Samples v. Hall of Mississippi, Inc., EC85-355-LS-D

• Decision Date: 21 July 1987
• Docket Number: EC85-375-LS-D.,No. EC85-355-LS-D,EC85-355-LS-D
• Parties: Ann SAMPLES, Plaintiff, v. HALL OF MISSISSIPPI, INC., Defendant. Conner DILLINGHAM, Plaintiff, v. HALL OF MISSISSIPPI, INC., Defendant.
• Court: U.S. District Court — Northern District of Mississippi

673 F. Supp. 1413

Ann SAMPLES, Plaintiff, v. HALL OF MISSISSIPPI, INC., Defendant.

Conner DILLINGHAM, Plaintiff, v. HALL OF MISSISSIPPI, INC., Defendant.

Nos. EC85-355-LS-D, EC85-375-LS-D.

United States District Court, N.D. Mississippi, E.D.

June 22, 1987.

Amended Opinion and Order July 21, 1987.

John Booth Farese, Ashland, Miss., for plaintiffs.

Wendell H. Trapp, Jr., Corinth, Miss., and Stephen X. Munger, Atlanta, Ga., for defendant.

MEMORANDUM OPINION DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

SENTER, Chief Judge.

These are actions for breaches of oral promises of employment and for tortious interference with an employment relationship. Defendant has filed motions for summary judgment as to the claims of both plaintiffs and as to its counterclaims for breach of a release agreement. For the reasons stated below, the court is of the opinion that defendant's motions as to plaintiff's claim of tortious interference with a business relationship are well taken and should be granted. The defendant's other motions on summary judgments are not well taken and should be denied.

I. Facts and Background.

The asserted facts are as follows: Hall of Mississippi, Inc., is a printer of magazines and other materials with a plant located in Corinth, Mississippi. Both plaintiffs were employed by the defendant in salaried positions, Conner Dillingham as engineering/maintenance coordinator and Ann Samples as clerk/typist. Hall of Mississippi, Inc., maintains a set of supervisor's guidelines with policy set forth on terminations for cause and reductions in force. Both plaintiffs were familiar with these guidelines, Dillingham as a former supervisor and Samples because updating the pressroom copy of the guidelines was part of her duties. Both plaintiffs and eight other salaried employees were terminated on May 3, 1985. The defendant called these terminations a reduction in force. Both plaintiffs signed release agreements and received severance pay in return. The plaintiffs stated that these release agreements were not explained and that they were threatened with not receiving severance pay if they did not sign a release. As the facts in the two cases are similar and the issues are identical, the motions in these cases will accordingly be considered together.

II. Contentions of the Parties.

Each complaint, as amended,¹ states two claims in diversity. The plaintiffs both allege breaches of oral employment contracts. Dillingham states that he was told after his transfer to engineering/maintenance coordinator that "as long as you do your job, you have a job." Dillingham points to his work during union organizational campaigns and his service as chief of the fire brigade as consideration for this promise. Samples states that similar promises were made to her and cites as consideration that she was a good employee. Both also point to the supervisor's guide provisions concerning termination for cause and reductions in force as implying contract for permanent employment.

Both complaints also allege that the managers of the firm, by terminating the plaintiff's employment, tortiously interfered with the employment relationships between the plaintiffs and Hall of Mississippi, Inc. These claims are not pressed against the individual managers, but rather against the defendant corporation on an agency theory. Dillingham alleges that there was no reduction in force and that his termination was part of a conspiracy among the managers to protect another supervisor previously disciplined for homosexual activities on the job. Samples alleges that there was no reduction in force and that her termination was solely on account of her absenteeism.

The defendant counterclaims against both plaintiffs on the grounds that the commencement of the present actions breached the release agreements signed by the plaintiffs in return for severance pay. Both plaintiffs state that the purpose of the releases was not explained and that they were told that they would not receive severance pay unless they signed these release agreements.

III. Conclusions of Law.

A. Standard for Summary Judgment.

This cause is under consideration through motions for summary judgment. Summary judgment "shall be issued forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). To preclude the granting of summary judgment, any factual dispute must be both genuine and material. Anderson v. Liberty Lobby, 477 U.S. 242, ___, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202, 211 (1986). An issue of fact is considered material if its outcome is determinative in the relevant area of substantive law. St. Amant v. Benoit, 806 F.2d 1294, 1297 (5th Cir.1987). Genuine factual issues are those "that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Liberty Lobby, 477 U.S. at ___, 106 S.Ct. at 2511, 91 L.Ed.2d at 211.

To support a motion for summary judgment, the moving party must inform the court of "the basis for its motion, and identifying those portions of the summary judgment evidence which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2553, 91 L.Ed. 2d 265 (1986). If the moving party meets this burden, the nonmoving party must show either that there is "a genuine issue of fact concerning an essential element of the claim on which judgment is being sought" or good reason why it is unable to present such facts. Bordelon v. Block, 810 F.2d 468 (5th Cir.1987).

B. Application of Mississippi Law under Erie Railroad v. Tompkins.

Mississippi law controls the disposition of each of the three issues presented in this case, and this court is therefore bound to apply the law in the same manner as a Mississippi court. Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); DiPascal v. New York Life Ins. Co., 749 F.2d 255 (5th Cir.1985). The Fifth Circuit has stated in regard to such application that

As a federal court, "it is not for us to adopt innovative theories of state law, but simply to apply that law as it currently exists," and to rule as we believe the state's highest tribunal would rule. We are emphatically not permitted to do merely what we think best; we must do that which we think the Mississippi Supreme Court would deem best. If the law of Mississippi is to be changed, "it is up to the Supreme Court of Mississippi and not this court to change the substantive law of that state." Finally, "under Erie we cannot skirt the clear import of state decisional law solely because the result is harsh."

Jackson v. Johns-Manville Sales Corp., 781 F.2d 394, 397 (5th Cir.1986), cert. denied ___ U.S. ___, 106 S.Ct. 3339, 92 L.Ed.2d 743 (1986).

In making an Erie guess without specific guidance from the Mississippi Supreme Court, this court must consider (1) lower state court decisions and Supreme Court dicta, (2) the general rule on the issue, (3) the rule in those other states referenced by Mississippi courts in formulating the substantive law of Mississippi, and (4) other legal sources including treatises and law review commentaries. Id. Using these sources, "we must attempt to predict state law, not create or modify it." United Parcel Service v. Weben Industries, Inc., 794 F.2d 1005, 1008 (5th Cir.1986).

C. Breach of an Oral-Employment Contract.

Since 1858, Mississippi has followed the rule that a contract to perform "particular services from time to time, to be paid for as the services are rendered, and without any agreement as to the time of its continuance, is determinable at the pleasure of either party." Butler v. Smith & Tharp, 35 Miss. 457, 464 (1858). Modern Mississippi cases have continued to follow this rule, holding that either the employer or employee may terminate the employment contract at will—whether for good reason, bad reason or no reasons. Kelly v. Mississippi Valley Gas Co., 397 So.2d 874 (Miss.1981); Montgomery Ward & Co. v. Skinner, 200 Miss. 44, 25 So.2d 572 (1946); Rape v. Mobile & Ohio Ry. Co., 136 Miss. 38, 100 So. 585 (1924). See generally, Comment, The Unfairness of Federal Preemption of State Law Exceptions to the Employment-at-Will Rule and the Need for a Uniform National Remedy for Wrongful Discharge, 55 Miss.L.J. 517, 522-24 (1985); Note, 51 Miss.L.J. 575, 576-98 (1981).

Recently, in the case of Shaw v. Burchfield, 481 So.2d 247 (Miss.1985), the Mississippi Supreme Court expressed disenchantment with the general rule of at-will employment. In upholding a written agreement allowing termination of employment in ten days notice by either party, the court stated:

Were this a case where no employment contract established expressly the ground rules for termination and where the employer was calling upon the state to furnish the law which authorized termination, we might well be charged to consider the at will termination rule.

Shaw, 481 So.2d at 254. To date, the court has considered only one subsequent case involving at-will termination, Vestal v. Oden, 500 So.2d 954 (Miss.1986), which also involved an express provision for termination at-will in a written contract. Vestal, 500 So.2d at 958. Consequently, the court has not yet overturned the terminable at-will rule nor suggested a replacement. In the absence of further guidance from the Mississippi Supreme Court, this court is bound to follow the general rule on the issue. Jackson, 781 F.2d at 397.

The terminable at-will rule is not absolute, however, because it is subject to the following exceptions:

(1) Express provision in the contract to the contrary may remove an employee from at-will status. McGlohn v. Gulf and S.I. RR, 179 Miss. 396, 174 So. 250 (1937) (upholding requirement of "trial" before termination under...