Geldreich v. American Cyanamid Co.

Citation299 N.J.Super. 478,691 A.2d 423
PartiesRichard GELDREICH, Plaintiff-Respondent/Cross-Appellant, v. AMERICAN CYANAMID COMPANY, Defendant-Appellant/Cross-Respondent.
Decision Date15 April 1997
CourtNew Jersey Superior Court – Appellate Division
Steven L. Lapidus, Newark, for appellant (Robinson, Lapidus & Livelli, attorneys; Mr. Lapidus, Serene M. Hennion, and Virginia L. Hardwick, on the brief)

Patrick J. Monaghan, Jr., Hackensack, for respondent (Monaghan, Monaghan, Lamb & Marchisio, attorneys; Mr. Monaghan, Mark F. Heinze, and Salvatore E. Rozzi, on the brief).


The opinion of the court was delivered by


Defendant American Cyanamid Company appeals a wrongful discharge verdict rendered against it in favor of plaintiff for $315,000. Plaintiff Richard Geldreich cross-appeals from the dismissal by the trial court of his age discrimination claim brought against defendant pursuant to the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -42.


Plaintiff began a thirty-one year professional career with defendant in 1960, at age 23, starting as an accounts payable trainee at its Formica subsidiary company in Ohio. Initially, he earned $375 per month. Over the years and after several relocations and many promotions, plaintiff was transferred to defendant's headquarters in Wayne, New Jersey as a manager of plant accounting and data processing for the Fibers Division. In 1983, plaintiff was promoted to Manager of Accounting Systems for the Chemical Group Controllers Department in which position he remained until February 13, 1991, when plaintiff was summarily informed that he was being terminated by reason of a reduction in force. At that point in time, plaintiff was fifty-four years of age, was earning $85,000 per year, and had worked for defendant and its subsidiaries for a total of thirty-one years.

Plaintiff then brought this suit in two counts, first, alleging age discrimination in violation of the LAD provisions and, second, alleging wrongful termination in violation of defendant's written personnel policy for salaried non-union employees since defendant did not seek to find and offer to plaintiff alternative employment within the company prior to his termination.

It appears that throughout his career with defendant, plaintiff received consistently favorable performance reviews which, over the years, contained such phrases as "excellent performance," "[o]verall performance and results are very good," "excellent 'feel' for financial data," "meets all major requirements," "excels in several major areas," and "has performed with enthusiasm and accuracy." At trial, plaintiff's supervisor, Robert Ritter, testifying for the defense, asserted that plaintiff was "only a fair accountant" and that other employees had told him that plaintiff was "difficult to work with at times."

On January 1, 1967, plaintiff entered into an Employment Agreement with a subsidiary of defendant. The agreement provided in part:

The EMPLOYEE'S employment hereunder shall ... continue until the earlier of the EMPLOYEE'S death or his retirement date under any applicable retirement ....

plan then in effect, subject to the right of either the EMPLOYEE or the COMPANY to terminate the employment by written notice....

This Agreement constitutes the entire understanding between the parties hereto ... and shall not be changed or modified except by a written instrument signed by both parties.

This Employment Agreement was subsequently assigned to defendant and was in effect when plaintiff was terminated.

Defendant claims that this agreement, which governs the relationship between the parties, is for an indefinite term and was therefore an at-will employment terminable with or without cause for any reason whatsoever. See Woolley v. Hoffmann-La Roche, Inc. 99 N.J. 284, 290-91, 491 A.2d 1257 (1985). On the other hand, plaintiff claims that defendant had a long-standing policy assuring that defendant would make special efforts to preserve the careers of long-service employees, even during a down-sizing for economic reasons, and asserts that defendant failed to honor its written promise to give deference to plaintiff's seniority during any reduction in force. Plaintiff relies on defendant's Personnel Policy Memorandum No. 8 (PPM-8), effective January 1, 1981, which in part provides:


1.1 To ensure equitable and consistent treatment of employees in all cases of termination of employment, and to ensure performance of the obligations and requirements of the Employment Agreement on the part of both the employee and the Company.


4.2 Involuntary Termination


b. Reduction in Force for Economic Reasons

(i) When it is necessary to terminate an employee because of a reduction in force or because the job is no longer needed, efforts will be made (particularly in the case of any long service employee) to take one or more of the following measures:

1. place the employee in a job of comparable level within the division;

2. examine the possibility of assigning the employee to a job of lower level and/or salary in the division;

3. explore the possibility of transfer of the displaced employee to another division ii) In the event that none of the above measures succeed, the employee is to be informed of the decision and the reasons therefor.

(iii) The provisions of Paragraphs 4.1 c, d, e and f will then be followed.

PPM-8 is one of several memoranda which constitute defendant's Personnel Policy Manual. Plaintiff was given a copy of PPM-8 in the 1980's as part of his job responsibility in dealing with the special accounting treatment of termination pay. Plaintiff was also given access to the entire Personnel Policy Manual by his immediate supervisor. Plaintiff testified that he understood the policy contained in PPM-8 was to be enforced. There never was any disclaimer in the books he had been given and he only saw a disclaimer after this litigation began.

The Personnel Policy Manual produced at trial does have a disclaimer on the first page which states:


The information contained in the Personnel Policy Memoranda is solely for the guidance of personnel representatives and is not intended to create any contractual right or obligation, either expressed or implied. The terms and conditions of employment of American Cyanamid Company non-union represented employees are governed solely by the Employment Agreement executed by the Company and the employee.

It does not appear that PPM-8 was distributed to the general non-unionized work force of defendant. Nevertheless, PPM-8 was not marked "confidential." It was made available for review by employees who sought to review it. Plaintiff had access to PPM-8 by virtue of his job. Other employees at plaintiff's level or higher had possession or access as well. Significantly, plaintiff testified that he expected the policy expressed in PPM-8 to be binding and continued his employment with PPM-8 in mind. We hold that the dissemination of PPM-8 coupled with the widespread awareness of its contents by management met the distribution test required by Woolley v. Hoffmann-La Roche, supra, 99 N.J. at 297-99, 491 A.2d 1257.


Under certain circumstances, a company's employment manual or, as here, a document such as defendant's Personnel Policy Memorandum No. 8, may contractually bind the company notwithstanding the fact that it contains a disclaimer negating the intent to create a contractual right or obligation.

Woolley makes it very clear that:

[I]f the employer, for whatever reason, does not want the manual to be capable of being construed by the court as a binding contract, there are simple ways to attain that goal. All that need be done is the inclusion in a very prominent position of an appropriate statement that there is no promise of any kind by the employer contained in the manual; that regardless of what the manual says or provides, the employer promises nothing and remains free to change wages and all other working conditions without having to consult anyone and without anyone's agreement; and that the employer continues to have the absolute power to fire anyone with or without good cause.

[99 N.J. at 309, 491 A.2d 1257.]

The language contained in the manual must be such that no one could reasonably have thought it was intended to create legally binding obligations. Id. at 299, 491 A.2d 1257. If one could reasonably think otherwise, then the termination provisions "would have to be regarded as an obligation undertaken by the employer." Id.

In our view, PPM-8 does contain language from which an employee could reasonably conclude that defendant bound itself to undertake certain procedures in the event of an involuntary termination. PPM-8 announces to an objective reader something more than good intentions. It may reasonably be read to indicate:

(A) The objective of PPM-8 is to "ensure equitable and consistent treatment of employees in all cases of termination ...." (Emphasis added).

(B) In the event of an involuntary termination by reason of a reduction in force for economic reasons "efforts will be made to take one or more of the following measures: ...." (Emphasis added).

(C) "In the event that none of the ... measures succeed, the employee is to be informed of the decision [of termination]." (Emphasis added).

(D) The provisions of Paragraphs 4.1 c, d, e and f (voluntary termination) "will then be followed." (Emphasis added).

The disclaimer notice contained in the Personnel Policy Manual indicates that it is "solely for ... guidance ... and not intended to create any contractual right...." However, the unqualified requirements for action underlined above, were obviously intended to create, for the benefit of defendant, a climate of employee confidence and reliance upon the company's compliance with the stated procedures. In the face of these unqualified statements in PPM-8, the separate...

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