Preston v. Claridge Hotel & Casino, Ltd.

• Decision Date: 27 February 1989
• Citation: 555 A.2d 12,231 N.J.Super. 81
• Parties: , 117 Lab.Cas. P 56,514, 4 IER Cases 493 Martha PRESTON, Plaintiff-Respondent, v. The CLARIDGE HOTEL & CASINO, LTD., and Del E. Webb Corporation, t/a The Claridge Hotel & Casino, Defendants-Appellants.
• Court: New Jersey Superior Court — Appellate Division

Page 81

231 N.J.Super. 81

555 A.2d 12, 117 Lab.Cas. P 56,514,

4 IER Cases 493

Martha PRESTON, Plaintiff-Respondent, v. The CLARIDGE HOTEL & CASINO, LTD., and Del E. Webb Corporation, t/a The Claridge Hotel & Casino Defendants-Appellants.

Superior Court of New Jersey Appellate Division.

Argued Jan. 17, 1989.

Decided Feb. 27, 1989.

W. Reed Gusciora, for defendants-appellants (DeGeorge & Avolio, Trenton, attorneys; Sarabeth Egan, Cherry Hill, of counsel and on the brief).

Carmen R. Faia, for plaintiff-respondent (Targan, Higbee & Faia, attorneys; Carmen R. Faia and Carol Higbee, Atlantic City, of counsel and on the brief).

Before Judges MICHELS, MUIR, Jr., and KEEFE.

The opinion of the court was delivered by

MICHELS, P.J.A.D.

Defendant The Claridge Hotel & Casino, Ltd., now known as The Claridge at Park Place, Inc., d/b/a Del Webb's Claridge Casino Hotel (hereinafter referred to as "Claridge") appeals from a judgment of the Law Division entered on a jury verdict that awarded plaintiff Martha Preston damages in the sum of $67,000, together with interest, and from an order denying its motion for a new trial or, alternatively, a remittitur of damages, in this action for wrongful termination of employment.

In November 1980, plaintiff was hired by Claridge as a casino floor person and was responsible for supervising the blackjack and baccarat games. Prior to the opening of the casino in June 1981, Claridge held a general orientation meeting at which time a Claridge representative distributed Employee Handbooks to all employees. The representative explained what was expected of the employees and what, in turn, the employees could expect in terms of employment policies. All employees were required to read the handbook and sign a form which indicated that they understood that they could be terminated for violating the terms contained in the handbook. Approximately one year later, Claridge issued an otherwise identical "revised" handbook which contained a disclaimer advising employees that the handbook was not to be construed as a contract. Although no explanation was provided as to the significance of this disclaimer, all employees were required to read the revised handbook and sign the detachable acknowledgment form.

In August 1984, plaintiff was fired by Claridge after becoming involved in a dispute with a co-worker in the casino. Thereafter, plaintiff instituted this action for wrongful discharge and was awarded damages in the sum of $67,000. The jury found that (1) Claridge was contractually prohibited from discharging plaintiff without just cause by virtue of the representations concerning maximum job security contained in the first handbook; (2) these obligations had not been extinguished by the disclaimer contained in the second or "revised" handbook; (3) plaintiff had not been fired for just cause and (4) plaintiff was entitled to $42,000 in current lost wages and $25,000 in future lost wages. The trial court awarded plaintiff pre-judgment interest on the $42,000 jury award. Claridge's motion for a new trial or, alternatively, a remittitur of the damages award, was denied. This appeal followed.

Claridge first contends that the decision reached in Woolley v. Hoffman-LaRoche, Inc., 99 N.J. 284, 491 A.2d 1257 (1985), mod. 101 N.J. 10, 499 A.2d 515 (1985), should not be applied retroactively. We disagree. In Woolley, the Supreme Court held that a distributed company policy manual that is intended to cover the general work force may be construed as an implied contractual offer to abide by the terms contained therein. The operative determination under Woolley is whether the distributed manual or handbook could have led employees to reasonably believe that the company's "policies," particularly with respect to job security, would be honored as terms and conditions of employment, therefore, obviating the need for unionization. If plaintiff reasonably could have construed the employment handbook issued to her in 1980 as a contract of employment, then the purposes of the law set forth in Woolley would be furthered by a retroactive application of that decision. See Grigoletti v. Ortho Pharmaceutical, 226 N.J.Super. 518, 525-526, 545 A.2d 185 (App.Div.1988), certif. granted, 113 N.J. 640, 552 A.2d 165 (1988); Giudice v. Drew Chemical Corp., 210 N.J.Super. 32, 35, 509 A.2d 200 (App.Div.1986), certif. granted in part and remanded, 104 N.J. 465, 517 A.2d 448 (1986); Cole v. Carteret Sav. Bank, 224 N.J.Super. 446, 454, 540 A.2d 923 (Law Div.1988). Hence, we hold that the principles of law enunciated in Woolley are applicable here.

Claridge next contends that even if Woolley is applicable, the clear and prominent disclaimer in the second handbook extinguished any contractual job security obligations that may have existed. Although Woolley permits employers to utilize disclaimers to achieve such a result, the language in the disclaimer must indicate, in straightforward terms, that the employee is subject to discharge at will. Here, the disclaimer contained in the revised handbook did not convey that message.

As in Woolley, it is significant that the handbook was intended to cover all Claridge employees and was distributed at the orientation meeting to provide the employees with an idea of what they could reasonably expect from Claridge and what, in turn, was expected from them. Since all Claridge employees were required to read the handbook and sign a form which indicated that they understood that a violation of the terms contained therein could result in termination, it was reasonable for those employees to expect that compliance with those same terms would prevent their discharge without just cause. Thus, there was sufficient credible evidence in the record for the jury to have found that the first employee handbook created an implied contract of employment under which neither plaintiff nor any other permanent employee could be discharged without just cause.

Claridge attempts to distinguish the terms contained in its first handbook from those contained in the handbook issued by Hoffman-LaRoche in Woolley. Claridge contends that the termination procedures contained in the Woolley manual are more detailed and go to a greater length to spell out "just cause" than the termination procedures contained in the Claridge Employee Handbook and that the Claridge procedures apply only when an employee chooses to terminate his employment. Claridge, however, fails to account for the fact that its handbook provides a step-by-step procedure for dealing with employee problems; enumerates the types of prohibited conduct that may result in termination, and represents that "[w]hile you work for the Claridge ... [y]ou will receive maximum job security." Claridge also fails to account for the fact that it supplied plaintiff with a detailed Policies and Procedures Manual which described its progressive four-step disciplinary scheme of (1) a verbal warning; (2) a written warning; (3) suspension, and (4) termination. Additionally, as in Woolley, Claridge's manual indicates that its personnel "programs and policies" are an alternative to unionization and collective bargaining agreements.

Although neither the Claridge Employee Handbook nor the Policies and Procedures Manual expressly declare that employees will be fired only for just cause, such a contractual agreement was created in view of the widespread distribution of the respective policy manuals and their application to the Claridge workforce at large; the required reading and signing of the employee handbooks; the provision of a progressive scheme of discipline for the enumerated types of prohibited conduct; the testimony of Claridge's Executive Director of Human Resources that it was Claridge's general policy to terminate employees only for cause, and, most importantly, the various representations of "maximum job security." Having offered these representations as an attractive alternative to collective bargaining, Claridge cannot avoid its obligations on the basis of semantic differences.

Claridge further contends that even if a contract of employment prohibiting termination without just cause was created by virtue of the initial handbook, the disclaimer contained in the second manual returned plaintiff to the status of an employee-at-will. Woolley dictates that "[t]he provisions of the manual concerning job security shall be considered binding unless the manual elsewhere prominently and unmistakably indicates that those provisions shall not be binding or unless there is some other similar proof of the employer's intent not to be bound." Woolley, supra, 99 N.J. at 307, 491 A.2d 1257. It was well within the jury's province to determine that Claridge had not met this burden.

The disclaimer set forth in the revised handbook reads as follows:

It is the policy of the Company that this handbook and the items contained, referred to, or mentioned herein, are not intended to create, nor should be construed to constitute, a contract of employment between the Company and any one or all of its personnel. This handbook and its items are presented only as a matter of information and direction regarding Company policy, benefits and other useful information.

However unequivocal this language may be in informing employees that the second handbook was not to be construed as a contract, it fails to explain the impact of the disclaimer upon the "maximum job security" provisions contained in both handbooks and the Policies...