Progress Printing Co., Inc. v. Nichols, 911648

Citation421 S.E.2d 428,244 Va. 337
Decision Date18 September 1992
Docket NumberNo. 911648,911648
Parties, 60 Fair Empl.Prac.Cas. (BNA) 430, 7 IER Cases 1560, 2 A.D. Cases 296, 3 NDLR P 178 PROGRESS PRINTING COMPANY, INC. v. William H. NICHOLS. Record
CourtSupreme Court of Virginia

Alexander W. Bell, Lynchburg, for appellee.

Present: All the Justices.

LACY, Justice.

In this employment termination dispute, the primary issue is whether the employment was at will or subject to an employment contract which prohibited termination without just cause and required a written warning prior to termination.

On January 20, 1987, William H. Nichols began to work as a pressman for Progress Printing Company, Inc. The personnel director provided Nichols with a copy of the company's Employees' Handbook. The Handbook section entitled "Discipline and Discharge" stated that the company would not discharge or suspend an employee "without just cause and shall give at least one warning notice ... in writing" except under certain circumstances. On February 2, 1987, the personnel director gave Nichols a form which stated that the employment relationship between Progress Printing and Nichols was "at will and may be terminated by either party at any time" (emphasis in original). Nichols and the personnel director both signed the form.

Nichols worked for Progress Printing for approximately two years, and, although he suffered from hypertension, he apparently performed his work satisfactorily. On March 8, 1989, however, Nichols became upset over the company's failure to correct a recurring defect in a print job, and he refused to complete that job assignment as directed by his supervisor. The following day at a meeting with the plant shift leader and the plant manager, Nichols was terminated. Nichols did not receive a written warning prior to his discharge.

Nichols filed a bill of complaint alleging, inter alia, that Progress Printing terminated him because of his hypertensive condition in violation of the Virginians with Disabilities Act, Code §§ 51.5-1--.5-52, and that Progress Printing breached his employment contract because it terminated him without good cause and without any prior written warning as set out in the Employees' Handbook.

Following an ore tenus hearing, the trial court held that Progress Printing terminated Nichols for his "bad attitude," not solely as a consequence of his hypertension and, therefore, Progress Printing did not violate the Virginians with Disabilities Act. The court also held that the contract of employment between Progress Printing and Nichols consisted of both the Handbook and the February 2 acknowledgment form. The court read the two documents together and held that the reference to at will employment contained in the acknowledgment form concerned only the 30-day probationary period. Therefore, the court found that, under the terms of the Handbook, Progress Printing was required to give Nichols a written warning prior to termination and could dismiss him only for cause. Consequently, the trial court held that Progress Printing had breached the employment contract and awarded Nichols $9,500 in damages. Progress Printing filed an appeal from this judgment and Nichols assigned cross-error to the trial court's finding that Progress Printing did not violate the Virginians with Disabilities Act.

Central to the disposition of Progress Printing's appeal is a determination of the nature of the employment relationship which existed between Nichols and Progress Printing. In Virginia, as in a majority of jurisdictions, the employment relationship is presumed to be "at will," which means that the employment term extends for an indefinite period and may be terminated for any reason upon reasonable notice. 1 Miller v. SEVAMP, Inc., 234 Va. 462, 465, 362 S.E.2d 915, 916-17 (1987); Stonega Coal and Coke Co. v. Louisville and Nashville R.R. Co., 106 Va. 223, 55 S.E. 551 (1906). This presumption may be rebutted, however, if sufficient evidence is produced to show that the employment is for a definite, rather than an indefinite, term. Norfolk Southern Ry. Co. v. Harris, 190 Va. 966, 976, 59 S.E.2d 110, 114 (1950).

Progress Printing argues that Nichols failed to rebut the presumption of employment at will because the Handbook did not constitute an enforceable employment contract and, even if it did, the subsequent execution of the acknowledgment form created an at will employment relationship.

Many of the provisions customarily included in an employee handbook are consistent with an at will employment relationship such as policies regarding vacations, severance pay, or employee grievance procedures. Donald W. Brodie, Individual Contracts of Employment (Part 1), 39 Lab.L.J. 585, 591 (1988). Normally, the employer retains the right to alter these policies at any time, although rights which have already vested in the employee are enforceable for the period of time during which those rights existed. Hercules Powder Co. v. Brookfield, 189 Va. 531, 543, 53 S.E.2d 804, 809 (1949); White v. Federal Express Corp., 729 F.Supp. 1536, 1548-49 (E.D.Va.1990).

While employee handbooks generally do not have the characteristics of bilateral contractual documents, a number of jurisdictions have held that the employer can be bound by termination for cause provisions contained in employee handbooks where those provisions are communicated to the employee in a sufficiently specific manner. 1 Henry J. Perritt, Jr., Employee Dismissal Law & Practice § 4.13 at 283-87 (3d ed. 1992); Davis S. Hames, The Current Status of the Doctrine of Employment-At-Will, 39 Lab.L.J. 19, 24-26 (1988); Carol D. Rasnic, The Employment-At-Will Rule in Virginia: Miller v. SEVAMP, Inc., 14 Va.B. Ass'n J., 13, 13-15 (1988). We have not adopted that standard. 2

We have held that an employment condition which allows termination only for cause sets a definite term for the duration of the employment. Harris, 190 Va. at 976, 59 S.E.2d at 114-15. However, the employment term created by a termination for cause condition, while definite, is not one capable of being performed within one year. Falls v. Virginia State Bar, 240 Va. 416, 418-19, 397 S.E.2d 671, 672 (1990). Therefore, a termination for cause provision used to overcome the presumption of employment at will must be in an employee manual or other document which complies with the statute of frauds.

Assuming, without deciding, that the Handbook containing the termination...

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    ...of an at-will disclaimer may be inferred from the employee's silence and continuation of work. Progress Printing Co., Inc. v. Nichols, 244 Va. 337, 421 S.E.2d 284 (1992). See generally George L. Blum, Effectiveness of Employer's Disclaimer of Representations in Personnel Manual or Employee ......

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