Brannan v. Wyeth Laboratories, Inc.

• Decision Date: 09 November 1987
• Docket Number: No. 87-CA-349,87-CA-349
• Citation: 516 So.2d 157
• Parties: 3 Indiv.Empl.Rts.Cas. (BNA) 61 Edwin P. BRANNAN v. WYETH LABORATORIES, INC., and American Home Products Corporation. Fifth Circuit
• Court: Court of Appeal of Louisiana — District of US

Page 157

516 So.2d 157

3 Indiv.Empl.Rts.Cas. (BNA) 61

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

No. 87-CA-349.

Court of Appeal of Louisiana

Fifth Circuit.

Nov. 9, 1987.

Writ Granted Jan. 29, 1988.

Partee, Waldrip, Mott, Tynan & Evans, Barbara Ryniker Evans, New Orleans, for defendants-appellants.

Post & Reinhardt, William H. Reinhardt, Jr., William M. McGoey, Metairie, for plaintiff-appellee.

Before CHEHARDY, C.J., and BOWES and GOTHARD, JJ.

CHEHARDY, Chief Judge.

This appeal arises from a jury verdict rendered in favor of plaintiff, Edwin P. Brannan, and against defendants, Wyeth Laboratories, Inc. (Wyeth), and American Home Products Corporation (AHPC), in a suit for breach of an employment contract, defamation, wrongful denial of stock option rights and wrongful denial of dental benefits. Damages were awarded to plaintiff in the amounts of $300,000 for breach of the employment contract; $250,000 for defamation; $40,000 for the stock option rights; and $350 for dental benefits.

In 1964 plaintiff interviewed with Wyeth and its parent corporation, AHPC, for a position in pharmaceutical sales. At the time he was employed as a research chemist with Louisiana State University Medical School, a position enjoying the security of civil service. After two interviews, the first with District Manager Frank Messina and the second with Messina and Division Manager Bernard Kaiser, plaintiff was hired. He was sent to Memphis, Tennessee, for training and ultimately received a sales territory in the New Orleans, Louisiana, area. Eighteen years later, in October 1982, plaintiff was terminated for falsifying doctor call reports.

After being fired, plaintiff requested Wyeth to pay certain dental bills incurred on behalf of his children, which the company refused to do. Plaintiff also attempted to exercise a portion of his stock option rights. The stock option plan provided the employee with the right to purchase company stock at a previously fixed amount within 90 days after termination, except in cases of voluntary termination or for termination for gross misconduct. The company refused this request as well.

As a result of his termination and the denial of his benefits, plaintiff filed suit for breach of an oral employment contract in which he alleged he had an oral contract with Wyeth which assured him employment and which provided that he would not be terminated except for just cause. He further alleged that subsequent to his termination certain Wyeth employees informed members of the pharmaceutical industry that he had been fired for not working, for falsifying reports, and for pursuing personal activities on company time--all of which plaintiff denied. Plaintiff also sought damages for the company's refusal to allow him to exercise his stock option rights and for the dental payments they refused to pay.

During the period preceding trial, defendants filed several peremptory exceptions of no cause of action and motions for summary judgment, all of which were denied, as was a writ taken to this court on those issues. (Brannan v. Wyeth Laboratories, Inc., and American Home Products Corporation, No. 86-C-220, April 9, 1986).

The case finally went to trial on November 10, 12 and 13, 1986, before a 12-person jury. Following the trial, the jury returned the above-mentioned verdict. Defendants then filed a motion for judgment notwithstanding the verdict (judgment N.O.V.). After the motion was denied, defendants perfected this appeal and plaintiff cross-appealed.

On appeal defendants assert the trial judge erred in denying their peremptory exception of no cause of action, their motion for summary judgment, their motions for directed verdict and/or for judgment N.O.V. on the contract claim. Defendants also contend that the jury was erroneously instructed; that the trial court erred in refusing to admit evidence at trial of plaintiff's subsequent employment and his termination therefrom; that the trial court erred in refusing to admit evidence of plaintiff's work history with defendant Wyeth; and that the verdict and the award were manifestly erroneous as to the contract claim. Defendants further assert the trial court erroneously denied their exception of no cause of action and their motion for summary judgment on the defamation claim; that the trial judge erred in denying their motions for directed verdict and judgment N.O.V. on the defamation claim, the stock option claim and the dental claim; and that the verdict and award were manifestly erroneous as to all of those demands.

In his cross-appeal, plaintiff asserts the jury erred in its award for the breach of employment contract. In this respect plaintiff contends the jury failed to award plaintiff the full amount due him for the entire term of the contract pursuant to LSA-C.C. art. 2749.

Our initial inquiry in this case is whether defendants' peremptory exception of no cause of action and/or their motion for summary judgment should have been granted by the trial court as to the contract claim.

The peremptory exception of no cause of action is designed to determine the sufficiency in law of the plaintiff's petition. Darville v. Texaco, Inc., 447 So.2d 473 (La.1984). The exception is triable solely on the face of the petition and for the purpose of determining the exception, the well-pleaded facts in the petition must be accepted as true. LSA-C.C.P. art. 927; Darville, id. The exception must be overruled unless the allegations of the petition show plaintiff has no cause of action under any evidence admissible under the pleadings. Darville, id. If the allegations of the petition set forth a cause of action as to any part of the demand, the exception must be overruled. Leenerts Farms, Inc. v. Rogers, 421 So.2d 216 (La.1982); Gulf Oil Corp. v. Marine Concrete Structures, Inc., 464 So.2d 829 (La.App. 5 Cir.1985), writ denied, 468 So.2d 1208 (La.1985).

The petition filed by plaintiff initially asserted that plaintiff had an oral agreement with defendants and that he was terminated arbitrarily, capriciously, unreasonably and without just or lawful cause. The petition was subsequently amended in response to defendants' first exception of no cause of action to state the employment was for a definite term, that is, so long as defendant Wyeth did not have reason or cause to terminate him, the causes being enumerated in the company manual. The petition further added an allegation that plaintiff was entitled to notice and an opportunity to correct any alleged violations prior to termination as provided by the employment manual. Plaintiff alleged he was entitled to such notice and probation whether or not the contract was for a fixed term.

Where an employee is employed for an indefinite term, Louisiana law generally provides the employment relationship is terminable at the will of either party. Pechon v. National Corporation Service, 100 So.2d 213 (La.1958); Williams v. Delta Haven, Inc., 416 So.2d 637 (La.App. 2 Cir. 1982). Absent a specific contract or agreement establishing a definite term of employment, the employer may dismiss the employee for any reason without incurring liability. LSA-C.C. art. 2747; Williams, id.; Gil v. Metal Service Corp., 412 So.2d 706 (La.App. 4 Cir.1982), writ denied, 414 So.2d 379 (La.1982); Jackson v. East Baton Rouge Parish School Bd., 393 So.2d 243 (La.App. 1 Cir.1980).

In a fixed-term contract, the breach of the agreement by the employer entitles the employee to the wages he would have received had he worked for the full term. LSA-C.C. art. 2749. Generally the contract may not extend beyond 10 years. The source of the 10-year rule is found in LSA-C.C. art. 167 and is used in conjunction with LSA-C.C. art. 2746, which states a laborer may only hire his services for a limited time. That time limitation, however, does not apply where there is special consideration. Pitcher v. United Oil and Gas Syndicate, Inc., 139 So. 760 (La.1932); Simmons v. Westinghouse Electric Corporation, 311 So.2d 28 (La.App. 2 Cir.1975).

While the jurisprudence has for the most part rigidly adhered to these rules, the courts have deviated from the strict interpretation of the articles under some circumstances. Recovery is not precluded and the employer may be bound where the employer has made promises to the employee related to a job disability. Aguillard v. Lake Charles Stevedores, Inc., 284 So.2d 124 (La.App. 3 Cir.1973), writ denied, 286 So.2d 663 (La.1973); see also, Freeman v. Elbilco, 338 So.2d 967 (La.App. 4 Cir.1976). Likewise, the employer may be liable in damages where the firing is deemed to be outrageous conduct. Maggio v. St. Francis Medical Center, Inc., 391 So.2d 948 (La.App. 2 Cir.1980), writ denied, 396 So.2d 1351 (La.1981).

The law on employment contracts favors the termination-at-will concept for employment without a fixed term. However, as seen by the above cases, it does not totally prohibit an employer from modifying or altering its right to terminate at will employees hired for an indefinite term. In Williams, supra, and Morgan v. Avondale Shipyards, 376 So.2d 516 (La. App. 4 Cir.1979), the courts noted if the employer wishes to contract that the terminable-at-will employee will not be terminated except for just cause, there is no reason the courts will not enforce such an agreement. Modification of this right to fire at will, however, must be shown by a specific contract or agreement. Williams, supra. (But see Westinghouse, supra, stating the agreement must be supported by extra consideration.)

In determining whether an employment agreement exists, the personnel manuals and related documents do not per se constitute the contract. Williams, supra; Terrebonne v. La. Ass'n of Educators, 444 So.2d 206 (La.App. 1 Cir.1983). Those documents, however, may be used as supporting evidence of an oral agreement.

In this case plaintiff's petition asserts he and Wyeth entered into an oral contract and...