Sabetay v. Sterling Drug, Inc.

• Decision Date: 23 January 1986
• Citation: 497 N.Y.S.2d 655,114 A.D.2d 6
• Parties: , 121 L.R.R.M. (BNA) 2716, 107 Lab.Cas. P 55,795 Alexander SABETAY, Plaintiff-Respondent-Appellant, v. STERLING DRUG INC., Defendant-Appellant-Respondent.
• Court: New York Supreme Court — Appellate Division

Page 655

497 N.Y.S.2d 655

114 A.D.2d 6, 121 L.R.R.M. (BNA) 2716,

107 Lab.Cas. P 55,795

Alexander SABETAY, Plaintiff-Respondent-Appellant, v. STERLING DRUG INC., Defendant-Appellant-Respondent.

Supreme Court, Appellate Division,

First Department.

Jan. 23, 1986.

Alan M. Koral, of counsel (Nicholas J. D'Ambrosio, Jr., New York City, with him on brief; Vedder, Price, Kaufman, Kammholz & Day, New York City, attorneys), for defendant-appellant-respondent.

Wayne N. Outten, New York City, of counsel (Lankenau, Kovner & Bickford, New York City, attorneys), for plaintiff-respondent-appellant.

Before SANDLER, J.P., and SULLIVAN, ROSS, KASSAL and ELLERIN, JJ.

SULLIVAN, Justice.

At issue is the sufficiency of a complaint alleging wrongful discharge, and for which recovery is sought both in tort and contract.

Hired by defendant Sterling Drug, Inc. in 1972 without a written contract of employment, plaintiff, a Director of Financial Projects, was discharged effective December 31, 1984, in the aftermath of the June 1983 dissolution of Sterling's Greek manufacturing facility, the liquidation of which plaintiff had been administering. He was recalled to New York in February, 1984 and was notified of his discharge in July, 1984 when no job within Sterling or any of its subsidiaries could be found for him. Plaintiff claims that Sterling's reasons for discharging him are pretextual and that his employment was terminated solely because he refused to participate in "tax avoidance schemes" and the maintenance of "slush funds", and "blew the whistle" on these illegal activities. His complaint alleges four contract and three tort causes of action, all based on his wrongful discharge.

Sterling did not answer, but moved instead, pursuant to CPLR 3211(a)(7) to dismiss the complaint on the ground that none of the seven causes of action stated a cognizable claim. Special Term dismissed the tort actions but denied the motion as to the four contract causes of action. Both sides appeal, plaintiff from the dismissal of his tort claims and Sterling from the denial of its motion to dismiss the contract actions. We affirm the dismissal of the causes of action sounding in tort. Since, however, we find that the causes of action based on breach of an implied contract of employment fail to state a cause of action, we also dismiss those causes and modify accordingly.

In his first cause of action plaintiff alleges that a statement in Sterling's corporate personnel policy manual constitutes a contractual commitment not to discharge him except for cause, unsatisfactory performance, permanent separation, i.e., elimination of a function or partial or full location closing, lack of work, resignation, retirement or death. Plaintiff claims that, as a manager, he "understood that those were the only reasons to terminate an employee", and that in reliance "on this assurance of job security" he discouraged "inquiries from other prospective employers." Citing Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458, 457 N.Y.S.2d 193, 443 N.E.2d 193, and distinguishing Murphy v. American Home Prods. Corp., 58 N.Y.2d 293, 461 N.Y.S.2d 232, 448 N.E.2d 86, Special Term held that "plaintiff can rest upon Sterling's Corporate Policy handbook containing an express limitation" on its right to terminate an at-will employment.

In our view, Special Term erred in its reliance on Weiner. It is still the law of this state that unless an employment is for a definite period of time the hiring is presumed to be at will. (Martin v. New York Life Ins. Co., 148 N.Y. 117, 121, 42 N.E. 416; Watson v. Gugino, 204 N.Y. 535, 98 N.E. 18; Edwards v. Citibank, N.A., 100 Misc.2d 59, 418 N.Y.S.2d 269, affd. 74 A.D.2d 553, 425 N.Y.S.2d 327, app. dismd. 51 N.Y.2d 875, 433 N.Y.S.2d 1020, 414 N.E.2d 400.) "[A]bsent a constitutionally impermissible purpose, a statutory proscription, or an express limitation in the individual contract of employment, an employer's right at any time to terminate an employment at will remains unimpaired." (Murphy v. American Home Prods. Corp., supra, 58 N.Y.2d at 305, 461 N.Y.S.2d 232, 448 N.E.2d 86.) As the Court of Appeals made clear in Murphy, the Weiner exception to the general rule that termination of an at-will employment cannot give rise to a cause of action for breach of contract requires, inter alia, and at the very least, "an express limitation on the employer's right of discharge." (Id. at 305, 461 N.Y.S.2d 232, 448 N.E.2d 86.) The requirement that there be an express limitation on the employer's right to terminate an at-will employment for the Weiner exception to apply has been recently restated in O'Connor v. Eastman Kodak Co., 65 N.Y.2d 724, 492 N.Y.S.2d 9, 481 N.E.2d 549 [plaintiff's reliance upon the popular perception of Kodak as a "womb to tomb" employer and its "Performance Appraisal System" requiring periodic evaluation of each employee found insufficient to constitute a limitation on its right to terminate at-will employment]; accord, Rizzo v. International Brotherhood of Teamsters, Local 237, 109 A.D.2d 639, 486 N.Y.S.2d 220.

Here, it is clear that the personnel manual's termination statement, a seven-page document categorizing the different kinds of terminations and reciting the severance benefits to which an employee so terminated is entitled, does not contain any express limitation on Sterling's right to terminate an at-will employment. Nowhere does the manual limit the reasons for which an employee may be terminated to those listed in the termination section. Indeed, as Sterling's Corporate Director of Personnel noted, Sterling employees have been dismissed for many reasons not encompassed by the termination statement, including obsolescence of technical skills, personality conflicts and office politics. Notably, the statement includes numerous reasons for discharge other than just cause, and Sterling claims that plaintiff's discharge was for one of the stated reasons. Nothing in Weiner supports the proposition that every statement in a personnel manual regarding termination constitutes a contractual commitment. Only an express commitment, not present here, that the employee will not be terminated in the absence of just cause is within its purview.

We also note that the record discloses uncontroverted...