Adkins v. Inco Alloys Intern., Inc.
| Citation | 417 S.E.2d 910,187 W.Va. 219 |
| Decision Date | 24 June 1992 |
| Docket Number | No. 20218,20218 |
| Parties | , 126 Lab.Cas. P 57,545, 7 IER Cases 877 Lowell R. ADKINS, Robert C. Browning, Johnny E. Damron, Carroll V. Edmonds, Dewey R. Johnson, James E. Lewis, and Leland E. Pottorff, Plaintiffs Below, Appellees, v. INCO ALLOYS INTERNATIONAL, INC., a Delaware Corporation, John H. Tunderman, Charles S. Ferguson, Thomas Donnally and Michael Knight, Defendants Below. Inco Alloys International, Inc., Appellant. |
| Court | Supreme Court of West Virginia |
Syllabus by the Court
1. Syllabus Point 2, Cook v. Heck's, Inc., 176 W.Va. 368, 342 S.E.2d 453 (1986).
2. "Contractual provisions relating to discharge or job security may alter the at will status of a particular employee." Syllabus Point 3, Cook v. Heck's, Inc., 176 W.Va. 368, 342 S.E.2d 453 (1986).
3. Where an employee seeks to establish a permanent employment contract or other substantial employment right, either through an express promise by the employer or by implication from the employer's personnel manual, policies, or custom and practice, such claim must be established by clear and convincing evidence.
4. In order to establish an implied contract right by custom and usage or practice, it must be shown by clear and convincing evidence that the practice occurred a sufficient number of times to indicate a regular course of business and under conditions that were substantially the same as the circumstances in the case at issue. Such a showing is necessary to demonstrate the parties' implied knowledge of and reliance on the custom or practice, an essential element of such a contract.
5. "When the plaintiff's evidence, considered in the light most favorable to him, fails to establish a prima facie right of recovery, the trial court should direct a verdict in favor of the defendant." Syllabus Point 3, Roberts v. Gale, 149 W.Va. 166, 139 S.E.2d 272 (1964).
Joseph M. Farrell, Jr., James A. McKowen, Hunt & Wilson, Charleston, Charles M. Hatcher, Jr., Huntington, for appellees.
John E. Jenkins, Jr., Evan H. Jenkins, Jenkins, Fenstermaker, Krieger, Kayes & Farrell, Huntington, for appellant.
This is an appeal by the defendant below, INCO Alloys International, Inc. (INCO), from a judgment, entered on March 5, 1991, by the Circuit Court of Cabell County, which affirmed a jury verdict in favor of the plaintiffs below, all former INCO employees, in an action for breach of their contracts of employment. The jury found that INCO had terminated the plaintiffs' employment in violation of implied contractual seniority rights. The principal issue on appeal is whether such rights can arise solely from the past practices of the employer. We conclude that under certain circumstances, such rights may arise, but did not in this case. We, therefore, reverse the judgment of the circuit court.
INCO operates a metallurgical plant in Huntington, Cabell County. The most senior of the plaintiffs, Lowell R. Adkins, began working for INCO in March of 1960. The most junior, Leland E. Pottorff, was hired in August of 1973. Almost all of the plaintiffs began work at INCO as hourly employees, or operators, who were members of a union and protected by a collective bargaining agreement. The plaintiffs were subsequently promoted to the inspection department. As inspectors, the plaintiffs occupied a management position not covered by the collective bargaining agreement and were transferred to the weekly salary payroll.
It appears from the record that prior to 1979 there was a seniority system with regard to movement within the inspection department. Seniority lists were kept, and written notices of job vacancies or openings were posted. Inspectors who were interested in moving to those positions "bid" on them by signing the notice sheet. The job would be awarded to the qualified inspector with the most seniority. If an inspector's job was eliminated, he could "bump" a less senior inspector and take the latter's job. This system of bidding and bumping was also used to choose vacation and workshifts and to distribute overtime. It does not appear, however, that any inspector had bidding or bumping rights outside the inspection department.
In 1979, INCO reorganized the inspection department, setting up three types of inspectors: Quality Control Specialists, which required specific knowledge of a particular product, Quality Assurance Specialists, which required broad product knowledge, and Quality Control Specialists--Nondestructive Testing, which required technical training and certification to perform testing required by the government and other customers. At the same time, all inspectors were transferred from the weekly salary payroll to the monthly salary payroll, from which most management employees were paid. The system of bidding and bumping for jobs and perquisites ceased.
The plaintiffs contend, however, that the inspectors retained an informal seniority system of sorts after the 1979 reorganization. At least some job openings were reported to a manpower coordinator, who would orally notify area supervisors, who, in turn, would notify the inspectors. Those interested in applying for the position would do so through their supervisors or by contacting the manpower coordinator. If all qualifications for the job were equal, the most senior inspector who applied would usually be awarded the job. It appears, however, that not all job openings were filled through this process and that at least some reshuffling of positions was done solely by management decision. Inspectors continued to earn overtime and, in at least some areas of the inspection department, continued to bid for shifts and other perquisites.
In 1987, because of declining profits, INCO commissioned two separate studies of its operation. One study noted a chronic economic decline and recommended that INCO reduce its fixed costs by reducing the number of employees. The other study recommended, among other things, streamlining the inspection function by teaching the operators to inspect their own materials and products. INCO undertook to implement these recommendations, and the resulting reorganization brought about the loss of approximately 200 jobs at the Huntington plant, including the elimination of fourteen inspector positions. Approximately 100 employees took advantage of voluntary retirement options INCO offered in an effort to reduce the number of layoffs.
In September 1987, the plaintiffs and seven other inspectors were advised that their positions were being eliminated as a result of the reorganization. These inspectors were told that INCO would try to find jobs for them elsewhere in the plant, and they were asked to train the operators to take over the responsibilities of the eliminated positions. However, INCO was able to find jobs for only two of the fourteen inspectors. A third was subsequently fired for cause. In December of 1987, INCO discharged approximately 100 people, including the plaintiffs.
The plaintiffs subsequently filed suit against INCO in the Circuit Court of Cabell County, alleging that INCO had breached their employment contracts by firing them and retaining less senior personnel. 1 Trial commenced on November 7, 1990. On December 3, 1990, the jury found in favor of the plaintiffs, awarding them over $2.6 million in damages. INCO's motions for a new trial and for judgment notwithstanding the verdict were denied by order of the circuit court dated March 5, 1991. It is from this order that INCO now appeals.
It is undisputed that the plaintiffs had no written contract of employment. The plaintiffs' breach of contract claim is, instead, premised on their assertion that INCO's conduct and prior dealings with them gave rise to an implied contract of employment requiring INCO to use seniority in making all employment decisions. INCO insists that the plaintiffs were at-will employees and that there were no enforceable contractual limitations on its right to fire them. 2
The plaintiffs rely, in part, on principles established in Cook v. Heck's, Inc., 176 W.Va. 368, 342 S.E.2d 453 (1986). The plaintiff employee in Cook had no written contract of employment. The employer, however, had distributed to its employees a handbook or policy manual which set forth a supposedly complete list of the reasons for which an employee could be fired. The plaintiff, who had been fired for other reasons, alleged that the handbook gave rise to an implied employment contract which permitted her to be discharged only for the reasons stated. The employer asserted that the plaintiff was an at-will employee who could be fired for any reason or for no reason at all. The circuit court entered a directed verdict in favor of the employer.
On appeal, we recognized, in Syllabus Point 2 of Cook, that an oral contract of employment for an indefinite period of time is presumed to give rise to an "at-will" employment relationship:
See Harless v. First Nat'l Bank in Fairmont, 162 W.Va. 116, 246 S.E.2d 270 (1978). We also recognized, however, that the presumption may be overcome by evidence of contractual provisions to the contrary. In Syllabus Point 3 of Cook, we stated:
"Contractual provisions relating to discharge or job security may alter the at will status of a particular employee."
See Bell v. South Penn Natural Gas Co., 135 W.Va. 25, 62 S.E.2d 285 (1950).
We noted in Cook that in other jurisdictions, promises of job security in an employee handbook...
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