Lobosco v. NY Tel. Co./Nynex

• Decision Date: 14 June 2001
• Citation: 751 N.E.2d 462,96 N.Y.2d 312,727 N.Y.S.2d 383
• Parties: ANTHONY LOBOSCO, Appellant, v. NEW YORK TELEPHONE COMPANY/NYNEX, Respondent.
• Court: New York Court of Appeals Court of Appeals

96 N.Y.2d 312

751 N.E.2d 462

727 N.Y.S.2d 383

ANTHONY LOBOSCO, Appellant, v. NEW YORK TELEPHONE COMPANY/NYNEX, Respondent.

Court of Appeals of the State of New York.

Argued April 26, 2001.

Decided June 14, 2001.

Law Offices of Leonard N. Flamm, New York City (Leonard N. Flamm and Norman Mednick of counsel), for appellant.

Epstein Becker & Green, P. C., New York City (Matthew T. Miklave, Darryll A. Buford and Sean T. Granahan of counsel), for respondent.

Chief Judge KAYE and Judges SMITH, WESLEY, ROSENBLATT and GRAFFEO concur; Judge LEVINE taking no part.

OPINION OF THE COURT

CIPARICK, J.

The issue presented on this appeal is whether plaintiff's complaint states a cause of action for breach of an employment contract in light of defendant's express disclaimer of contractual rights and obligations contained in its employee manual. For the reasons stated below, we conclude that it does not.

Plaintiff, Anthony Lobosco, was hired by New York Telephone/NYNEX in 1968 and attained the position of Product Manager in 1987. In 1996 plaintiff became a party-witness for his employer in a litigation between NYNEX and a number of its contractors. In preparation for his testimony, plaintiff met with NYNEX counsel, who instructed him to "limit his testimony to certain particulars only, and to not reveal certain other particulars." He also claims counsel pressured him "to testify in a certain way as to certain matters, which [he] did not believe to be true and/or accurate." Finally, plaintiff claims that he informed NYNEX counsel that a fellow employee had concealed documents relevant to the litigation.

In August 1996, plaintiff was fired, ostensibly for having unreported communications with the adversaries' principals. Claiming that the real reason NYNEX fired him was in retaliation for refusing to testify untruthfully, and for "blowing the whistle" on a fellow employee's unethical conduct, plaintiff sued NYNEX on several theories. This appeal concerns only the cause of action for breach of contract based on language contained in an employee manual.

In 1995, 27 years into plaintiff's employment, NYNEX distributed a manual entitled the "Code of Business Conduct" to all of its employees. In its approximately 50 pages, the Code discusses a variety of legal and ethical considerations relevant to NYNEX employees. Content ranges from general encouragement of moral behavior to specific examples of conduct that can result in termination. The dispute in this case focuses primarily on the section entitled "Putting the Code to Work" which states:

"Reporting violations. If employees have knowledge or suspicion of any illegal, unethical or fraudulent acts anywhere within the NYNEX companies, they should discuss the matter immediately with their supervisor or notify any other manager, the Legal, Security or Internal Auditing departments, or the NYNEX Office of Ethics and Business Conduct.

"NYNEX assures protection against any form of reprisal for reporting actual or suspected violations of our Code of Business Conduct."

On the facing page, there appears the following disclaimer:

"This code of conduct is not a contract of employment and does not create any contractual rights of any kind between NYNEX and it employees. The code and its contents may be modified and changed, without notice, at any time by NYNEX.

"United States employees * * * must understand that at NYNEX there is no fixed duration to the employment relationship. They can terminate their employment whenever they wish and for whatever reason they might have, just as NYNEX can terminate their employment at any time and for any reason, unless the employment is covered by a collective bargaining agreement. This is known as employment-at-will. This at-will employment relationship may not be modified except in a written agreement signed by the employee and an authorized representative of the company."

On defendant's motion, Supreme Court dismissed all of plaintiff's claims except his claim for breach of contract. The court held that the general provisions denying the creation of contract rights were superseded by the specific provisions guaranteeing no reprisals for disclosure of wrongdoing. The Appellate Division, with two Justices dissenting, reversed and dismissed the complaint in its entirety, holding that plaintiff did not sufficiently plead reliance or rebut defendant's motion to dismiss with an affidavit asserting reliance. We now affirm but for different reasons. Where the term of employment is for an indefinite period of time, it is presumed to be a hiring at will that may be freely terminated by either party at any time for any reason or even for no reason (Martin v New York Life Ins. Co., 148 NY 117, 121). New York does not recognize the tort of wrongful discharge (Murphy v American Home Prods. Corp., 58 NY2d 293, 297). Furthermore, there is no exception for firings that violate public policy such as, for example, discharge for exposing an employer's illegal activities (id. at 301).¹

New York does, however, recognize an action for breach of contract when plaintiff can show that the employer made its employee aware of an express written policy limiting the right of discharge and the employee detrimentally relied on that policy in accepting employment (Weiner v McGraw-Hill, Inc.,...