Humphreys v. Bellaire Corp.

• Decision Date: 04 June 1992
• Docket Number: No. 91-3584,91-3584
• Citation: 966 F.2d 1037
• Parties: 122 Lab.Cas. P 56,980, 15 Employee Benefits Cas. 1644 David A. HUMPHREYS, Plaintiff-Appellant, v. BELLAIRE CORPORATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1037

966 F.2d 1037

122 Lab.Cas. P 56,980, 15 Employee Benefits

Cas. 1644

David A. HUMPHREYS, Plaintiff-Appellant, v. BELLAIRE CORPORATION, Defendant-Appellee.

No. 91-3584.

United States Court of Appeals, Sixth Circuit.

Argued March 16, 1992.

Decided June 4, 1992.

Melvin P. Stein (argued and briefed), Kuhn, Engle & Stein, Pittsburgh, Pa., J. Mark Costine, Costine & Costine, St. Clairsville, Ohio, for plaintiff-appellant.

James A. Rydzel (argued and briefed), Robert S. Gilmore, Jones, Day, Reavis & Pogue, Cleveland, Ohio, David C. Crago, Jones, Day, Reavis & Pogue, Columbus, Ohio, for defendant-appellee.

Before BATCHELDER, Circuit Judge; LIVELY, Senior Circuit Judge; and TAYLOR, District Judge. ^*

BATCHELDER, Circuit Judge.

Plaintiff-appellant, David Humphreys, who was discharged after almost ten years of employment, claimed in the district court that his discharge constituted a breach of employment contract and a violation of ERISA, and that it violated principles of promissory estoppel. The district court granted summary judgment for the defendant-appellee, North American Coal Corporation, ¹ on all counts of Humphreys' complaint. We affirm.

I. BACKGROUND

The district court presented the facts thoroughly and accurately in its opinion, Humphreys v. Bellaire Corp., 764 F.Supp. 489 (S.D.Ohio 1991), and we will only capsulize them here. Humphreys had worked for Quarto Mining Company, a subsidiary of North American, for almost ten years when he was discharged in early April, 1987. ² He had worked at a number of management positions prior to 1983, the year Robert Murray became executive vice president of North American. When Murray arrived, he promoted Humphreys to mine manager of the Quarto mine. ³ Humphreys claims that from some time in 1984 to March 1987, Murray made promises and assurances to him of continued employment with North American. Some of these representations were made only to Humphreys, while others were made to Humphreys and other employees in groups of two, four, or as many as twelve to fifteen. The most specific of these representations were that Humphreys (and sometimes others) would have a job with North American with no cut in pay regardless of what happened to the Quarto mine. The sale of the Quarto mine took effect in early April 1987, and when North American discharged Humphreys, he took a job at a lower salary with the purchaser of the mine. Humphreys then brought this lawsuit.

Humphreys asserted three claims in his complaint: (1) that he was terminated in violation of an oral contract; (2) that he detrimentally relied upon the promises of North American's president and chief operating officer, Robert Murray; and (3) that his termination was in violation of ERISA, 29 U.S.C. § 1140. After discovery, the district court granted summary judgment for North American on each of these claims. Humphreys v. Bellaire Corp., 764 F.Supp. 489 (S.D.Ohio 1991). The court held that Humphreys' contract claim must fail because (1) there was no specific term of employment, (2) Humphreys failed to adduce proof that both parties intended to alter the employment relationship, which the district court presumed to be at will, and (3) Humphreys provided no additional consideration for the alleged promise of job security. The court granted summary judgment for North American on the estoppel claim because Humphreys did not show an issue of fact on the elements of (1) actual detrimental reliance, and (2) reasonable reliance. Finally, the district court held that because Humphreys was an at-will employee, who could be discharged at any time, "plaintiff's ERISA claims need not be addressed." 764 F.Supp. at 494.

II. DISCUSSION

A. Contract Claim

On appeal, Humphreys contends that the contractual promise which he seeks to enforce is one of employment with North American regardless of whether the Quarto contract was cancelled. Taken as a whole, however, Humphreys' deposition testimony clearly indicates that his understanding of Murray's representations was that the "contract" he had with North American was for permanent employment until he decided to retire or otherwise leave. As North American points out, this is the only reasonable interpretation of Humphreys' contract claim. If the alleged contract really was for employment regardless of whether North American operated the mine, Humphreys' employment status after the mine was actually closed or sold would once again be employment at will.

The general rule in Ohio is that unless otherwise agreed to by the parties, an employment agreement purporting to be permanent or for life, or for no fixed time period is considered to be employment terminable at the will of either party. Henkel v. Education Research Council, 45 Ohio St.2d 249, 344 N.E.2d 118 (1976). However, Ohio recognizes exceptions to this rule, particularly that

the facts and circumstances surrounding an oral employment-at-will agreement, including the character of the employment, custom, the course of dealing between the parties, company policy, or any other fact which may illuminate the question, can be considered by the trier of fact in order to determine the agreement's explicit and implicit terms concerning discharge.

Mers v. Dispatch Printing Co., 19 Ohio St.3d 100, 483 N.E.2d 150, 154 (1985). Since Humphreys' alleged contract admittedly was for no specific period of time, his employment was presumptively at will. In order for Humphreys' employment to be considered other than at will, at a minimum Humphreys must have furnished North American some consideration for its promise of continued employment. The rule in Ohio is as follows:

Generally speaking, a contract for permanent employment, for life employment, or for other terms purporting permanent employment, where the employee furnishes no consideration additional to the services incident to the employment, amounts to an indefinite general hiring terminable at the will of either party, and a discharge without cause does not constitute a breach of such contract justifying recovery of damages.

Henkel, 45 Ohio St.2d at 255, 344 N.E.2d at 121-22 (emphasis supplied). The Supreme Court of Ohio reiterated this rule in Mers, and Ohio courts of appeals have followed it consistently. E.g., Shaffer v. Frontrunner, Inc., 57 Ohio App.3d 18, 566 N.E.2d 193 (1990); Boggs v. Avon Products, Inc., 56 Ohio App.3d 67, 564 N.E.2d 1128 (1990); Boundy v. Arnold Haviland Co., 33 Ohio App.3d 156, 514 N.E.2d 931 (1986).

At oral argument, counsel for Humphreys conceded that the only consideration supplied by Humphreys was his forbearing from looking for other employment, but contended that this inactivity supplied all the consideration necessary to support the alleged contract. In support of this proposition, counsel cited Helle v. Landmark, Inc., 15 Ohio App.3d 1, 472 N.E.2d 765 (1984). In Helle, however, the employer had made new promises of severance benefits to its employees, and the court addressed the effect of those promises on an existing employment contract for a definite term, not the length of employment contracts. Indeed, the court made it clear that the employee-plaintiffs were not employed at will because they had been told the plant was to close within one year. 472 N.E.2d at 772. Helle is therefore inapplicable here. See also Bolling v. Clevepak Corp., 20 Ohio App.3d 113, 484 N.E.2d 1367, 1372-74 (1984).

In addition, the Helle court explicitly distinguished Henkel because that case involved the right to terminate an employee, and did not involve a benefit that had been promised to the employees orally and in a personnel handbook. Id. This Court, applying Ohio law, has also distinguished between cases involving the ability to terminate and those involving other promised benefits. Bernard v. Rockwell Int'l Corp., 869 F.2d 928, 932 (6th Cir.1989). Since the present case involves the right to terminate an employment relationship, we hold that cases such as Helle and Bolling have no application here.

Henkel and Mers make it clear that merely continuing to work cannot constitute additional consideration sufficient to modify an at-will employment relationship. We see no difference between an employee's continuing his normal work and his forebearing from seeking other employment, and we attach no legal significance to such forebearance. We recognize that Ohio law might consider an employee's forebearing from accepting an offer of other employment sufficient to constitute additional consideration to support an employer's promise of permanent employment. In the present case, however, Humphreys had not received an offer of other employment which he could have turned down in exchange for the claimed promise of permanent employment. ⁴ Under these circumstances, Humphreys' continuing to work for North American cannot constitute the additional consideration necessary to support a promise of permanent employment.

Under the foregoing principles of Ohio law, we conclude that summary judgment for North American on Humphreys' contract claim was appropriate. Humphreys' alleged contract did not contain a term during which he was to remain employed. Rather, it was a contract for life, which under Ohio law constitutes a contract for employment at will. Henkel v. Education Research Council, 45 Ohio St.2d 249, 344 N.E.2d 118 (1976); Pyle v. Ledex, Inc., 49 Ohio App.3d 139, 142, 551 N.E.2d 205, 208 (1988). In addition, Humphreys provided no additional consideration to North American to support the alleged promise of continued employment. In the absence of a contract between Humphreys and North American for something more than employment terminable at will, Humphreys cannot maintain an action for breach of contract.

B. Promissory Estoppel Claim

An employer is limited in its ability to discharge an employee when representations have been made to such employee that fall within the doctrine of promissory estoppel. Mers, 483 N.E.2d at 154. To prove a claim for...