Mers v. Dispatch Printing Co., 84-1682

• Decision Date: 09 August 1985
• Docket Number: No. 84-1682,84-1682
• Citation: 19 Ohio St.3d 100,19 OBR 261,483 N.E.2d 150
• Parties: , 120 L.R.R.M. (BNA) 3299, 117 Lab.Cas. P 56,466, 19 O.B.R. 261, 2 IER Cases 1031 MERS, Appellant, v. DISPATCH PRINTING COMPANY et al., Appellees.
• Court: Ohio Supreme Court

Page 100

19 Ohio St.3d 100

483 N.E.2d 150, 120 L.R.R.M. (BNA) 3299, 117 Lab.Cas. P 56,466,

19 O.B.R. 261, 2 IER Cases 1031

MERS, Appellant, v. DISPATCH PRINTING COMPANY et al., Appellees.

No. 84-1682.

Supreme Court of Ohio.

Aug. 9, 1985.

Syllabus by the Court

1. Unless otherwise agreed, either party to an oral employment-at-will employment agreement may terminate the employment relationship for any reason which is not contrary to law.

2. 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.

3. The doctrine of promissory estoppel is applicable and binding to oral at-will employment agreements. The test in such cases is whether the employer should have reasonably expected its representation to be relied upon by its employee and, if so, whether the expected action or forbearance actually resulted and was detrimental to the employee.

Appellant, William Mers, worked as a traveling representative of appellee Dispatch Printing Company ("Dispatch") for nearly four years, when, on April 20, 1982, he was arrested for the crimes of rape, kidnapping, and gross sexual imposition. He was suspended from his job on April 29 without pay because of the accusations, until such time as the criminal charges would be favorably resolved. The trial resulted in a hung jury. The court overruled a motion for acquittal. Nevertheless, the charges were dismissed because the alleged victim no longer desired to prosecute the case.

The Dispatch subsequently notified Mers that he would not be reinstated and terminated his employment. Appellant filed suit against the Dispatch and two of his supervisors, also appellees herein, alleging that under the terms of his oral employment agreement he was improperly fired. Appellant essentially argued that his good employment record, oral promises made to him by the Dispatch's agents at the time of hiring and suspension, dismissal of the criminal charges, provisions in the company's handbook, and the Dispatch's failure to follow its own published internal grievance procedures, all combined to provide grounds for this action. Mers theorized that he was entitled to relief either on a breach-of-contract or promissory-estoppel basis.

Appellees denied any breach of the employment agreement and alleged Mers was an employee-at-will, subject to discharge for any reason. On motion, the trial court granted summary judgment in favor of the Dispatch.

On appeal Mers argues that the trial court erred in granting the motion for summary judgment because there were genuine issues of material fact concerning whether appellant was entitled to relief under the theory of promissory estoppel and, also, whether there existed an implied-in-fact contract not to discharge him except for just cause. The court of appeals acknowledged the continuing viability of the employment-at-will doctrine. It observed that appellant was an employee-at-will and concluded there was no evidence of express or implied contract terms which negated the principles of employment-at-will. The appeals court also believed appellee made its decision to discharge appellant in good faith. The court reasoned that the Dispatch's representations regarding reinstatement were not enforceable promises in the subjective view of the promisor and, hence, did not fall within the parameters of the doctrine of promissory estoppel. The judgment of the trial court was affirmed.

The cause is now before this court pursuant to the allowance of a motion to certify the record.

Thomas M. Tyack & Assoc. Co., L.P.A., and Mark A. Serrott, Columbus, for appellant.

Jones, Day, Reavis & Pogue, Mark S. Coco and Gary D. Begeman, Columbus, for appellees.

CELEBREZZE, Chief Justice.

The ultimate issue before us is whether the trial court properly granted appellees' motion for summary judgment. Central to this determination is whether there were questions of fact concerning the existence of supplemental provisions to the oral employment agreement which would limit the Dispatch's discretion so that it could only terminate appellant's employment for good cause. Additionally, we must decide if promissory estoppel may ever constitute an exception to the doctrine of employment-at-will and, if so, whether there are disputed facts in this case relating to promises made by appellees which could afford appellant relief.

Appellant initially urges us to abolish the long-standing doctrine of employment-at-will. ¹ Appellant contends the doctrine is no longer viable and argues for the establishment of a new rule whereby employees can only be discharged for just cause.

Unless otherwise agreed, either party to an oral employment-at-will agreement may terminate the employment relationship for any reason which is not contrary to law. This doctrine has been repeatedly followed by most jurisdictions, including Ohio, which has long recognized the right of employers to discharge employees at will. See, e.g., LaFrance v. Internatl. Brotherhood (1923), 108 Ohio St. 61, 140 N.E. 899; Henkel v. Educ. Research Council (1976), 45 Ohio St.2d 249, 344 N.E.2d 118 ; Fawcett v. G.C. Murphy & Co. (1976), 46 Ohio St.2d 245, 348 N.E.2d 144 ; Evely v. Carlon Co. (1983), 4 Ohio St.3d 163, 447 N.E.2d 1290.

This is not to say that employment-at-will agreements are without any defined limits. For example, Congress and the General Assembly have enacted laws forbidding retaliatory discharge for filing workers' compensation claims and for union activity, and discriminatory filings based on race, sex, age or physical handicap. ² However, we are not persuaded that modern developments which have taken place in employment relationships constitute a sufficient basis for us to now totally abolish the employment-at-will doctrine. Such an action would, among other things, place Ohio's courts in the untenable position of having to second-guess the business judgments of employers. The need for certainty and continuity in the law requires us to stand by precedent and not disturb a settled point unless extraordinary circumstances require it.

While we believe that considerations of public policy do not demand total abandonment of the employment-at-will doctrine, this case demonstrates that there are occasions when exceptions to the general rule are recognized in the interest of justice. Accordingly, while we find it ill-advised to add a blanket "just cause" requirement to the employment-at-will doctrine, we find appellant's other contentions well-taken for the reasons to follow.

In Henkel, supra, this court stated that the "facts and circumstances" surrounding an at-will agreement should be considered to ascertain if they indicate what took place, the parties' intent, and the existence of implied or express contractual provisions which may alter the terms for discharge. Appellant alleges, inter alia, that oral representations were made which limited the Dispatch's right to discharge him. "[T]he character of the employment, custom, the course of dealing between the parties, or other fact which may throw light upon the question" can be considered by the jury in order to determine the parties' intent. Bascom v. Shillito (1882), 37 Ohio St. 431, 434. Employee handbooks, company policy, and oral representations have been recognized in some situations as comprising components or evidence of the employment contract. E.g., Hedrick v. Center for Comprehensive Alcoholism Treatment (1982), 7 Ohio App.3d 211, 454 N.E.2d 1343; Helle v. Landmark, Inc. (1984), 15 Ohio App.3d 1, 472 N.E.2d 765.

A priori, 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. In this regard, we believe there was a genuine issue concerning the components of the facts and circumstances surrounding this employment agreement. ³

An additional limit on an employer's right to discharge occurs where representations or promises have been made to the employee which fall within the doctrine of promissory estoppel. The Restatement of the Law 2d, Contracts, as quoted by this court in Talley v. Teamsters Local No. 377 (1976), 48 Ohio St.2d 142, 146, 357 N.E.2d 44 , provides the rule of law that: " '[a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. * * * ' "

In this vein, appellant contends that he relied to his detriment on the Dispatch's promise that he would be reinstated with back pay if the criminal charges were "favorably resolved." Appellant argues that there existed a factual issue as to whether the state's dismissal of the charges constituted a favorable resolution. If so, appellant asserts that he should be able to enforce the Dispatch's promise.

The trial court herein incorrectly concluded that promissory estoppel cannot be used to limit a contract which is otherwise terminable at will. (See Hedrick and Helle, supra, which correctly recognize promissory estoppel as a viable exception to rebut a presumption that the employment was at-will.) Although the appellate court herein retreats from the trial court's holding by recognizing promissory estoppel as a possible exception, it concludes the appropriate test involves the promisor's subjective interpretation of the promise. In other words, the promisor's construction of what it meant...