Ewers v. Stroh Brewery Co.
| Decision Date | 16 August 1989 |
| Docket Number | Docket No. 98834 |
| Citation | 443 N.W.2d 504,178 Mich.App. 371 |
| Parties | Robert G. EWERS, Plaintiff-Appellant, v. STROH BREWERY COMPANY, Defendant-Appellee. 178 Mich.App. 371, 443 N.W.2d 504, 50 Fair Empl.Prac.Cas. (BNA) 926, 119 Lab.Cas. P 56,675, 4 Indiv.Empl.Rts.Cas. (BNA) 1098 |
| Court | Court of Appeal of Michigan — District of US |
[178 MICHAPP 372] Conway, Bogdanski & Wright by Michael A. Conway and Daniel J. Wright, Troy, for plaintiff-appellant.
Butzel, Long, Gust, Klein & Van Zile by Virginia F. Metz and David B. Calzone, Detroit, for defendant-appellee.
Before McDONALD, P.J., and DOCTOROFF and NEFF, JJ.
Plaintiff, Robert G. Ewers, appeals as of right from a February 20, 1987, order granting summary disposition in favor of defendant, Stroh Brewery Company, pursuant to MCR 2.116(C)(10). We reverse.
Plaintiff sued defendant on November 15, 1984, [178 MICHAPP 373] alleging wrongful discharge, negligent breach of contract, and age discrimination in violation of the Civil Rights Act, M.C.L. Sec. 37.2101 et seq.; M.S.A. Sec. 3.548(101) et seq. The parties stipulated to dismiss with prejudice plaintiff's count for negligent breach of contract.
Plaintiff was hired by defendant approximately fifteen years before his discharge on November 16, 1981. Plaintiff was thirty-nine years old when his termination was announced, but because of defendant's "bridge-pay program" and plaintiff's accrued vacation pay, his discharge did not actually take effect until September 1, 1982, at which time plaintiff was forty years old.
Plaintiff's work record was good, and unsatisfactory performance was not the reason for his discharge. Defendant claims that plaintiff's discharge was a result of a reorganization and a reduction in the company's salaried work force brought about by "the necessity to achieve economy and efficiency." A total of eighty-seven salaried employees were terminated by defendant on November 16, 1981.
After discovery, defendant filed a motion for summary disposition pursuant to MCR 2.116(C)(10). In support of its motion for summary disposition, defendant presented evidence which it alleged indicated that the November, 1981, reduction in force was precipitated by a poor profit forecast for the fiscal year 1982, due in large part to an industry price war between Anhauser-Busch and Miller. According to defendant, the price war caused depressed economic conditions in the brewing industry. The depression forced defendant to reorganize and reduce its work force. This, in turn, resulted in plaintiff's discharge.
Plaintiff challenged the legitimacy of defendant's "economic necessity" defense and argued [178 MICHAPP 374] that he had the right to have a jury determine the true reason for his discharge.
A motion for summary disposition under MCR 2.116(C)(10) tests whether there is factual support for a claim. The court must consider the pleadings, affidavits, depositions, admissions, and other documentary evidence available to it. Dumas v. Auto Club Ins. Ass'n, 168 Mich.App. 619, 626, 425 N.W.2d 480 (1988).
The party opposing the motion has the burden of showing that a genuine issue of disputed fact exists. Dumas, supra. The nonmovant may not rest on mere allegations or denials in the pleadings, but must, by documentary evidence, set forth specific facts showing that there is a genuine issue for trial. Metropolitan Life Ins. Co. v. Reist, 167 Mich.App. 112, 118, 421 N.W.2d 592 (1988), lv. den. 431 Mich. 876 (1988). Giving the benefit of reasonable doubt to the nonmovant, the court must determine whether a record might be developed which would leave open an issue upon which reasonable minds could differ. Dumas, supra. All inferences are to be drawn in favor of the nonmovant. Dagen v. Hastings Mutual Ins Co, 166 Mich.App. 225, 229, 420 N.W.2d 111 (1987), lv. den. 430 Mich. 887 (1988). Before judgment may be granted, the court must be satisfied that it is impossible for the claim asserted to be supported by evidence at trial. Peterfish v. Frantz, 168 Mich.App. 43, 48-49, 424 N.W.2d 25 (1988).
Plaintiff first contends on appeal that the trial court erred in granting defendant's motion for summary disposition on the wrongful discharge count because the evidence shows that defendant [178 MICHAPP 375] promised to discharge him only for just cause and defendant's professed reason for plaintiff's termination--economic necessity--is false. Defendant contends that the trial court did not err in granting its motion for summary disposition on the wrongful discharge claim and that plaintiff's breach of contract claim under Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 292 N.W.2d 880 (1980), reh. den. 409 Mich. 1101 (1980), is without merit.
The record is clear that plaintiff had a just-cause discharge contract with defendant. 1 Defendant argues, however, that just-cause discharge does not apply under the present circumstances, which involve an economically motivated reduction in force. Plaintiff, on the other hand, contends that defendant's "economic necessity" defense is false and that immunizing the question whether it was economically necessary to reduce the number of employees contradicts the rationale underlying the jury review that was granted by our Supreme Court in Toussaint.
In opposition to defendant's motion for summary disposition, plaintiff relied on deposition and documentary evidence which he argued indicated that defendant was experiencing substantial economic growth and operating at a substantial profit before and after his discharge.
Using defendant's Form 10-K annual report filed [178 MICHAPP 376] with the Securities and Exchange Commission, plaintiff showed a pattern of positive net earnings and increased dividends over the 1980-82 period. The same document showed an increase in the total salaried work force from 600 to approximately 2,100. The evidence established that full bonuses were to be paid to participants in the incentive compensation plan based on the company's profitable performance in fiscal 1983.
During the same time period defendant bought Schaefer Brewery for $80,000,000 and Schlitz for $660,000,000.
The reduction in force was carried out with little or no advanced planning and with no study of its need or effect on the corporation, according to testimony of Stroh executives. In fact, the president of the corporation testified that no study was done before the decision was made to terminate the employees.
In Toussaint, supra, at p. 622, 292 N.W.2d 880, our Supreme Court stated:
Where the employer alleges that the employee was discharged for one reason--excessive tardiness--and the employee presents evidence that he was really discharged for another reason--because he was making too much money in commissions--the question also is one of fact for the jury. The jury is always permitted to determine the employer's true reason for discharging the employee. [Emphasis added.]
The issue before us is whether plaintiff's challenge to the bona fides of defendant's economic necessity defense entitles him to a jury determination of whether the economic necessity defense is the "true reason" he was discharged.
In support of its argument that summary disposition under MCR 2.116(C)(10) was proper, defendant[178 MICHAPP 377] relies, inter alia, on two relatively recent cases from this Court, Bhogaonker v. Metropolitan Hospital, 164 Mich.App. 563, 417 N.W.2d 501 (1987), lv. den. 429 Mich. 898 (1988), and Friske v. Jasinski Builders, Inc., 156 Mich.App. 468, 402 N.W.2d 42 (1986), lv. den. 428 Mich. 880 (1987). Both of those cases involved termination of the plaintiff's employment due to economic necessity.
Defendant's reliance is misplaced. The plaintiffs in those cases conceded the legitimacy of the economic necessity defense of the employer as justification for a reduction in force. 2
Defendant also relies on Boynton v. TRW, Inc., 858 F.2d 1178 (CA 6, 1988), an en banc decision. Defendant specifically relies on the following language in Boynton:
Further, while "[t]he jury is always permitted to determine the employer's true reason for discharging the employee[,]" Toussaint, 408 Mich at 622; 292 NW2d 880, we find no support for the proposition that the soundness of a management decision to effect a reduction in force solely by reason of adverse economic circumstances is also subject to jury review. See Friske, 156 Mich App at 472-73; 402 NW2d 42; Bhogaonker, 164 Mich App at 565-66; 417 NW2d 501. Accordingly, we hold that to the extent Boynton's claim challenges the "justness" of TRW's economically motivated decision to eliminate his sales position, a position left unfilled, TRW is entitled to a judgment as a matter of law. [Boynton, supra, at p. 1184.]
However, the opinion of the court in Boynton unequivocally explains that the discharge of plaintiff[178 MICHAPP 378] in that case was "concededly motivated solely by an economically mandated reduction in force." Boynton, supra, at p. 1179. The Boynton court went on to quote from the previous Court of Appeals panel's majority opinion as follows:
Boynton raised "no challenge as to the sincerity of TRW's motive in making this decision [the decision to lay off Boynton] and [made] no assertions that the reasons advanced by TRW in selecting him for termination were pretextual for any discriminatory intent, or in any way motivated by malice or bad faith." [Boynton, supra, at p. 1181.]
Defendant in this case has not cited a single case, and we have found none, where a court has held that an economic necessity reduction in force claim is a per se defense to a termination where there is a just-cause requirement. Defendant would have us hold that in all cases the employer is the sole judge and final arbiter of the legitimacy of the economic necessity defense subject to review by no one. We decline to do so.
There is no per se rule that a reduction in force...
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