Crowell v. Transamerica Delaval, Inc.

• Decision Date: 17 September 1984
• Citation: 502 A.2d 573,206 N.J.Super. 298
• Parties: William W. CROWELL, Plaintiff, v. TRANSAMERICA DELAVAL, INC., Defendant.
• Court: New Jersey Superior Court

Page 298

206 N.J.Super. 298

502 A.2d 573

William W. CROWELL, Plaintiff, v. TRANSAMERICA DELAVAL, INC., Defendant.

Superior Court of New Jersey, Law Division Burlington County.

Sept. 17, 1984.

John F. Pilles, Jr., Mount Holly, for plaintiff (Schlesinger, Schlosser, Foy & Harrington, Mount Holly, attorneys).

Jerem M. Gordon, Marlton, for defendant (Parker, McCay & Criscuolo, Marlton, attorneys).

HAINES, A.J.S.C.

Nemo protest mutare consilium suum in alterius injuriam. ¹ Justinian's Digest, 50, 17, 75, Black's Law Dictionary 1190 (4th Ed.1968).

The issue here is whether this ancient doctrine thoroughly entrenched in our jurisprudence and known as equitable estoppel, is "public policy" that prevents the discharge of an employee at will on the facts of this case.

William W. Crowell was an employee of the defendant for nearly 13 years, becoming foreman in 1978. He was involved, during the time of employment with which we are concerned, in the manufacture of a condenser for a nuclear submarine. Written specifications for the condenser were provided to all foremen, including the plaintiff. On April 15, 1983, he discovered that certain tubes which were component parts of the condenser were "over rolling" and therefore out of specification. He promptly halted the manufacturing operations, marked the deficient tubing with red plugs and consulted the defendant's quality control inspector who, in turn, conferred with his supervisor concerning the problem. They decided that the departures from the specifications were tolerable; they had been found acceptable on prior occasions. Notwithstanding these approvals, plaintiff disclosed the problem to his immediate supervisor and plant superintendent who said nothing but permitted the tube rolling operation to continue. On July 15, 1983, a similar tube-rolling defect was observed by plaintiff, who nevertheless, relying upon his April experience and advice, permitted the manufacturing process to continue. This time however, the defendant, charging plaintiff with improper supervision, terminated his employment.

Plaintiff sues, apparently on tort and contract grounds, for compensatory and punitive damages as well as other relief. The defendant, claiming the right to discharge the plaintiff as an employee at will with or without cause, moves for summary judgment dismissing the complaint. The recited facts reflect a view most favorable to the plaintiff for the purpose of the motion.

Plaintiff first argues that his employment status, as well as his ability to acquire future employment, is a property interest by virtue of the New Jersey Constitution (1947) Art. 1. par. 1, which guarantees the right to acquire, possess and protect property. The issue has not been passed upon in New Jersey. However, the United States Supreme Court has held that employment status is not a property interest protected by the due process clause of the Fourteenth Amendment to the United States Constitution. In Bishop v. Wood, 426 U.S. 341, 96 S.Ct. 2074, 48 L.Ed.2d 684 (1976), the Court held that plaintiff's status as an employee at will "necessarily established" that he had no property interest in his employment. Id. at 345, n. 8, 96 S.Ct. at 2078 n. 8. A like decision was made in Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972), in connection with a claimed property interest in the right to reemployment. An exception to these rulings may be fashioned from the Court's opinion in Connell v. Higginbotham, 403 U.S. 207, 91 S.Ct. 1772, 29 L.Ed.2d 418 dealing with public employment. However, this exception is a narrow one. As the court said in Board of Regents (referring to Connell ):

Only last year, the Court held that the principle "proscribing summary dismissal from public employment without hearing or inquiry required by due process" also applied to the teacher recently hired without tenure or a formal contract, but none the less with a clearly implied promise of continued employment. [at 408 U.S. 577, 92 S.Ct. at 2709; emphasis supplied.]

I find no reason to read the New Jersey Constitution differently. In Board of Regents, the court held Property interests, of course, are not created by the Constitution. Rather they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law, rules or understandings that secure certain benefits and that support claims of entitlement to those benefits. [at 577, 92 S.Ct. at 2709]

Thus, a property interest in employment can be created by statute, by ordinance, or by an implied contract as discussed in Perry v. Sinderman, 408 U.S. 593, 602, 92 S.Ct. 2717, 2700, 33 L.Ed.2d 581. However, to have a property interest, a person must have more than a unilateral interpretation of continued employment. Bd. of Regents, at 577, 92 S.Ct. at 2709. Here, plaintiff has presented no law and no evidence of any promise of continued employment that supports his property interest claim. Plaintiff was, in fact, an "employee at will" and under state law could have his employment terminated at any time. At the most, plaintiff had a unilateral expectation of continued employment, no legitimate claim of entitlement to it.

The significant claim made by plaintiff is that his discharge was contrary to public policy. This claim is well-founded. The public policy supporting the doctrine of equitable estoppel was violated.

In Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 417 A.2d 505 (1980), the Supreme Court limited the common law rule permitting the termination of "at will" employment agreements with or without cause. It said:

We hold that an employee has a cause of action for wrongful discharge when the discharge is contrary to a clear mandate of public policy. The sources of public policy include legislation; administrative rules, regulations or decisions; and judicial decisions. In certain instances, a professional code of ethics may contain an expression of public policy. However, not all such sources express a clear mandate of public policy. For example, a code of ethics designed to serve only the interests of a profession or an administrative regulation concerned with technical matters probably would not be sufficient. Absent legislation, the judiciary must define the cause of action in case-by-case determinations. An employer's right to discharge an employee at will carries a correlative duty not to discharge an employee who declines to perform an act that would require a violation of a clear mandate of public policy. However, unless an employee at will identifies a specific expression os public policy, he may be discharged with or without cause.

An employee who is wrongfully discharged may maintain a cause of action in contract or tort or both. An action in contract may be predicated on the breach of an implied provision that an employer will not discharge an employee for refusing to perform an act that violates a clear mandate of public policy.

An action in tort may be based on the duty of an employer not to discharge an employee who refused to perform an act that is a violation of a clear mandate of public policy. In a tort action, a court can award punitive damages to deter improper conduct in an appropriate case. That remedy is not available under the law of contracts. Our holding should not be construed to preclude employees from alleging a breach of the express terms of an employment agreement. [citations omitted; at 72-73, 417 A.2d 505.]

The statement that an action may be based upon the discharge of an employee for refusal to perform an act that is "a violation of a clear mandate of public policy" requires discussion. In the present case, the plaintiff did not refuse to perform an act; instead his action permitted the manufacture of a defective piece of equipment. Consequently, the quoted language, if read literally, would not support the present suit. Pierce, however, cannot be read so narrowly. The Court's basic premise is that "an employee has a cause of action for wrongful discharge when the discharge is contrary to a clear mandate of public policy." Thus, the focus of the employee's cause of action is the discharge itself. The claim is sustainable when the discharge violates public policy. That is the plaintiff's claim in this cause.

In order to apply Pierce there must be an understanding of what is meant by "a specific expression of public policy." Id. at 72, 417 A.2d 505. The Court repeats this standard throughout the opinion, e.g., "clear mandate of public policy," Id. at 72, 417 A.2d 505, "clear expression of public policy," Id. at 73, 417 A.2d 505, "clear mandate of public policy," Id. at 76, 417 A.2d 505. In this context, the Court warns that even professional codes of ethics serving "only the interests of a profession" may not be sufficient; they must address directly some public policy at issue in the case. The plaintiff in Pierce was not permitted to recover because she did not identify a "specific expression of public policy." The Court ruled, for example, that the ethic expressed in the Hippocratic Oath that "I will prescribe regimen for the good of my patients according to my ability and my judgment and never do harm to anyone," was not a sufficient pronouncement to justify her refusal to participate in reasonable research. The Court said: "An employee does not have a right to continued employment when he or she refuses to conduct research simply because it would contravene his or her personal morals." Id. at 75, 417 A.2d 505. It is apparent, therefore, that the Court's insistence upon the identification of "a specific expression of public policy" is intended to distinguish between subjective and objective considerations.

Pierce was followed by Lally v. Copygraphics, 85 N.J. 668, 428 A.2d 1317 (1981), in which the court decided that a retaliatory firing caused by the filing of a workers' compensation claim gave rise to a right of action...