Gries v. Zimmer, Inc., C-C-87-0576-P

• Decision Date: 28 February 1989
• Docket Number: No. C-C-87-0576-P,C-C-87-0577-P.,C-C-87-0576-P
• Citation: 709 F. Supp. 1374
• Court: U.S. District Court — Western District of North Carolina
• Parties: Wayne R. GRIES, Plaintiff, v. ZIMMER, INC., Defendant. Michael J. MORAN, Plaintiff, v. ZIMMER, INC., Defendant.

709 F. Supp. 1374

Wayne R. GRIES, Plaintiff, v. ZIMMER, INC., Defendant.

Michael J. MORAN, Plaintiff, v. ZIMMER, INC., Defendant.

Nos. C-C-87-0576-P, C-C-87-0577-P.

United States District Court, W.D. North Carolina, Charlotte Division.

February 28, 1989.

Louis L. Lesesne, Jr., Gillespie, Lesesne & Connette, and Richard A. Vinroot, Robinson, Bradshaw & Hinson, Charlotte, N.C., for plaintiffs.

Martin N. Erwin, Julie C. Theall, Smith Helms Mulliss & Moore, Greensboro, N.C., for defendant.

MEMORANDUM AND ORDER

ROBERT D. POTTER, Chief Judge.

I. PRELIMINARY STATEMENT

THIS MATTER is before the Court on Defendant's Motion for Partial Summary Judgment, filed July 8, 1988. On January 24, 1989, a hearing was conducted on this motion, the undersigned presiding. Attorneys Louis L. Lesesne, Jr., Richard A. Vinroot, and Sam Walker appeared at the hearing to argue on Plaintiffs' behalf, and attorneys Martin N. Erwin and Julie C. Theall appeared on Defendant's behalf. After hearing the arguments of counsel, the undersigned took the motion under advisement. For the reasons that follow, this Court will grant Defendant's Motion for Partial Summary Judgment and will dismiss Counts 2 and 3 of Plaintiffs' Complaints.

II. NATURE OF THE CASE

These cases have been consolidated for trial. Plaintiffs were employed by Defendant. On April 6, 1987, Defendant terminated Plaintiffs' employment. Plaintiffs have filed two, substantially similar, three-count complaints. In Count 1 of both Complaints, Plaintiffs allege age discrimination, a violation of the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C.A. §§ 621-634 (West 1985 & Supp. 1988) ("ADEA"). This Court's subject-matter jurisdiction over Plaintiffs' age discrimination claims is based upon 28 U.S.C.A. § 1331 (West Supp.1988) (federal question), and 28 U.S.C.A. § 1343(a)(4) (West Supp. 1988) (civil rights). In the present motion, however, Defendant is seeking summary judgment only on Counts 2 and 3 of Plaintiffs' Complaints, and, therefore, this Court will not discuss the facts or the law relating to Plaintiffs' age discrimination claims.

In Counts 2 and 3 of both Complaints, Plaintiffs allege breach of contract. Specifically, Plaintiffs allege that Defendant induced each of them to move from their state of residence, Virginia, to another state, Indiana, by assurances that they would be employed with Defendant for as long as they adequately performed their jobs. Plaintiffs contend that their moves to Indiana constitute sufficient independent consideration to make their employment with Zimmer terminable only for cause. Plaintiffs conclude that Defendant's termination of their employment was done without cause and, thus, breached their employment agreements. In addition, Plaintiffs allege that certain provisions of Defendant's employee handbook — which provided for "bumping" of more junior employees in other positions during reductions-in-force — guaranteed to them permanent employment. Plaintiffs contend that Defendant's termination of their employment breached this portion of their employment agreements. Plaintiffs are seeking damages and injunctive relief on their breach of contract claims.

This Court has diversity jurisdiction, 28 U.S.C.A. § 1332(a) (West Supp.1988), over Plaintiffs' breach of contract claims because the parties are citizens of different states and the amount in controversy exceeds $10,000.00.

Defendant denies, in its Answer, having made any representations to Plaintiffs regarding "permanent employment" and denies that Plaintiffs were guaranteed permanent employment by any provisions of Defendant's employee handbook. Nevertheless, Defendant contends in its Motion for Partial Summary Judgment that even if Plaintiffs' allegations are taken as true, for the purposes of the motion, they must fail as a matter of law.

III. QUESTIONS PRESENTED

(1) Under North Carolina's choice of law rules, which this Court must apply to Plaintiffs' diversity claims, does North Carolina's law or Indiana's law apply to Counts 2 and 3 of Plaintiffs' complaints, which allege breach of contract?

(2) If Indiana's law governs, then should this Court refuse to apply it because it is purportedly contrary to North Carolina's settled public policy?

(3) Since Plaintiffs did not have an employment agreement for a definite amount of time, were Plaintiffs merely "at-will" employees, under the applicable state's law, who could be discharged for good cause, bad cause, or no cause at all without giving rise to an action for damages or did Plaintiffs furnish sufficient independent consideration to support a promise of permanent employment?

(4) Did statements in Defendant's employee handbook become, under the applicable state's law, part of Plaintiffs' employment agreements with Defendant and guarantee to them "bumping" rights?

IV. STATEMENT OF FACTS¹

The material facts, taken in the light most favorable to the Plaintiffs, the non-moving parties, are as follows:

A. Plaintiffs

Michael J. Moran ("Moran") is a citizen and resident of Mecklenburg County, North Carolina. Wayne R. Gries ("Gries") is a resident and citizen of Mecklenburg County, North Carolina.

B. Defendant

Zimmer, Inc. ("Zimmer") is a Delaware corporation, and it is a wholly owned subsidiary of Bristol-Myers. Zimmer manufactures and retails orthopedic devices and related surgical instruments and supplies. (Davis Depo. at 3). Zimmer's principal place of business is in Warsaw, Indiana, but it also has offices and plants in several other states, including California, Colorado, Georgia, New York, Ohio, Texas, and North Carolina. (Davis Depo. at 4). Zimmer employs in excess of three thousand people. (Davis Depo. at 4).

C. The Present Action

(1) Moran

From 1973 until 1975, Moran worked as the assistant division controller for Crawford Manufacturing Company ("Crawford"), in Richmond, Virginia. (Moran Aff. at 1; Moran Depo. at 7). In 1975, Moran's immediate supervisor told him that he should seek other employment because new owners were going to take control of Crawford. (Moran Depo. at 18-19).²

Zimmer interviewed Moran for a position.³ At the time Moran accepted his position with Zimmer in Indiana, he was told that he was being hired as a "permanent employee who would be removed only for good cause," (Moran Aff. at 1), and that as long as he did his job and performed well he would not have to worry about continued employment. (Moran Depo. at 17-18). On September 15, 1975, Moran began his employment with Zimmer in Warsaw, Indiana, as the manufacturing controller. (Moran Depo. at 7). To take this job, Moran had to quit his job with Crawford and move from Richmond to Warsaw.

In 1980, Zimmer transferred Moran to North Carolina to work as the division controller for Zimmer's Patient Care Systems Division, a division newly established at that time. (Moran Depo. at 7). At the time of the transfer, Moran was assured that all the benefits available to him at Zimmer's operation in Warsaw would be applicable to his new job in North Carolina. (Moran Depo. at 85-86). In 1984, Moran became Vice President of Operations for Zimmer's Patient Care Systems Division.

(2) Gries

From 1973 until 1979, Gries worked as the vice president and controller for United Leasing Corporation ("United Leasing"), in Richmond, Virginia. (Gries Depo. at 5; Gries Declar. at 1).

In 1978, Gries learned that Zimmer had two financial-oriented jobs: budget director and international controller. (Gries Declar. at 2). Gries was at that time looking for a new job because United Leasing was making some changes in its operations. (Gries Declar. at 2). Although Gries felt that his job was secure at United Leasing, he was attracted to Zimmer because he had learned that Zimmer was generous towards its employees. (Gries Declar. at 2). Gries applied for the two financial positions, and in December 1978 Zimmer's staffing director, Jim Steger ("Steger"), called him for an interview. (Gries Declar. at 2).

In January 1979, Steger interviewed Gries. Steger said at the interview that Gries' potential job with Zimmer might be the last job he would ever have "because Zimmer expected its employees to remain with them to retirement." (Gries Declar. at 2). In addition, Steger said that Zimmer expected loyalty from its employees and reciprocated by maintaining them on a "permanent basis." (Gries Declar. at 2). Further, Steger told Gries that Zimmer had never had a layoff since 1927 and that people who worked for Zimmer would be there until retirement because they would only be fired for incompetence or for doing something illegal. (Gries Declar. at 3). Other Zimmer employees, including Russ Schrode, director of profit planning, David Berry, vice president of finance, and Dick Milbern, corporate controller, made similar comments to Gries concerning job security at Zimmer. (Gries Declar. at 3; Gries Depo. at 6-7).

Gries relied on these assurances when he made his decision to leave United Leasing to join Zimmer. (Gries Declar. at 3). In 1979, Gries quit his job with United Leasing, sold his house in Richmond, withdrew his children, ages 12 and 14, from school, and moved to Indiana with his family to join Zimmer as the corporate budget director of the corporate staff. (Gries Declar. at 3; Gries Depo. at 6).

In 1984, Zimmer transferred Gries to North Carolina to work in Zimmer's Patient Care Systems Division. (Gries Declar. at 4). Gries was told at the time of his transfer to North Carolina that he could anticipate "permanent employment" with Zimmer. (Gries Declar. at 4). Relying on these assurances, Gries and his family moved to North Carolina to work as the Vice President of Finance for Zimmer's Patient Care Systems Division. (Gries Declar. at 4).

(3) The Reduction-In-Force

When they started their employment with Zimmer, each Plaintiff received Zimmer's employee handbook ("the Handbook"). (Moran Aff. at 1; Gries Depo. at 8-9; Plaintiffs' Consolidated Brief in...