Brooks v. Trans World Airlines, Inc., Civ. A. No. 82-K-1185.

• Decision Date: 18 October 1983
• Docket Number: Civ. A. No. 82-K-1185.
• Citation: 574 F. Supp. 805
• Parties: David M. BROOKS, Plaintiff, v. TRANS WORLD AIRLINES, INC., Defendants.
• Court: U.S. District Court — District of Colorado

574 F. Supp. 805

David M. BROOKS, Plaintiff, v. TRANS WORLD AIRLINES, INC., Defendants.

Civ. A. No. 82-K-1185.

United States District Court, D. Colorado.

October 18, 1983.

Michael P. Serruto, Myrick & Newton, P.C., Denver, Colo., for plaintiff.

Elliot H. Shaller, New York City, Edward W. Stern, Denver, Colo., for defendants.

MEMORANDUM OPINION AND ORDER

KANE, District Judge.

Plaintiff's first amended complaint states six claims for relief, chief among which is his claim that TWA furloughed him in violation of the Age Discrimination in Employment Act and the Fair Labor Standards Act, 29 U.S.C. § 626(b), 29 U.S.C. § 216(b). Jurisdiction is predicated upon 29 U.S.C. § 626(b) and 28 U.S.C. § 1137. The remaining five claims seek damages and injunctive relief for breach of contract, negligence, fraud, negligent misrepresentation and wrongful discharge. From the record before me, I find the following prolusory facts.

Brooks first accepted employment with TWA in 1962 in California. At the time, his employment application included the following language:

If given employment, I hereby agree that such employment may be terminated by the Company at any time without advance notice and without liability to me for wages or salary, except as may have been earned prior to such termination.

Brooks was also introduced to TWA's Management Policies and Procedure Manual (MP & P), a handbook of

guidelines and instructions to management in carrying out their responsibilities, authority and activities to achieve the goals established for the Corporation.

MP & P, § A.1, Defendant's Exhibit B. After being hired, Brooks was advised that

the provisions of the MP & P controlled the procedure in which the majority of his functions were to be handled, were to be followed by him as a condition of employment and that failure to do so could result in termination or disciplinary action.

Brooks Affidavit at 1.

Brooks transferred to Colorado in 1976 where he worked as a customer service agent, a non-management position. In 1977, Brooks became an Agent in Charge — Cargo, still based in Denver. He received a management title on February 26, 1979, when he accepted a promotion to the position of Senior Sales Representative (SSR). In large part, Brooks was responsible for the solicitation of cargo space in a three state region encompassing Colorado, and parts of Wyoming and New Mexico.

In late 1979, TWA abolished the SSR position, provided Brooks with a week's worth of additional training, and gave him a new job number and title, Account Manager—Cargo (AMC). Brooks received no "promotion" or pay raise as such with the new position: he continued to be paid $2,000 per month. The new position, however, did carry a higher pay grade than the old. In October, 1981, Brooks was informed that his position would be eliminated and that he would be furloughed. At the time, the MP & P contained the following displacement clause:

An employee occupying a management position which is eliminated and who does not qualify under Paragraph 4.a. preceding, will be permitted to exercise seniority to displace into the LAST HELD nonmanagement position in the metropolitan area, seniority permitting, IF THE EMPLOYEE ENTERED THE MANAGEMENT POSITION DIRECTLY FROM A NONCONTRACT NONMANAGEMENT POSITION.

MP & P, § 10.49.02C4(b), (emphasis in original). TWA refused to permit Brooks to return to his earlier position of Agent in Charge—Cargo. TWA reasoned that Brooks had not entered the Account Manager position directly from a non-management position, as required by the MP & P. TWA told Brooks that he had entered the management position from another management position, Senior Sales Representative, and thus could not exercise his rights under the displacement provision. Before Brooks left TWA's employ, he "oriented" a 27 year old account manager to assist him in taking over 80% of Brook's sales territory.

Before me are cross-motions for summary judgment on Count II (breach of contract), TWA's motion for summary judgment on counts I, III and IV, as well as Brook's motion in limine. For the reasons discussed below, I deny the cross-motions for summary judgment and the motion in limine. I also deny in part and grant in part TWA's motion for summary judgment.

I. BREACH OF CONTRACT

TWA makes two arguments in support of its motion. First, it asserts that its own personnel manual creates no contractual rights which are enforceable against it. Second, it claims that Brooks did not enter his "management position as Account Manager — Cargo directly from a non-contract nonmanagement classification," within the meaning of the MP & P.

The plaintiff claims that TWA is estopped to deny that the MP & P creates contract rights, since Brooks, when he was furloughed, was told only that the MP & P did not permit him to displace. Brooks also argues that the MP & P creates enforceable contract rights in his favor.

I do not think that TWA is estopped to deny the enforceability of the MP & P. Brooks claims that TWA furloughed him for the single reason that he did not qualify under the MP & P's displacement provisions. Brooks relies on the general rule that one who has

given a definite reason for his conduct and decision about a matter in controversy, cannot, after litigation has begun, change his ground and put his conduct upon another and a different consideration.

28 Am.Jur.2d, Estoppel § 72 (1966). The facts are disputed about whether and when TWA changed its position during the course of the litigation. I am satisfied, however, that there has been no prejudice to Brooks and that TWA acted without any intent to deceive him. The general rule quoted above can only be understood in

light of the principles governing equitable estoppel, including the element that an assertion or act to constitute an estoppel must be wilfully made or done with the intention to deceive the other party, and that it is of doubtful application in any case unless the former position is inconsistent with the position adopted after the litigation or unless the adverse party has been misled or prejudiced by the change of attitude.

28 Am.Jur.2d Estoppel § 72. (Emphasis added.)

CONTRACT RIGHTS IN AN EMPLOYMENT MANUAL

It has long been the rule, in this state and others, that a discharged employee has no recourse against his or her employer in the absence of a fixed term contract, unlawful discrimination or a specific constitutional right. Justice v. Stanley Aviation Corp., 35 Colo.App. 1, 530 P.2d 984 (1974); Amaan v. City of Eureka, 615 S.W.2d 414 (Mo.1981); Johnson v. National Beef Packing Company, 220 Kan. 52, 551 P.2d 779 (1976); Lynas v. Maxwell Farms, 279 Mich. 684, 273 N.W. 315 (1937); Knudson v. Green, 116 Fla. 47, 156 So. 240 (1934); Martin v. New York Life Ins. Co., 148 N.Y. 117, 42 N.E. 416 (1895). The rule is said to have its origin as "an adjunct to the law of master and servant in England. ..." Wiener v. McGraw Hill, Inc., 57 N.Y.2d 458, 457 N.Y.S.2d 193, 195, 443 N.E.2d 441, 443 (1982); Feiger, "Employment at Will" and the Discharged Employee in Colorado, 12 Colo.Lwyr. 733 (1983).

Judicial reluctance to interfere with "at-will" contracts stems from a perceived lack of definiteness, mutuality and consideration. Johnson v. National Beef Packing Co., 551 P.2d at 782; Pine River State Bank v. Mettille, 333 N.W.2d 622, 628 (Minn.1983). In a recent decision from Florida, the district court of appeals said:

we see no justification to depart from long established principles that an employment contract requires definiteness and certainty in its terms. An employee's entitlement to a particular term of employment or to particular salary levels on the basis of criteria more subject to misunderstanding and dispute than definite terms in an employment contract is not ... within the province of a court of law.

Muller v. Stromberg Carlson Corp., 427 So.2d 266, 269 (Fla.App. 2 Dist.1983).

In the past 50 years, however, courts have shown an increased willingness to step between employer and employee. They have typically either recognized actions for wrongful discharge in violation of public policy, Tameny v. Atlantic Richfield Co., 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330 (1980), a covenant of good faith in employment contracts, Cleary v. American Airlines, Inc., 111 Cal.App.3d 443, 168 Cal.Rptr. 722 (1980), or found an implied contract in a personnel manual or an employer's specific policies. Toussaint v. Blue Cross Blue Shield of Michigan, 408 Mich. 579, 292 N.W.2d 880 (1980). It is only the latter theory of implied contract with which this case is concerned.

The leading case is Toussaint, supra. There, an employee specifically inquired regarding job security when he was hired. He was told he would be with Blue Cross as long as he did his job. Toussaint was also given a Blue Cross personnel manual which said that

the disciplinary procedures applied to all Blue Cross employees who had completed their probationary period and that it was the `policy' of the company to release employees `for just cause only.'

292 N.W.2d at 884. The Toussaint court held that

1) a provision of an employment contract providing that an employee shall not be discharged except for cause is legally enforceable although the contract is not for a definite term — the term is `indefinite,' and

2) such a provision may become part of the contract either by express agreement, oral or written, or as a result of an employee's legitimate expectations grounded in an employer's policy statements.

292 N.W.2d at 885. The Toussaint rationale has been followed in an impressive number of jurisdictions.¹ It has also been criticized and several courts have specifically refused to follow it.²

Colorado has never addressed the issue. It has, however, recognized a tort of wrongful discharge under limited circumstances. In Lampe v. Presbyterian Medical Center, 41 Colo.App. 465, 590 P.2d 513, 514 (1978), the court of appeals restated the general rule...