Kovacs v. Electronic Data Systems Corp.

• Decision Date: 28 June 1990
• Docket Number: Civ. A. No. 89-3677.
• Parties: Peter KOVACS, Plaintiff, v. ELECTRONIC DATA SYSTEMS CORPORATION, a Texas Corporation, Defendant.
• Court: U.S. District Court — Western District of Michigan

762 F. Supp. 161

Peter KOVACS, Plaintiff, v. ELECTRONIC DATA SYSTEMS CORPORATION, a Texas Corporation, Defendant.

Civ. A. No. 89-3677.

United States District Court, E.D. Michigan, S.D.

June 28, 1990.

John C. Eidt, Eidt & Baylor, Southfield, Mich., for plaintiff.

Robert B. Cassey, Electronic Data Systems Corp., Southfield, Mich., for defendant.

MEMORANDUM OPINION AND ORDER

SUHRHEINRICH, District Judge.

This matter is before the Court on a motion to dismiss filed by defendant Electronic Data Systems ("EDS"). Plaintiff Peter Kovacs ("Kovacs") has responded. Pursuant to Local Rule 17(1)(2), the matter will be decided without oral argument.

In the instant action, plaintiff claims that he was wrongfully discharged from employment with EDS. Kovacs began his employment on October 1, 1986 when his former employer, National Data Corporation, was sold to EDS. Prior to the commencement of his employment with EDS, plaintiff completed a job application form. In signing the application form plaintiff acknowledged that he understood his "EMPLOYMENT WITH THE COMPANY IS AT WILL AND THE EMPLOYMENT RELATIONSHIP MAY BE ENDED BY EITHER PARTY, AT ANY TIME WITH OR WITHOUT NOTICE." (Emphasis in original.) That same day plaintiff also executed a formal Employee Agreement. The Agreement stated that the employment relationship between plaintiff and EDS "may be terminated at will, with or without cause at any time...." (Employee Agreement, ¶ 7.) The Agreement also stated: "It is further agreed that this Agreement may be modified or amended only by a written instrument executed by EDS and Employee, and approved in writing by an Officer of EDS." (Emphasis added.)

Plaintiff was located in Fairfield, New Jersey when his employment with EDS began on October 1, 1986. Thereafter, it was announced that the New Jersey facility would be closed and that the site was to be transferred to Detroit. George Schooler, the New Jersey Data Center Manager discussed with plaintiff and his wife the possibility of continuing their employment with defendant in the Detroit area. Plaintiff and his wife met with George Schooler to discuss the transfer opportunity. During the meeting plaintiff raised several concerns he had were he to consider moving to Detroit. Plaintiff mentioned that he had just purchased a home in New Jersey and had been living in it, at that time, less than one year.

Schooler encouraged plaintiff to visit the Detroit area before deciding to make the transfer. Plaintiff claims that Schooler told him that EDS would take care of plaintiff's New Jersey home if he could not sell it. Plaintiff and his wife visited Detroit and upon their return plaintiff accepted the position.

Plaintiff and his wife moved to Detroit in July/August 1988, where they were provided with a corporate apartment and company car. Plaintiff and his family lived in the corporate apartment from July 1988 until late March 1989. EDS, through Empire America, purchased plaintiff's New Jersey home in February 1989. The purchase price was $145,000, which resulted in a $5,000 loss to plaintiff. As a result of this loss, defendant gave plaintiff a check for $5,000, in consideration of which plaintiff signed a promissory note. The note provided that the $5,000 given to plaintiff would be forgiven in yearly increments if plaintiff agreed to remain with defendant for three years. The promissory note also stated: "The maturity date of this note shall be the date, if any, upon which Borrower's employment with Electronic Data Systems Corporation, or any subsidiary or affiliate thereof, is terminated voluntarily by Borrower or for good cause by EDS." (Emphasis added.)

Upon transferring to Detroit, plaintiff worked as a shift supervisor/manager on the third shift. In January 1989, plaintiff became Operations Manager, and he began reporting directly to George Schooler. Plaintiff received a 12% pay raise and became responsible for managing approximately 40 people. In March 1989, plaintiff began reporting to Doug Klaus, after Schooler was transferred.

During the summer of 1989, plaintiff was accused of impeding his subordinates' free, uninhibited use of the Company's Open Door Policy. This policy provides that employees are encouraged to bypass their immediate supervisors and address their concerns on virtually any issue to upper level management. Supervisors are instructed that they must not inhibit the use of the policy by any employee. Plaintiff allegedly chastised one of his subordinates, Kathy Gothard, for making use of the open door policy to meet with plaintiff's supervisor regarding an allegedly racially related remark that plaintiff had made. One month later, another of plaintiff's subordinates, Suzanne Austin, used the open door policy to advise plaintiff's supervisor that she heard plaintiff leaking confidential information regarding EDS' profit margin. After learning of this meeting, plaintiff allegedly called Austin into his office and angrily voiced his displeasure with her action.

Plaintiff contends that no investigations have been conducted in either incident and that the complaints against him have not been factually substantiated. Defendant on the other hand counters that an investigation into the underlying facts was carried out and that plaintiff was then confronted. Plaintiff's supervisors asked him if he wished to be placed in a performance improvement plan. Plaintiff declined to do so, and was terminated on September 1, 1989.

Analysis

Defendant brings the instant motion for summary judgment pursuant to Fed.R. Civ.P. 56. Under Rule 56(c) of the Federal Rules of Civil Procedure, a district court may grant summary judgment upon a showing that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The party seeking summary judgment always bears the initial responsibility of informing the court of the basis of its motion and of pointing out those portions of the record which demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). There is no express or implied requirement, however, that the moving party support its motion with affidavits or similar materials negating the opponent's claim. Id. After such a showing is made, the nonmoving party must go beyond the pleadings to designate, by affidavit, deposition, interrogatory, or otherwise, "specific facts showing that there is a genuine issue for trial." Id. at 324, 106 S.Ct. at 2553. Summary judgment may be granted where the evidence is merely colorable or is not significantly probative. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); but all inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion. Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1355, 89 L.Ed.2d 538 (1986).

I. Breach of Contract Claims

A. Nature of Plaintiff's Employment with EDS

Counts I and IV of plaintiff's complaint allege the existence of an express contract whereby plaintiff would not be terminated except for cause. Under Michigan law, it is well settled that in the absence of circumstances to the contrary, an employment relationship is presumed to be terminable at will; that is, terminable by either party at any time for any or no reason. Lynas v. Maxwell Farms, 279 Mich. 684, 273 N.W. 315 (1937); Michigan State Employees Assoc. v. Dep't of Mental Health, 421 Mich. 152, 365 N.W.2d 93 (1984). See also Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 610, 292 N.W.2d 880, reh'g denied, 409 Mich. 1101 (1980) (noting that "employers are most assuredly free to enter into employment contracts terminable at will without assigning cause"). In the instant case, EDS argues that it took the action expressly approved in Toussaint and entered into a contract with plaintiff making his employment terminable at will, pointing to the express language of the employment application and the employment contract. Defendant therefore argues that when plaintiff accepted a position with EDS, his employment was subject to the terms and conditions set forth in those documents. See Batchelor v. Sears, Roebuck & Co., 574 F.Supp. 1480, 1484 (E.D.Mich.1983), aff'd sub nom Reid v. Sears, Roebuck & Co., 790 F.2d 453 (6th Cir.1986); see also Novosel v. Sears, Roebuck & Co., 495 F.Supp. 344 (E.D.Mich.1980).

Plaintiff contends, however, that despite the express language of the employment contract, defendant could terminate his employment only for just cause. In support plaintiff cites to subsequent oral statements allegedly made by George Schooler that plaintiff would have a career in Detroit as long as he performed. Plaintiff further alleges that in order to reassure this promise, Schooler told plaintiff that EDS would take care of his New Jersey home if he could not sell it. Plaintiff claims that these statements by Schooler created legitimate expectations in Kovac's job security and played a role in his decision to move to Detroit.

The Court finds that even if such statements were made, they fail as a matter of law to alter the at-will nature of the employment relationship existing under the terms of plaintiff's employment contract. Employment contracts containing essentially the same language as that signed by Kovacs have routinely been found by the state and federal courts in Michigan to destroy the at-will nature of the employment relationship. See Vollrath v. Georgia-Pacific Corp., 899 F.2d 533 (6th Cir. 1990); McCormick v. Sears, Roebuck & Co., 712 F.Supp. 1284 (W.D.Mich.1989); Batchelor, supra; Summers v. Sears, Roebuck & Co., 549 F.Supp. 1157 (E.D. Mich.1982); Novosel, supra; Eliel v. Sears, Roebuck & Co., 150 Mich.App. 137, 387 N.W.2d 842 (1985). In each of these cases, courts have entered...