Schipani v. Ford Motor Co.

• Decision Date: 06 January 1981
• Docket Number: Docket No. 43298
• Citation: 102 Mich.App. 606,302 N.W.2d 307,30 Fair Empl.Prac.Cas. (BNA) 361
• Parties: Frank SCHIPANI, Plaintiff-Appellee, v. FORD MOTOR COMPANY, a foreign Corporation, Defendant-Appellant. 102 Mich.App. 606, 302 N.W.2d 307, 30 Fair Empl.Prac.Cas. (BNA) 361
• Court: Court of Appeal of Michigan — District of US

Page 307

302 N.W.2d 307

Frank SCHIPANI, Plaintiff-Appellee, v. FORD MOTOR COMPANY, a foreign Corporation Defendant-Appellant.

Docket No. 43298.

102 Mich.App. 606, 302 N.W.2d 307,

30 Fair Empl.Prac.Cas. (BNA) 361

Court of Appeals of Michigan.

Jan. 6, 1981.

Released for Publication March 3, 1981.

[102 MICHAPP 609] James C. Curtiss, Dearborn, for defendant-appellant.

V. Paul Donnelly, Detroit, for plaintiff-appellee.

Before BEASLEY, P. J., and CAVANAGH and PORTER, ^* JJ.

[102 MICHAPP 610] CAVANAGH, Judge.

Plaintiff, Frank Schipani, an employee of defendant Ford Motor Company, filed a complaint against defendant which alleged a breach of contract, age discrimination, malicious and bad faith demotion, impairment of prospective economic opportunity and failure to objectively evaluate plaintiff's performance.

Defendant responded by filing a motion for accelerated judgment and for summary judgment dismissing plaintiff's complaint. The trial court denied defendant's motion in toto and defendant now appeals by leave of this Court.

Plaintiff commenced employment with Ford Motor Company on December 8, 1948, and was periodically promoted, eventually to the position of Superintendent, Production, Frame Plant in 1969. On February 4, 1952, plaintiff signed a written employment agreement with Ford, providing:

"I understand that my employment is not for any definite term, and may be terminated at any time, without advance notice by either myself or Ford Motor Company * * *."

Plaintiff's job performance was evaluated on an annual basis. On November 4, 1977, plaintiff was suspended and thereafter went on medical leave. Effective December 1, 1977, plaintiff was reassigned to a different job classification at a lower salary grade. There is a question whether plaintiff's position as Superintendent of Production was filled by a person or persons younger than plaintiff. Plaintiff was age 53 at the time of reassignment.

Plaintiff's Count I alleges breach of an implied contract to employ plaintiff until he reached age 65 arising from defendant's literature, policy and [102 MICHAPP 611] practices. Defendant moved for accelerated judgment claiming that the action was barred by the Statute of Frauds. The court denied defendant's motion on the basis of three considerations: (1) the Statute of Frauds is properly invoked to prevent one from "fraudulently constructing" contracts, and plaintiff here "is clearly not fraudulently constructing a contract in an attempt to bilk defendant"; (2) further discovery was necessary; and (3) the exception of part performance might be invoked to avoid the application of the Statute of Frauds.

The Statute of Frauds is not only invoked to prevent fraudulent construction of a written contract but also to prevent disputes over what provisions were included in an oral contract. Plaintiff bases his case on both oral and written contracts.

The only written contract of employment presented in this case specifically provided that the employment was terminable at will. Such contracts are generally held to be indefinite hirings, terminable at the will of either party "in the absence of distinguishing features or provisions or a consideration in addition to the services to be rendered". Lynas v. Maxwell Farms, 279 Mich. 684, 687, 273 N.W. 315 (1937); Adolph v. Cookware Co. of America, 283 Mich. 561 569, 278 N.W. 687 (1938); Hawthorne v. Metropolitan Life Ins. Co., 285 Mich. 329, 335, 280 N.W. 777 (1938); Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 292 N.W.2d 880 (1980).

Under a contract terminable at will, an employee may be terminated with or without cause. Hernden v. Consumers Power Co., 72 Mich.App. 349, 356, 249 N.W.2d 419 (1976). Even an arbitrary and capricious discharge is not actionable under a contract terminable at will. Hernden v. Consumers [102 MICHAPP 612] Power Co., supra. However, the Supreme Court in Toussaint stated:

"Employers are most assuredly free to enter into employment contracts terminable at will without assigning cause. We hold only that an employer's express agreement to terminate only for cause, or statements of company policy and procedure to that effect, can give rise to rights enforceable in contract." Toussaint, supra, 610, 292 N.W.2d 880.

Here, as in Toussaint, it is for the trier of fact to determine whether the contract was not terminable at will because of the defendant employer's oral or written assurances.

Plaintiff contends that an oral agreement to employ plaintiff until age 65 served to bind defendant. The alleged oral agreement is unenforceable because employment contracts for a term exceeding one year come within the Statute of Frauds. McMath v. Ford Motor Co., 77 Mich.App. 721, 724, 259 N.W.2d 140 (1977). A contract which is not, by any possibility, capable of being performed within a year is within the statute. Rowe v. Noren Pattern & Foundry Co., 91 Mich.App. 254, 283 N.W.2d 713 (1979). Under the statute, the agreement is void unless in writing and signed by the party to be charged therewith. M.C.L. § 566.132(1); M.S.A. § 26.922(1), McMath, supra, 724, 259 N.W.2d 140.

The doctrine of partial performance, relied upon by the trial court to avoid the application of the Statute of Frauds, is available in land transactions but is inapplicable to employment contracts. McMath, supra, 725, 259 N.W.2d 140.

Plaintiff argued that defendant should be estopped from raising a Statute of Frauds defense. The elements of equitable or promissory estoppel are: (1) a promise; (2) that the promisor should [102 MICHAPP 613] reasonably have expected to induce action of a definite and substantial character on the part of the promisee; (3) which in fact produced reliance or forbearance of that nature; and (4) in circumstances such that the promise must be enforced if injustice is to be avoided. McMath v. Ford Motor Co., supra, 725, 259 N.W.2d 140.

Plaintiff alleges that based on "Defendant Company's literature, policy, and practices, Plaintiff was led to believe that he would be employed until the normal retirement age of sixty-vie (sic) (65)". The written contract on which plaintiff seeks to rely contains the previously quoted disclaimer.

The Michigan Supreme Court in Toussaint v. Blue Cross & Blue Shield of Michigan, supra, 619, 292 N.W.2d 880, held that:

"An employer who establishes no personnel policies instills no reasonable expectations of performance. Employers can make known to their employees that personnel policies are subject to unilateral changes by the employer. Employees would then have no legitimate expectation that any particular policy will continue to remain in force."

Plaintiff in Toussaint relied on oral representations and statements in the employer's policy manuals assuring that employees would be dismissed for "cause" only, asserting that his dismissal was not for "cause". In treating the policy manual assertions of Blue Cross as sufficient to give rise to contractual rights in Toussaint, the Court found that whether there was "cause" sufficient to justify dismissal was a question for the trier of fact.

The instant case is distinguishable from Toussaint because the presence of disclaimers in the policy handbooks may serve to negate the reliance on plaintiff's part which would be justified to [102 MICHAPP 614] either give rise to a contract or give effect to the doctrine of promissory estoppel. The Supreme Court's decision in Toussaint, supra, indicates that where such questions exist, the trial judge acts properly in denying a motion for accelerated judgment and allowing the case to be presented to the jury.

The Court of Appeals in Kari v. General Motors Corp., 79 Mich.App. 93, 261 N.W.2d 222 (1977), held that where the defendant employer specifically stated that its separation and pay schedule and conditions, contained in its handbook, were not intended to establish a contractual relationship, "(a)n employee reading this language and that of the general disclaimer at the end of the booklet should realize that further negotiations, and not merely the acceptance of employment with General Motors, are necessary to create a contract for severance pay." However, the Supreme Court reversed Kari v. General Motors Corp., supra, by order in lieu of leave to appeal, 402 Mich. 926 (1978), remanding the action to the trial court to consider all of plaintiff's claims including claims raised by plaintiff's interpretation of the handbook and possible oral promises to award the separation allowance. This remand may indicate the Supreme Court's belief that under appropriate circumstances, oral promises may negate the effect of disclaimers which are intended to absolve employers from liability for policies presented in handbooks or other employer literature.

Promissory estoppel requires plaintiff to show that his reliance was definite and substantial. In Pursell v. Wolverine-Pentronix, Inc., 44 Mich.App. 416, 205 N.W.2d 504 (1973), plaintiff had been employed by Dow Chemical until he was 59 years old as the manager of one of its plants. The plant was [102 MICHAPP 615] acquired by defendant. The defendant offered to keep the plaintiff on as general manager, orally promising to employ him as vice-president until he reached retirement at age 65. In reliance on these promises, the plaintiff severed his employment with Dow and accepted the position offered by the defendant. A few years later defendant terminated plaintiff's employment. Pursell, supra, 417-418, 205 N.W.2d 504. This Court found that the giving up of his prior employment and the substantial retirement benefits that accompanied it was sufficient reliance to estop the defendant from raising the Statute of Frauds as a defense. Pursell, supra, 419, 420, 205 N.W.2d 504. Likewise, in Rowe v. Noren Pattern & Foundry Co., supra, 257, 283 N.W.2d 713, the Court found that "plaintiff's giving up of his prior job where he has been employed for 131/2 years, and his soon-to-vest retirement...