Schwartz v. Michigan Sugar Co., Docket No. 50145

• Court: Court of Appeal of Michigan (US)
• Writing for the Court: J. H. GILLIS; BRONSON
• Citation: 308 N.W.2d 459,106 Mich.App. 471
• Docket Number: Docket No. 50145
• Decision Date: 20 May 1981
• Parties: Bruce H. SCHWARTZ, Plaintiff-Appellant, v. MICHIGAN SUGAR COMPANY, Defendant-Appellee. 106 Mich.App. 471, 308 N.W.2d 459, 115 L.R.R.M. (BNA) 4535, 1981 O.S.H.D. (CCH) 25,584

Page 459

308 N.W.2d 459 Bruce H. SCHWARTZ, Plaintiff-Appellant,
v.
MICHIGAN SUGAR COMPANY, Defendant-Appellee. Docket No. 50145.
106 Mich.App. 471, 308 N.W.2d 459, 115 L.R.R.M. (BNA) 4535,
1981 O.S.H.D. (CCH) 25,584 Court of Appeals of Michigan. May 20, 1981.
Released for Publication July 24, 1981.

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[106 MICHAPP 474] Eugene D. Mossner, Saginaw, for plaintiff-appellant.

Timothy D. Wittlinger, Detroit, for defendant-appellee.

Before BRONSON, P. J., and J. H. GILLIS and BOSMAN, ^* JJ.

J. H. GILLIS, Judge.

Plaintiff, Bruce H. Schwartz, appeals from a February 13, 1980, order of the Saginaw County Circuit Court granting defendant summary judgment. Plaintiff had alleged that he was wrongfully and unjustly discharged from defendant's[106 MICHAPP 475] employ on September 20, 1978, after working for defendant for 28 years.

Plaintiff's complaint can be broken down into three claims. First, he alleges the existence of an implied contract of employment to continue until age 65, absent termination for just cause. Second, plaintiff claims that his discharge was in retaliation for his effective performance as company safety director and that defendant thereby violated the Michigan Occupational Safety and Health Act (MIOSHA), M.C.L. § 408.1001 et seq.; M.S.A. § 17.50(1) et seq. Finally, plaintiff argues that, as a long-term employee, by law he could only be discharged for just cause.

Neither defendant's motion nor the subsequent opinion and order specified whether the summary judgment was based on GCR 1963, 117.2(1) or 117.2(3). Although defense counsel argued that plaintiff had failed to "state a claim upon which relief can be granted", the parties and court relied on various depositions and documents recorded with the court. Further, defendant's motion

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and accompanying memorandum argued that there was no genuine issue of material fact and that it was entitled to judgment as a matter of law. The lower court's opinion concluded:

"The court finds that under Michigan law that a contract of employment for an indefinite period, or a contract for permanent employment, is a contract for employment at will, and the employee involved may be terminated by the employer at any time, for any cause, or without cause. The court further finds that if the termination is in retaliation for actions of the employee on the job, or for attempting to 'do too good a job', the cases are uniform that the employer still retains the right to discharge the employee."

Out of necessity, we consider each of plaintiff's [106 MICHAPP 476] claims under GCR 1963, 117.2(1) and 117.2(3). Cf. Partrich v. Muscat, 84 Mich.App. 724, 728-729, 270 N.W.2d 506 (1978).

A motion for summary judgment under GCR 1963, 117.2(1) tests the legal sufficiency of the plaintiff's pleadings, which for purposes of the motion are considered to be true. Weckler v. Berrien County Road Comm., 55 Mich.App. 7, 9, 222 N.W.2d 9 (1974). The appropriate test is whether the plaintiff's claim is so clearly unenforceable as a matter of law that no factual development can possibly justify a right to recovery. Crowther v. Ross Chemical & Manufacturing Co., 42 Mich.App. 426, 431, 202 N.W.2d 577 (1972).

A motion for summary judgment under GCR 1963, 117.2(3) tests the factual sufficiency of the plaintiff's claim. The court is to consider affidavits, pleadings, depositions and other documentary evidence submitted by the parties. Sanders v. Clark Oil Refining Corp., 57 Mich.App. 687, 692, 226 N.W.2d 695 (1975). The court is to give the benefit of any reasonable doubt to the party opposing the motion and thereafter grant the motion only if it is impossible for the claim to be supported at trial because of a deficiency which cannot be overcome. Rizzo v. Kretschmer, 389 Mich. 363, 372, 207 N.W.2d 316 (1973).

Contracts for permanent employment are generally considered to be indefinite hirings terminable at the will of either party. Lynas v. Maxwell Farms, 279 Mich. 684, 687, 273 N.W. 315 (1937). Nonetheless, a contract providing that the employee shall be discharged for cause only is enforceable. Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 598, 609-610, 292 N.W.2d 880 (1980). Enforceable contractual rights of this nature may result from statements of company [106 MICHAPP 477] policy and procedure. Id. For example, in Toussaint, the employer's personnel policy manual stated that it was company policy to release employees "for just cause only". Id., 597-598, 292 N.W.2d 880. Moreover, the plaintiff in that case inquired as to job security upon hiring and was told he would remain as long as he did his job. Id.

In the instant case, there were no such statements of employee policy or procedure. Plaintiff readily conceded in his deposition that he was never told he would be employed until the age of 65, absent termination for cause. Further, he admitted that his superiors never made statements that would have led him to believe as much. He argues, however, that the circumstances of his employment require that such a contractual agreement be implied in fact.

The requirements for a contract implied in fact were discussed in Erickson v. Goodell Oil Co., Inc., 384 Mich. 207, 211-212, 180 N.W.2d 798 (1970):

"A contract implied in fact arises under circumstances which, according to the ordinary course of dealing and common understanding, of men, show a mutual intention to contract. In re Munro's Estate (1941), 296 Mich. 80 (295 N.W. 567). A contract is implied in fact where the intention as to it is not manifested by direct or explicit words between the parties, but is to be gathered by implication or proper deduction from the conduct of the parties, language used or things done by them, or other pertinent circumstances attending the transaction. Miller v. Stevens (1923), 224 Mich. 626 (195 N.W. 481)."

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Thus, an employer's conduct and other pertinent circumstances may establish an unwritten "common law" providing the equivalent of a just cause termination policy. Rules and understandings, promulgated and fostered by the employer, may justify a legitimate claim to continued employment. [106 MICHAPP 478] Toussaint, supra, 408 Mich. 617-618, 292 N.W.2d 880, quoting Perry v. Sindermann, 408 U.S. 593, 601-603, 92 S.Ct. 2694, 2699-2700, 33 L.Ed.2d 570 (1972). Nonetheless, a mere subjective expectancy on the part of an employee will not create such a legitimate claim. Perry v. Sindermann, supra.

A review of plaintiff's deposition testimony reveals that his claim of an implied contract for continued employment was based on his own subjective expectancy regarding his relationship with the company. Plaintiff based his belief on the fact that the company was originally a closeknit family operation, not known for its high salaries, with virtually no employee turnover. The company, though it had no established sick leave policy, usually paid sick employees for extended periods of time. Further, literature on the company's pension plan indicated that all employees would be eligible unless the particular employee "was injurious or detrimental to the interests of the company". Plaintiff concluded that it was a "foregone conclusion that if you perform your job competently and are an asset to the company, the natural expectation is that you will continue to be employed by the company".

These circumstances do not evidence a common understanding or mutual intent to contract that employment be continuing but for cause. The pension plan condition does not manifest an employment guarantee, but evidences that pension benefits can be lost through detrimental employee actions. For example, a long-term employee could be precluded from receiving a pension if he took employment with a competing firm. Plaintiff conceded that he attached no independent significance to the brochures. Likewise, although the company paid relatively low salaries, that was not perceived [106 MICHAPP 479] as a tradeoff for continued employment. Plaintiff indicated that each year a Mr. Rennert would conduct a salary review. In some years plaintiff's salary increase would keep up with the rising cost of living and in other years it would not. In the bad years, Rennert would be apologetic and say that the company was ready to "take off", insinuating that plaintiff had a "terrific future" with the company. However, plaintiff never viewed Rennert's representations as an agreement for continued work but for cause. Rather, he saw Rennert as "a Pollyanna type of fellow that promised you things were going to be better tomorrow".

Plaintiff's deposition testimony made it clear that he felt he could only be discharged for cause not because of any representations or policies promulgated, but because of his own personal belief that an employee doing competent work would be retained as a company asset. Plaintiff considered this "a convenience in almost any company". Such a subjective belief is insufficient to establish a contract implied in fact. Thus, although plaintiff's complaint sufficiently pled a cause of action on this theory, in fact, plaintiff's basis for the claim is not the objective circumstances of his employment, but his own personal view of what the law should be.

Plaintiff's second theory is that he was discharged because of his effective performance as safety director. In effect, plaintiff contends that his rigorous enforcement of MIOSHA regulations precipitated his dismissal.

We agree that a termination in contravention of a strong public policy is wrongful and an exception to the general rule that such employment contracts are terminable at will. Cf. Trombetta v. Detroit, T & I R Co., 81 Mich.App. 489, 265 N.W.2d [106 MICHAPP 480] 385 (1978); Sventko v. The Kroger Co., 69 Mich.App. 644, 245 N.W.2d 151 (1976). In pertinent part, § 65(1) of MIOSHA, M.C.L. § 408.1065(1); M.S.A. § 17.50(65)(1) provides:

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"A person shall not discharge an employee or in any manner discriminate...