O'Brien v. New England Tel. & Tel. Co.

• Decision Date: 17 May 1996
• Citation: 664 N.E.2d 843,422 Mass. 686
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: , 132 Lab.Cas. P 58,150, 11 IER Cases 1221 Mary C. O'BRIEN v. NEW ENGLAND TELEPHONE & TELEGRAPH COMPANY & another. 1

Page 843

664 N.E.2d 843

422 Mass. 686, 132 Lab.Cas. P 58,150,

11 IER Cases 1221

Mary C. O'BRIEN v. NEW ENGLAND TELEPHONE & TELEGRAPH COMPANY & another.¹

Supreme Judicial Court of Massachusetts Hampden.

Argued Dec. 5, 1995.

Decided May 17, 1996.

Pamela A. Smith, Boston, for defendants.

Edward J. McDonough, Jr. (William C. Flanagan with him), Springfield, for plaintiff.

Stephen S. Ostrach, Boston, for New England Legal Foundation, amicus curiae, submitted a brief.

Before LIACOS, C.J., and WILKINS, ABRAMS, LYNCH, O'CONNOR and FRIED, JJ.

WILKINS, Justice.

Mary C. O'Brien was awarded judgment against Edwin H. Hurley, Jr., for intentional interference with her contractual relations with her employer, New England Telephone & Telegraph Company (NET). She was also awarded judgment against NET for wrongful termination of her implied contract of employment. We allowed the defendants' application for direct appellate review.

Hurley, who was O'Brien's supervisor in NET's marketing department in Springfield, argues that the judge should not have submitted the claim against him to the jury. We shall determine that the jury could reasonably have concluded that Hurley's treatment of O'Brien maliciously interfered with O'Brien's rights and precipitated her discharge.

Although NET contends that O'Brien was only an at-will employee and, therefore, could be discharged without cause, we shall conclude that NET's personnel manual granted O'Brien rights beyond those of an at-will employee. Those rights, however, had to be asserted first through the grievance procedure set forth in the manual. Because O'Brien did not pursue that course, she lost whatever rights that the personnel manual provided her. Judgment must be entered in favor of NET.

We shall first explain why the verdict against Hurley for intentional interference with contractual relations should be upheld. Next, we shall explain why O'Brien may not recover against NET.

1. We reject Hurley's argument that the evidence did not warrant a finding that he unlawfully and intentionally interfered with O'Brien's employment relationship. We have little difficulty in concluding that the jury were warranted in finding that Hurley's conduct toward O'Brien was motivated by "actual malice" and was not related to NET's legitimate corporate interests. See Wright v. Shriners Hosp. for Crippled Children, 412 Mass. 469, 476, 589 N.E.2d 1241 (1992); Gram v. Liberty Mut. Ins. Co., 384 Mass. 659, 663-664, 429 N.E.2d 21 (1981), S.C., 391 Mass. 333, 461 N.E.2d 796 (1984). Although the question is a closer one, the jury were also warranted in finding that Hurley's treatment of O'Brien caused her to commit the misconduct that led to her discharge.

The jury could have found the following facts. O'Brien first went to work for NET in 1956 as a general clerk in the division traffic office in Springfield, where she worked for twenty-two years, had a good relationship with fellow workers, and was never reprimanded or disciplined. Thereafter she worked in two other NET departments without adverse incident. In December, 1982, she joined the marketing department headed by Hurley. In 1983, Hurley rated O'Brien's performance as satisfactory in an evaluation, although he indicated that she could use her time more effectively. In 1984, Hurley asked O'Brien to fill out a transfer form because there was a surplus of clerks in the department, and he wanted her to be transferred. O'Brien, who believed that her seniority would protect her from being transferred against her will, refused Hurley's request and filed a grievance. A NET personnel manager upheld the grievance on the basis that the terms of NET's personnel manual protected O'Brien from involuntary transfer in the circumstances.

After O'Brien's grievance was upheld, Hurley became very hostile toward O'Brien. He screamed and yelled at her over small things every day, often in front of other people in the office. He called her stupid, the "nitwit in the north end," "the Blessed Mother," and "loony tunes." A witness heard Hurley scream at O'Brien and call her a "whore," "prostitute," and "slut." He described Hurley's outbursts toward O'Brien as temper tantrums. One could hear Hurley yelling at her all over the building. Hurley would persist until O'Brien started shaking and crying. When Hurley made O'Brien cry, "that was like his victory."

Hurley wanted O'Brien out of the department. He gave her work to other people and refused to let her do work that she had been trained to do. He also refused to give her a key to the supply closet to obtain supplies, although the junior clerk was given a key, and, in the past, O'Brien always had been given access. Hurley refused to discuss with O'Brien why he had ceased to give her work. In his performance evaluation of O'Brien in 1985, after she had successfully grieved the attempted transfer, Hurley reported that O'Brien's performance was "unsatisfactory" and that she "has been told of her deficiencies. Her overall skills do not let her perform in a satisfactory manner." He also reported that "she procrastinates, is unable to prioritize, needs constant direction, and is much too deliberate in her duties." O'Brien refused to sign this evaluation.

One day in October, 1985, while O'Brien was typing her notes regarding her relationship with Hurley, pursuant to a direction by a NET personnel manager, Hurley came out of his office, took her notes (which she seized back), and told her to leave and to leave everything on her desk. Hurley suspended O'Brien for three days without pay. Upon her grievance of the suspension, a NET personnel manager rescinded the three-day suspension; changed the discipline to one day off without pay; ordered that the discipline letter be rewritten to eliminate any reference to a suspension; and promised O'Brien that all memos and correspondence regarding the suspension would be removed from her file.

In 1987, after O'Brien had obtained payroll training, Hurley refused to give her any opportunity to practice doing the payroll work. One time when he asked her to do the payroll he yelled at her because she expressed some concern about her lack of practice. When she grieved this issue, Hurley was directed to allow O'Brien to do the payroll occasionally so she could get some practice. Hurley did not fully comply with this directive.

Hurley's harassment of O'Brien continued. Some days O'Brien had no work to do. Hurley gave secretarial work to a salesperson in the department who was not a clerk. Toward the end of 1989, O'Brien believed that Hurley and the salesperson were spending time together and confirmed her suspicions by making telephone calls to Hurley's office, to his home, to the salesperson's office, and once to her home. O'Brien never said anything during any of the telephone calls. She simply hung up. O'Brien was concerned that the salesperson was taking over her job. At Hurley's request, NET traced the "hang-up calls" to O'Brien. She admitted making them and that it was wrong to do so. She was immediately suspended. About one week later, NET terminated her employment on the stated ground that annoyance calls were a violation of criminal laws and a violation of NET's Code of Business Conduct. O'Brien did not file a grievance concerning her termination.

Although Hurley argues that his treatment of O'Brien was consistent with his supervisory responsibilities, the jury were warranted in finding that Hurley's conduct exceeded his rightful role as O'Brien's supervisor and was prompted by his resentment of O'Brien's successful challenges to his decisions and her refusal to transfer out of his department. Screaming at an employee repeatedly to humiliate her in front of other employees, calling her names, and denying her work to do when work is available could be found both to exceed the protected conduct of a supervisor and to constitute malicious conduct unrelated to an employer's legitimate business interests.

Hurley has suggested in his brief that the jury could not reasonably have found that his treatment of O'Brien caused her to make the "hang-up" telephone calls that caused NET to discharge her. Certainly a finding was warranted that O'Brien would not have made the "hang-up" telephone calls if Hurley had not treated her as he did. ²

2. Next, we come to O'Brien's claim that NET violated her contract of employment by discharging her without cause. O'Brien, who had no written contract, was an at-will employee unless the provisions of NET's personnel manual, entitled "Personnel Practices," altered her status. There was nothing in O'Brien's other dealings with NET that gave her greater rights than those that we conclude she had under NET's personnel manual. O'Brien contended at trial that NET's personnel manual provided her protection from dismissal without cause. NET, in turn, argued that, because the manual granted O'Brien no enforceable rights, there was no jury issue as to whether NET had cause to discharge O'Brien. NET also contended that, even if the manual did grant O'Brien contractual rights, O'Brien's claim also failed because (1) she did not pursue the grievance procedures of the personnel manual and (2) in any event, O'Brien's admittedly improper conduct provided just cause for her discharge. We conclude that NET's motion for a directed verdict (or at least its motion for judgment notwithstanding the verdict) should have been allowed.

The principle that promises made in a personnel manual may be binding on an employer is accepted in a clear majority of American jurisdictions. See Comment, Unilateral Modification of Employment Handbooks: Further Encroachments on the Employment-at-Will Doctrine, 139 U.Pa.L.Rev. 197, 208-209 n. 76 (1990) (citing cases from thirty-three States and the District of Columbia). There are differences among the States as to the theory of liability (unilateral contract or promissory estoppel), id. at 209, and there are differences as...