Vintage Health Resources, Inc. v. Guiangan
| Decision Date | 22 February 2010 |
| Docket Number | No. W2008-01288-COA-R3-CV.,W2008-01288-COA-R3-CV. |
| Citation | 309 SW 3d 448 |
| Parties | VINTAGE HEALTH RESOURCES, INC. v. James Jose R. GUIANGAN. |
| Court | Tennessee Court of Appeals |
Elizabeth E. Chance, Memphis, Tennessee, and E. Patrick Lancaster, Olive Branch, Mississippi, for the Plaintiff/Appellant Vintage Health Resources, Inc.
Maureen T. Holland, Memphis, Tennessee, for the Defendant/Appellee James Jose R. Guiangan.
This appeal involves a breach of an employment agreement. The plaintiff company recruits health care workers from the Philippines to come to the United States to work for its clients. The company recruited the defendant nurse by using written recruitment materials. The nurse signed an employment agreement that differed from the recruitment materials in that one of the benefits listed as "free" in the recruitment materials was not free. Approximately one year into the nurse's three-year term of employment, the nurse resigned. When notified of the nurse's intent to resign, the company's management threatened to report the nurse to immigration officials. Despite the threats, the nurse left the employ of the company. The company then filed the instant lawsuit against the nurse, asserting breach of contract. In his answer, the nurse asserted, inter alia, that the employment agreement violated public policy and was unenforceable because the company's threats constituted involuntary servitude. Although unconscionability was not pled, the nurse was permitted to assert the defense at trial. The trial was bifurcated, with the issue of damages reserved. After the trial, the trial court held that the company's threats constituted involuntary servitude, and that the employment agreement was unenforceable because it was unconscionable and contrary to public policy. The trial court also, sua sponte, enjoined the company in the future from using recruitment materials that differed from the employment agreements and from threatening to report employees to immigration officials. The company appeals. We reverse the holding that the employment agreement is unenforceable because unconscionability was never pled, the employment agreement is not unconscionable, and the agreement is not contrary to public policy. We vacate the injunctive relief as to the recruitment materials and affirm as to the remaining injunctive relief. The cause is remanded for consideration of the plaintiff company's damage claim and the defendant nurse's counterclaims.
Plaintiff/Appellant Vintage Health Resources, Inc. ("Vintage"), located in Germantown, Tennessee, provides contract health care workers, primarily nurses, to clients such as hospitals and nursing homes. In order to provide these services, Vintage recruits health care workers from the Philippines to come to the United States to work. In a typical situation, a Filipino who is interested in working for Vintage signs an employment agreement in which he agrees to immigrate to the United States, undergo the required testing for licensure in the U.S., and thereafter work for Vintage for three years, in a location and for a client designated by Vintage. In return, Vintage agrees to handle the immigration procedures and obtain an employment visa for the employee, transport the employee to the United States, provide room and board, classes and pay to the employee while he is studying for the licensure exam, and pay the employee a competitive wage and benefits during his three-year term of employment. When Vintage contracts with a medical facility for the employee's services, Vintage is paid by the medical facility at a higher rate than the rate paid by Vintage to its employee; Vintage retains the difference to recoup its expenses and as its profit. After the initial three-year term of employment, the employee can either renew his employment agreement with Vintage or work elsewhere. To recruit Filipinos to work for it, Vintage circulates recruitment materials in the Philippines that outline the benefits of working for Vintage.
One of the nurses recruited by Vintage was Defendant/Appellee James Jose R. Guiangan ("Mr. Guiangan"). Mr. Guiangan is a Filipino citizen, educated in the Philippines. In the Philippines, Mr. Guiangan's course work was taught in English, and he is fluent in English. He worked as a nurse in the Philippines for some 12 to 13 years.
In 2004, Mr. Guiangan was employed as a nurse in the Philippines making approximately 5,000 pesos per month; this was the equivalent of approximately $50 to $100 per month in U.S. dollars. He was interested in immigrating to the United States in order to better provide for his family.1 Mr. Guiangan received a flier from Vintage about opportunities to work in the United States; when he inquired, Vintage sent him a recruitment "packet" outlining the benefits of working for Vintage. The recruitment materials Mr. Guiangan received listed the following benefits: "Free Recruitment, Free Visa Processing,2 Free TSE Review, Free Language Exams, Free Airfare, NCLEX Tutoring,3 Driver's Training, Paid Vacation & Holidays, Free Housing until working, Health Insurance Provided, Life Insurance Provided, Professional Liability Provided, Workers' Compensation, Up to $1,500 Housing Loan, Up to $1,500 Auto Loan." The recruitment materials did not indicate that recruits would be compensated for time spent preparing for the NCLEX exam.
On March 30, 2004, Mr. Guiangan signed Vintage's "Master Employment Agreement" and "Assignment Policy" (collectively, the "Agreement") at issue in this case. Under the Agreement, Mr. Guiangan agreed to relocate to the United States, with Vintage paying the cost of transportation and, with minor exceptions, the cost of immigrating to the United States and obtaining a visa. Once in the United States, the Agreement stated that, for up to eight weeks, housing, transportation, NCLEX tutoring, and driver's training would be provided to Mr. Guiangan "at a reasonable cost and deducted from his Pre-NCLEX compensation." The "Pre-NCLEX" pay, at the rate of $9 per hour, was designed to pay for Mr. Guiangan's expenses while he studied for the NCLEX exam at Vintage's training center in Cleveland, Mississippi.
The Agreement also set out the hourly base and overtime pay that Mr. Guiangan would receive once he passed the NCLEX licensure exam and began working as a nurse. He would receive sick leave, vacation, holidays, and medical and life insurance. Mr. Guiangan agreed to work for Vintage at a U.S. facility of Vintage's choosing for a period of three years; upon completion of this term of employment, he would receive a $4,000 bonus. The Agreement provided that, if Mr. Guiangan left employment with Vintage prior to the completion of his term of employment, he would be subject to a non-compete covenant and would be liable to Vintage for its actual and consequential damages. The Agreement also stated that, if it appeared to Vintage that Mr. Guiangan had accepted employment with Vintage for the sole purpose of obtaining a visa, Vintage may report this to U.S. immigration officials.
During the period of time in which Mr. Guiangan's immigration paperwork was being processed, he communicated regularly with Vintage personnel, by email and otherwise. He informed the Vintage employees that his wife is a nurse, that his wife has a sister in California, and that he and his wife were in the process of legally adopting his wife's niece and hoped to eventually bring the niece to the United States to live with them.
Mr. Guiangan relocated to the United States on June 7, 2004. The next day, he attended a one-day orientation at Vintage's headquarters in Germantown, Tennessee. During the orientation, Mr. Guiangan signed an acknowledgment that the Agreement he had signed in the Philippines on March 30, 2004 governed his employment in the United States with Vintage. He also signed a document entitled "Living Stipend," which provided that during his NCLEX preparation, he would be paid a net stipend of $300 per month.4 The Living Stipend contemplated a gross stipend of $1,000 per month with a $700 monthly deduction to pay for expenses such as housing, transportation, and driver's training. The remaining $300 was designed to cover Mr. Guiangan's out-of-pocket expenses.
Mr. Guiangan passed the NCLEX exam. He was assigned to work for Vintage at the Tuomey Regional Medical Center in Sumter, South Carolina. Mr. Guiangan's start date under the Agreement was September 7, 2004. During the course of Mr. Guiangan's employment in South Carolina, Vintage was pleased with his job performance and Mr. Guiangan was satisfied with his employment with Vintage.
On September 29, 2005, approximately a year into his three-year term of employment, Mr. Guiangan emailed a letter to Robert Zimmerman ("Mr. Zimmerman"), Vintage's Senior Vice President, stating that he would resign his employment with Vintage5 Mr. Guiangan stated in the letter that he was leaving because his wife was pregnant and she wanted to move to California to be with her sister and to enroll in California's Medicare program.
After Vintage received Mr. Guiangan's email, Jerry Turner ("Mr. Turner"), Vintage's Vice President for Operations in South Carolina, scheduled a meeting with Mr. Guiangan. During the meeting, Mr. Guiangan reiterated his reasons for leaving. In response, Mr. Turner warned Mr. Guiangan that, if he left Vintage before the end of his term of employment, Vintage would report him to immigration officials for breaching his employment contract.
The meeting with Mr. Turner did not change Mr. Guiangan's mind about resigning. Consequently, on October 19, 2005, Mr. Zimmerman sent a letter to Mr. Guiangan outlining to him the ramifications of his...
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