Brannan v. Wyeth Laboratories, Inc.

• Decision Date: 23 May 1988
• Docket Number: No. 87-C-2667,87-C-2667
• Citation: 526 So.2d 1101
• Parties: Edwin P. BRANNAN v. WYETH LABORATORIES, INC. and American Home Products Corporation. 526 So.2d 1101, 3 Indiv.Empl.Rts.Cas. (BNA) 609
• Court: Louisiana Supreme Court

Page 1101

526 So.2d 1101

Edwin P. BRANNAN v. WYETH LABORATORIES, INC. and American Home Products Corporation.

No. 87-C-2667.

526 So.2d 1101, 3 Indiv.Empl.Rts.Cas. (BNA) 609

Supreme Court of Louisiana.

May 23, 1988.

Rehearing Denied Sept. 8, 1988.

Barbara Ryniker Evans, Kimberly Wooten, Partee, Waldrip, Mott, & Evans, New Orleans, for applicant.

William Reinhardt, Jr., Post, Reinhardt & Rougelot, William McGoey, Metairie, for respondents.

Charles R. Moore, Baton Rouge, James Wysocki, New Orleans, Louisiana Trial Lawyers Ass'n, Baton Rouge, Louis L. Robein, Jr., Magdalen C. Blessey, Gardner, Robein & Healey, Metairie, amicus curiae for Louisiana Trial Lawyers Ass'n Stephen D. Ridley, Andrew P. Burnside, McCalla, Thompson, Pyburn & Ridley, New Orleans, amicus curiae for Louisiana Ass'n of Business and Industry and the Chamber/New Orleans and the River Region.

DIXON, Chief Justice.

Edwin P. Brannan sued his former employer, Wyeth Laboratories, Inc. and American Home Products Corporation (AHPC), for breach of an employment contract, defamation and wrongful denial of stock option rights and dental benefits. A jury verdict was rendered in plaintiff's favor awarding plaintiff damages of $300,000 for breach of employment contract, $250,000 for defamation, $40,000 for the stock option rights and $350 for dental benefits. The court of appeal affirmed. Brannan v. Wyeth Laboratories, Inc. and American Home Products Corp., 516 So.2d 157 (La.App. 5th Cir.1987). We reverse in part and affirm in part.

Plaintiff began work with Wyeth and its parent corporation, AHPC, on September 1, 1964 as a pharmaceutical salesman or detailman, and eighteen years later, on October 8, 1982, he was terminated for falsifying doctor call reports. Plaintiff had previously been employed at the Louisiana State University Medical School as a research chemist, where he was a civil service employee. Plaintiff testified that he was concerned about job security when he was considering employment with Wyeth. He said the two people who interviewed him at Wyeth, Division Manager Bernard Kaiser and District Manager Frank Messina, made it clear to him that he was applying and being interviewed for a permanent position, and he would be able to keep the job as long as he performed. Plaintiff says it was also stated that Wyeth had a policy not to terminate without reasonable, just cause. Also if there was some problem with his employment, it would be pointed out, and if it was serious, he would be put on probation and given an appropriate length of time in which to correct it. If it was not corrected, then termination was a possibility. These are the conditions under which plaintiff says he accepted the position at Wyeth.

These assurances along with a number of documents signed subsequent to his employment are what plaintiff relies on in his contention that he had an oral employment contract for a definite term--until he reached retirement age at sixty-five. Plaintiff submitted documents to support this alleged contract. Most of these documents are standard forms which refer to the employee reaching the normal retirement age of sixty-five, or refer to plaintiff's expected date of retirement, October 1, 2004. These documents include: (1) an Aetna Life Insurance policy; (2) three documents captioned "Your Personal and Confidential Report of Employee Benefits for" 1970, 1971, and 1972; (3) a letter dated August 7, 1972 from H.W. Blades, Chairman of Wyeth, and signed also by Charles Kerns, President of Wyeth, outlining the improvement in the retirement plan; (4) internal correspondence from J.F. Johnson, Vice President of Industrial Relations of Wyeth; and (5) a Retirement Plan booklet and letter from John Culligan, President of AHPC, and Lowell F. Johnson, Vice President. Plaintiff also submitted an agreement dealing with the proper handling of samples which states that violation of this policy is just cause for dismissal, and an employment agreement dated June 20, 1974 in which the employee agrees not to engage in other similar work, not to disclose company secrets, and agreeing that anything developed, discovered or patented by the employee will be turned over to Wyeth. Finally, plaintiff submitted a Territory Managers Manual, dated June 4, 1979, in which Sec. 301 refers to performance appraisal and indicates that if an employee's performance is not up to the required standard, he can be put on a performance improvement program. If performance does not improve, the employee can be put on probation.

Plaintiff was placed on a performance improvement program in September, 1979 in order to increase his number of daily doctor calls and because he was not following the plan promotion program. According to plaintiff's supervisor, Frank Messina the expected number of calls was seven calls per day. Before September, 1979 plaintiff was making an average of just over six calls a day, and his average did not change during or after the performance improvement program in January, 1980.

Plaintiff received raises each year he was employed with Wyeth, although, according to Messina, they were tied into his sales, and were not the highest raises given. Plaintiff also showed an increase in sales over the years of his employment which Messina said was partially due to new products and increased prices. Plaintiff's territory included East Jefferson Parish, which was the fastest growing parish in Louisiana.

In 1982 Messina received calls from Dr. Thomas Dunn and Marlene Armbruster, a Registered Nurse who worked for Dr. Andrew Rinker, complaining about attempts to place orders with or get in touch with plaintiff. Dr. Dunn testified that in the spring of 1982 he wanted to place an order for a Wyeth First Aid Kit for his church. Dr. Dunn notified his receptionist that he wanted to see the Wyeth representative on his next visit. At about three week intervals Dr. Dunn would receive reminders from the church about the first aid kit, and Dr. Dunn felt embarrassed when he was reminded for the third time. At that point he had his office pharmacist call Wyeth. A few days later Messina came to take the order. Plaintiff's call reports indicated that he had called on Dr. Dunn five times from January, 1982 to August, 1982. Dr. Dunn testified that he would be surprised if it were that many times.

Armbruster testified that she had problems placing orders with Wyeth and asked plaintiff to call every two or three weeks to avoid hassles with ordering drugs for Dr. Rinker's office. She testified that she called plaintiff at home at night to place orders or leave messages on his answering machine. Despite her requests, plaintiff did not make calls every two or three weeks. She testified that her problems with placing orders with plaintiff went back a number of years. She called Messina to complain about her attempts to get in touch with plaintiff. Armbruster prepared a drug survey for several years to show how much business her office did with Wyeth and to show that they needed service.

The complaint from Dr. Rinker's office precipitated an investigation by Messina at the direction of James French, a division manager for Wyeth. Messina conducted a two day surveillance of plaintiff and also visited a number of doctors plaintiff had reported having visited. This investigation brought about plaintiff's termination on October 8, 1982 for falsifying "doctor call" reports. French and Messina testified that plaintiff admitted not having called on Drs. Sterling Dunn, Sara Lain, Jefferson Steele and Ronald Martz on September 16, 1982 and Dr. Dabney Ewin on September 17, 1982, although his call reports indicated he had made these calls. In his testimony, plaintiff denied having admitted he did not make these calls. Plaintiff was given the option of resigning, but he refused.

BREACH OF EMPLOYMENT CONTRACT

Several articles of the Louisiana Civil Code are pertinent to this issue:

"Persons who have attained the age of majority cannot bind themselves for a longer term than ten years." C.C. art. 167.

"A man can only hire out his services for a certain limited time, or for the performance of a certain enterprise." C.C. art. 2746.

"A man is at liberty to dismiss a hired servant attached to his person or family, without assigning any reason for so doing. The servant is also free to depart without assigning any cause." C.C. art. 2747.

"A contract of unspecified duration may be terminated at the will of either party by giving notice, reasonable in time and form, to the other party." C.C. art. 2024.

There is a consistent line of jurisprudence in this state holding that an employment contract for life or for an indefinite term is terminable at the will of either party. Pechon v. National Corporation Service, Inc., 234 La. 397, 100 So.2d 213 (1958); United Credit Co., Inc. v. Croswell Co., Inc., 219 La. 993, 54 So.2d 425 (1951); Page v. New Orleans Public Service Inc., 184 La. 617, 167 So. 99 (1936); Jackson v. The East Baton Rouge Parish Indigent Defender's Board, 353 So.2d 344 (La.App. 1st Cir.1977), writ denied, 354 So.2d 1385 (La.1978). Also a contract for longer than the time provided in art. 167, which is presently ten years, is void. Hill v. Missouri Pacific Ry., 8 F.Supp. 80 (W.D.La.1934); Lowther v. Fireside Mutual Life Insurance Co., 228 La. 946, 84 So.2d 596 (1955). In Pitcher v. United Oil & Gas Syndicate, 174 La. 66, 139 So. 760, 761 (1932), this court held that a contract for employment as long as the employer-master is operating is a contract for an indefinite period, and without other consideration from the employee-servant than services to be rendered, the contract is terminable at the will of either party. In Pitcher the court elaborated on the reasons behind this law:

"... An employee is never presumed to engage his services permanently, thereby cutting himself off from all chances of improving his condition; indeed, in this land of opportunity it would be against public policy and...