Dillon v. Champion Jogbra, Inc.
Annotate this Case
Dillon v. Champion Jogbra, Inc. (2000-560); 175 Vt. 1; 819 A.2d 703
[Filed 27-Dec-2002]
NOTICE: This opinion is subject to motions for reargument under
V.R.A.P. 40 as well as formal revision before publication in the Vermont
Reports. Readers are requested to notify the Reporter of Decisions,
Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
any errors in order that corrections may be made before this opinion goes
to press.
No. 2000-560
Linda Dillon Supreme Court
On Appeal from
v. Chittenden Superior Court
Champion Jogbra, Inc. November Term, 2001
Matthew I. Katz, J.
Pietro J. Lynn, Heather E. Thomas and Jennifer G. Mihalich of Lynn &
Associates, P.C., Burlington, for Plaintiff-Appellant.
Donald J. Rendall, Jr. and Eric E. Hudson of Sheehey Furlong Rendall & Behm
P.C., Burlington, for Defendant-Appellee.
PRESENT: Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.
¶ 1. MORSE, J. Plaintiff Linda Dillon appeals an order of the
superior court granting summary judgment to defendant Champion Jogbra, Inc.
in her action for wrongful termination. Dillon contends that the trial
court erroneously concluded as a matter of law that Dillon's at-will
employment status had not been modified by Jogbra's employment manual and
employment practices, and that the undisputed material facts failed to give
rise to a claim for promissory estoppel supporting a claim for wrongful
discharge. We affirm with respect to Dillon's claim for promissory
estoppel, but reverse and remand on her breach of contract claim.
¶ 2. On appeal from an order of summary judgment, we apply the
same standard as the
trial court. White v. Quechee Lakes Landowners' Ass'n, 170 Vt. 25, 28, 742 A.2d 734, 736 (1999). "[I]f the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any material fact and that
[the moving] party is entitled to a judgment as a matter of law," then
summary judgment is proper. V.R.C.P. 56(c). When determining whether
genuine issues of material fact exist for trial, we resolve all doubts in
favor of the nonmoving party. O'Donnell v. Bank of Vt., 166 Vt. 221, 224,
692 A.2d 1212, 1214 (1997). The nonmoving party, however, "may not rest
upon the mere allegations or denials in its pleadings, 'but . . . must set
forth specific facts showing that there is a genuine issue for trial.' "
White, 170 Vt. at 28, 742 A.2d at 736 (quoting V.R.C.P. 56(e)). A dispute
with regard to the legal significance of a fact or facts, as opposed to the
facts themselves, will not preclude summary judgment. Tooley v. Robinson
Springs Corp., 163 Vt. 627, 629, 660 A.2d 293, 295?96 (1995) (mem.), cited
in Beecher v. Stratton Corp., 170 Vt. 137, 144, 743 A.2d 1093, 1099 (1999).
¶ 3. Our review of the record provided by the parties to the trial
court, giving the benefit of all doubts and inferences to Dillon,
establishes the facts: Jogbra has an employee manual that it distributes to
all employees at the time of their employment. The first page of the
manual states the following in capitalized print:
The policies and procedures contained in this manual constitute
guidelines only. They do not constitute part of an employment
contract, nor are they intended to make any commitment to any
employee concerning how individual employment action can, should,
or will be handled.
Champion Jogbra offers no employment contracts nor does it
guarantee any minimum length of employment. Champion Jogbra
reserves the right to terminate any employee at any time "at
will," with or without cause.
¶ 4. During the period from 1996 to 1997, however, Jogbra
developed what it termed a "Corrective Action Procedure." This procedure
established a progressive discipline system for employees and different
categories of disciplinary infractions. It states that it applies to all
employees and will be carried out in "a fair and consistent manner." Much
of the language in the section is mandatory in tone.
¶ 5. Linda Dillon began working for Jogbra part-time in January 1997.
She was hired on as a full-time employee in August 1997 in the position of
"charge-back analyst." In the summer of 1998, the position of "sales
administrator" was going to become vacant. Dillon was approached by Jogbra
management about applying for the position, which started on July 31. She
eventually decided to apply and interviewed for the position. In the course
of interviewing for the position, Dillon recalls that she was told that she
would receive "extensive training." More specifically, she was told by the
human resources manager that she would overlap with her predecessor who
would train her during those days. Originally, her predecessor was
scheduled to leave August 15. In the course of Dillon's interview with the
vice president of sales, who would be her immediate supervisor, he informed
her that her predecessor was actually leaving earlier and would be
available for only two days of training before Dillon started the job. He
reassured her, though, that the predecessor would be brought back sometime
thereafter for more training. Dillon also recalls that he told her that
"it will take you four to six months to feel comfortable with [the]
position," and not to be concerned about it. Dillon was offered and
accepted the position. She spent most of her predecessor's remaining two
days with her. Her predecessor then returned in early September for an
additional two days of training. Dillon stated that she felt that, after
the supplemental training, she had received sufficient training for the
job.
¶ 6. On September 29, Dillon was called into her supervisor's
office. The human resources manager was also present. They informed
Dillon that things were not working out and that she was going to be
reassigned to a temporary position, at the same pay and benefit level, that
ended in December. She was told that she should apply for other jobs
within the company, but if nothing suitable became available, she would be
terminated at the end of December. According to Dillon, her supervisor
stated that he had concluded within ten days of her starting that "it
wasn't going to work out." Prior to the meeting, Dillon was never told her
job was in jeopardy, nor did Jogbra follow the procedures laid out in its
employee manual when terminating her.
¶ 7. Dillon applied for one job that became available in the ensuing
months, but was not selected for it. She left Jogbra in December when her
temporary position terminated. Dillon then brought suit against Jogbra for
wrongful termination. She asserted claims for breach of contract and
promissory estoppel. Jogbra filed a motion for summary judgment, which the
trial court granted. She now appeals to this Court.
I.
¶ 8. Dillon contends that the trial court erroneously determined, as
a matter of law, that Jogbra had not unilaterally altered her at-will
employment status by means of its employment manual and practices. Dillon
contends that this matter should have been left for a jury to determine.
¶ 9. In approaching this issue, we are mindful at the outset that
at-will employment relationships have fallen into disfavor. See C.
Estlund, Wrongful Discharge Protections in an At-Will World, 74 Tex. L.
Rev. 1655, 1655-56 (1996) (noting the numerous exceptions that have evolved
in second half of twentieth century to the at-will doctrine and the
narrowing of the debate over its further limitation); see generally D.
Ballam, Employment At-Will: The Impending Death of
a Doctrine, 37 Am. Bus. L. J. 653, 687 (2000) (predicting the end of the
doctrine's viability given state of employment law). In the implied
contract context, we have noted the motivating policy considerations that
inform this trend: when an employer takes steps to give employees the
impression of job security and enjoys the attendant benefits that such an
atmosphere confers, it should not then be able to disregard its commitments
at random. See Taylor v. Nat'l Life Ins. Co., 161 Vt. 457, 464, 652 A.2d 466, 471 (1993) (citing the leading case Toussaint v. Blue Cross & Blue
Shield of Mich., 292 N.W.2d 880, 892 (Mich. 1980)).
¶ 10. Additionally, it must be remembered when analyzing Dillon's
argument that principles of contract law govern such determinations. See
Ross v. Times Mirror, 164 Vt. 13, 19, 665 A.2d 580, 584; see also
Marcoux-Norton v. Kmart Corp., 907 F. Supp. 766, 774 (D. Vt. 1993). In
fact, we have noted repeatedly that the presumption that employment for an
indefinite term is an "at-will" agreement is simply a general rule of
contract construction. See, e.g., Ross, 164 Vt. at 19, 665 A.2d at 584;
Taylor, 161 Vt. at 462, 652 A.2d at 470; Foote v. Simmonds Precision Prods.
Co., 158 Vt. 566, 570, 613 A.2d 1277, 1279 (1992). "The rule imposes no
substantive limitation on the right of contracting parties to modify terms
of their arrangement or to specify other terms that supersede the
terminable-at-will [arrangement]." Foote, 158 Vt. at 570, 613 A.2d at
1279. Additionally, an employer may modify an at-will employment agreement
unilaterally. Id. at 571, 613 A.2d at 1279-80. When determining whether
an employer has done so, we look to both the employer's written policies
and its practices. Benoir v. Ethan Allen, Inc., 147 Vt. 268, 270, 514 A.2d 716, 718 (1986); see also Raymond v. IBM Corp., 954 F. Supp. 744, 748 (D.
Vt. 1997) (noting under Vermont law "[a]t-will employment contracts may be
modified by . . . the personnel policies or practices of the employer").
An employer not only may implicitly bind itself to terminating only
for cause through its manual and practices, but may also be bound by a
commitment to use only certain procedures in doing so. See Ross, 164 Vt.
at 21-22, 665 A.2d at 585.
¶ 11. At least one court has interpreted our case law to hold that
the interpretation of employment manuals is always a question for the jury.
McKenny v. John V. Carr & Son, Inc., 922 F. Supp. 967, 978 (D. Vt. 1996)
("Vermont courts have consistently held that it is for a jury to determine
whether a handbook has established contractual rights."); see also Logan v.
Bennington Coll. Corp., 72 F.3d 1017, 1022 (2nd Cir. 1995) (making general
statement that "[u]nder Vermont law, disputes concerning the agreed-upon
terms and conditions of an employment contract are an issue of fact for the
jury"). A closer reading of our case law, however, demonstrates that only
when the terms of the manual are ambiguous should the question be submitted
to the jury. Farnum v. Brattleboro Retreat, Inc., 164 Vt. 488, 494, 671 A.2d 1249, 1254 (1995) (holding that where the provisions of the employee
handbook sent "mixed messages," question of whether the handbook created an
implied contract was properly submitted to the jury); see also Taylor, 161
Vt. at 461-67, 652 A.2d at 469-472 (where terms of manual were inconsistent
with at-will status and hiring letter stating terms of employment relied on
by both parties was "ambiguous," jury's finding that employment contract
restricted employer to termination for-cause was supported by the record).
¶ 12. We have not abrogated, in the employment context, the
long-standing law of contract that the interpretation of unambiguous
writings is a matter of law for the court, see John A. Russell Corp. v.
Bohlig, 170 Vt. 12, 16, 739 A.2d 1212, 1216 (1999) (noting that, if a court
determines that a contract is unambiguous, "it must declare the
interpretation as a matter of law"), as is the determination of whether a
writing is ambiguous, New England P'ship v. Rutland City Sch. Dist., ___
Vt. ___, ___, 786 A.2d 408, 414 (2001); Bohlig, 170 Vt. at 16, 739 A.2d at
1216. See also
Benoir, 147 Vt. at 271-72, 514 A.2d at 718-719 (noting that "[w]here the
essential terms of a contract are expressly stated in clear and definite
terms, the interpretation of the writing is for the court," and holding
trial court properly determined as a matter of law that employee handbook
had modified at-will status such that employees could be terminated only
for cause) (internal quotation marks and citation omitted). Only after a
determination that the writing is ambiguous should the interpretation of
the writing be submitted to the jury. See New England P'ship, ___ Vt. at
___, 786 A.2d at 415; Bohlig, 170 Vt. at 16, 739 A.2d at 1216.
¶ 13. When the terms of a manual are ambiguous, however, or send
mixed messages regarding an employee's status, the question of whether the
presumptive at-will status has been modified is properly left to the jury.
Farnum, 164 Vt. at 494, 671 A.2d at 1254; see also Taylor, 161 Vt. at
461-67, 652 A.2d at 469-72. This may be the case even if there is a
disclaimer stating employment is at-will, as the presence of such a
disclaimer is not dispositive in the determination. See Farnum, 164 Vt. at
494, 671 A.2d at 1254 ("The mere inclusion of boilerplate language
providing that the employee relationship is at will cannot negate any
implied contract and procedural protections created by an employee
handbook."). Furthermore, an employer's practices can provide context for
and help inform the determination. See Benoir, 147 Vt. at 270, 514 A.2d at
718; Raymond, 954 F. Supp. at 748.
¶ 14. The question of whether a written manual is ambiguous is a
determination of law that we review de novo. See Bohlig, 170 Vt. at 16,
739 A.2d at 1216; cf. Benoir, 147 Vt. at 271-72, 514 A.2d at 718-719
(holding trial court properly determined as a matter of law that
unambiguous terms in employee manual that were inconsistent with at-will
employment relationship created an implied contract foreclosing employer's
right to terminate without cause). In this case, we cannot agree with
the trial court that the terms of Jogbra's manual are unambiguous such
that, as a matter of law, Dillon's status was not modified, especially
considered in light of the conflicting record before the court regarding
Jogbra's employment practices. Cf. Farnum, 164 Vt. at 494, 671 A.2d at
1254 ("Given the contents of [employer's] handbook provisions, we conclude
that it was, at best from [employer's] perspective, a jury question as to
whether the handbooks created an implied contract.") (emphasis added);
Sherman v. Rutland Hosp., Inc., 146 Vt. 204, 208-09, 500 A.2d 230, 233
(1985) (noting court properly submitted question to jury of whether at-will
status modified when employee argued that his oral negotiations during the
hiring process had resulted in greater protections for him individually,
notwithstanding his concession that manual standing on its own did not
modify general at-will status).
¶ 15. Notwithstanding the disclaimer contained on the first page of
the manual quoted above, the manual goes on to establish in Policy No. 720
an elaborate system governing employee discipline and discharge. It states
as its purpose: "To establish Champion Jogbra policy for all employees."
It states that actions will be carried out "in a fair and consistent
manner." (Emphasis added.) It provides that "[t]he Corrective Action
Policy requires management to use training and employee counseling to
achieve the desired actions of employees." (Emphasis added.) It
establishes three categories of violations of company policy and
corresponding actions to be generally taken in each case. It delineates
progressive steps to be taken for certain types of cases, including
"[u]nsatisfactory quality of work," and time periods governing things such
as how long a reprimand is considered "active." Cf. Taylor, 161 Vt. at
461-62, 465, 652 A.2d at 469-70, 471 (noting that manual provisions
stating, among other things, that employees would be treated fairly and
uniformly, that progressive discipline should be used except in the case of
serious misconduct, and listing
circumstances that may result in termination were sufficient to support
jury's determination that employer unilaterally modified at-will
arrangement such that it could only terminate for cause). All of these
terms are inconsistent with the disclaimer at the beginning of the manual,
in effect sending mixed messages to employees. Furthermore, these terms
appear to be inconsistent with an at-will employment relationship, its
classic formulation being that an employer can fire an employee "for good
cause or for no cause, or even for bad cause." D. Ballam, supra, at 653 n.
4 (quoting Payne v. W. & Atl. R.R., 81 Tenn. 507, 518-20 (1884)(overruled
on other grounds by Hutton v. Watters, 179 S.W. 134, 138 (Tenn. 1915)).
¶ 16. With respect to the record before the court on Jogbra's
employment practices, Dillon herself was aware of at least one employee
whose termination was carried out pursuant to the terms set forth in the
manual. She also testified in her deposition to conversations with the
human resources manager, with whom she was friendly, in which the manager
had described certain procedures used for firing employees. She stated
that the manager had told her that Jogbra could not "just get rid of"
people, but instead had to follow procedures. The human resources manager
herself testified that, although the progressive discipline system was not
generally applied to salaried employees, it was "historically" used for
non-salaried employees. She could only recall two instances in which the
portion of the manual providing for documentation of progressive action was
not followed, one of which resulted in a legal claim against the company
and the other of which involved an employee stealing from the company. In
fact, the manual specifically provides that stealing "will normally result
in discharge on the first offense." (Emphasis in original.) Thus, it is
not clear how that discharge deviated from the provisions of the manual.
¶ 17. In conclusion, the manual itself is at the very least
ambiguous regarding employees'
status, and Jogbra's employment practices appear from the record to be both
consistent with the manual and inconsistent with an at-will employment
arrangement. Therefore, summary judgment was not proper on Dillon's breach
of implied contract claim.
II.
¶ 18. Dillon also argues that the trial court's grant of summary
judgment on her claim of promissory estoppel was erroneous. Dillon based
her claim on two separate statements: the assurance that she would receive
training and the assurance that it would take her four to six months to
become comfortable with the sales administrator position.
¶ 19. We have held that, even if an employee otherwise enjoys only
at-will employment status, that employee may still be able to establish a
claim for wrongful termination under a theory of promissory estoppel if
that employee can demonstrate that the termination was in breach of a
specific promise made by the employer that the employer should have
reasonably expected to induce detrimental reliance on the part of the
employee, and that the employee did in fact detrimentally rely on the
promise. Foote, 158 Vt. at 571, 573, 613 A.2d at 1280 (noting "promissory
estoppel may modify an at-will employment relationship and provide a remedy
for wrongful discharge," and setting forth elements of promissory
estoppel). We agree with the trial court in this case, however, that
essential elements of promissory estoppel are absent with regard to both
statements.
¶ 20. With respect to Jogbra's promise to Dillon that she would
receive training, Dillon specifically conceded that, upon her predecessor's
return in September, she had received adequate training to perform the job.
In other words, Jogbra had delivered on its promise. Furthermore, even
assuming that Jogbra failed to provide the full extent of promised
training, Dillon has failed to explain how, as a matter of law, the promise
of training modified her at-will status. Cf. id. at 571-72,
613 A.2d at 1280 (where manual promised that employees would not be
penalized in any way for using company grievance procedure, employee
established that his otherwise at-will status had been modified such that,
although employer could terminate him for any other reason, it could not
terminate him for his use of the grievance procedure). In other words, it
is not clear from Dillon's brief how the promise of training foreclosed
Jogbra from nevertheless terminating her either on an at-will basis or for
cause. (FN1) Cf. Taylor, 161 Vt. at 471-72, 652 A.2d at 475 (employee
failed to demonstrate how enforcement of promise to provide timely
evaluation would have foreclosed the elimination of his position based on
economic necessity).
¶ 21. With respect to the assurance that it would take four to six
months to become comfortable with the position, the statement cannot be
reasonably be relied upon as a promise of employment in the sales
administrator position for a set period of time. Courts have generally
required a promise of a specific and definite nature before holding an
employer bound by it. See, e.g., Chang v. Cargill, Inc., 168 F. Supp. 2d 1003, 1012 (D. Minn. 2001) (generalized assertions made in course of
interview that employee would have opportunities to develop trading skills
not kind of definitive promise that would support claim of promissory
estoppel binding employer to provide training program); see also Kallich v.
N. Iowa Anesthesia Assocs., 179 F. Supp. 2d 1043, 1053 (N.D. Iowa 2002)
(noting in wrongful discharge case that one element of promissory estoppel
is a clear and definite promise); Willis v. New World Van Lines, Inc., 123 F. Supp. 2d 380, 395 (E.D. Mich. 2000) (noting "[t]he sine qua non of
promissory estoppel is a promise that is definite
and clear")(internal quotations omitted). An estimate of how long it would
take a person to adjust to a job cannot be converted into a definite
promise of employment for that period of time. Thus, the vague assurance
given to Dillon is not sufficient to support her claim of promissory
estoppel. See McKenny v. John V. Carr & Sons, Inc., 922 F. Supp. 967, 980
(D. Vt. 1996)(noting mere expression of hope is not sufficiently definite
to give rise to claim for promissory estoppel in employment context).
¶ 22. In sum, the trial court properly granted Jogbra summary
judgment on Dillon's promissory estoppel claim.
The grant of summary judgment on Linda Dillon's claim for promissory
estoppel is affirmed; the grant of summary judgment on her breach of
contract claim is reversed and remanded.
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Dissenting
¶ 23. AMESTOY, C.J., dissenting. I agree with the majority's
finding that the trial court properly granted employer summary judgment on
employee's promissory estoppel claim. I disagree that the trial court
erred in granting employer summary judgment on employee's breach of implied
contract claim. I therefore respectfully dissent.
¶ 24. The salient question in this case is whether the following
language of the employment manual is ambiguous:
THE POLICIES AND PROCEDURES CONTAINED IN THIS MANUAL CONSTITUTE
GUIDELINES ONLY. THEY DO NOT CONSTITUTE PART OF AN EMPLOYMENT
CONTRACT, NOR ARE THEY INTENDED TO MAKE ANY COMMITMENT TO ANY
EMPLOYEE CONCERNING HOW INDIVIDUAL EMPLOYMENT ACTION CAN, SHOULD,
OR WILL BE HANDLED. CHAMPION JOGBRA OFFERS NO EMPLOYMENT
CONTRACTS NOR DOES IT GUARANTEE ANY MINIMUM LENGTH OF EMPLOYMENT.
CHAMPION JOGBRA RESERVES THE RIGHT TO TERMINATE ANY EMPLOYEE AT
ANY TIME "AT WILL," WITH OR WITHOUT CAUSE.
¶ 25. The majority offers two explanations as to why the employer's
extraordinarily direct statement that it "reserves the right to terminate
any employee at any time 'at will,' with or without cause" (emphasis added)
should be construed to mean exactly the opposite of what it says. I
disagree with each.
¶ 26. First, the majority concludes that additional language
contained within the manual setting forth progressive steps to be taken for
certain types of cases sends a "mixed message" to employees about their
employee status. But the manual carefully reiterates the employer's
unambiguous initial message that the discipline system is intended only as
a guideline, and specifically reserves the right of managers to deviate
from said guidelines in individual cases. (FN2)
¶ 27. We have previously noted that "disciplinary procedures are
not inconsistent or in conflict with the at will doctrine." Ross v. Times
Mirror, 164 Vt. 13, 21, 665 A.2d 580, 585 (1995). A policy that expressly
leaves the disciplinary sanction to the employer's discretion does not
create an enforceable promise to terminate for cause. Ross, 164 Vt. at 21,
665 A.2d at 585. Moreover, even a statement which expressly or impliedly
includes a promise to an employee for specific treatment in specific
situations will not bind an employer "if it conspicuously and effectively
states that the policy is not intended to be part of the employment
relationship." Ross, 164 Vt. at 20-21, 665 A.2d at 584 (citing Thompson v.
St. Regis Paper Co., 685 P.2d 1081, 1088 (1984)). As noted
above, the employment manual contained the following statement in capital
letters: "THE POLICIES AND PROCEDURES CONTAINED IN THIS MANUAL CONSTITUTE
GUIDELINES ONLY. THEY DO NOT CONSTITUTE PART OF AN EMPLOYMENT CONTRACT."
If the majority considers this statement to be insufficient, then it is
difficult to imagine the language an employer could use in order to
conspicuously state that the policy is not intended to be part of the
employment relationship.
¶ 28. I do not believe that the manual at issue in this case can
reasonably be construed as ambiguous. The "mixed message" the majority
discerns, more accurately describes the message conveyed by an opinion
which observes that "at-will employment relationships have fallen into
disfavor," when recently this Court cautioned against interpretations "that
irreconcilably conflict[] with the employment at-will doctrine . . . and
result[] in unreasonable judicial interference into what is a private
relationship." Ross, 164 Vt. at 23, 665 A.2d at 586 (internal citations
omitted). The trial court correctly determined that the terms of the
employer's manual are unambiguous as a matter of law.
¶ 29. Nor do I agree with the majority's second justification that
the record before the court of employer's practices created ambiguity. In
support of employee's contention that employer's practices were at odds
with an at-will policy, employee cites to her own deposition, wherein she
claimed to have known of other employees who received progressive
discipline prior to termination. When pressed, however, employee admitted
that, of the three employees with whose discharge she was familiar, she
could state with certainty that only one received progressive discipline.
Moreover, employee stated that she was unfamiliar with the manner in which
the other two employees' cases were handled prior to their discharge.
While her own experience is relevant, it does not by itself
suggest a definitive company wide practice. Hearsay statements about what
employee "had heard" is insufficient to raise a genuine issue. See Ross,
164 Vt. at 22-23, 665 A.2d at 585 (plaintiff's own recollection about what
other employees had told him is insufficient to support opposition to
summary judgment). I would affirm the trial court's grant of summary
judgment. I am authorized to state that Justice Skoglund joins in this
dissent.
FOR THE COURT:
_____________________________________
Associate Justice
Dissenting:
_________________________________
Chief Justice
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Footnotes
FN1. In his deposition, Dillon's supervisor expressed the firm opinion that
even with training, or corrective action for that matter, Dillon simply did
not possess the skills necessary to successfully perform the job of sales
administrator. Specifically, he did not think that her time-management,
prioritization or computer skills were adequate for the position.
FN2. "While these guidelines list the normal actions to be taken for each
violation listed, they should not be automatic, and each case should be
reviewed carefully to determine the appropriate action to be taken based
upon the circumstances."
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