Carpenter v. American Excelsior Co., 85-CV-40567-FL.

Citation650 F. Supp. 933
Decision Date08 January 1987
Docket NumberNo. 85-CV-40567-FL.,85-CV-40567-FL.
PartiesSpencer J. CARPENTER, Plaintiff, v. AMERICAN EXCELSIOR COMPANY, a foreign corporation, Defendant.
CourtUnited States District Courts. 6th Circuit. United States District Court (Western District Michigan)

Max Dean, Flint, Mich., for plaintiff.

Russell J. Thomas, Jr., Detroit, Mich., for defendant.

MEMORANDUM OPINION AND ORDER

NEWBLATT, District Judge.

Plaintiff brought this action in the Circuit Court for the County of Genesee, alleging that defendant wrongfully discharged him from its employ. Pursuant to 28 U.S.C. §§ 1332 and 1441(a), defendant removed the action based on diversity of citizenship. Plaintiff's contention of wrongful discharge is based on two theories. First, plaintiff claims that defendant breached an implied oral contract that he could be terminated only for just cause. Then, plaintiff alleges that his discharge resulted from age discrimination in violation of the Elliott-Larsen Civil Rights Act, MICH.COMP.LAWS ANN. §§ 37.2101, et seq. (West 1985). Defendant filed this Motion for Summary Judgment under Fed.R. Civ.P. 56, claiming that plaintiff's action can be decided on the evidence currently in the record, since there is no issue of material fact. Also pending is plaintiff's Motion to Compel answers to certain interrogatories. For the reasons set forth below, defendant's motion for summary judgment will be granted as to both counts, and plaintiff's motion to compel will be denied.

The pertinent facts of this case are as follows: On July 18, 1981 when plaintiff was 59, he was hired as a "floor covering specialist" for the Westland branch office of American Excelsior Company, where he was employed until June 15, 1984, when his employment was terminated. (Plaintiff's Dep. 34, 111).

Fred Kelly, one of defendant's customers, initially put plaintiff in contact with Loren Dahlberg, the manager of the Westland branch office. Mr. Kelly was aware that a major company for whom plaintiff sold carpeting had gone bankrupt. (Plaintiff's Dep. 9-12). Plaintiff interviewed with Mr. Dahlberg on July 8, 1981, at which time plaintiff alleges that Mr. Dahlberg told him that he would be able to work for the company as long as he performed properly, and that his age was no barrier to his employment. (Plaintiff's Dep. 167, 234); See also, plaintiff's Affidavit in response to Defendant's Motion for Summary Judgment ¶ 2(j). Mr. Dahlberg offered the available position with the company to plaintiff during this interview, choosing plaintiff over forty other applicants who were not as experienced as plaintiff. (Plaintiff's Dep. 7, 26, 261). After these alleged representations by Mr. Dahlberg, he requested that plaintiff complete an employment application which expressly set forth the following acknowledgement:

Further, I understand and agree that my employment is for no definite period and may regardless of the date of payment of my wages and salary be terminated at any time without any previous notice.

(Plaintiff's Employment Application p. 2, attached as Exhibit B to defendant's Motion for Summary Judgment). Plaintiff alleges that he and Mr. Dahlberg never discussed this provision. Further, plaintiff claims that he did not ever read the "fine print" containing this language, nor did he sign the application. (Plaintiff's Affidavit, ¶ 2(k)).1

In its motion, defendant contends that the general rule of law in Michigan is that employment for an indefinite time is terminable at the will of either party. Lynas v. Maxwell Farms, 279 Mich. 684, 687, 293 N.W. 315 (1937). The Michigan Supreme Court carved out a narrow exception to this rule, however, in the seminal decision of Toussaint v. Blue Cross & Blue Shield, 408 Mich. 579, 292 N.W.2d 880 (1980). In Toussaint, the Court recognized 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.

Id. at 598, 292 N.W.2d 880.

In order to defeat defendant's motion for summary judgment, plaintiff must show that more than a mere subjective expectancy existed that he would be terminated only for just cause. Reid v. Sears, Roebuck & Co., 790 F.2d 453 (6th Cir.1986). While this subjective expectancy of continued employment standing alone is an insufficient basis for a Toussaint claim, Schwartz v. Michigan Sugar Company, 106 Mich.App. 471, 308 N.W.2d 459, 462, appeal denied, 414 Mich. 870 (1982), it is a prerequisite for establishing that an implied contract arose for just cause termination. Longley v. Blue Cross & Blue Shield of Michigan, 136 Mich.App. 336, 356 N.W.2d 20 (1984).

In Reid, the Sixth Circuit examined three cases consolidated on appeal, that originated in the Eastern District of Michigan.2 All three suits were brought against Sears. Sears successfully argued for summary judgment in the district court by relying on language found in the employment applications which acknowledged that employment was terminable at will.3 This provision in the application was found to be outside the coverage of the Toussaint exception, as indicated by that court when it wrote:

Employers are most assuredly free to enter into employment contracts terminable at will without assigning cause. We hold only that an employer's express agreement to terminate only for cause or statements of company policy and procedure to that effect, can give rise to rights enforceable in contract.

Reid, 790 F.2d at 455, quoting Toussaint v. Blue Cross & Blue Shield, 408 Mich. 579, 610; 292 N.W.2d 880 (1980). Accord, Valentine v. General American Credit, Inc., 420 Mich. 256, 258-259, 362 N.W.2d 628 (1984) ("absent a contractual provision for job security, either the employer or the employee may ordinarily terminate an employment contract at any time for any, or no, reason"). The Reid court found that all three plaintiffs were bound by the language contained in their employment applications, and that they did not create an issue of fact by relying on Sears' Employee handbook to show that they indeed should be terminated only for just cause.4 The court readily distinguished Toussaint, in which case the employer provided literature containing language that promised "to treat employees leaving Blue Cross in a fair and consistent manner and to release employees for just cause only."5 Toussaint, 408 Mich. at 617, 292 N.W.2d 880, quoted in Reid, 790 F.2d at 460.

Here, plaintiff contends that there is a genuine issue of fact as to whether an implied contract for just cause employment arises, based on Mr. Dahlberg's statement that he would be employed as long as he performed properly. Plaintiff also argues that he is not bound by the language contained in the employment application because he neither discussed it with Mr. Dahlberg, nor did he notice the fine print on the employment application. (Plaintiff's Aff. ¶ 2(k)).

As to plaintiff's first contention, it does not appear that plaintiff has shown more than a "mere subjective expectancy" that he would only be terminated for just cause.6 Although plaintiff has stated that Mr. Dahlberg, at their initial interview, assured him of continued employment, (Plaintiff's Aff. ¶ 2(j)), nevertheless, plaintiff, according to defendant, then indicated his willingness to agree to "terminable at will" employment subsequent to this assurance when he filled out his employment application. Id. ¶ 2(k). This employment application simply is irrelevant if no durational basis is initially established by plaintiff. Further, plaintiff has not provided any other evidence such as employee handbooks, policy statements or other literature to buttress his argument that an implied contract arose for just cause termination. Therefore, plaintiff was not reasonable in his subjective assumption that he could not be terminated except for just cause.

Plaintiff's second contention that he is not bound by the language of the application must also fail for two reasons: first, the Michigan Supreme Court has stated that the failure to read or understand an agreement is not cause for avoiding the same. See Sponseller v. Kimball, 246 Mich. 255, 260, 224 N.W. 359 (1929); accord, Vandendries v. General Motors Corporation, 130 Mich.App. 195, 343 N.W.2d 4 (1983). Plaintiff was probably asked to complete the employment application for a purpose; to memoralize the most significant term of the employment — that is, that he was subject to termination at will. Therefore, he should be bound by that concession, and his count for breach of contract should be dismissed. But secondly and more importantly, as noted before, he has not established any basis for a specific durational contract.

The second count of plaintiff's complaint charges that defendant's discharge of plaintiff was an act of age discrimination. The pertinent statute reads as follows:

Section 202. (1) An employer shall not:

(a) Fail or refuse to hire, or recruit, or discharge, or otherwise discriminate against an individual with respect to employment, compensation, or a term, condition, or privilege of employment, because of religion, race, color, national origin, age, sex, height, weight, or marital status.
(b) Limit, segregate, or classify an employee or applicant for employment in a way which deprives or tends to deprive the employee or applicant of an employment opportunity, or otherwise adversely affects the status of an employee or applicant because of religion, race, color, national origin, age, sex, height, weight, or marital status.
(c) Segregate, classify, or otherwise discriminate against a person on the basis of sex with respect to a term, condition, or privilege of employment, including a benefit plan or system.

Specifically, plaintiff claims that defendant deprived him of "sales...

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