Nordling v. Northern States Power Co., CX-90-1500
| Decision Date | 15 January 1991 |
| Docket Number | Nos. C7-90-1499,CX-90-1500,s. C7-90-1499 |
| Citation | 465 N.W.2d 81 |
| Parties | , 119 Lab.Cas. P 56,710, 6 Indiv.Empl.Rts.Cas. (BNA) 140 Gale K. NORDLING, Appellant, v. NORTHERN STATES POWER COMPANY, et al., Respondents (C7-90-1499), Jack F. Sjoholm, et al., Respondents (). Nos. C7-90-1499, . |
| Court | Minnesota Court of Appeals |
Syllabus by the Court
1. Appellant's status as in-house counsel precluded wrongful discharge claims against his former employer.
2. Corporate officer who acted within the scope of his employment in discharging appellant is shielded from liability for tortious interference with contract.
3. Minnesota does not recognize a cause of action against a co-employee for tortious interference with contract.
James H. Kaster, Nichols, Kaster & Anderson, Minneapolis, for appellant.
Robert R. Reinhart, Melissa Raphan, Oppenheimer, Wolff & Donnelly, Minneapolis, for respondents.
Considered and decided by KALITOWSKI, P.J., and NORTON and FLEMING *, JJ.
Appellant, Gale K. Nordling, initiated this action against respondents Northern States Power Company and David McGannon, alleging, inter alia, breach of employment contract, retaliatory discharge in violation of Minn.Stat. Sec. 181.932, and tortious interference with contract arising out of his discharge as corporate counsel for Northern States Power Company. Appellant initiated a second action, also arising out of his discharge, against Northern States Power Company and respondent Jack F. Sjoholm, alleging, inter alia, tortious interference with contract. The district court granted summary judgment in respondents' favor on the breach of contract and tortious interference with contract claims, finding these claims precluded under the general rule that a client has an absolute right to discharge an attorney without liability for breach of contract. The district court also granted summary judgment in respondents' favor on the retaliatory discharge claim on the grounds that appellant produced insufficient evidence to support a cause of action under Minn.Stat. Sec. 181.932. This court consolidated the appeals in both actions.
On appeal from the district court's grant of summary judgment, we view the facts in the light most favorable to appellant. Appellant, Gale K. Nordling, was hired by respondent Northern States Power Company (NSP) as an engineer in 1971 and was employed in this capacity while he attended law school. NSP contributed part of Nordling's law school tuition in exchange for his promise to work for NSP as an attorney following his graduation. Nordling joined the NSP Law Department in the position of corporate attorney after he was admitted to the bar in 1975.
As corporate attorney, Nordling worked primarily with NSP's engineering departments. His responsibilities included contract drafting and negotiation related to the utility business, including construction of NSP's utility plants.
Nordling worked successfully as corporate counsel. During his tenure with NSP, he consistently received above average performance ratings. In 1987, he was rated as a "commendable" employee, "commendable" being defined in NSP's rating system as
an employee who consistently meets all his objectives and contributes to departmental or team productivity above that which would normally be expected of a fully competent employee.
Nordling made numerous contributions to the company beyond his employment responsibilities. While employed by NSP's Engineering Systems Department, Nordling, with significant expenditure of his own time, developed and provided to NSP for no additional compensation a valuable computer program. As corporate counsel, Nordling worked many extra hours at no additional compensation to develop NSP teaching materials. Nordling also worked on behalf of NSP as an arbitrator for the Minnesota Better Business Bureau without separate compensation. He served on various NSP boards and committees and spoke at public forums and industry-related seminars without separate compensation.
In early 1987, the NSP Law Department was involved in preparations for proceedings before the Public Utility Commission (PUC) to seek approval of electricity rate increases. A major component of the rate increase request was the $1 billion cost of construction of "SherCo III," a new electrical power generation facility located in Sherburne County. In preparation for PUC review of NSP's rate increase request, the Law Department set up a task force for the purpose of anticipating and preparing appropriate responses to potential PUC questions about expenditures for construction of SherCo III. As part of its work, the task force consulted with an attorney in private practice to determine what internal reviews or investigatory steps NSP might take to satisfy the PUC that no significant construction funds had been wasted or misappropriated.
In March 1987, David McGannon, then NSP's Vice President of Law, informed Nordling that the private attorney was orchestrating a personal lifestyle investigation of NSP employees working at the SherCo III power plant. It was Nordling's understanding, from his conversation with McGannon, that the private attorney's plan would involve surveillance of employees on the job site and at their homes. Nordling believed such surveillance was not justified and would constitute an invasion of the employees' privacy. He therefore voiced his objections to McGannon and to Gary Johnson, then NSP's Director of Law.
When McGannon did not indicate that he would stop or impede the plan, Nordling reported to John Noer, General Manager of Plant Engineering and Construction, his conversation with McGannon. Noer, in turn, reported the plan to NSP Vice President Roland Jensen and to James Kettner, SherCo III Project Manager.
Kettner voiced his strenuous objection to the plan to Johnson and accused him of being involved. Although Kettner refused to disclose the source of his information, Johnson assumed it was Nordling. Johnson reported to McGannon his conversation with Kettner and told McGannon that he suspected Nordling as Kettner's source of information.
In response to Noer's information, Jensen reported the matter to his superior, Dennis Gilberts, Senior Vice President of NSP. Gilberts reported the matter to NSP's Chief Executive Officer, James Howard. A meeting took place between Jensen, Gilberts and Howard, and Howard made the decision to stop whatever investigatory work the private attorney was planning.
In April 1987, McGannon began monitoring Nordling's phone messages and personally returning Nordling's incoming calls allegedly because McGannon felt that Nordling was working on nonwork matters during the day. McGannon monitored the calls to determine whether they were from NSP personnel or from others. McGannon also maintained that Nordling was spending an inordinate amount of time out of the office without indicating on the Law Department's call/message board where he was going.
McGannon sent Nordling a memorandum, dated April 9, 1987, informing him that the messages he left on the call/message board were "insufficient." McGannon included a detailed list of Nordling's alleged "deficiencies" in complying with a February 19, 1987 memorandum that instructed Law Department personnel on use of the call/message board. McGannon's memorandum to Nordling also instructed him to adhere to certain conditions in order to correct his deficiencies and threatened to place him on "Positive Discipline" if he failed to do so. (See discussion below regarding "Positive Discipline.")
Nordling met with McGannon shortly after receiving the memorandum. Nordling was perplexed and somewhat angered by the memorandum, as he perceived the criticism as unwarranted. At the end of the meeting, McGannon retracted the memorandum and indicated that he would destroy it.
On November 30, 1987, David McGannon discharged Nordling from his position without notice or warning. McGannon's stated reasons for terminating Nordling included his belief that Nordling was "unhappy" and his "unhappiness" affected his relationships with others in the Law Department, including McGannon. McGannon alleged that Nordling did not say "good morning, good night, how are you" and impeded lunch meetings between Law Department personnel.
McGannon also claimed to have relied on specific statements made by Jack F. Sjoholm in reaching his decision to terminate Nordling. Both Sjoholm and Johnson reported to McGannon that Steve Larsen, an NSP employee, had related to them a conversation he had had with Nordling. Larsen allegedly came to see Johnson in his office about a legal matter. Johnson's door was closed because he was in a meeting. Nordling allegedly told Larsen that he should "barge right in" because Johnson was not working anyway, so Larsen would not "interfere with a thing." Larsen testified that incident in question never took place.
Sjoholm also related to McGannon, at an October 1987 meeting, that he had overheard Nordling telling Nordling's secretary, Barbara Tiemann that McGannon and Johnson could not be trusted. Tiemann testified that Nordling never made such a statement.
As a NSP employee, Nordling received a copy of the NSP Employee Handbook and was subject to a policy called "Positive Discipline." The handbook describes "Positive Discipline" as:
a company-wide, uniform policy which covers job performance and commitment for all NSP employees. * * * It provides a system to recognize and communicate good performance and gain commitment to change inappropriate behavior.
* * * * * *
The three formal steps of the Positive Discipline system are:
1. Oral Reminder
2. Written Reminder
3. Decision Making Leave--(day off with pay for you to decide your commitment to the job).
Should * * * informal coaching and counseling and the three formal steps of Positive Discipline fail to bring about appropriate behavior, an employee may be terminated.
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