Cox v. Resilient Flooring Div. of Congoleum Corp.
| Decision Date | 13 June 1986 |
| Docket Number | No. CV84-6951-JSL(JRx).,CV84-6951-JSL(JRx). |
| Citation | 638 F. Supp. 726 |
| Parties | Richard L. COX, Plaintiff, v. RESILIENT FLOORING DIVISION OF CONGOLEUM CORPORATION, a corporation, also known as Congoleum Corporation, a corporation, also known as Congoleum-Narin, Defendant. |
| Court | U.S. District Court — Central District of California |
Steve Roseman, Los Angeles, Cal., for plaintiff.
Frank Cronin and Louis F. Gutierrez, Jackson, Lewis, Schnitzler & Krupman, Los Angeles, Cal., for defendant.
ORDER ON JOINT MOTION FOR RECONSIDERATION OF MOTION FOR SUMMARY JUDGMENT
The parties have filed a joint motion for reconsideration of defendant's motion for summary judgment. Having considered in detail all of the materials presented in connection with the motion,1 the Court is of the opinion that the motion for summary judgment should be granted as to all causes of action.
This case is the first of four wrongful discharge cases to be decided together by the Court. These cases were taken under submission in an effort to determine whether there may be a consistent thread woven among the rapidly proliferating California decisions in the area which, if identified and enunciated, would provide a greater degree of predictability for employers and employees, both in planning their conduct and in determining whether particular lawsuits should be filed and pursued. The Court believes that such a thread does exist in the California decisions, and has attempted to articulate it in the alternative grounds of its decision here. Mindful of the duty of federal courts to follow rather than to lead state law in diversity cases, however, the Court has first analyzed the case in conventional terms.
1. PROCEDURAL HISTORY
This action arises out of the termination of Plaintiff Richard L. Cox's employment as a regional sales manager with Defendant Congoleum Corp. ("Congoleum"). It is a diversity case governed by the substantive law of California. The complaint originally alleged five causes of action: (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) intentional infliction of emotional distress; (4) intentional misrepresentation; and (5) negligent misrepresentation. Plaintiff has abandoned his claims for intentional infliction of emotional distress and negligent misrepresentation.
Congoleum's initial motion for summary judgment on all causes of action was denied by Judge Waters.2 Subsequently, on Congoleum's motion for reconsideration, Judge Waters vacated his previous order and granted summary judgment on Cox's claims for breach of contract and breach of the covenant of good faith and fair dealing (the "wrongful discharge" claims). He denied the motion with respect to the intentional misrepresentation claim.3
After the case was reassigned here, the parties moved for reconsideration of the summary judgment motion. Congoleum asserts that the failure to grant summary judgment on the misrepresentation claim is fatally inconsistent with the Court's ruling on the wrongful discharge claims. Congoleum seeks summary judgment against Cox on all causes of action. Although Cox contends that the two rulings are compatible, he argues primarily that the motion for summary judgment should be denied in its entirety. The Court has concluded that the wrongful discharge claims cannot survive summary judgment, and that the misrepresentation claim must fall as well.
II. FACTS
The relevant facts are largely undisputed. Where there is a disagreement about material facts, the evidence has been construed and inferences drawn in favor of the nonmoving party. See, e.g., Adickes v. S.H. Kress & Co., 398 U.S. 144, 157-59, 90 S.Ct. 1598, 1608-09, 26 L.Ed.2d 142 (1970).
Congoleum manufactures resilient vinyl flooring. It markets its products exclusively through independent wholesale distributors. Cox was first employed by Congoleum in 1957 as a salesman in northern California. In 1962, he became Assistant District Manager in the Chicago area. In 1964, he was transferred to Philadelphia and promoted to District Sales Manager. He was transferred and promoted again to the position of District Sales Manager of the larger district of Los Angeles in 1969. In 1982, he was promoted to the position of Western Regional Sales Manager. As Western Regional Sales Manager, Cox was responsible for Congoleum's overall sales and marketing efforts in the western United States.
In 1984, after more than two years as Western Regional Sales Manager, Cox's employment was terminated. The formal notice of termination stated only: Fifteen other Congoleum sales employees were terminated at the same time as Cox. Congoleum treated all fifteen terminations as part of a single reduction in force. In accordance with established corporate procedures, Cox was given 27 weeks severance pay and two additional weeks pay in lieu of notice. Upon receiving notice of his termination, Cox requested that Congoleum place him in another position with the company. He offered to accept any of several lesser positions, including district sales manager or salesman. Cox was told that he would not be considered for any other position. He received no counseling of any kind, and was not given the formal "exit interview" to which he claims to have been entitled.
During Cox's term as Western Regional Sales Manager, Congoleum received a number of complaints about Cox from Congoleum distributors with whom Cox had business dealings. The gist of the complaints was that Cox's attitude toward some personnel of these distributors was abrasive, inflexible and sometimes condescending, and that his attitude was detrimental to business relations.
During the course of Cox's employment, he and Congoleum entered into three separate written employment agreements. The first agreement was executed at or about the time of Cox's initial hiring. The second and third agreements were executed at or about the time Cox accepted transfers and promotions to District Sales Manager for Philadelphia and Los Angeles, respectively. Each of the employment agreements contained substantially the following provision:
It is understood that my employment shall being on ________, or shall continue, and may be terminated by either the Company or myself upon not less than fifteen days' advance notice, unless I shall have been employed for less than six months, in which event my employment may be terminated by either the Company or myself upon five days' advance notice. In the event of such notice of termination by the Company or me, I shall remain in the active employment of the Company for all or any part of the notice period, if so requested by the Company, but the Company reserves the right to pay me my salary for or during the notice period and to terminate the employment immediately or at any time during the notice period. This employment shall comprise such duties as the Company may direct, and if I, at any time, refuse or neglect to perform my duties to the Company's reasonable satisfaction or violate any agreement or regulation, the Company may terminate my employment without any notice period.
The Court assumes that during Cox's successive tenures as salesman, Philadelphia District Sales Manager, and Los Angeles District Sales Manager, he received no significant criticism from anyone within Congoleum about his performance. Indeed, during that period he received numerous commendations. Cox's immediate superiors and other officials assured him that he was a "highly valued employee," and that Congoleum's policy was to "reward long-term employees" and "to provide them with the assurance of steady employment." For purposes of this opinion, it is assumed that responsible company officials represented to Cox that he was guaranteed continued employment until his retirement, subject only to termination for good cause.
The Court also accepts as true the doubtful proposition that Cox was familiar with and relied upon Congoleum's written policies regarding long-term employees. The Court accepts as true Cox's assertion that the purport of Congoleum's policies with respect to the treatment of long-term employees whose positions were to be eliminated through reductions in force was to offer transfer or reassignment, where practical, as an alternative to outright severance. The Court also accepts as true that absent a reduction in force, a long-term Congoleum employee who was to be terminated for cause would be entitled to more personal counseling, and additional internal corrective procedures, than Cox was afforded.
III. ANALYSIS
Conventional analysis of California employment law begins with reference to Cal. Labor Code section 2922, which provides:
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