Sellitto v. Litton Systems, Inc.

• Decision Date: 13 September 1994
• Docket Number: Civ. No. 93-3885 (HLS).
• Citation: 881 F. Supp. 932
• Parties: Benjamin F. SELLITTO, Jr., Plaintiff, v. LITTON SYSTEMS, INC., Litton Industries, Inc., Airtron Division, Litton Systems, Inc., ABC Corp. (said name being fictitious), Robert Obst, General Manager of Airtron Division, Litton Systems, Inc. and John Doe (said name being fictitious), Defendants.
• Court: U.S. District Court — District of New Jersey

881 F. Supp. 932

Benjamin F. SELLITTO, Jr., Plaintiff, v. LITTON SYSTEMS, INC., Litton Industries, Inc., Airtron Division, Litton Systems, Inc., ABC Corp. (said name being fictitious), Robert Obst, General Manager of Airtron Division, Litton Systems, Inc. and John Doe (said name being fictitious), Defendants.

Civ. No. 93-3885 (HLS).

United States District Court, D. New Jersey.

September 13, 1994.

COPYRIGHT MATERIAL OMITTED

Joseph J. Bell, Denville, NJ, for plaintiff.

Francis X. Dee, Carpenter, Bennett & Morrissey, Newark, NJ, for defendants.

OPINION

SAROKIN, District Judge.

Before the court is defendants' motion for summary judgment.

Background

Plaintiff Benjamin F. Sellitto, Jr. ("Sellitto") began work on March 19, 1990 as a Marketing Manager in the Microwave Products Group of defendant Airtron Division, Litton Systems, Inc. ("Airtron"). Airtron engineers, manufactures, and markets microwave components for commercial and military radar defense systems applications.

On his first day at Airtron, Sellitto received copies of the Airtron Employee Handbook ("Handbook") and a booklet entitled Litton — Statement of Principles ("Booklet"). The same day plaintiff signed a separate, one-page document labeled Statement of Employment Relationship ("Statement"). At some later date, plaintiff also received a copy of the Airtron Policy Manual ("Manual").

The Handbook and Manual contain detailed summary discharge and progressive discipline procedures that are substantially similar, enumerating grounds for immediate dismissal and for the initiation of a four-step progressive discipline process. In the Manual and Handbook, one of the grounds for invocation of the progressive disciplinary procedure is "poor work performance." Poor performance is not listed as a ground for immediate dismissal in either the Manual or Handbook.

Both documents contain a Preface stating that neither the Manual nor the Handbook constitute a "contract of employment," nor should they be "construed or interpreted" as such. The documents also include a paragraph following the text of the disciplinary procedures repeating that the documents do not constitute a contract of employment, nor should they be so construed. Finally, the Statement signed by Sellito on his first day reads in part, "the Company recognizes your right to resign at any time for any reason, and retains the right to terminate the employment relationship at any time for any reason."

On June 18, 1990, Sellito's supervisor completed an Initial Evaluation Review Form indicating that Sellito's performance had been satisfactory to date and provided Sellitto a copy. As part of a company-wide cost containment action, Airtron announced July 30, 1990 that it would postpone all performance evaluations and wage increases six months beyond the date they would otherwise have been made, which for Sellito would have been March 1991.

In May 1991, the same supervisor prepared an "Initial Review" listing five "major weaknesses and concerns" with plaintiff's work, and in June 1991 the supervisor prepared a Performance Review and Appraisal detailing further concerns. Airtron did not provide copies of either the May 1991 or the June 1991 evaluations to plaintiff.

On June 21, 1991 Airtron terminated Sellito for allegedly poor performance. It is undisputed that Airtron ignored the progressive disciplinary procedures of the Manual and Handbook.

Plaintiff commenced this action on or about June 18, 1993 by filing a complaint in the Superior Court of New Jersey, Law Division, Passaic County, claiming breach of an implied contract of employment, breach of an implied covenant of good faith and fair dealing, and negligent or intentional infliction of emotional distress.

After receiving plaintiff's Statement of Damages, indicating that plaintiff seeks damages of $826,000, on or about August 27, 1993 defendant filed a Notice of Filing of Notice of Removal, pursuant to 28 U.S.C. §§ 1446 and 1332(a)(1).

Following discovery, defendants moved for summary judgment, claiming that Sellito was an employee-at-will unprotected by an implied employment contract or implied covenant, and that plaintiff had failed to state a claim for negligent or intentional infliction of emotional distress.

Discussion

This court will grant summary judgment when there are no issues of material fact presented in admissible form and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). See Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Wisniewski v. Johns-Manville Corp., 812 F.2d 81, 83 (3d Cir.1987). In opposition to a motion for summary judgment, a party

must do more than simply show that there is some metaphysical doubt as to the material facts.... In the language of the Rule, the non-moving party must come forward with specific facts showing that there is a genuine issue for trial.

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986).

Though plaintiff failed to submit any affidavit in opposition to the motion, defendants are not excused from their burden of establishing the lack of a material issue of fact. On a motion for summary judgment, "the court is obligated to search the record and independently determine whether or not a genuine issue of fact exists." Higgins v. Baker, 309 F.Supp. 635, 639 (S.D.N.Y.1969), quoted in 10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure, § 2739 (1983). In fact, when the moving party's papers themselves "demonstrate that there is inherent in the problem a factual controversy then ... a counter-affidavit is not essential." Inglett & Co. v. Everglades Fertilizer Co., 255 F.2d 342, 348 (5th Cir.1958); White v. Thomas, 660 F.2d 680, 683 (5th Cir.1981), cert. denied, 455 U.S. 1027, 102 S.Ct. 1731, 72 L.Ed.2d 148 (1982) (same); Adickes v. Kress & Co., 398 U.S. 144, 158, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970).

1. Breach of implied contract for employment

The first issue presented is whether defendants' disclaimers are sufficient to negate any possible implied contract contained in the Manual or Handbook.

In New Jersey, employees serve at the will of their employer unless there is an employment contract. Woolley v. Hoffmann-La Roche, Inc., 99 N.J. 284, 491 A.2d 1257 (1985), modified, 101 N.J. 10, 499 A.2d 515 (1985); Bernard v. IMI Sys., Inc., 131 N.J. 91, 106, 618 A.2d 338 (1993). Since 1985, however, the harsh consequences of at-will employment have been mitigated by the unanimous Woolley decision and its progeny, which hold that "absent a clear and prominent disclaimer, an implied promise contained in an employment manual that an employee will be fired only for cause may be enforceable against an employer even when the employment is for an indefinite term and would otherwise be terminable at will." Woolley, 99 N.J. at 285-86, 491 A.2d 1257. Where a manual is detailed, comprehensive, widely distributed, and lacks a clear and prominent disclaimer, characteristics which a court "should construe in accordance with the reasonable expectations of the employees," id. at 298, 491 A.2d 1257, an enforceable contract exists.

The Woolley decision was rooted in the Court's belief that the common-law doctrine of employment at will, appropriate for a 19th century economy, no longer reflected modern legal and economic relationships. Id. at 291, 491 A.2d 1257; Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 72, 417 A.2d 505 (1980).

No longer is there the unquestioned deference to the interests of the employer and the almost invariable dismissal of the contentions of the employee ... this Court is no longer willing to decide these questions without examining the underlying interests involved, both the employer's and the employees', as well as the public interest, and the extent to which our deference to one or the other served or disserved the needs of society as presently understood.

Woolley, 99 N.J. at 291, 491 A.2d 1257.¹ The Court believed further that "it would be unfair to allow an employer to distribute a policy manual that makes the workforce believe that certain promises have been made and then to allow the employer to renege on those promises." Id. 99 N.J. at 309, 491 A.2d 1257.

Woolley's recognition of implied employment contracts did not create the first exceptions to the at-will doctrine. See N.J.S.A. 10:5-1 to -28 (prohibiting discrimination on basis of race, creed, sex, age, marital status, ancestry, national origin, family status, or sexual orientation); Pierce, 84 N.J. at 73, 417 A.2d 505 (prohibiting discharges that are contrary to public policy).

Since Woolley courts have analyzed the reasonable expectations of numerous employees regarding their employment manuals, finding that some constitute implied contracts, see e.g. Preston v. Claridge Hotel & Casino, Ltd., 231 N.J.Super. 81, 555 A.2d 12 (App.Div.1989); Schwartz v. Leasametric, Inc., 224 N.J.Super. 21, 539 A.2d 744 (App. Div.1988); House v. Carter-Wallace, Inc., 232 N.J.Super. 42, 556 A.2d 353 (App.Div.), certif. denied, 117 N.J. 154, 564 A.2d 874 (1989), while others do not, see e.g. Radwan v. Beecham Laboratories Div. of Beecham, Inc., 850 F.2d 147 (3d Cir.1988); Maietta v. United Parcel Service, 749 F.Supp. 1344 (D.N.J.1990), aff'd without op., 932 F.2d 960 (3d Cir.1991) (policy book states only goals and ideals, not a comprehensive discharge procedure); Brunner v. Abex Corp., 661 F.Supp. 1351 (D.N.J.1986) (manual's termination procedure insufficiently detailed to constitute contract); Labus v. Navistar Int'l Transp. Corp., 740 F.Supp. 1053 (D.N.J.1990) (employee who learned of employment manual only after termination had no reasonable expectation manual's discharge policy would be followed); Kane v. Milikowsky, 224 N.J.Super. 613, 541 A.2d 233 (App.Div.1988).²

On June 30, 1994 the New Jersey Supreme Court revisited Woolley, rendering two unanimous decisions in...