Although her salary and job duties remained the same, plaintiff claimed this change constituted a demotion. Plaintiff retained this newly entitled position until her November 1, 1991, discharge.

The day plaintiff was demoted in 1989, Boczkaja, her subordinate and one-time trainee, assumed her position as "employer manager" of the department.

In November 1991, when plaintiff was forty-four years of age, she was notified that her position was being eliminated pursuant to the employer's reduction in force. To rebut the presumption of discrimination, the employer showed that the company-wide RIF was prompted by a projected significant decline in company sales. ⁵ The employer provided statistical data to establish that between 1987 and 1992 the number of employees in Whitehall was reduced by almost fifty percent (from 4,100 to 2,450) and that in 1991 the RIF resulted in termination of ninety-one employees, only fifty-four of whom were under the age of forty and sixty-eight of whom were male.

Six months before plaintiff's discharge, the employer hired Andrea Achterhoff as human resources manager of a different department. About that same time, the employer also effected a transfer of Jeff Billingsley to the training section of plaintiff's department. Billingsley was specifically transferred to facilitate training of a new manufacturing concept, a job he had been performing for the previous two years in another department.

Boczkaja completed plaintiff's termination evaluation on November 22, 1991. Her supervisor, Malady, accepted the evaluation, which indicated that plaintiff should be rehired should a nonsupervisory, administrative position become available. Meanwhile, upon discharge, plaintiff's duties were distributed among other departmental employees.

Roughly two months later, on January 7, 1992, plaintiff filed a complaint against the employer and her supervisor, alleging wrongful discharge, or breach of a "just-cause" employment contract, and age and gender discrimination in violation of Michigan's Civil Rights Act, M.C.L. § 37.2202; M.S.A. § 3.548(202).

B

Plaintiff's breach of contract claim was premised on two theories. First, plaintiff asserted that she legitimately expected that her employment would not be terminated except for just cause, given certain employee handbook provisions and verbal assertions. Second, plaintiff further claimed that in 1979 she told Ozar that she was considering resigning, in response to which he assured plaintiff that her employment was not only secure, but subject to further advancement.

With respect to the legitimate-expectation claim, at the time she was hired in 1973, plaintiff received an employee handbook that set forth all the employer's employment policies and procedures. Specifically the handbook provided:

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.]

Regarding employment status, the handbook stated that a probationary period existed during which both employer and employee could evaluate whether to continue the employment relationship. That same section also included the following statement:

No employee will be terminated without proper cause or reason and not until management has made a careful review of the facts.

In 1981, the employer added the following disclaimer to the handbook: "[T]he Company reserves the right to terminate employees without assigning cause; therefore, the employee serves at the will of the employer." Generally, only new employees received direct notification of this disclaimer, which was affixed to handbooks distributed to new employees. Plaintiff's job duties, however, included supervising employees who actually placed such notices in the new handbooks. When she noticed the policy, plaintiff claims she asked a co-worker if it applied to her and was told it only applied to new employees.

C

Pursuant to MCR 2.116(C)(10), both defendants moved for summary disposition, which the circuit court granted with respect to all counts.

The Court of Appeals partially reversed and remanded. 209 Mich.App. 179, 530 N.W.2d 135 (1995). ⁶ This Court granted leave to appeal, ⁷ and issued a divided opinion in which the majority affirmed the decision of the Court of Appeals, finding that plaintiff reasonably could have had a legitimate expectation of just-cause employment. The majority reversed the Court of Appeals, however, by finding that plaintiff failed to present evidence demonstrating the existence of bad faith on behalf of defendant-employer in employer's decision to conduct a reduction in force (RIF). The majority further affirmed the Court of Appeals holding that plaintiff raised a genuine issue of fact with respect to whether the defendant-employer discriminated against her on the basis of her age and gender. 456 Mich. 1, 566 N.W.2d 582 (1997).

We granted the reconsideration motions filed by both parties to again consider the issues presented in this case. 456 Mich. 1202 (1997).

II

Plaintiff claimed she was wrongfully discharged because her employment could only be terminated for just cause. Generally, and under Michigan law by presumption, employment relationships are terminable at the will of either party. Lynas v. Maxwell Farms, 279 Mich. 684, 687...