Sheets v. Teddy's Frosted Foods, Inc.

Citation427 A.2d 385,179 Conn. 471
CourtSupreme Court of Connecticut
Decision Date22 January 1980
Parties, 115 L.R.R.M. (BNA) 4626 Emard H. SHEETS v. TEDDY'S FROSTED FOODS, INC.

Robert F. McWeeney, Hartford, for appellant (plaintiff).

Neil P. Coughlan, Hartford, for appellee (defendant).

Before COTTER, C. J., and LOISELLE, BOGDANSKI, PETERS and HEALEY, JJ.

PETERS, Associate Justice.

The issue in this case is whether an employer has a completely unlimited right to terminate the services of an employee whom it has hired for an indefinite term. The plaintiff, Emard H. Sheets, filed a complaint that as amended alleged that he had been wrongfully discharged from his employment as quality control director and operations manager of the defendant, Teddy's Frosted Foods, Inc. The defendant responded with a motion to strike the complaint as legally sufficient. The plaintiff declined to plead further when that motion was granted. From the consequent rendering of judgment for the defendant, the plaintiff has appealed to this court.

Since this appeal is before us pursuant to a motion to strike, 1 we must take the facts to be those alleged in the plaintiff's complaint as amended, and must construe the complaint in the manner most favorable to the pleader. Stradmore Development Corporation v. Commissioners, 164 Conn. 548, 550-51, 324 A.2d 919 (1973); Senior v. Hope, 156 Conn. 92, 97, 239 A.2d 486 (1968); Rossignol v. Danbury School of Aeronautics, Inc., 154 Conn. 549, 557, 227 A.2d 418 (1967). The complaint alleges that for a four-year period, from November 1973 to November 1977, the plaintiff was employed by the defendant, a producer of frozen food products, as its quality control director and subsequently also as operations manager. In the course of his employment, the plaintiff received periodic raises and bonuses. In his capacity as quality control director and operations manager, the plaintiff began to notice deviations from the specifications contained in the defendant's standards and labels, in that some vegetables were substandard and some meat components underweight. These deviations meant that the defendant's products violated the express representations contained in the defendant's labeling; false or misleading labels in turn violate the provisions of General Statutes § 19-222, 2 the Connecticut Uniform Food, Drug and Cosmetic Act. In May of 1977, the plaintiff communicated in writing to the defendant concerning the use of substandard raw materials and underweight components in the defendant's finished products. His recommendations for more selective purchasing and conforming components were ignored. On November 3, 1977, his employment with the defendant was terminated. Although the stated reason for his discharge was unsatisfactory performance of his duties, he was actually dismissed in retaliation for his efforts to ensure that the defendant's products would comply with the applicable law relating to labeling and licensing.

The plaintiff's complaint alleges that his dismissal by his employer was wrongful in three respects. He claims that there was a violation of an implied contract of employment, a violation of public policy, and a malicious discharge. On this appeal, the claim of malice has not been separately pursued, and we are asked to consider only whether he has stated a cause of action for breach of contract or for intentionally tortious conduct. On oral argument, it was the tort claim that was most vigorously pressed, and it is upon the basis of tort that we have concluded that the motion to strike was granted in error.

The issue before us is whether to recognize an exception to the traditional rules governing employment at will so as to permit a cause of action for wrongful discharge where the discharge contravenes a clear mandate of public policy. In addressing that claim, we must clarify what is not at stake in this litigation. The plaintiff does not challenge the general proposition that contracts of permanent employment, or for an indefinite term, are terminable at will. See Somers v. Cooley Chevrolet Co., 146 Conn. 627, 629, 153 A.2d 426 (1959); Fisher v. Jackson, 142 Conn. 734, 736, 118 A.2d 316 (1955). Nor does he argue that contracts terminable at will permit termination only upon a showing of just cause for dismissal. Some statutes, such as the Connecticut Franchise Act, General Statutes § 42-133e through 42-133h, do impose limitations of just cause upon the power to terminate some contracts; see § 42-133f; but the legislature has recently refused to interpolate such a requirement into contracts of employment. See H.B. No. 5179, 1974 Sess. 3 There is a significant distinction between a criterion of just cause and what the plaintiff is seeking. "Just cause" substantially limits employer discretion to terminate, by requiring the employer, in all instances, to proffer a proper reason for dismissal, by forbidding the employer to act arbitrarily or capriciously. See Pierce v. Ortho Pharmaceutical Corporation, 166 N.J.Super. 335, 399 A.2d 1023, 1026 (1979). By contrast, the plaintiff asks only that the employer be responsible in damages if the former employee can prove a demonstrably improper reason for dismissal, a reason whose impropriety is derived from some important violation of public policy.

The argument that contract rights which are inherently legitimate may yet give rise to liability in tort if they are exercised improperly is not a novel one. Although private persons have the right not to enter into contracts, failure to contract under circumstances in which others are seriously misled gives rise to a variety of claims sounding in tort. See Kessler & Fine, "Culpa in Contrahendo," 77 Harv.L.Rev. 401 (1964). The development of liability in contract for action induced by reliance upon a promise, despite the absence of common-law consideration normally required to bind a promisor; see Restatement (Second), Contracts § 90 (1973); rests upon principles derived at least in part from the law of tort. See Gilmore, The Death of Contract 8-90 (1974). By way of analogy, we have long recognized abuse of process as a cause of action in tort whose gravamen is the misuse or misapplication of process, its use "in an improper manner or to accomplish a purpose for which it was not designed." Varga v. Pareles, 137 Conn. 663, 667, 81 A.2d 112, 115 (1951); Schaefer v. O. K. Tool Co., 110 Conn. 528, 532-33, 148 A. 330 (1930); Restatement (Second), Torts § 682 (1977); Wright & Fitzgerald, Connecticut Law of Torts § 163 (1968); Prosser, Torts § 121 (1971).

It would be difficult to maintain that the right to discharge an employee hired at will is so fundamentally different from other contract rights that its exercise is never subject to judicial scrutiny regardless of how outrageous, how violative of public policy, the employer's conduct may be. Cf. General Statutes § 31-126 (unfair employment practices). The defendant does not seriously contest the propriety of cases in other jurisdictions that have found wrongful and actionable a discharge in retaliation for the exercise of an employee's right to: (1) refuse to commit perjury; Petermann v. International Brotherhood of Teamsters, 174 Cal.App.2d 184, 189, 344 P.2d 25 (1959); (2) file a workmen's compensation claim; Frampton v. Central Indiana Gas Co., 260 Ind. 249, 252, 297 N.E.2d 425 (1973); Sventko v. Kroger Co., 69 Mich.App. 644, 648-49, 245 N.W.2d 151 (1976); Brown v. Transcon Lines, 284 Or. 597, 603, 588 P.2d 1087 (1978); (3) engage in union activity; Glenn v. Clearman's Golden Cock Inn, Inc., 192 Cal.App.2d 793, 798, 13 Cal.Rptr. 769 (1961); (4) perform jury duty; Nees v. Hocks, 272 Or. 210, 216-19, 536 P.2d 512 (1975); Reuther v. Fowler & Williams, Inc., 255 Pa.Super. 28, 386 A.2d 119, 120 (1978). While it may be true that these cases are supported by mandates of public policy derived directly from the applicable state statutes and constitutions, it is equally true that they serve at a minimum to establish the principle that public policy imposes some limits on unbridled discretion to terminate the employment of someone hired at will. See Blades, "Employment at Will vs. Individual Freedom: On Limiting the Abusive Exercise of Employer Power," 67 Colum.L.Rev. 1404 (1967); Blumberg, "Corporate Responsibility and the Employee's Duty of Loyalty and Obedience: A Preliminary Inquiry," 24 Okla.L.Rev. 279, 307-318 (1971). No case has been called to our attention in which, despite egregiously outrageous circumstances, the employer's contract rights have been permitted to override competing claims of public policy, although there are numerous cases in which the facts were found not to support the employee's claim. See Larsen v. Motor Supply Co., 117 Ariz. 507, 508, 573 P.2d 907 (1978); Scroghan v. Kraftco Corporation, 551 S.W.2d 811, 812 (Ky.1977); Jackson v. Minidoka Irrigation District, 98 Idaho 330, 333-34, 563 P.2d 54 (1977); Geary v. United States Steel Corporation, 456 Pa. 171, 319 A.2d 174, 180 (1974); Roberts v. Atlantic Richfield Co., 88 Wash.2d 887, 896, 568 P.2d 764 (1977); but cf. Hinrichs v. Tranquilaire Hospital, 352 So.2d 1130, 1131 (Ala.1977).

The issue then becomes the familiar common-law problem of deciding where and how to draw the line between claims that genuinely involve the mandates of public policy and are actionable, and ordinary disputes between employee and employer that are not. We are mindful that courts should not lightly intervene to impair the exercise of managerial discretion or to foment unwarranted litigation. We are, however, equally mindful that the myriad of employees without the bargaining power to command employment contracts for a definite term are entitled to a modicum of judicial protection when their conduct as good citizens is punished by their employers.

The central allegation of the plaintiff's complaint is that he was discharged because of his conduct in calling to his employer's...

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