Nora v. Carrier Corp.

• Decision Date: 14 November 1988
• Docket Number: No. 86-1459,86-1459
• Citation: 861 F.2d 457
• Parties: 119 Lab.Cas. P 56,705, 3 Indiv.Empl.Rts.Cas. 1693 James D. NORA, Plaintiff-Appellant, v. CARRIER CORPORATION & United Technologies, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 457

861 F.2d 457

119 Lab.Cas. P 56,705, 3 Indiv.Empl.Rts.Cas. 1693

James D. NORA, Plaintiff-Appellant, v. CARRIER CORPORATION & United Technologies, Defendants-Appellees.

No. 86-1459.

United States Court of Appeals Sixth Circuit.

Argued Feb. 17, 1987.

Decided Nov. 14, 1988.

John J. Nora (argued), Nora, Hemming, Essad and Polaczyk, P.C., Geno D. Salomone Plymouth, Mich., for plaintiff-appellant.

Richard J. Seryak (argued), Miller, Canfield, Paddock & Stone, Detroit, Mich., Linda O. Goldberg, Miller, Canfield, Paddock & Stone, Ann Arbor, Mich., for defendants-appellees.

Before MARTIN and NELSON, Circuit Judges, and CONTIE, Senior Circuit Judge.

DAVID A. NELSON, Circuit Judge.

In December of 1982, pursuant to the same sort of "economically mandated reduction in force" with which we were concerned in Boynton v. TRW, Inc., 858 F.2d 1178, 1179 (6th Cir.1988) (en banc), defendant Carrier Corporation discharged plaintiff James Nora from his employment with the company. Mr. Nora brought a diversity action against Carrier in federal district court, alleging both intentional and negligent breach of implied and express employment contract rights. The district court entered summary judgment for Carrier, and Mr. Nora appealed. For the reasons set forth below, we shall affirm the judgment of the district court.

Mr. Nora began working for Carrier in 1967, following his graduation from college. The company assured him that he would receive fair and caring treatment as an employee. Although he had concerns about some of the terms of the employment contract he was invited to sign, he was satisfied by the company's oral assurances and relied on them in accepting the company's offer of employment.

The contract that Mr. Nora signed permitted discharge "at will without notice" during the first six months of employment; advance notice would be required thereafter, the contract provided, except in the case of discharge for cause, but the clear implication of the contract was that subject to the giving of the required notice, Mr. Nora could always be discharged "at will." By its terms, the contract "supersed[ed] any and all agreements of every kind, relating to [the] employment...." The contract concluded with the following language: "This agreement cannot be changed, nor any provision thereof waived, except by mutual consent in writing."

In 1969, after working for two years as a sales trainee, Mr. Nora was promoted to a salesperson's position. In 1973 he was promoted to the position of branch manager. From 1973 through December of 1981 he was the manager and sole member of Carrier's Machinery and Systems Division branch in Grand Rapids, selling heavy commercial equipment for large construction projects.

In December of 1981 Carrier consolidated its Machinery and Systems Division with its Distribution Sales Division. Mr. Nora lost his branch manager status as a result of the consolidation, but continued to be employed as one of three salespeople working out of the Grand Rapids office. The other two were Gary Ehlers, the manager of the combined operation, and H. Peter Sexton, a full-time salesperson. Both Mr. Ehlers and Mr. Sexton had more experience in light equipment sales than Mr. Nora did.

In 1982 and 1983 the Grand Rapids branch did not sell any of the heavy commercial equipment that Mr. Nora had specialized in. In September of 1982, as part of a nationwide reduction in its workforce, Carrier placed Mr. Nora on layoff status with full salary and benefits. Mr. Sexton was kept on the job. This decision was made by Mr. Ehlers on the basis of a determination that Mr. Sexton's ability, potential, and relevant experience were superior to Mr. Nora's, even though Mr. Sexton had substantially less seniority than Mr. Nora did.

After the layoff Carrier offered Mr. Nora an opportunity to serve as a branch manager at its Machinery and Systems Division in Oklahoma City, Oklahoma. Mr. Nora rejected the offer even though he would have received a salary and benefits identical to those he had received as a branch manager in Grand Rapids.

Carrier discharged Mr. Nora in December of 1982. Two years later he brought suit. Relying on Toussaint v. Blue Cross and Blue Shield of Michigan, 408 Mich. 579, 292 N.W.2d 880 (1980), where the Michigan Supreme Court held that an employer's policy statements to the effect that employment for an indefinite term would only be terminated "for cause" could give rise to legally enforceable contract rights even without evidence that the parties had mutually agreed that the policy statements would create such rights, Mr. Nora alleged in his complaint that "the statements contained in Defendant's policy, procedures, standard practice, appraisals, and past history of operation create[d] express contracts of employment." The complaint quoted statements from Carrier's "Standard Practice Instruction" indicating that layoffs among employees would be made according to seniority and would be supported by specific documentation.

In Renny v. Port Huron Hospital, 427 Mich. 415, 417-18, 398 N.W.2d 327, 329 (1986), the Michigan Supreme Court clarified the Toussaint doctrine by explaining that "[t]he existence of a just-cause contract is a question of fact for the jury where the employer establishes written policies and procedures by which to discharge an employee, but does not expressly retain the right to terminate employees at will. " (Emphasis supplied.) The hospital handbook on which the plaintiff relied in Renny contained this language: "The Hospital retains the sole right to manage and operate the Hospital. This includes, but is not limited to, the sole and exclusive right ... to hire, lay off, discipline, discharge, assign, transfer, and promote employees...." Id. at 427, 398 N.W.2d at 333-34. The handbook did not expressly retain the right to terminate employment at will, and the omission of such a provision enabled the Michigan court to affirm a judgment for the plaintiff employee based on the finding of a jury that as a matter of fact the employee handbook established an employment contract allowing discharge only for "just cause."

The Renny handbook provided that "[t]hese rights are subject only to the regulations and restrictions outlined in this Employee Handbook," id. at 427, 398 N.W.2d at 334 (emphasis omitted), and the court cited this language in explaining that "[w]hile the hospital maintained the sole right to discharge employees, this right was expressly subject to the regulations and restrictions provided for in the handbook." Id. at 430, 398 N.W.2d at 335. The court went on to say that

"There is no express statement within the handbook that employees were still terminable at the will of the hospital. While the management rights clause implies that the employer could revise its policies unilaterally, there was no evidence presented at trial that defendant hospital had altered any of the policies upon which plaintiff relied. Indeed, any suggestion that the hospital could fire an employee at will despite the...