Foote v. Simmonds Precision Products Co., Inc.

• Decision Date: 08 May 1992
• Docket Number: No. 90-182,90-182
• Citation: 158 Vt. 566,613 A.2d 1277
• Parties: , 10 IER Cases 1689 Fletcher E. FOOTE v. SIMMONDS PRECISION PRODUCTS CO., INC., Robert Morris, Paul Brace and Anthony Panella.
• Court: Vermont Supreme Court

Page 1277

613 A.2d 1277

158 Vt. 566, 10 IER Cases 1689

Fletcher E. FOOTE v. SIMMONDS PRECISION PRODUCTS CO., INC., Robert Morris, Paul Brace and Anthony Panella.

No. 90-182.

Supreme Court of Vermont.

May 8, 1992.

Motion for Reargument Denied June 22, 1992.

Thomas Z. Carlson, Langrock, Sperry & Wool, Burlington, for plaintiff-appellee.

Craig Weatherly, Gravel and Shea, Burlington, for defendant-appellant.

Before ALLEN, C.J., DOOLEY, MORSE and JOHNSON, JJ., and PECK, J. (Ret.), Specially Assigned.

JOHNSON, Justice.

The primary issue before us is whether the doctrine of promissory estoppel may modify an employment contract that is otherwise terminable at will. We hold that it may and affirm.

This is an appeal from a jury verdict for plaintiff, Fletcher Foote, against his former employer, Simmonds Precision Products Co., Inc. Plaintiff was discharged from his employment as a computer operator after approximately twenty years of service. Defendant claimed that plaintiff was fired for falsifying his time card. Plaintiff alleged that his discharge was the result of his efforts to use the grievance procedure published in the company's employee handbook. The procedure assured employees that "[i]f you follow these steps, you cannot be criticized or penalized in any way." Plaintiff claimed that he relied on this promise of nonretaliation. Defendant pointed to another passage in the employee handbook, which stated that "[t]he employment relationship between the company and you may be terminated by either party at any time." On that basis, it contended that plaintiff was an at-will employee and it was entitled to discharge him.

The evidence showed that, prior to his use of the grievance procedure, plaintiff had an excellent work history as a senior computer operator at Simmonds. His periodic evaluations were consistently very good to outstanding. In the late summer of 1986, he and other operators became concerned about the hiring of a supervisor whom they considered unqualified, and about changes in pay and benefit practices. Although plaintiff wanted to pursue these problems through defendant's grievance process, he was concerned about losing his job. He consulted an employee relations manager about how to pursue grievances within the company's policy. The manager referred him to the "Problem-Solving Procedure" in the employee handbook, containing the language that employees could not be criticized or penalized in any way if they complied with the procedures. Defendant's personnel manager testified that the company intended that employees rely on the statement.

Plaintiff attempted to follow the procedure, but was met with increasing irritation by his supervisors. In December 1986, plaintiff suffered a poor work evaluation, which he claimed was unjustified. Three months later, he was discharged. According to defendant, plaintiff recorded hours on his time card that he had not actually worked. Plaintiff contended he was relying on a policy that allowed computer operators to leave before the end of their shifts. Defendant claimed it had discontinued the policy and specifically notified plaintiff.

The jury believed plaintiff's side of the story. Although plaintiff proceeded on express and implied contract theories, as well as promissory estoppel, the jury based its verdict solely on promissory estoppel. Its verdict was reflected in a series of interrogatories. The relevant interrogatories and answers were:

1. At the time of termination of employment of Fletcher Foote, was there an employment contract that could be terminated at will by the employer? Yes.

2. At the time of termination of employment, was there an employment contract that required good cause for termination of employment by the employer? No.

3. Did Simmonds Precision Products Co., Inc. breach a contract of employment when Fletcher Foote was terminated from employment? No.

4. Was Fletcher Foote terminated from employment by Simmonds Precision Products Co., Inc. for good cause? No 5. Were Fletcher Foote's grievances the real reason leading to termination and the real reason for termination was not any false time card and the employer should be estopped from saying he was properly terminated? Yes.

7. What damages do you find, if any, for breach of contract? $150,000.00.

After the jury returned its verdict, an additional interrogatory was submitted and answered, as follows:

Is the damage amount of $150,000.00 for damages proximately caused by the promissory estoppel answer of question # 5. Yes.

On appeal, defendant argues that the trial court erred in denying its motions for a directed verdict and for judgment notwithstanding the verdict. Although variously phrased, defendant's arguments boil down to three--promissory estoppel should not have been charged as an independent cause of action that may modify an at-will employment contract, the jury's answers to the interrogatories are legally inconsistent, and alternatively, that the evidence was insufficient to prove the elements of promissory estoppel. ¹

The legal question raised by motions for directed verdict and for judgment notwithstanding the verdict under V.R.C.P. 50 is the same. The question is whether the result reached by the jury is sound in law on the evidence produced. Kinzer v. Degler Corp., 145 Vt. 410, 412, 491 A.2d 1017, 1018 (1985). In reviewing the denial of these motions, we view the evidence in the light most favorable to the nonmoving party and exclude the effect of any modifying evidence. Center v. Mad River Corp., 151 Vt. 408, 413, 561 A.2d 90, 93 (1989). If any evidence fairly or reasonably supported a lawful theory of the plaintiff, then the trial court acted properly in denying the motions. Id.

I.

We turn first to defendant's argument that at-will employment and the doctrine of promissory estoppel are mutually exclusive, and that the court's instructions on these issues produced a verdict that is legally inconsistent.

As we stated in Sherman v. Rutland Hospital, 146 Vt. 204, 207, 500 A.2d 230, 232 (1985), an employment contract for an indefinite term is an "at-will" agreement, terminable at any time, for any reason. However, this is simply a rule of contract construction. Toussaint v. Blue Cross & Blue Shield, 408 Mich. 579, 596-97, 292 N.W.2d 880, 884 (1980). The common law presumes the existence of an at-will provision when employment is for an indefinite term. It is a presumption that may, like any other, be overcome by evidence to the contrary. Pugh v. See's Candies, Inc., 116 Cal.App.3d 311, 324, 171 Cal.Rptr. 917, 924 (1981). The rule imposes no substantive limitation on the right of contracting parties to modify terms of their arrangement or to specify other terms that supersede the terminable-at-will provision. Sherman, 146 Vt. at 207, 500 A.2d at 232; Helle v. Landmark, Inc., 15 Ohio App.3d 1, 7, 472 N.E.2d 765, 772 (1984).

Aside from bilateral modifications as in Sherman, at-will employment contracts may be modified by statute or common law. Federal and state laws prohibiting discrimination on the basis of race, sex, religion, national origin, handicap and age are examples of statutory modifications that alter every at-will contract in Vermont. 42 U.S.C. § 2000e-2(a); 21 V.S.A. § 495(a). Common law public policy exceptions to the at-will doctrine have also been recognized in this state. Payne v. Rozendaal, 147 Vt. 488, 491, 520 A.2d 586, 588 (1986); Jones v. Keogh, 137 Vt. 562, 564, 409 A.2d 581, 582 (1979).

A number of courts have held that an employer may unilaterally modify an at-will contract, by publishing a company handbook or manual on which it intends employees to rely. See Thompson v. St. Regis Paper Co., 102 Wash.2d 219, 229-30, 685 P.2d 1081, 1087-88 (1984) (employer's unilateral objective manifestation of intent that employee will remain on job creates expectation, and obligation of treatment in accord with written promises); Toussaint, 408 Mich. at 619, 292 N.W.2d at 895 (employer may not treat announced promise to dismiss for cause only as illusory); Continental Air Lines v. Keenan, 731 P.2d 708, 711-12 (Colo.1987) (at-will employee may be able to enforce termination procedures in employee manual under theories of unilateral contract or promissory estoppel).

Similarly, promissory estoppel may modify an at-will employment relationship and provide a remedy for wrongful discharge. Mers v. Dispatch Printing Co., 19 Ohio St.3d 100, 105, 483 N.E.2d 150, 155 (1985); Rognlien v. Carter, 443 N.W.2d 217, 220 (Minn.Ct.App.1989). Contrary to defendant's assertion, it is an independent cause of action, and may be used affirmatively, if the elements are present. See Larose v. Agway, Inc., 147 Vt. 1, 3-4, 508 A.2d 1364, 1366 (1986) (insufficient evidence on element of reliance deprived discharged employee of promissory estoppel claim).

Nothing about the at-will doctrine suggests that it does not coexist with numerous modifications and exceptions imposed by law, including the law of promissory estoppel, depending on the facts of a particular case. Whether or not these modifications technically remove the employment contract from the at-will realm, as defendant argues, is form over substance. Even with modifications, employees for an indefinite term are still considered at-will employees, who may be discharged for any number of...