Swanson v. Van Duyn Chocolate Shops, Inc.

• Decision Date: 06 June 1978
• Parties: , 115 L.R.R.M. (BNA) 4774, 99 L.R.R.M. (BNA) 2499, 85 Lab.Cas. P 55,163 Elvin SWANSON, Appellant, v. VAN DUYN CHOCOLATE SHOPS, INC., Respondent. . *
• Court: Oregon Supreme Court

Page 239

579 P.2d 239

282 Or. 491, 115 L.R.R.M. (BNA) 4774,

99 L.R.R.M. (BNA) 2499,

85 Lab.Cas. P 55,163

Elvin SWANSON, Appellant, v. VAN DUYN CHOCOLATE SHOPS, INC., Respondent.

Supreme Court of Oregon,In Banc. ^*

Argued and Submitted April 4, 1978.

Decided June 6, 1978.

Raymond J. Conboy, Portland, argued the cause for appellant. With him on the briefs were Dan O'Leary, Pozzi, Wilson, Atchison, Kahn & O'Leary.

Nelson D. Atkin II, Portland, argued the cause for respondent. With him on the brief were William F. Lubersky, Denzendorf, Spears, Lubersky & Campbell.

LINDE, Justice.

Plaintiff sued defendant, his former employer, for lost wages plus costs and attorney fees resulting from his discharge without good cause. His complaint alleged that he had been employed by defendant for 19 years, that the employment was covered by a collective bargaining agreement incorporated by reference in the complaint, that plaintiff continued in his employment in reliance on his belief that defendant would not discharge him arbitrarily and without good cause, that the past conduct of the parties gave rise to an implied covenant of the contract prohibiting such discharges, and that defendant breached this covenant by discharging plaintiff without good cause. The circuit court sustained defendant's demurrer to plaintiff's third amended complaint, and plaintiff appeals. We affirm.

In the absence of statute, an employee has no claim to be discharged only for good cause unless such an obligation of the employer is explicit or implicit in an individual or collective agreement. See Yartzoff v. Democrat-Herald Publishing Co., 281 Or. 651, 576 P.2d 356 (1978). No explicit clause to this effect is claimed in this case. Plaintiff contends that the employer's obligation to discharge employees only for good cause arises from the collective agreement in this case either by virtue of its other terms or implicitly as part of the unwritten law of the plant.

Five clauses of the contract are cited by plaintiff as giving rise to an implication of continued employment terminable only for cause. (1) A union security clause requires union membership as a condition of employment. This clause is to secure the collective interest of the employees in the bargaining relationship itself; it cannot be read to imply that an employee who meets the condition of union membership will in fact be retained. (2) In an antidiscrimination clause of the contract, the employer agrees not to discriminate against any employee or job applicant on several grounds including "age." However, plaintiff does not allege discrimination. (3) More closely in point is a provision that seniority will apply in "lay-offs due to lack of work" and in restoring laid-off workers to employment. But we are not persuaded that this is open to the implication that the employer has accepted a more general commitment not to discharge senior employees without good cause, and plaintiff does not allege that he was laid off due to lack of work. (4) A vacation clause provides annual vacation benefits increasing with an employee's length of service up to 15 and more years. This implies no more than an assumption that there will be a number of long-term employees. (5) Similarly, a provision in the contract for pension and retirement benefits implies an expectation that there will be "eligible employees" who will become entitled to benefit from the trust funds created under that provision. However, the clause states that it "encompasses the sole and total agreement between the Employer and the Union with respect to pensions or retirement," and it is silent on the issue of discharge. ¹

Plaintiff argues that taken together, these clauses recognize valuable rights in continued employment from which an employee could reasonably infer, and a tribunal could imply, a commitment that he would not be discharged without good cause. We think that, aside from plaintiff's subjective assumptions, the clauses at most added up to an inference that the beneficial expectations thus created will not be destroyed for an affirmatively improper reason, for instance in order to reduce the employer's exposure to vacation pay or the benefits payable by the pension fund. ² The complaint makes no such affirmative allegations. But we do not think that the presence of these other clauses suffices to imply into the contract a different provision committing the employer to terminate anyone's employment only for good cause, a provision which is conspicuous by its absence precisely because, according to the complaint, it is common in the collective bargaining agreements negotiated with other employers in the same industry. Why it was omitted in this contract cannot be surmised from the pleadings, but we cannot fill this omission of a major and valuable term, which is usually bargained for by the parties, simply by implication.

Plaintiff places his chief reliance on the approach to labor agreements stated by the United States Supreme Court in United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960). That case and its companions in the "Steelworker Trilogy" concerned the scope of arbitration under collective bargaining agreements, including the arbitrability of particular disputes. The Court held in Warrior & Gulf that the question whether a claim was arbitrable under an agreement should itself have been submitted to an arbitrator. This was found to follow from the agreement to subject what would otherwise be unilateral management decisions to the terms of a contract and to binding arbitration in exchange for the union's sacrificing its corresponding power of unilateral action by a binding no-strike clause. A collective...