SCHOLZ v. MONTGOMERY WARD & CO. Docket No. 80709, (Calendar No. 1).
437 Mich. 83 (1991)
468 N.W.2d 845
SCHOLZ v. MONTGOMERY WARD & CO., INCORPORATED
Supreme Court of Michigan.
Decided April 5, 1991.
Pinsky, Smith, Fayette & Hulswit (by H. Rhett Pinsky) for the plaintiff.
Dykema, Gossett (by Charles C. DeWitt, Jr., and Bruce G. Davis) for the defendant.
Clark, Klein & Beaumont (by Dwight H. Vincent, J. Walker Henry, and Rachelle G. Silberberg) for Michigan Manufacturers Association.
Conboy, Fell, Stack, Lieder & Hanson (by Lloyd C. Fell) for General Motors Corporation.
Miller, Canfield, Paddock & Stone (by Diane M. Soubly) for American Society of Employers, Motor Vehicle Manufacturers Association of the United States, Inc., Greater Detroit Chamber of Commerce, and Michigan State Chamber of Commerce.
Mark Granzotto, Monica Farris Linkner, and Charles P. Burbach for Michigan Trial Lawyers Association.
Sommers, Schwartz, Silver & Schwartz, P.C. (by Lionel J. Postic), and Charles Gottlieb for Michigan Employment Lawyers Association.
I. INTRODUCTION AND FACTS
This case is a wrongful discharge/religious discrimination action brought against the defendant, Montgomery Ward & Co., Incorporated, by Jane Scholz, a former employee of defendant at its North Kent Mall Store in Grand Rapids, Michigan.
The Court held in abeyance defendant's application for leave to appeal pending decisions in Bullock v Automobile Club of Michigan, 432 Mich. 472; 444 N.W.2d 114 (1989), and In re Certified Question, Bankey v Storer Broadcasting Co, 432 Mich. 438; 443 N.W.2d 112 (1989). On May 2, 1990, we granted leave to appeal.
The sole issue to be decided in this appeal is whether plaintiff had a contract not to be terminated for refusing to work on Sundays on the basis
The facts of this case are set forth in the Court of Appeals decision, unpublished opinion per curiam of the Court of Appeals, decided January 27, 1987 (Docket No. 86118):
Plaintiff brought suit in Kent Circuit Court on January 16, 1984, against Montgomery Ward, alleging age and religious discrimination and breach of contract. A jury awarded her $8,250 on the religious discrimination claim and $16,503 on the breach of contract claim, plus costs, interest, and attorney fees. Scholz, supra, slip op, p 1.
The trial court denied both motions. Defendant appealed, and the Court of Appeals affirmed the trial court's ruling on the motions, reasoning that Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich. 579; 292 N.W.2d 880 (1980), reh den 409 Mich. 1101 (1980), does not permit an employer to unilaterally modify a contract. Scholz, supra, slip op, p 4.
The Court of Appeals concluded that since the question whether defendant retained the right to unilaterally change the terms of the oral employment contract with plaintiff was one of fact for the jury and not one of law for the trial court, the jury reasonably could have concluded that provisions of the 1970 oral contract remained in force. Therefore, the trial court properly denied the motion for judgment notwithstanding the verdict and similarly did not abuse its discretion in refusing to grant a new trial. Scholz, supra, slip op, pp 5-6.
In Toussaint, we recognized that employers may provide a contract of employment at will by way of express disclaimers in their employment policies.
In the instant case, plaintiff relies on the pre-hiring statements made by Mr. Hansen, Montgomery Ward's personnel director, to allege an express contract that she was not required to work Sundays.
This case is analogous to Ledl v Quik-Pik Stores, 133 Mich.App. 583; 349 N.W.2d 529 (1984). In Ledl, the plaintiff was given assurances at the time she accepted employment that she would continue to be employed as long as her performance was satisfactory. Approximately seven and one-half years after being hired, she signed an employment agreement which provided that the defendant could terminate her employment with or without cause. The Court of Appeals concluded that the plaintiff failed to state a claim for breach of an employment contract because the language of the contract negated any prior oral agreements she may have had that were based on her employer's assurances.
In the instant case, on May 16, 1982, thirteen years after plaintiff was hired, she signed an employment agreement which provided that her employment was at will. A closely related sign-off sheet was involved in Dell v Montgomery Ward &
Plaintiff argues that although she read and
It is well settled that the failure of a party to obtain an explanation of a contract is ordinary negligence.
As this Court has previously held:
If plaintiff did not understand the terms of the sign-off sheet, she had a duty to inquire about its contents. The record does not reflect any attempt by plaintiff to find out whether or not she was excused from Sunday employment under the terms of the disclaimer. In any case, we find the disclaimer unambiguous on the subject of discharge and comprehensive on the subject of termination.
In sum, Montgomery Ward took the action expressly approved in Toussaint and entered into a contract with plaintiff making her employment terminable at will. Plaintiff assented to the terms of the employment agreement by signing the signoff sheet and returning it to Montgomery Ward. Upon the basis of this agreement, Montgomery Ward terminated plaintiff's employment. Therefore, regardless of whether an express oral contract actually existed at the time of her hiring, as a matter of law, plaintiff and Montgomery Ward later reached a mutual understanding with regard to termination through the sign-off sheet. We find that plaintiff's employment with Montgomery Ward was, as a matter of law, an employment-at-will relationship. Therefore, plaintiff cannot prevail in her breach of contract action.
Plaintiff also argues that defendant acquiesced in her refusal to work Sundays, thus creating a contract implied in fact that she not be terminated for such refusal. Regardless of whether an implied contract arose, as a matter of law, it did not apply to plaintiff at the time she was discharged because the express modified contract under the terms of the sign-off sheet was in effect at the time of her discharge. An implied contract cannot be enforced where the parties have made an express contract covering the same subject matter. In re De Haan Estate, 169 Mich. 146; 134 NW 983 (1912); Steele v Cold Heading Co, 125 Mich.App. 199, 202-203; 336 N.W.2d 1 (1983); Hickman v General Motors Corp, 177 Mich.App. 246, 251; 441 N.W.2d 430 (1989).
Our decision recognizes that once a disclaimer providing employment at will is signed by an employee, excepting any subsequent modification, the employee may be terminated for any, or no, reason. Thus, in the present case, plaintiff cannot prevail on a claim for breach of contract.
The decision of the trial court and Court of Appeals is reversed with regard to the breach of contract claim, and a judgment notwithstanding the verdict shall be entered.
However, we affirm the trial court's ruling on the religious discrimination issue because of defendant's failure to object to the instructions given at trial. We do not retain jurisdiction.
CAVANAGH, C.J., and BRICKLEY, BOYLE, and GRIFFIN, JJ., concurred with RILEY, J.
The jury found that Montgomery Ward
The majority does not challenge the jury's findings of fact. It states rather that "[e]ven if we were to assume plaintiff had an express oral contract with Montgomery Ward that she did not have to work on Sundays," a contract Scholz claimed was entered into when she was hired, Scholz subsequently reached a "new understanding" with Montgomery Ward, in May, 1982, when she signed the sign-off sheet, "governing the terms of her employment status" and providing for employment at will. (Ante, pp 89-90.)
The majority concludes that because Scholz was an employee at will she cannot maintain an action for wrongful discharge. It affirms the verdict for Scholz on the religious discrimination claim, and to that extent I concur.
The "new understanding" is embodied in the following paragraph of the "new employee sign-off sheet" that Scholz was asked to and did sign in May, 1982, although she was not a new employee:
Scholz testified that she did not understand that by signing the sign-off sheet she could be required to work on Sundays. Scholz argued that the rules and regulations in the Welcome to Montgomery Ward Handbook that accompanied the new employee sign-off sheet had nothing to do with Scholz' "other agreement," entered into when she was hired, whereby she had conditioned her employment on not working on Sundays, and to which Montgomery Ward had agreed.
The facts are essentially undisputed. This is not a case where the testimony of the witnesses for the employer differed significantly from the testimony of the employee's witnesses. Employer claims that juries are inclined to be sympathetic to employees, and, on that basis, in defiance of the evidence, resolve against employers disputed factual issues are, insofar as this case is concerned, misplaced.
When Scholz was hired, Montgomery Ward was not open on Sundays. A short time later Montgomery Ward opened on Sundays, and Scholz was thereafter asked by a person other than Hansen to work on Sundays. She refused to do so, and no action was taken by Montgomery Ward.
Five years later, in 1977, a new store manager asked Scholz to work on Sundays. When she explained that she was not required to work on Sunday, he asked her to obtain a letter from her pastor, which she did. Scholz was not required, until the events that led to her discharge, to work on Sunday at any time during the thirteen years of her employment with Montgomery Ward. She worked holidays to make up for the time that she did not work on Sundays.
In May, 1982, Scholz signed the new employee sign-off sheet. Subsequently, another employee manual was issued, but Scholz did not sign an accompanying employee sign-off sheet. The employee sign-off sheet that Scholz did not sign contained language corresponding to the language in the sign-off sheet considered in Dell v Montgomery Ward & Co, Inc, 811 F.2d 970 (CA 6, 1987), discussed in the majority opinion.
Scholz was then three years short of retirement at age seventy. Montgomery Ward required that Scholz work one Sunday a month for perhaps three hours — it was the policy to permit persons who attended church, which Scholz did every Sunday, to report for work Sunday afternoon. The controversy thus concerned no more than forty hours a year for three years — one hundred twenty hours — which Scholz would have been willing to make up by working on national holidays. The store manager testified that it was nevertheless necessary to discharge Scholz because "store policy required uniformity in treatment of employees," the Law of the Medes and the Persians.
Scholz asserts that she did not understand that
The premise of the majority is, thus, that the language of the sign-off sheet is unambiguous, and can have only one meaning. Professor Corbin wrote that statements about "`plain and clear'" meaning "assume a uniformity and certainty in the meaning of language that do not in fact exist...."
The United States Supreme Court has said that "[i]t is hornbook contract law that the proper construction of an agreement is that given by one of the parties when `that party had no reason to
The record establishes that Scholz would not have agreed to work on Sunday, did not know or have reason to know that Montgomery Ward attached to the sign-off sheet the meaning that she could, by signing it, thereby be required to work on Sunday, and would not have signed it if she thought that by doing so she was agreeing to work on Sunday. The record also establishes that Montgomery Ward knew or had reason to know
Scholz argues that the new employee sign-off sheet had nothing to do with her "other agreement," entered into when she was hired, whereby she had conditioned her employment on not working on Sundays, and to which Montgomery Ward had agreed. This presents the question whether the sign-off sheet was a complete integration of all the terms of the employment contract.
"[A] writing cannot of itself prove its own completeness, and wide latitude must be allowed for inquiry into circumstances bearing on the intention of the parties." 2 Restatement Contracts, 2d, § 210, comment b, p 118. In Brady v Central Excavators, Inc, 316 Mich. 594, 607; 25 N.W.2d 630 (1947), this Court said the parties may introduce extrinsic evidence to show that a writing is only a partial integration and does not include all the elements of their agreement.
It is, I think, clear that the new employee sign-off sheet was not a complete integration. It was in terms addressed to new employees, persons who perforce would not have entered into prior oral agreements with Montgomery Ward. The sign-off sheet did not purport to supersede any prior agreement, oral or written. It simply did not focus on prior agreements, did not evidence a "`deliberate regard for the many questions which would naturally arise out of the subject-matter of the contract,'" Brady, supra, p 606, and was not a complete integration respecting the prior agreement with Scholz.
Scholz asserts that she was coerced into signing the sign-off sheet. The Restatement provides:
(b) to the extent provided by statute; or
The accompanying comment states:
Scholz acknowledged that, from the outset of her employment, she was an employee at will. She claimed only that it was agreed that she would not be required to work on Sunday, and would not be discharged for refusing to work on Sunday. The jury found for her on those issues when it found she was wrongfully discharged when she was discharged for refusing to work on Sunday. Because
there was no modification of a duty under the employment contract, and hence the signing of the 1982 sign-off sheet did not work a modification of the agreement that Scholz was not required to work on Sunday.
Further, the possibility of Montgomery Ward remaining open on Sunday was anticipated by Scholz and, thus, was not a "circumstance not anticipated by the parties" when the contract was made. Also, requiring Scholz to work on Sunday was not "fair and equitable" under all the circumstances. She could have been asked to work forty hours a year on national holidays and clearly would have agreed to do so.
The majority concludes "as a matter of law, plaintiff and Montgomery Ward later reached a mutual understanding with regard to termination through the sign-off sheet." Ante, p 93. (Emphasis added.)
Be that as it may, the foregoing and other statements in the majority opinion are likely to be
The majority states that an identical sign-off sheet was involved in Dell, supra, text accompanying n 2, and quotes language in that opinion adverting to language in the sign-off sheet in Dell that is not in the sign-off sheet in the instant case.
The majority, also following the lead of Dell, states that Montgomery Ward "took action which we expressly approved of in Toussaint [v Blue Cross & Blue Shield of Michigan, 408 Mich. 579; 292 N.W.2d 880 (1980)] and entered into a contract with plaintiff making her employment terminable at will." (Ante, p 90.)
Dell was a new employee, not an employee, like Scholz, with whom there was a prior oral agreement sought to be modified. The statement in Toussaint, quoted in Dell, spoke of a "company policy of requiring prospective employees to acknowledge that they served at the will or the
In Toussaint, this Court said, and later, in Valentine v General American Credit, Inc, 420 Mich. 256, 258; 362 N.W.2d 628 (1984), repeated that employment is at will absent another agreement, and that a contract of employment may properly so expressly provide.
Modification of an employment contract is in general subject to the same rules of law applicable to the modification of other contracts. These rules of law, the product of experience, seek to achieve a reasoned balance between competing values and policies and to protect and enforce the true agreement. There are no special rules of law designed to lighten the burden on an employer who seeks to modify an express oral agreement.
Affirming the jury verdict that Scholz was wrongfully discharged would not negate an employer's power to negotiate for modification of a prior oral just- or good-cause contract, or, as here, a contract that no work will be required on Sunday.
Employers have full freedom of contract and managerial control. When, however, they enter into an agreement with an employee, they give up something as does any person who enters into a contract. Presumably employers who enter into agreements with their employees hope to obtain, and probably generally do obtain, something worthwhile in return.
MALLETT, J., took no part in the decision of this case.
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