Libby v. Calais Regional Hosp.

• Decision Date: 02 March 1989
• Citation: 554 A.2d 1181
• Court: Maine Supreme Court
• Parties: 111 Lab.Cas. P 56,049, 4 IER Cases 213 Elizabeth LIBBY v. CALAIS REGIONAL HOSPITAL.

Page 1181

554 A.2d 1181

111 Lab.Cas. P 56,049, 4 IER Cases 213

Elizabeth LIBBY v. CALAIS REGIONAL HOSPITAL.

Supreme Judicial Court of Maine.

Argued Nov. 3, 1988.

Decided March 2, 1989.

Eugene C. Coughlin, Amy Faircloth (orally), Vafiades, Brountas & Kominsky, Bangor, for plaintiff.

Daniel L. Lacasse (orally), Brown, Tibbetts, Churchill & Lacasse, Calais, for defendant.

Before McKUSICK, C.J., and ROBERTS, WATHEN, CLIFFORD, HORNBY and COLLINS, JJ.

CLIFFORD, Justice.

The plaintiff, Elizabeth Libby, a former employee of defendant Calais Regional Hospital (the "Hospital"), appeals from a judgment for the Hospital entered in Superior Court (Washington County; Smith, J.) on a motion for a directed verdict made at the close of the plaintiff's case in her suit for breach of contract for wrongful discharge. Libby contends that the court erred in concluding that she did not present enough evidence that her discharge was a breach of contract and that the case should have been submitted to the jury. We affirm the judgment.

Because we are reviewing a judgment entered on a motion for a directed verdict, we "view the evidence 'including every justifiable inference,' in the light most favorable to the plaintiff so that we may decide whether by any reasonable view of this evidence a jury verdict for the plaintiff could be sustained." Packard v. Central Maine Power Co., 477 A.2d 264, 267 (Me.1984) (quoting Boetsch v. Rockland Jaycees, 288 A.2d 102, 104 (Me.1972)).

Libby presented evidence at trial, and the jury would have been warranted in finding that Libby was employed by the Hospital in 1978 as a medical technologist, at which time she was given an employee handbook. When this handbook was revised in 1982, Libby received a copy of the revised handbook as well as an "acknowledgement of receipt." The acknowledgement, which Libby signed, stated that Libby had "received and read" the handbook and that she "understood that this handbook [did] not constitute a contract of employment."

Libby presented evidence to show that she was a competent, helpful employee who had not received any disciplinary action until September of 1984 when she was discharged from employment. There was further evidence that the specific termination procedures outlined in the employee handbook were not followed when Libby was fired.

It is well established in the common law that a contract of employment for an indefinite time is terminable at the will of either party. Rowell v. Jones & Vining, Inc., 524 A.2d 1208, 1211 (Me.1987); Larrabee v. Penobscot Frozen Foods, 486 A.2d 97, 99 (Me.1984). However, parties may enter into an employment contract terminable only pursuant to its express terms by clearly stating their intention to do so, and they may do so even though no consideration other than services is expected by the employer, or is performed or promised by the employee. Larrabee, 486 A.2d at 99-100.

The terms of an employment handbook can be used as the means by which an employment contract may be changed from one terminable at will to one terminable only by its express terms. Toussaint v. Blue Cross & Blue Shield of Mich., 408 Mich. 579, 292 N.W.2d 880, 894 (1980); see Annotation, Right to Discharge Allegedly "At-Will" Employee as Affected by Employer's Promulgation of Employment Policies as to Discharge, 33 A.L.R. 4 120, 128-35 (1984 & Supp.1988); see also Rowell, 524 A.2d at 1211 (court may look to employment policy manual for terms of employment). The handbook, however, must clearly state an intent to impose restrictions upon the employer's right to discharge the employee. Larrabee, 486 A.2d at 99-100.

Libby argues that the Hospital's revised handbook manifests a clear intention to enter into a contract terminable only pursuant to its express terms, and thus brings her outside the common law rule that her employment is terminable at will.

The first page of the handbook contains a letter from the Hospital president. The letter states:

... [T]his handbook is your employment guide.... It will explain what you can expect from the hospital, as well as what the hospital will expect from you....

The handbook later delineates behavior that would constitute grounds for immediate dismissal. It also outlines procedures to be followed when an employee's work performance is unsatisfactory. Furthermore, after receiving the handbook, Libby signed an acknowledgement of receipt providing that the handbook "constitutes the general personnel policies of the hospital;" that these policies may be added to or amended; that the employee is "governed by them;" and that the "handbook does not constitute a contract of employment."

The Hospital contends that the disclaimer establishes conclusively that the handbook does not form a contract between it and Libby. Even if we assume that the terms of the handbook comprised a contract with Libby, the handbook merely provides a method of discharge and implies that discharge will be for cause only. The handbook does not, however, clearly limit the Hospital to that method of terminating Libby's employment, and does not expressly restrict the Hospital's right to discharge an employee. Written or oral language merely implying that discharge is for cause only is not sufficient to bind an employer. Larrabee, 486 A.2d at 99-100. Libby did not present any evidence of an express restriction on the Hospital's common law right to discharge her at will, and her employment contract for an indefinite time remained terminable at will. No jury verdict for the plaintiff could be sustained, Rowell, 524 A.2d at 1211, and the court properly directed the verdict in favor of the Hospital.

The entry is:

Judgment affirmed.

McKUSICK, C.J., and WATHEN and COLLINS, JJ., concurring.

HORNBY, Justice, with whom ROBERTS, Justice, joins, dissenting.

As the Court recognizes, the issue is whether this case should have gone to...