Damrow v. Thumb Co-op. Terminal, Inc.

• Decision Date: 05 August 1983
• Docket Number: Docket No. 65662
• Citation: 126 Mich.App. 354,337 N.W.2d 338
• Parties: Joyce DAMROW, Plaintiff-Appellant, v. THUMB COOPERATIVE TERMINAL, INC., Defendant-Appellee. 126 Mich.App. 354, 337 N.W.2d 338
• Court: Court of Appeal of Michigan — District of US

Page 338

337 N.W.2d 338

Joyce DAMROW, Plaintiff-Appellant, v. THUMB COOPERATIVE TERMINAL, INC., Defendant-Appellee.

Docket No. 65662.

126 Mich.App. 354, 337 N.W.2d 338

Court of Appeals of Michigan.

Submitted April 13, 1983.

Decided June 7, 1983.

Released for Publication Aug. 5, 1983.

[126 MICHAPP 355] Keller, Katkowsky & Golden, P.C. by Lawrence S. Katkowsky, Southfield, for plaintiff-appellant.

Smith & Brooker, P.C. by Mona C. Doyle and Glenn F. Doyle, Bay City, for defendant-appellee.

Before DANHOF, C.J., and ALLEN and WALSH, JJ.

WALSH, Judge.

Plaintiff, Joyce Damrow, sued defendant, Thumb Cooperative Terminal, Inc., for wrongful discharge from employment, alleging breach of the employment agreement between the parties as set forth in defendant's employee manual. The circuit court, sitting as trier of fact, found in favor of defendant. Plaintiff appeals entry of a judgment of no cause of action. We address only the dispositive issue of whether plaintiff proved a breach of an employment agreement; we must decide the applicability, if any, of the Supreme Court's decision in Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 292 N.W.2d 880 (1980), reh. den. 409 Mich. 1101 (1980).

Plaintiff was hired by defendant as a bookkeeper [126 MICHAPP 356] in September, 1976. The hiring authority at that time was vested in general manager Wayne Bauer. On March 28, 1977, Bauer appointed plaintiff to the position of office manager. At trial Bauer testified that it was his understanding that plaintiff would continue as office manager as long as she wanted, providing she performed properly; "[o]therwise it was kind of an indefinite" arrangement. Bauer and plaintiff enjoyed a good working relationship.

After plaintiff was hired, Bauer was authorized by the board of directors to prepare an employee manual. On May 16, 1977, the board adopted the manual as the "operating policy" of the company and declared that it would "remain in full force and effect until * * * revised, superseded or cancelled by the issuing authority".

Copies of the manual were distributed to all employees. There was a general meeting so that the manual could be explained and employees' questions could be answered. On May 19, 1977, plaintiff signed a form, witnessed by Bauer, in which she stated:

"As the undersigned, I hereby acknowledge, on this date, I have received, reviewed and understand the personnel policies, benefits and guidelines as set forth in the Thumb Cooperative Terminal, Incorporated Employee Manual as effected on the 16th day of May, 1977, including all subsequent additions, deletions and amendments."

According to Bauer, the purpose of the manual was to provide continuity, improve communication between defendant and its employees, to set out their respective obligations, and to identify the disciplinary actions which would be taken if an employee's conduct proved unsatisfactory. He testified[126 MICHAPP 357] that the manual applied to employees hired before and after its adoption; the manual changed the arbitrary manner in which disciplinary matters had previously been handled. According to the president of defendant's board of directors, the purpose of the manual was to acquaint employees with the rules of the company. He acknowledged that the manual was in full force and effect at the time of plaintiff's discharge.

Bauer left defendant's employ in late 1978. James Bollenbacher was hired to replace him as general manager; he began working on February 1, 1979. The working relationship between Bollenbacher and plaintiff was never a good one. They had many heated arguments; the atmosphere permeating their interactions was always tense.

On January 24, 1980, Bollenbacher fired plaintiff, giving her no reasons for his action. According to plaintiff, he had previously given her two verbal warnings concerning her performance. She had received no prior written warnings, and her discharge was preceded by no less drastic disciplinary action. In documents prepared after the discharge, Bollenbacher stated that the reasons for his action were plaintiff's resistance to changes recommended by him, her inability to adjust to him and his policies, and her inability or refusal to delegate responsibility. It was repeatedly emphasized, however, that plaintiff's work skills were in no way deficient. In deposition testimony, Bollenbacher stated that plaintiff had failed to change her accounting system after he had asked her to do so. In addition, he identified the following problems which, in combination, had led him to the decision to fire plaintiff: (1) plaintiff's working an average of 47 hours per week after being changed from salaried to hourly status and being asked by Bollenbacher[126 MICHAPP 358] to work only 40-hour weeks; (2) plaintiff's sending her own audit to the bank without Bollenbacher's knowledge and before the certified public accountants had finished their six-month audit; (3) the considerable discrepancy between the audits.

Plaintiff disputed the stated reasons for her discharge. She testified that Bollenbacher never gave her any direction, that he had never asked her to work a 40-hour week and that it had always been her responsibility to send audits to the bank. She stated that Bollenbacher had asked her to delegate more responsibility, but that she had not refused to do so. She described Bollenbacher's fiery temper and the resultant tension in the office.

Plaintiff also testified that it had been her understanding that she would continue as office manager until she quit or until she was not able to do the job properly. She described the meeting at which the employee manual had been presented, and testified that the employees were told that the manual contained the "rules and regulations" that would thenceforth be followed.

Presented in the employee manual are a detailed description of the company--its history and organization--and extended discussion of employee classifications, schedules, promotions, salaries, wages, performance reviews, benefits and terminations. With particular reference to employee performance and discharge, the manual sets out a comprehensive scheme of work rules. The following policy statement precedes these work rules:

"If You Are Discharged

"We don't expect it to happen very often, but on occasion we will have reason to discharge an employee. The fact is, some people do not do their fair share of [126 MICHAPP 359] work, or do not adhere to guidelines, or just cannot get along with other employees. When one or all of these situations take place, we are forced to discharge the person(s) involved. Naturally, discharged employees forfeit all employee benefits.

"No employee will be discharged without prior final warning, except for cases involving dishonesty, gross insubordination and other such serious offences as defined in the Terminal work rules section of this manual. Any final warning will not remain in effect for more than twelve (12) months." (Emphasis in original.)

The work rules address problems of theft, physical violence, drinking and drugs (all subject to immediate discharge without final warning); possession of illegal weapons, failure to comply with garnishment requirements and failure to follow safety procedures (a written, final warning at first offense and immediate discharge at second offense); solicitation (written warning at first offense, 3 day payless suspension with final warning at second offense and immediate discharge at third offense); and gambling, obscenity, unauthorized use of telephones, tardiness and absenteeism (written warnings at first and second offenses, 3 day payless suspension with final warning at third offense, and immediate discharge at fourth offense). Gross misconduct, which is subject to immediate discharge, with no final warning, is defined as:

"The refusal to do assigned work (includes walking off the job); deliberate insubordination; horseplay or the deliberate violation of safety practices and procedures resulting in injuries or excessive damage; or wilful damage to equipment and property of the Terminal."

The rule concerning disciplinary action to be taken in the event of unsatisfactory employee performance provides:

[126 MICHAPP 360] "Performance

"The failure to be in your assigned work area at the scheduled time; leaving your assigned work area without the approval of your immediate supervisor (except in the case of emergency, accident or injury); loafing or stalling during working hours; failure to report to your immediate supervisor that you have completed your assigned task(s); failure to properly follow orders or instructions of your supervisor; and a demonstrated and repeated failure or inability to meet minimum standards of responsibility, skill, or other requirements inherent in the work assigned, including the failure to meet minimum production and/or quality standards.

                "First offense   -  Written warning
                 Second offense  -  Written warning
                 Third offense   -  3 day suspension
                                    without pay, including
                                    final warning
                 Fourth offense  -  Subject to immediate
                                    discharge"
                

The trial court found that the difficulties which led to plaintiff's discharge were merely a manifestation of the personality conflict between plaintiff and Bollenbacher. The court found: (1) that plaintiff's employment contract was of indefinite duration and terminable at the will of either party, citing Lynas v. Maxwell Farms, 279 Mich. 684, 273 N.W. 315 (1937); (2) that the Supreme Court's "pronouncements [in Toussaint v. Blue Cross, supra ] concerning...