Rowe v. Noren Pattern and Foundry Co.

• Decision Date: 10 July 1979
• Docket Number: Docket No. 78-2059
• Citation: 91 Mich.App. 254,283 N.W.2d 713
• Parties: Reginald ROWE, Plaintiff-Appellant, v. NOREN PATTERN AND FOUNDRY COMPANY, Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 713

283 N.W.2d 713

91 Mich.App. 254

Reginald ROWE, Plaintiff-Appellant, v. NOREN PATTERN AND FOUNDRY COMPANY, Defendant-Appellee.

Docket No. 78-2059.

Court of Appeals of Michigan.

July 10, 1979.

Rehearing Denied Sept. 17, 1979.

Released for Publication Oct. 10, 1979.

Norman C. Halbower, Muskegon, for plaintiff-appellant.

Jared E. Collinge by Thomas L. Riegler, Muskegon, for defendant-appellee.

Before R. B. BURNS, P. J., and ALLEN and MacKENZIE, JJ.

ALLEN, Judge.

At the conclusion of plaintiff's proofs in a trial by jury on plaintiff's claim against defendant for breach of an oral contract of employment, defendant's motion for a directed verdict against plaintiff was granted. In granting the motion on May 3, 1978, the trial court stated it found Toussaint v. Blue Cross and Blue Shield of Michigan, 79 Mich.App. 429, 262 N.W.2d 848 (1977), controlling and that plaintiff's claim should be denied because the contract (1) was for more than one year and therefore was in violation of the statute of frauds, and (2) was a contract for permanent employment which, under Michigan law, is a contract at will terminable with or without cause by either party at any time. Plaintiff appeals of right.

To the extent that the trial court granted the directed verdict on the basis of the statute of frauds defense, we find error. While it is true that the contract of employment was intended to continue for more than one year, it is also true that, technically speaking, it could have been performed within one year. Plaintiff testified that when defendant sought his services he was told that after he had worked for defendant for 45 days he would become a member of the union, after which he could only be fired for just cause. At another point, plaintiff testified he was informed "that the only way I would get laid off is if the company closed down". Since the company could have been closed down within one year or since plaintiff could have performed his assigned duties so poorly as to give his employer just cause to discharge him, the contract of employment could have been for less than a year.

Where an oral contract may be completed in less than a year, even though it is clear that in all probability the contract will extend for a period of years, the statute of frauds is not violated. Fotherqill v. McKay Press, 361 Mich. 666, 668, 106 N.W.2d 215 (1960), quoted with approval the following language from Smalley v. Mitchell, 110 Mich. 650, 652, 68 N.W. 978, 979 (1896):

"The mere fact that the contract may or may not be performed within the year does not bring it within the statute. The rule is that If, by any possibility, it is capable of being completed within a year, it is not within the statute, though the parties may have intended and thought it probable that it would extend over a longer period, and though it does so extend." (Emphasis supplied.)

Furthermore, it appears that under the rationale of Pursell v. Wolverine-Pentronix, Inc., 44 Mich.App. 416, 419-420, 205 N.W.2d 504 (1973) and Conel Development, Inc. v. River Rouge Savings Bank, 84 Mich.App. 415, 423, 269 N.W.2d 621 (1978), plaintiff's giving up of his prior job, where he had been employed for 131/2 years, and his soon-to-vest retirement benefits constituted a reliance sufficient to circumvent the statute of frauds, at least by raising a question of fact to be resolved by the jury.

The question of whether the trial court was correct in concluding that the oral agreement was for employment of indefinite duration and, as such, was a contract terminable at will, is more difficult to resolve. In Michigan, as well as in a majority of states, the rule is well established that, in the absence of some special consideration passing from the employee to the employer, other than the services to be performed by the employee, a contract for employment for an indefinite term is a contract which may be terminated at any time by either party for any reason or for no reason at all. Lynas v. Maxwell Farms, 279 Mich. 684, 689, 273 N.W. 315 (1937); Adolph v. Cookware Co. of America, 283 Mich. 561, 568, 278 N.W. 687 (1938); McLaughlin v. Ford Motor Co., 269 F.2d 120, 125 (CA 6, 1959); Percival v. General Motors Corp., 539 F.2d 1126 (CA 8, 1976); Milligan v. The Union Corp., 87 Mich.App. 179, 274 N.W.2d 10 (1978). Cf. Anno: Employee's Arbitrary Dismissal as Breach of Employment Contract Terminable At Will, 62 A.L.R.3d 271. Further, in a majority of jurisdictions, relinquishment by the employee of a job, business or profession in order to accept the new position of permanent employment does not constitute special consideration sufficient to support the contract. ¹ Anno: Validity and Duration of Contract Purporting To Be For Permanent Employment, 60 A.L.R.3d 226, 264-266, Lynas, supra; Adolph, supra.

But, because the rule is sometimes harsh and offers opportunities for arbitrary dismissal, the courts have been quick to find exceptions. As is stated in Anno: "Validity and Duration of Contract Purporting To Be For Permanent Employment", 60 A.L.R.3d 226, 232:

"Notwithstanding the above-stated rule that an employment contract which is indefinite as to duration will be considered terminable at will, many courts will hesitate to hold an employment contract unenforceable merely because it fails to specify a term of employment. Before holding an employment contract indefinite for such a reason, The courts will look to the intention of the parties for clues as to the intended duration of the contract, this understanding and intent of the parties to be ascertained from the written and oral negotiations of the parties, business custom and usage, the situation of the parties, the nature of the employment, and the particular circumstances of the case." (Footnotes omitted, emphasis supplied.)

Likewise, an exception to the rule is recognized where it is clear that the employer knew at the time of the hiring that the employee would not have left his former position except for the offer of a permanent position. 60 A.L.R.3d 267 and cases cited. Thus, where the job which is given up is "tenured" or permanent and the new job offer is also tenured or permanent, special consideration is found to exist. Collins v. Parsons College, 203 N.W.2d 594 (Iowa, 1973).

This brings us to the key issue. Does the situation in the case before us fall within the general rule or within one of the exceptions? Or, stated another way, is the instant employment contract a Toussaint v. Blue Cross or McLaughlin v. Ford Motor Co. situation, or is it something else? We conclude it is something else.

Plaintiff's testimony was clear and straightforward. He stated that for 131/2 years he was the "fix-it man of all types" in charge of maintenance work at Muskegon Aluminum where he was paid $4.52 an hour working 50 to 60 hours a week. He stated that he was close to having a vested pension with only a year and one-half remaining before his pension vested; that without any solicitation from him, Nils Bodman, an employee of defendant Noren Pattern & Foundry Company (Noren), contacted him saying that Noren needed a maintenance man and "how much better they could do" him; that he was contacted by Bodman three or four times until finally a meeting was arranged at the Noren plant where Bodman introduced plaintiff to Jim Surge, personnel manager at Noren; that Noren was particularly interested in whether plaintiff knew how to keep a Hunter Automatic Molding Machine operating; that plaintiff had been operating a Hunter machine for several years at Muskegon Aluminum and had taken schooling for it; that Noren offered $5.30 an hour to begin work; that Surge stated he wanted plaintiff to come to work for him and wanted to know what else he could do to get plaintiff to come to work. At this point the transcript of plaintiff's testimony shows:

"Q (counsel for plaintiff) Did you explain what else he could do to get you to come there?

"A Yes. I asked him what kind of a guarantee could he give me that I would work for that I wouldn't be laid off in a week or two weeks or a year or what have you. And he said that he couldn't give me a written agreement because there was a union there and I had to join the union in 45 days. But he said in 45 days I would have to join the union.

"Q When you were talking about job security, what was said?

"A He said that he couldn't give me a written thing a guarantee that I would work there, but that I would work for 45 days and I would join the union. Then I would be covered under the union contract and

"Q Did Mr. Surge ever tell you that the 45 days was a probation period?

"A No. In fact, he told me that it wasn't. He said He told me: 'You don't have to worry about that. You are the man we want. You got the qualifications, and you sure don't have to worry about ' You know, that they wanted me to come there. There is no way I would have went there for one minute if I didn't figure that, you know, that I would belong to the union.

"Q During the conversation with Mr. Surge, was the possibility of layoff discussed?

"A Yes, it was.

"Q Would you relate to the Court

"A I asked him about getting laid off. He said there was no one in the plant that could bump me because there was nobody qualified for that job. They already posted it and they couldn't get no one to fill it. And he said (h)e went on to say that the only way that I would get laid off is if the company closed down.

"Q Were you given, at any time prior to your termination, a copy of the union contract?

"A No.

"Q Were you ever told that you had to undergo a 45-day probation period?

"A No, sir. It was the opposite. He told me that led me to believe just exactly the opposite that I would not be on probation, that they knew what I could do. They wanted me there. It was just a matter of I had to be there 45 days before I could join the union."

Plaintiff's testimony was not rebutted since defendant's motion came at the conclusion of plai...