McLaughlin v. Ford Motor Company, 13615.

• Decision Date: 27 July 1959
• Docket Number: No. 13615.,13615.
• Citation: 269 F.2d 120
• Parties: Delbert J. McLAUGHLIN, Appellant, v. FORD MOTOR COMPANY, Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

269 F.2d 120 (1959)

Delbert J. McLAUGHLIN, Appellant, v. FORD MOTOR COMPANY, Appellee.

No. 13615.

United States Court of Appeals Sixth Circuit.

July 27, 1959.

Charles S. Toy, Detroit, Mich., Howell Van Auken, Detroit, Mich., on brief, for appellant.

George E. Brand, Detroit, Mich., William T. Gossett and Richard B. Darragh, Dearborn, Mich., of counsel, for appellee.

Before SIMONS and MILLER, Circuit Judges, and SHELBOURNE, District Judge.

SHACKELFORD MILLER, Jr., Circuit Judge.

Appellant brought this action in the District Court to recover damages from the appellee, Ford Motor Company, hereinafter referred to as Ford, in the amount of $2,000,000 by reason of the alleged breach by the appellee of its promise to give appellant a position in general management in the Ford organization. Jurisdiction was based upon diversity of citizenship and the amount in controversy. The case was tried to a jury, with appellant's evidence in the first instance being limited to the issue of liability. Evidence on the question of damages was to follow if the evidence as to liability was sufficient to take the case to the jury. At the close of appellant's evidence on the issue of liability, the District Judge sustained appellee's motion for a directed verdict. This appeal was taken from the resulting judgment in favor of the appellee.

For some time prior to August 15, 1950, appellant held the position of Director of Planning and Methods in the General Motors Truck and Coach Division, which position he had attained after long-term service in various subordinate positions in the General Motors organization at widely scattered localities. On June 16, 1950, appellant wrote to Mr. Breech, vice president of appellee, with respect to a position with the Ford Foundation. This letter did not reach the Foundation, but was acknowledged by Mr. Beaver, manager, Salaried Personnel of Ford, by letter of June 22. About the middle of July appellant received a telegram from someone in Mr. Beaver's office asking that he come in for an interview. This resulted in a series of interviews between the appellant and various persons in the Ford organization.

In these interviews, appellant stated that his main interest was in "the general management field" where he had been most recently occupied. It was suggested to appellant that he take a position in Ford's finance group and that one of the ways to get into general management in the Ford Company would be to go into finance first. With respect to compensation, appellant stated that he wanted $24,000.00 a year which, as far as he was concerned, could be made up in any proportion of base salary and bonus. Appellant was advised in these interviews that the base pay for executives was $13,200 and that any employment of him in the Ford organization would have to be passed upon by the Executive Committee which had to approve the employment of anyone on the executive level. He was also advised that in addition to the need of Executive Committee approval, an investigation of the appellant by the Industrial Relations Service Department would have to be made.

During the latter part of July appellant was advised that this investigation by the Industrial Relations Service Department was completed and that Ford wanted to employ him. A few days later appellant met Mr. O'Leary, who was an assistant in the Controller's Office, at the Ford Administration Building at Dearborn and was introduced to Mr. Victor Z. Brink, Assistant Controller of the Ford Motor Company. The three of them had lunch at the Dearborn Inn where Mr. Brink questioned appellant in considerable detail about his work at General Motors and asked him if he would be interested in taking the position of manager of the appellee's Cost Department. Appellant reiterated his interest in a general management position dealing with operations rather than in finance, and stated that he wasn't concerned about a position as manager of the Cost Department at that time. The three men left the meeting at Dearborn Inn with the matter still unresolved. They drove back to the Administration Building and went to Mr. Brink's office. Appellant testified that the following conversation then occurred:

"Mr. Brink indicated that they — they had a need, a pressing need for a man in the Cost Department, to take over the managership in the Cost Department and that a man that had had general management background and was familiar with all departments would be of considerable use to them in that activity, especially if he knew the cost work.

"And I told Mr. Brink and Mr. O\'Leary, however, that my interests lay in the general management area, rather than in finance.

"Mr. Brink then said, `Well, if you will take the managership of the Cost Department for a year, then, we will give you the general management job.\'

"And I said to him, `That\'s good enough for me.\'"

Appellant later testified that Mr. Brink's full statement was, "If you will take the managership of the Cost Department for a year, and contribute what you can, then, we'll give you a job in general management." The date of September 1, 1950, was set for appellant to begin work.

Appellant reported for work at the Ford Motor Company on September 1, at which time Mr. Brink told him that the Executive Committee had set his base salary at $13,500 per annum. Appellant stated that this was all right, if the bonus allotment would be sufficient to bring it up to the $24,000 per year that he had said he would accept. Mr. Brink indicated that he was not conversant with that phase of the negotiations and appellant told Mr. Brink that if the deal wasn't going to go through the way they had agreed, it wasn't too late for Ford to pull out of the deal entirely. Mr. Brink left the office to talk with Mr. McNamara, controller of the Ford Motor Company, who was one of the men with whom appellant had previously conferred. When Mr. Brink returned he told appellant "that McNamara didn't like to commit on these things * * * but that I could be sure that my bonus would be satisfactory for 1950." Appellant replied, "Fine, then the deal is okay." Mr. Brink said, "Let's go down now and meet the people in the Department." They left Mr. Brink's office and went to the conference room on the second floor of the Administration Annex where the key men from the Cost Department were congregated. Mr. Brink introduced appellant to the various people of the Cost Department, told them how pleased they were to get the appellant for the job as manager of the Cost Department and also told them that appellant would not be there too long because of other plans.

On September 6, 1950, appellant signed a form entitled "Employment Agreement" which contained, among other provisions, the following statement:

"I understand that my employment is not for any definite term and may be terminated at any time, without advance notice, by either myself or Ford Motor Company; that my employment is subject to such rules, regulations, and personnel practices and policies, and changes therein, as Ford Motor Company may from time to time adopt; and that my employment shall be subject to such lay-offs, and my compensation to such adjustments, as Ford Motor Company may from time to time determine."

Effective November 1, 1951, appellant's salary was increased to $14,850 per year. The written recommendation for this increase included the following "Remarks." "Since coming with the Company, Mr. McLaughlin has been Manager of the Cost Department, Controller's Office. In this position, he is responsible for the development of our cost accounting system and the preparation of unit cost reports. Mr. McLaughlin has demonstrated exceptional ability, both from a technical and administrative standpoint. He has been and is making an outstanding contribution in the development of our product costs. The increase in compensation is in recognition of his increasing value to the Company." The recommendation was approved by action of the Executive Committee.

Appellant continued as head of the Cost Department until March 1, 1953, during which time he realized that there was difficulty in getting appellee to carry out what he termed its commitment to him. About October, 1952, appellant talked with Mr. McNamara about the fulfillment of the commitment, who told him that there were some people ahead of him in connection with positions in the general management area, but that the Executive Committee was going to approve a new Division to produce another line of cars and that arrangements could be made to transfer him to the Lincoln-Mercury Division in connection with this new Division. He asked Mr. McNamara whether the general management of the...