Harris v. Duke Power Co.

• Decision Date: 02 June 1987
• Docket Number: No. 697A86,697A86
• Parties: , 2 IER Cases 269 Tony C. HARRIS v. DUKE POWER COMPANY, a corporation.
• Court: North Carolina Supreme Court

Page 357

356 S.E.2d 357

319 N.C. 627, 2 IER Cases 269

Tony C. HARRIS v. DUKE POWER COMPANY, a corporation.

No. 697A86.

Supreme Court of North Carolina.

June 2, 1987.

Russell & Sheely by Michael A. Sheely, Charlotte, and Edelstein & Payne by M. Travis Payne, Raleigh, for plaintiff-appellant.

Mullins & Van Hoy by Philip M. Van Hoy, and Duke Power Co. Legal Dept. by Robert M. Bisanar, Charlotte, for defendant-appellee.

Ogletree, Deakins, Nash, Smoak and Stewart by Stuart M. Vaughan, Jr., Raleigh, for North Carolina Associated Industries, amicus curiae.

MEYER, Justice.

In his complaint, plaintiff alleged that he had been employed as a welder by Duke Power Company at the Catawba Nuclear Power Plant and that he was discharged without cause in November 1984. Plaintiff further alleged that defendant's termination policy, as contained in its management procedure manual on the subject of "Rules of Conduct," was incorporated and became an integral part of his contract of employment. A copy of the management procedure pamphlet was attached to the complaint.

Plaintiff alleged that he was discharged from his employment in violation of the employer's Rules of Conduct as contained in the management procedure manual. He did not allege that he was employed for a fixed term or that he had furnished any special consideration for the incorporation of these rules in his employment contract.

The sole question presented on this appeal is whether the trial court erred in dismissing plaintiff's complaint. We hold that under the facts and circumstances of this case, plaintiff has failed to allege a cause of action sufficient to withstand defendant's motion to dismiss, and we therefore affirm the opinion of the Court of Appeals.

The superior court granted defendant's motion to dismiss, and the Court of Appeals affirmed, based upon plaintiff's status as an employee-at-will. The majority of the panel below held that even if the provisions of the management procedure were made part of plaintiff's contract of employment, plaintiff had no right to relief because the procedure did not contain any promise or representation that defendant would discharge plaintiff only for cause. Judge Phillips dissented, arguing that the plaintiff's complaint raised the issue of whether his employment was subject to conditions set forth in defendant's management procedure manual.

North Carolina courts have repeatedly held that absent some form of contractual agreement between an employer and employee establishing a definite period of employment, the employment is presumed to be an "at-will" employment, terminable at the will of either party, irrespective of the quality of performance by the other party, and the employee states no cause of action for breach of contract by alleging that he has been discharged without just cause. Still v. Lance, 279 N.C. 254, 182 S.E.2d 403 (1971).

The "employee-at-will" rule is subject to some well-defined exceptions. First, statutory authority often dictates that an otherwise terminable-at-will employee shall not be discharged in retaliation for certain protected activities, e.g., filing workers' compensation claims, N.C.G.S. § 97-6.1 (1985); engaging in labor union activities, N.C.G.S. § 95-83 (1985); instituting an Occupational Safety and Health Act proceeding, N.C.G.S. § 95-130(8) (1985). Second, if an employee furnishes "additional consideration" or gives something additional of value, such consideration may take the case out of the usual employment-at-will rule. Tuttle v. Kernersville Lumber Co., 263 N.C. 216, 139 S.E.2d 249 (1964) (setting forth exception, but declining to apply to the facts); Sides v. Duke University Hospital, 74 N.C.App. 331, 328 S.E.2d 818, disc. rev. denied, 314 N.C. 331, 333 S.E.2d 490 (1985) (plaintiff's moving from Michigan to North Carolina to accept position with defendant was additional consideration which took contract out of traditional employment-at-will rule). Cf. Malever v. Jewelry Co., 223 N.C. 148, 25 S.E.2d 436 (1943). See also L. Larson, Unjust Dismissal § 10.34 (1985 and Supp.1987).

Plaintiff does not fall within any of the well-recognized exceptions to the general rule that an employment contract of indefinite duration is terminable at the will of either employer or employee. He contends, however, that this Court should join those jurisdictions in which an employer's personnel policy is incorporated by reference into an employment contract. See Annot., "Right to Discharge Allegedly 'At Will' Employee as Affected by Employer's Promulgation of Employment Policies as to Discharge," 33 A.L.R.4th 120, §§ 3-4 (1984 and Supp.1986); Note, Continued Resistance to Inclusion of Personnel Policies in Contracts of Employment, 62 N.C.L.Rev. 1326 (1984); Note, Employee Handbooks and Employment At Will Contracts, 1985 Duke L.J. 196 (1985); Parker, The Uses of the Past: The Surprising History of Terminable-at-Will Employment in North Carolina, 22 Wake Forest L.Rev. 167 (1987).

Several cases decided by the Court of Appeals, and federal courts applying North Carolina law, hold that an employer's personnel manual is not part of an employee's contract of employment. Walker v. Westinghouse, 77 N.C.App. 253, 335 S.E.2d 79 (1985), disc. rev. denied, 315 N.C. 597, 341 S.E.2d 39 (1986) (handbook not part of employment contract, notwithstanding language that the handbook would "become more than a handbook ... it will become an understanding"); Smith v. Monsanto Corp., 71 N.C.App. 632, 322 S.E.2d 611 (1984) (company policy not incorporated in employment contract); Griffin v. Housing Authority, 62 N.C.App. 556, 303 S.E.2d 200 (1983) (defendant-employer's personnel manual not expressly incorporated into plaintiff's contract of employment); Williams v. Biscuitville, Inc., 40 N.C.App. 405, 253 S.E.2d 18, cert. denied, 297 N.C. 457, 256 S.E.2d 810 (1979) (operations manual unilaterally adopted by employer and could be changed; employer could discharge plaintiff in manner not set forth in manual); Rupinsky v. Miller Brewing Co., 627 F.Supp. 1181 (W.D.Pa.1986) (applying North Carolina law). We have not been persuaded to depart from the rules developed and applied in our prior decisions.

It is noteworthy that in those jurisdictions in which statements in employment handbooks have been treated as binding on the employer, making the traditional rule of employment-at-will inoperative, the handbook, policy manual, or personnel manual contains an express representation that employees will be dismissed only for "just cause." Toussaint v. Blue Cross and Blue Shield of Michigan, 408 Mich. 579, 292 N.W.2d 880, reh'g denied, 409 Mich. 1101 (1980). Compare Weiner v. McGraw Hill, 57 N.Y.2d 458, 443 N.E.2d 441, 457 N.Y.S.2d 193 (1982) (handbook indicated that employer would resort to dismissal for "just and sufficient cause only") with Sabetay v. Sterling Drug, Inc., 69 N.Y.2d 329, 506 N.E.2d 919, 514 N.Y.S.2d 209 (1987) (personnel manual merely suggests standards for dismissal; employee fails to demonstrate express limitation on employer's unfettered right to discharge). See L. Larson, Unjust Dismissal § 8.02 (1985 and Supp.1987).

Plaintiff relies on Trought v. Richardson, 78 N.C.App. 758, 338 S.E.2d 617, disc. rev. denied, 316 N.C. 557, 344 S.E.2d 18 (1986). There, the plaintiff alleged, inter alia, that the hospital's policy manual provided that employees could be discharged only for cause; that when she was hired as a nurse, she was required to sign a statement that she had been read the policy manual; and that she had been discharged without cause. The Court of Appeals held that such allegations were sufficient to defeat defendant's motion to dismiss. While this Court has not addressed the issue presented in Trought and does not do so here, that case is readily distinguished from the case at bar by reason of the specific no-discharge-except-for-cause allegation in Trought. The management procedure in question here, and upon which plaintiff relies, contains no such express representation, and plaintiff does not so allege.

Plaintiff's complaint alleges that he performed a particular weld or "tack" at the request of a fitter. This procedure was investigated by management employees, and plaintiff was then discharged for Class B and Class C violations. Plaintiff alleges that his actions in making the weld were, at most, a Class B (concealing defective work) violation.

On a motion to dismiss pursuant to Rule 12(b)(6), we treat the factual allegations of the complaint as if they were established. Sutton v....