Wade v. Kessler Institute

• Decision Date: 13 June 2002
• Citation: 798 A.2d 1251,172 N.J. 327
• Parties: Sheila WADE, Plaintiff-Appellant, v. KESSLER INSTITUTE, Defendant-Respondent, and Jane Does 1-10, John Does 1-10 and ABC Co. 1-10 (fictitious names), Defendants.
• Court: New Jersey Supreme Court

798 A.2d 1251

172 N.J. 327

Sheila WADE, Plaintiff-Appellant, v. KESSLER INSTITUTE, Defendant-Respondent, and Jane Does 1-10, John Does 1--10 (fictitious names), Defendants.

Supreme Court of New Jersey.

Argued April 29, 2002.

Decided June 13, 2002.

Emanuel Needle, Maplewood, argued the cause for appellant (Kohn & Needle, attorneys).

John H. Schmidt, Jr. argued the cause for respondent (Lindabury, McCormick & Estabrook, attorneys; Mr. Schmidt, Kathleen Connelly-Agnostak and Christine M. Martinez, Westfield, on the brief). The opinion of the Court was delivered by VERNIERO, J.

In this wrongful discharge case, a jury found that an employer breached its covenant of fair dealing when it terminated an employee without a hearing as allegedly required by the company's employment manual. The jury also found that the employer did not violate the terms of plaintiff's employment based on provisions in that same manual. The employer appealed that seemingly inconsistent verdict, and the Appellate Division reversed and remanded the matter for a new trial. We now affirm the Appellate Division's disposition, but for reasons other than those expressed by that court.

I.

The facts are derived largely from testimony and other evidence adduced at trial. From 1982 until 1996, Sheila Wade (plaintiff) worked at Kessler Institute (defendant or employer) ostensibly as an at-will employee. In 1991, she transferred into a secretarial position. A supervisor asked plaintiff whether she would accept the task of collecting money from her co-workers to be distributed to those employees who experienced a birth of a child, a wedding, the loss of a loved one, or similar life events. Plaintiff agreed and collected monies in the ensuing years.

In 1992, plaintiff's supervisors questioned her level of tardiness and her attendance. In March of that year, plaintiff's performance evaluation indicated that she was not reporting to work in a "timely manner[.]" Plaintiff's supervisor noted that plaintiff was "somewhat resistive to constructive time management." The employer placed plaintiff on probation for three months, and her attendance improved. In 1993, the employer placed plaintiff on another three-month probationary period because she had reported late to work on numerous occasions. As a result, defendant deferred plaintiff's scheduled raise pending completion of her probationary period. Eventually, plaintiff's attendance did improve, and she collected her raise.

In spring 1994, plaintiff received another unfavorable evaluation showing that she was late twenty-nine times. The employer initially placed plaintiff on probation for three months, but extended that probationary period for an additional six months after plaintiff had failed to improve her attendance to a satisfactory level. In November 1994, a nurse prepared a memorandum for plaintiff's personnel file stating that plaintiff still had "excessive" absences and that "[a]ny future incidents will result in further disciplinary action up to and including termination." A supervisor testified that she met with plaintiff in March 1996 and spoke to her about "the decline in her job performance as a whole and her duties."

Around that same time in early 1996, plaintiff began collecting money for three co-workers. Before she completed that task, plaintiff went on approved medical leave for approximately ten days. When she returned, she resumed collections. Plaintiff stated that because the amounts collected were not large she decided to wait until the next payday, when more people might donate funds, before distributing the money to the intended beneficiaries. Plaintiff kept the money in three separate envelopes, each bearing the name of the intended beneficiary.

In April 1996, a supervisor spoke to plaintiff about the collection effort. She informed plaintiff that some workers had expressed concern that their donations had not been distributed. Plaintiff explained the delay and offered to turn over the funds to the supervisor. Although the supervisor responded that it was not necessary for her to take possession of the funds, she suspended plaintiff for three days pending an investigation. During the course of plaintiff's suspension, the supervisor spoke with employees who questioned whether their donations had been properly credited or recorded by plaintiff.

On April 5, 1996, when she returned to work at the conclusion of her suspension, plaintiff met with her supervisor and gave her the three envelopes and a handwritten memorandum for each envelope. Plaintiff also gave the supervisor a separate memorandum stating that she was hurt and upset by the allegations, and that she would no longer collect money for her co-workers. According to the memoranda, one envelope contained forty dollars, and the other two envelopes each contained twenty-eight dollars.

After counting the money, the supervisor informed plaintiff that she was five dollars short in one of the envelopes. The supervisor testified that plaintiff stated that she had borrowed the five dollars. Plaintiff denied making that statement. Plaintiff claimed that, as far as she knew, the amounts in the envelopes were correct. The supervisor also testified that the envelopes contained a list of donors and that five employees, who had informed her that they had given money, were not listed. Plaintiff denied that the envelopes contained the names of donors.

According to the employer, the supervisor informed plaintiff at their April 5, 1996, meeting that she was being terminated for misallocating funds and for prior tardiness and absenteeism. Plaintiff's written termination form does not indicate any reason other than the alleged misallocation. The form, however, does indicate a numerical evaluation of "4" under the headings "attitude," "performance," "dependability," and "attendance." (Pursuant to defendant's system, an employee is ranked on a scale of one to four, with a one meaning "excellent" and a four meaning "poor.") Plaintiff also acknowledged in a letter (described below) that the supervisor raised absenteeism when orally informing plaintiff of the termination.

Plaintiff wrote a handwritten, seven-page letter requesting that defendant provide her with a "fair hearing ... reaching all proper hands." The letter, which is dated April 6, 1996, presumably refers to the procedures set forth in an employment manual furnished to plaintiff during the course of her employment. In a section entitled "Resolving Work Problems," the manual states in full:

It is the policy of Kessler to expedite the processing of employee complaints or grievances in an expeditious manner. To assure this, any grievance must be presented within (5) days of the event or problem.

The levels for presentation and review of grievances in order of occurrence are:

Department Director

Vice President for Department

Senior Vice President

If the decision reached at any of the three review levels is adverse to the employee, it may be appealed within five (5) days upon the employees [sic] request to the next designated review level.

At the request of the aggrieved party, the records of the grievance proceedings and the decision reached by the Senior Vice President may be further reviewed by the President of Kessler. The decision of the President shall be final, binding and unappealable. Employees are encouraged to utilize the services of the Personnel Department to assist in the reconciliation of grievances.

In a separate section entitled "Discharge," the manual provides in full: "When deemed necessary in the interest of Kessler, Kessler reserves the right to dismiss an employee from its services with or without notice. An employee whom Kessler determines has violated Kessler's rules and regulations may be subject to immediate dismissal without notice."

Plaintiff testified that defendant did not respond to her letter or return telephone calls that she had placed pertaining to the letter. Although she called the human resources vice president at least three times, plaintiff acknowledged that only once did she leave her name. Plaintiff also acknowledged that on the one occasion when she left her name, she merely identified herself and stated that she would call back later. In any event, defendant responded that it never received the letter or any telephone messages from plaintiff.

Plaintiff filed a Law Division complaint alleging various causes of action. She claimed that the employer breached an implied covenant of good faith and fair dealing and the express terms of the employment manual when it terminated her "without just cause" and without providing her access to a grievance procedure. She additionally asserted intentional infliction of emotional distress. (Plaintiff's complaint also alleged racial discrimination, common-law wrongful discharge, negligent supervision, tortious interference, and respondeat superior liability for pain and suffering caused by the termination. Those allegations were dismissed prior to trial and are not before us in this appeal.)

Plaintiff's allegation regarding the covenant of good faith and fair dealing generated rulings by two different trial courts. Although it denied defendant's summary judgment motion, the first trial court ordered: "[A]ny claim that the defendant breached the covenant of good faith and fair dealing by failing to afford the plaintiff a hearing is dismissed with prejudice." (The record before us does not reveal the court's rationale for that ruling.) Defendant moved to enforce the first court's ruling before a second judge (the judge who presided over the trial itself), asserting that "the only issue that the jury is to deal with is whether or not [plaintiff] was denied a grievance proceeding, not the... entire issue of whether she was properly terminated[.]" The second judge denied defendant's motion, stating "I don't think that we can surgically submit it to the jury in that fashion."

Near the conclusion of the...