Hughey v. Miles Inc., CA No. 2:95-3520-18AJ (D. S.C. 1997)

Decision Date01 March 1997
Docket NumberCA No. 2:95-3520-18AJ.
PartiesMARK HUGHEY, PLAINTIFF, v. MILES INC. AND BAYER CORP., DEFENDANTS.
CourtU.S. District Court — District of South Carolina
ORDER

DAVID C. NORTON, District Judge.

This matter is before the court upon the magistrate judge's recommendation that Defendant Bayer's ("Defendant")1 Motion for Summary Judgment be granted in part and denied in part. This record includes a report and recommendation of the United States Magistrate Judge made in accordance 28 U.S.C. § 636(b)(1)(B).

I. TIME FOR FILING OBJECTIONS

A party may object, in writing, to a magistrate judge's report within ten days after being served with a copy of that report. 28 U.S.C. § 636(b)(1). Three days are added to the ten day period if the recommendation is mailed rather than personally served. The magistrate judge's report and recommendation was filed on February 28, 1997. Plaintiff filed his timely written objections with the court on March 13, 1997. Defendant also filed timely objections with the court on March 17, 1997.

II. REVIEW OF MAGISTRATE JUDGE'S REPORT

This court is charged with conducting a de novo review of any portion of the magistrate judge's report to which a specific objection is registered and may accept, reject, or modify, in whole or in part, the recommendations contained in that report. 28 U.S.C. § 636(b)(1). Plaintiff objects to the magistrate judge's conclusions that Plaintiff did not have an employment contract with Bayer and that Plaintiff does not have a claim for breach of the implied covenant of good faith and fair dealing. Defendant objects to the magistrate judge's determination that a genuine issue of fact exists concerning Plaintiff's national origin discrimination claim. Defendant also raises the issue of Plaintiff's indirect retaliation claim, which the magistrate judge did not address.

A. Plaintiff's Objections
a. breach of contract claim

Plaintiff asserts that Defendant's written termination policies constituted an employment contract which altered his employment-at-will status. The traditional at-will employment relationship may be altered where the employer issues a handbook or other written policy. Small v. Springs Industr., Inc., 357 S.E.2d 452, 455 (S.C. 1987) (Springs I). Under certain circumstances, the handbook may create a limiting agreement on the employee's at-will status. Id.

Because a contract of employment is no different than any other type of contract, the court must look to general principles of contract law to analyze Plaintiff's claim of breach of an employment contract. Taylor v. Cummins Atlantic, Inc., 852 F. Supp. 1279, 1285 (D.S.C. 1994), aff'd, 48 F.3d 1217 (4th Cir.), cert. denied, 116 S.Ct. 176 (1995) (citation omitted) (determining the conclusions in Springs I are unquestionably based on principles of contract law, specifically unilateral contract principles).

An action for damages on a breach of an employment contract claim is predicated on the existence of a contract. Id. (citation omitted). The essential elements of a contract are an offer, an acceptance, and valuable consideration. Id. It is elemental that before a party can recover for the breach of a contract, he must allege and prove by competent, relevant testimony each one of the material elements of the contract sued on. Id.

There are two different policies Plaintiff emphasizes. The pertinent portions of one of the written termination procedures, contained in Policy No. 33, are as follows:

Purpose — To establish uniform policies and consistent procedures to be followed regarding the termination of salaried employees . . .

Should reductions in force become necessary, whether temporary (lay-offs) or permanent force reductions (terminations), they will be arranged with fairness and consideration for all employees and the Company's need to effectively operate the business.

(Mobay Corp., Bushy Park Plant Policy No. 33, Termination policy, Exhibit S, beginning paragraph).

Defendant essentially argues that it did not make an offer to Plaintiff to alter his at-will employment status. First, Defendant contends the policy manuals which contained Policy No. 33 were recalled and discarded. (Motion for Summary Judgment, p. 20). Defendant asserts the manuals were superseded by new employment policies in 1993 after Mobay was merged into Miles, Inc. (Motion for Summary Judgment, p. 20). An employee handbook may be modified by a subsequent employee handbook provided the employee is given actual notice of the modification of the handbook. King v. PYA/Monarch, Inc., 453 S.E.2d 885, 888 (S.C. 1995); Fleming v. Borden, 450 S.E.2d 597 (S.C.Ct.App. 1994).2

In his deposition, Plaintiff states that Policy No. 33 was one of two policies of which he was aware. (Plaintiff Depo., p. 50). Plaintiff also indicates he did not know if Policy No. 33 had been replaced by a later policy, but that a later policy came out after Policy No. 33. (Plaintiff Depo., p. 50). Plaintiff's testimony indicates he did not have actual notice that Policy No. 33 had been replaced by a later policy. Accordingly, this court will presume, for purposes of Defendant's Summary Judgment Motion, that Policy No. 33 applied to Plaintiff.

However, despite Policy No. 33 applying to Plaintiff, this court agrees with Defendant and the magistrate judge that the language in the policy is not sufficiently definite to create an employment contract. See Grooms v. Mobay, 861 F. Supp. 497, 506 (D.S.C. 1991), aff'd, 993 F.2d 1537 (4th Cir.), cert. denied, 510 U.S. 996 (1993); cf. Shelton v. Oscar Mayer Foods Corp., 459 S.E.2d 851 (S.C.Ct.App. 1995), cert. denied, ___ S.E.2d ___, Op. No. 24580 (Feb. 18, 1997).

The language in Policy No. 33 is virtually identical to that in Grooms, where this court determined the reduction in force language was too vague and ambiguous to create a contract. Nonetheless, Plaintiff urges this court to follow Shelton, arguing Shelton mandates a different outcome.

In Shelton the court was faced with determining whether the company's handbook language, when referring to the rules of conduct, created an employment contract. The handbook stated: "These rules are a fair way to protect everyone and the company will [en]sure that these rules will be enforced fairly and equally with regard to all employees." Id. at 856. The court concluded that "[t]his is not a case where the employer had merely made general, gratuitous assurances of fair dealing, as (defendant) would have us hold. See e.g., Mills v. Leath, 709 F. Supp. 671, 674 (D.S.C. 1988) (holding handbook language that stated `disciplinary actions taken against employees are fair, equitable and consistent in all departments' did not alter the employee's at-will status.)" The court determined the language was couched in mandatory terms, expressly guaranteeing that the employer would implement and adhere to the rules outlined, and could amount to an employment contract.

Plaintiff's case is more analogous to Grooms. The language in Policy No. 33 indicates a general assurance of fair dealing. Policy No. 33 does not include, as did the case in Shelton, mandatory language guaranteeing Defendant will follow an outlined set of rules. Rather, the language indicates that, when a reduction in force becomes necessary, the company will make attempts to be fair to the employee and the company. This language is not mandatory nor does it otherwise require the company follow a set of rules.

Even if Plaintiff could establish that Defendant's policy contained sufficiently mandatory language to be an offer for a contract of employment, he cannot show that he accepted any offer. See Springs I, 357 S.E.2d at 454 (determining that plaintiff's action or forbearance in reliance on defendant's promise was sufficient consideration to make the promise legally binding). Despite awareness of Policy No. 33, Plaintiff testified that he did not believe the policy applied to him. (Plaintiff Depo., p. 62-64). Because Plaintiff did not believe Policy No. 33 applied to him, he cannot claim he relied upon it to form an employment contract with Defendant. There is another policy containing provisions which should also be considered. Bayer's current Policy 8.2, which discusses "involuntary terminations" provides in relevant part:

The Company may initiate the termination of employment for various reasons. Termination of employment is a serious action and supervisors and human resources representatives are advised to follow the procedures outlined in this practice.

Policy 8.3 addresses Staff Reductions:

The company may decide to reduce its work force because of business conditions, reassignments or reducing or phasing out certain operations.

When a reduction in staff becomes necessary: Identify positions to be affected. Generally, the most important factors are job qualifications and performance; however, length of service is also a significant factor. Eliminate temporary employees and contract personnel. . . . Review reassignment opportunities for affected employees. Efforts are made to reassign affected salaried employees to existing vacancies at the site for which they are qualified.

The language in Policy 8.2 does not create an employment contract. Despite the evolution of handbook law, "advising" a supervisor to follow rules is not a promise or mandate sufficient to create a contract. Cf. King, 453 S.E.2d at 888 (finding that manual which states procedures "are to be followed," that company is to "abide by the policies and procedures," and that disciplinary action "will be in accordance with `established policy'" created a contract of employment).

The language in Policy 8.3 does not create an employment contract. Policy 8.3 contains the procedure Plaintiff alleges Defendant was required to and did not follow. This court cannot conclude that words or phrases such as "may decide," "when a reduction in staff becomes necessary," "generally," and "efforts are made," are promissory or...

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