Eastman v. Chicago, Cent. & Pacific R. Co. (CC & P)

• Decision Date: 19 April 1991
• Docket Number: No. 90-1058,90-1058
• Citation: 930 F.2d 1173
• Parties: 120 Lab.Cas. P 56,723 Wayne A. EASTMAN, Jr., Plaintiff-Appellant, v. CHICAGO, CENTRAL & PACIFIC RAILROAD COMPANY (CC & P), Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1173

930 F.2d 1173

120 Lab.Cas. P 56,723

Wayne A. EASTMAN, Jr., Plaintiff-Appellant, v. CHICAGO, CENTRAL & PACIFIC RAILROAD COMPANY (CC & P),

Defendant-Appellee.

No. 90-1058.

United States Court of Appeals, Seventh Circuit.

Argued Nov. 6, 1990.

Decided April 19, 1991.

Carlton E. Odim, Chicago, Ill., for plaintiff-appellant.

James A. Fletcher, David B. Potter, Lois K. Winston, Oppenheimer, Wolff & Donnelly, Chicago, Ill., for defendant-appellee.

Before BAUER, Chief Judge, FLAUM, Circuit Judge, and ESCHBACH, Senior Circuit Judge.

BAUER, Chief Judge.

The issue in this appeal is whether the Chicago, Central & Pacific Railroad Company ("CC & P") made, and then breached, an oral contract for permanent employment with Wayne Eastman. The jury thought so, and awarded Eastman damages for wrongful discharge. But the district court judge disagreed. In fact, the court believed that no verdict in Eastman's favor could ever stand and, accordingly, granted CC & P's motion for judgment notwithstanding the verdict ("JNOV"). For the reasons discussed below, we affirm.

I

Wayne Eastman was a railroad man. Beginning in January 1969, he worked eighteen years for the Illinois Central Gulf Railroad ("ICG"). By early 1986, Eastman had advanced to the management position of "trainmaster" with the ICG. Eastman also had acquired substantial seniority in his union. As a result of the combination of that seniority and a merger protection agreement in effect at ICG, Eastman's position at ICG was "permanent," meaning that, should he lose his management position with ICG, he was guaranteed employment (at a substantially lower salary) within the union ranks.

In late 1985, ICG--which by that time had become "IC Industries," a diversified holding company--began selling off its lines to other railroads. Seeing the handwriting on the wall, Eastman started looking for jobs with likely purchasers of ICG's lines and other railroads in the Chicago region. (Eastman had worked for many years in ICG's Chicago yards and wanted to keep his family here.) A few months later, in February 1986, Eastman got a call from Terry Hearst, vice president of transportation at CC & P. CC & P, a new railroad company, had purchased some of ICG's lines west of Chicago, and some ICG employees had already gone over to CC & P after that sale. Hearst, himself a former ICG employee, was calling to see if Eastman, too, would be interested in coming over to CC & P. Hearst told Eastman that CC & P was "having a lot of problems" because many inexperienced people had been hired. To address these problems, Hearst was planning to create a new "superintendent" position and fill it with someone who had significant management experience in the rail industry. The superintendent basically would oversee the operations of CC & P's lines between Chicago and Galena. Hearst confided that Eastman's name was "on the top of the list" for that new position, and asked him if he was interested. Eastman assured Hearst that he was indeed interested, so they scheduled an interview to take place a few days later at CC & P's offices in Waterloo, Iowa.

What occurred at that interview in February 1986--the substance of the conversations between Eastman and Hearst, promises and statements that were and were not made, etc.--is the critical factual question upon which this case depends. Thus, we must focus in some detail on the record evidence concerning that meeting.

For his part, Eastman offered only his own recollections of the meeting. According to Eastman's testimony, he and Hearst spent a long afternoon together, during which they toured the Waterloo facilities and talked about the future of the fledgling CC & P and Eastman's potential role in it. Hearst was very positive, telling Eastman that CC & P was "all psyched up and raring to go." Hearst also told Eastman, according to Eastman's testimony, that the CC & P needed a superintendent who could "step in and take charge of the railroad." Eastman testified that he was concerned with leaving the ICG and losing the union security he had built up there, and that he shared that concern with Hearst. According to Eastman, Hearst told him that he, too, had worried a great deal about the stability and security he had sacrificed when he left the ICG. But Hearst assured Eastman, "This is the place to be." Still concerned, Eastman "flat out asked [Hearst], 'What is going to happen down the road?' "

Q [Plaintiff's counsel]: What did he say when you asked him that question?

A [Eastman]: He assured me that there would be a job down the road. He said, "I'm not sure right now whether you are going to end up as superintendent with the east half of the railroad ... or you are going to end up as area manager in Chicago." ... But he assured me I would have a job with the CC & P. It wasn't a bandaid approach: "Come in and fix my railroad and you're gone." ...

Q: ... [D]id he make any comment with regard to your giving up the union security?

A: Well, I told Mr. Hearst that they would have to match my security that I was giving up. I had security with my union, ... and I told him I could not go over to the CC & P without assurances and guarantees that I would have a job. I wasn't going to give all this up to come over on a whim....

Q: What did he say in response to those concerns that you expressed?

A: He told me not to worry.... [O]nce the railroad was up and running and these beginning problems were over, I would either be superintendent or I'd be area manager. He told me I would have a job, and I was assured I would have a job.

Q: Did he tell you for how long you would have a job?

A: We didn't use exact words or references, but it was, you know, it was a forever type attitude.... You know, we talked long-term, we talked plans, we talked future, we talked security.

Q: Would you say he was matching your union security?

A: The security I was giving up, ... what I had [at ICG], he said I'd have it. He told me not to worry....

Transcript of Proceedings on July 26, 1989 ("Trial Tr."), Vol. 2, at 21-24.

On cross-examination, Eastman admitted that, at least going into the interview, he was concerned because "it was a newly created job" and he "did not know if it was going to be permanent." When pressed as to the exact words used by Hearst, Eastman could not recall whether the word "permanent" was ever used, nor could he swear that Hearst ever described the job as "guaranteed." To the question "Did he tell you you had the job for the rest of your life?", Eastman responded, "I don't believe he used that term." CC & P's counsel pressed Eastman further, which resulted in the following exchange:

Q [Defendant's Counsel]: But did he tell you that that job was going to be around for as long as you wanted it?

A [Eastman]: No, I can't say in that many words, you know, exactly what words he said, but he told me I would have the job there as long as we wanted it, yes.

Trial Tr., Vol. 2, at 93-97. Finally, on cross-examination, Eastman explained that he never asked Hearst to put any of these assurances into writing because "it is not common practice in the rail industry," and Eastman admitted that he knew of no one else at either CC & P or ICG who had a guaranteed job. Id. at 97-101.

Hearst's account of the events and conversations was quite different. Hearst, who had left the employ of CC & P over one year before the trial on Eastman's claim, denied ever making the kind of assurances described by Eastman:

Q [Defendant's counsel]: At any time in your interview with Mr. Eastman that day, Mr. Hearst, did you tell him that he would have that superintendent's job for the rest of his life?

A [Hearst]: No.

Q: Did you ever tell him at any time during the interview that that job would be guaranteed, guaranteed for as long as he was willing to work at it?

A: Never.

Q: Now, when you offered the job to Mr. Eastman that day, did he tell you that he couldn't leave his position at the [ICG] ... unless you gave him a guarantee that he would have a job with the [CC & P] for as long as he wanted?

A: No, we never discussed guarantees.

Trial Tr., Vol. 1, at 37-38. See also id. at 41 (wherein Hearst testified that at no time either before or after Eastman was terminated by CC & P did he (Hearst) tell him the job was "guaranteed"). Hearst added that not a single management employee at the CC & P had a guaranteed job, and that he, in fact, was not authorized to offer such a job. Id. at 38-39. ¹ Further, according to Hearst, the job security Eastman had at ICG and the "permanent" status of his job there were never discussed, neither in the telephone conversations between Eastman and Hearst nor at the interview in Waterloo. Id. at 27 & 31-32.

Both Eastman's and Hearst's accounts agree on this much: at the end of their afternoon together, Hearst offered Eastman the superintendent position and asked him to think about it. Eastman accepted the job on the spot. The salary was $45,000 per year, $2,000 to $3,000 per year higher than Eastman's salary as a trainmaster at ICG. CC & P also gave Eastman other perks he did not have at ICG, including the use of a brand new company car, the possibility of a performance-related bonus, and regular, daytime hours (Eastman's hours at ICG had been from 4:00 pm to 2:00 am).

The day after his interview in Waterloo, Eastman met with his boss at ICG and gave his two weeks' notice. Eastman then collected a $22,820 severance payment from ICG in return for, among other things, the release of his rights under ICG's merger protection agreement. His employment at ICG concluded, Eastman began working at CC & P in early March 1986. In Eastman's first few months at the superintendent position, all indications were that he was performing well. Eastman testified that both Hearst and Jack Haley, the president of CC & P, gave him positive reviews of his work. Then, in mid-1986, CC & P experienced further financial problems. Haley decided to reorganize the...