Wior v. Anchor Industries, Inc.

• Decision Date: 07 August 1996
• Docket Number: No. 82S01-9505-CV-518,82S01-9505-CV-518
• Citation: 669 N.E.2d 172
• Parties: 132 Lab.Cas. P 58,147, 11 IER Cases 1742 Glenn WIOR, Appellant, v. ANCHOR INDUSTRIES, INC., Appellees.
• Court: Indiana Supreme Court

Page 172

669 N.E.2d 172

132 Lab.Cas. P 58,147, 11 IER Cases 1742

Glenn WIOR, Appellant, v. ANCHOR INDUSTRIES, INC., Appellees.

No. 82S01-9505-CV-518.

Supreme Court of Indiana.

Aug. 7, 1996.

Rehearing Denied Nov. 27, 1996.

Joseph A. Yocum, Yocum and Yocum, Evansville, for Appellants.

William Michael Schiff, Mary Lee Franke, Kahn, Dees, Donovan & Kahn, Evansville, for Appellees.

ON PETITION TO TRANSFER

SELBY, Justice.

This case presents three questions: (1) whether an oral agreement for employment until retirement, which was understood by the parties to mean retirement in "20 plus" years, is unenforceable under the Statute of Frauds; (2) whether Anchor could discharge Wior without cause; and (3) whether Wior has a wrongful discharge claim based upon his assertion that Anchor terminated him for refusing to discharge an employee with a worker's compensation claim.

I. FACTS

Glenn Wior has worked in the "needle trades" all of his working life. When Wior moved to Indianapolis in 1988, he worked at a plant manufacturing uniforms and safety equipment for the racing industry. Over the years, Wior belonged to various trade-related organizations, and subscribed to trade journals.

From early 1991 to May 1992, Wior operated a sole proprietorship in Indianapolis known as Sewing Services. Altogether, Sewing Services' gross income as of May 1992 was less than $6,500 and Wior's net profit for this period was $2,705. In 1992, Wior actively sought other employment.

Anchor Industries ("Anchor") specializes in the manufacturing of custom canvas and synthetic products for the outdoor recreational industry. In May 1992, Wior responded to a blind advertisement which Anchor placed in an Indianapolis newspaper. Anchor interviewed Wior for the position of Plant Supervisor of one of Anchor's Evansville, Indiana plants. Anchor told Wior that the position was not a temporary position. Wior informed Anchor that he would not leave Indianapolis unless he had a commitment for permanent employment until retirement in "20 plus" years. Anchor questioned whether Wior would be willing to give up his consulting business, and Wior responded, "With a commitment to a sound future, a long-term employment--you were talking 20 plus years--a good opportunity here to be a V.P. at Anchor, yes." (R. at 160). Anchor agreed to employ Wior for "20 plus" years, until Wior retired, but the parties never memorialized their agreement in writing.

Wior and his family relocated to Evansville, and Wior began work at Anchor on August 3, 1992. At this time he was advised that his job performance would be evaluated after his first ninety days of employment. With Anchor's knowledge and assistance, Wior purchased a home in Evansville. On November 11, 1992, Anchor terminated Wior because he did not "fit in." Anchor Vice-President Ken Dimmett explained that Anchor had sought someone they did not have to train, and that Wior was "just not working out." (R. at 309).

Wior brought suit seeking damages for breach of contract, wrongful discharge, negligent misrepresentation, and intentional misrepresentation. Anchor moved for summary judgment, which the trial court granted. Wior appealed to our Court of Appeals, which affirmed in part and reversed in part. Anchor petitioned this Court for transfer. We grant transfer and affirm the trial court.

II. THE STATUTE OF FRAUDS

Our Statute of Frauds states, in relevant part:

No action shall be brought in any of the following cases:

....

Fifth. Upon any agreement that is not to be performed within one (1) year from the making thereof;

....

Unless the promise, contract or agreement upon which such action shall be brought, or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or by some person thereunto by him lawfully authorized, excepting however, leases not exceeding the term of three (3) years.

I.C. § 32-2-1-1 (1979).

The progenitor of our Statute of Frauds is the former English Statute of Frauds, enacted more than 300 years ago. The original English statute was enacted to prevent " 'many fraudulent practices, which are commonly endeavored to be upheld by perjury and subornation of perjury.' " McIntosh v. Murphy, 52 Haw. 29, 469 P.2d 177, 179 (1970) (quoting 29 Car. 2, c. 3 (1677)). Additionally, commentators have identified at least three justifications for the continued vitality of modern statutes of fraud:

(1) the Statute serves an "evidentiary" function, lessening the danger that courts or juries will be misled by perjured testimony as to the existence or purport of a contract; (2) it has a "cautionary" effect, tending to impress upon the contracting parties the significance of their agreement; and (3) it acts as a "channeling" device, providing a basis for distinguishing contracts which are enforceable from those which are not.

Note, Statute of Frauds--The Doctrine of Equitable Estoppel and the Statute of Frauds, 66 Mich. L.Rev. 170, 170-71 (1967). The Court of Appeals reversed in part the trial court's grant of summary judgment to Anchor concluding that Wior and Anchor's employment agreement was not within the Statute of Frauds. Wior v. Anchor Industries, Inc., 641 N.E.2d 1275 (Ind.Ct.App.1994). The Court of Appeals observed that "death is the contingency which renders [a contract of lifetime employment] fully performed." Id. at 1278. Because Wior could have died within one year of entering into the contract with Anchor, the Court of Appeals held that the contract was capable of being "performed" within one year and, thus, did not require a writing under the Statute of Frauds.

Judge Baker aptly points out in his dissent, however, that there is a difference between the concept of lifetime employment and Wior's permanent employment until retirement. Generally, "permanent employment" means steady employment, not lifetime or eternal employment. Georgia Power Co. v. Busbin, 242 Ga. 612, 250 S.E.2d 442, 443-44 (1978). In this case, Anchor assured Wior that the position offered was not a temporary position, but a position in which Wior could work until a traditional retirement age, thus allowing him "20 plus" years with Anchor. ¹ Since the parties understood that retirement as used in this way would occur at an age that Wior could not attain within one year, the Statute of Frauds required the agreement to be in writing. ² See Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 483, 489 (Tex.1991). While death may serve as a contingency constituting performance in a lifetime employment contract, death does not constitute performance in contracts involving employment until retirement, where the parties intend that the employee will retire only after a number of years greater than one. Retirement in "20 plus" years is the bargained-for contingency constituting performance in the contract between Wior and Anchor.

Were we to rule otherwise, the Statute of Frauds' continued vitality in service contracts would be substantially eroded. Under the Court of Appeals' analysis, any person with a service agreement intended to span a long period of time could avoid the writing requirement of the Statute of Frauds, since death could always occur within one year. Such a holding would seriously undermine the Statute of Frauds' efficacy in encouraging written contracts and preventing fraud and perjury.

We reject the analysis offered by the majority below as incompatible with the purposes of the Statute of Frauds. Thus, we decline to interpret death as a contingency constituting performance in an agreement for employment for "20 plus" years until the employee retires at a traditional retirement age. As such, Wior's breach of contract claim is within the Statute of Frauds and because the contract was not reduced to writing, it is unenforceable. Since no valid contract for permanent employment exists, Anchor employed Wior at will. ³

III. EMPLOYMENT AT WILL

Indiana follows the doctrine of employment at will, under which employment may be terminated by either party at will, with or without reason. Speckman v. City of Indianapolis, 540 N.E.2d 1189, 1192 (Ind.1989). However, the at-will employment relationship may be converted to a relationship in which the employer may terminate the employee only for good cause. In order to achieve the termination-for-good-cause status, the employee must provide adequate independent consideration. Id.

We have held that

[a]s a general rule, Indiana employment relationships are terminable at the will of either party. If an employee gives independent consideration for an employment contract, however, the employer may terminate the employee only for good cause without incurring liability for its action.

Id.

We have identified fact scenarios in which the employee's act or forbearance might provide adequate independent consideration sufficient to support an employment contract terminable only for good cause. Indiana jurisprudence has suggested that giving up a competing business could provide adequate consideration, Ohio Table Pad Co. v. Hogan, 424 N.E.2d 144, 146 (Ind.Ct.App.1981), and has held that conveying a valuable coal lease in exchange for the employment, Mt. Pleasant Coal Co. v. Watts, 91 Ind.App. 501, 151 N.E. 7 (1926), or releasing the employer from liability on a personal injury claim, Toni v. Kingan & Co., 214 Ind. 611, 15 N.E.2d 80 (1938), would constitute adequate independent consideration.

In Romack v. Public Service Co., 511 N.E.2d 1024 (Ind.1987), (adopting and incorporating Romack v. Public Service Co., 499 N.E.2d 768 (Ind.Ct.App.1986) (Conover, J., dissenting)), we held that [A]n employer cannot arbitrarily fire an employee when (1) the employer knows the employee had a former job with assured permanency (or assured non-arbitrary firing policies) and (2) [the employee] was only accepting the new job upon receiving assurances the new employer could guarantee similar permanency.

Romack, 499 N.E.2d at 778.

Wior contends that he provided...