Dissenting opinion by LEVIN, J., filed August 2, 1991.
In Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich. 579; 292 N.W.2d 880 (1980), this Court joined the forefront of a nationwide experiment in which, under varying theories, courts extended job security to nonunionized employees. In the vast outpouring of ensuing cases, there are indeed situations in which employers have in reality agreed to limit managerial discretion. However, the theory remains troubling because of those instances in which application of contract law is a transparent invitation to the factfinder to decide not what the "contract" was, but what "fairness" requires.
That courts have not been successful in unraveling
It is in this context that we address the question presented in this appeal: whether an employer's oral statements and written policy statements created an employment contract terminable only for cause.
FACTS AND PROCEEDINGS
In August of 1976, plaintiff applied for a sales position at defendant's North Kent Mall store in Grand Rapids. Plaintiff was interviewed by Mr. Vern Harryman who, according to plaintiff, told her that she would have a job at Montgomery Ward & Co., Incorporated, as long as she achieved her sales quota. With regard to his meeting with plaintiff, Mr. Harryman testified:
At the time of her hiring, plaintiff signed a sheet entitled "Rules of Personal Conduct." The sheet stated that adherence to company policies would help an employee to achieve "growth, profit, security, [and a] successful career." The rules further provided that anyone involved in the following activities would be immediately dismissed.
Several years later, in January of 1982, defendant issued to all employees a handbook entitled "Welcome to Wards." The handbook contained disciplinary guidelines which classified infractions according to severity, and allowed four types of discipline for transgression: "1) Written Warning(s); 2) Suspension without Pay; 3) Probation ...; and 4) Separation." In the back of the handbook was a form designated the "New Employee Sign-Off Sheet." The sheet provided in part:
Although a personnel employee informed plaintiff that the sheet was applicable to her, plaintiff refused to sign the form. Plaintiff claimed that it applied only to new employees, and she did not "feel it's right that you can fire somebody for no reason, at all." Plaintiff noted on the back of the sign-off sheet, "Read and do not wish to sign. 5-20-82. [s] Mary Rowe."
Defendant issued another employee handbook to its work force in August of 1982. The August, 1982 handbook also contained an "Employee Sign-off Sheet" providing for termination with or without cause. Plaintiff received but did not sign this sheet. All Montgomery Ward employees, including plaintiff, received another handbook in May of 1983. In the 1983 handbook, there was further language providing for employment at will. Virtually the same disciplinary guidelines were included in all the handbooks.
The Court of Appeals opinion aptly describes the facts surrounding plaintiff's termination.
Defendant appealed the decision, and the Court
The issue posed by this case is whether defendant employer's oral statements and written policy statements directed at plaintiff may be interpreted to permit a promise implied in fact not to terminate except for cause. We find that plaintiff's allegations are insufficient to support her contention of a promise implied in fact limiting the defendant's right to terminate her employment. Thus, plaintiff cannot maintain an action for breach of contract as a result of her dismissal.
This Court has held that contracts for permanent employment are for an indefinite period of time and are presumptively construed to provide employment at will. Lynas v Maxwell Farms, 279 Mich. 684, 687; 273 NW 315 (1937). When contract claims rest on proofs of oral representations, the presumption provides assurance that oral contracts for an indefinite term, which fall outside the statute of frauds, will be recognized only where circumstances suggest both parties intended to be bound. The presumption may be overcome by proof of an express contract for a definite term or a provision forbidding discharge in the absence of just cause, or it may be overcome by proofs which permit a promise implied in fact of employment
In Lynas, the Court declined to imply a durational term where the plaintiff accepted an offer of a "permanent lifetime position with the defendant." The Court observed, however, that the presumption of employment at will can be overcome if a contract is accompanied by "distinguishing features or provisions," or additional consideration supporting a term of permanent employment.
Again, in Toussaint v Blue Cross & Blue Shield of Michigan, supra, p 600, the Court stated that "[b]ecause the parties began with complete freedom, the court will presume that they intended to obligate themselves to a relationship at will." In general, parties to an employment contract "remain free to provide, or not to provide, for job security." Valentine v General American Credit, Inc, 420 Mich. 256, 258; 362 N.W.2d 628 (1984).
In Toussaint, we had the opportunity to expand on the rule in Lynas and explore the kinds of "distinguishing features or provisions," or special circumstances which limit an employer's right to discharge on an open-ended contract. This Court there found sufficient factual evidence to permit a jury to imply a limitation on the employer's right to discharge and held that a provision of termination for just cause may become part of a contract for indefinite duration by express agreement, or "as a result of an employee's legitimate expectations grounded in an employer's policy statements." 408 Mich. 598. However, the Court was careful to limit the effect of its holding:
Plaintiff asserts that oral statements made to her at a prehiring interview amounted to a contract to terminate only for just cause, while defendant asserts that the plaintiff was an employee at will. However, this is not a situation in which interpretation requires an express determination of credibility. McIntyre v Smith-Bridgman & Co, 301 Mich. 629; 4 N.W.2d 36 (1942). Rather, this is a situation in which the parties attach different meanings to undisputed facts, and the Court is asked to conclude that the jury was entitled to determine from the conduct of the parties that a promise existed limiting the employer's ability to discharge.
Again, we are asked here to decide whether an employer's oral statements and written policy statements created an employment contract terminable only for cause. We do not decide that the words and conduct of parties cannot, as a matter of law, create an issue submissible to a jury regarding the existence of a contract implied in fact. Moreover, we do not suggest that a contract of employment is too indefinite to be enforced where the employee's consideration is the work performed in response to a unilateral offer. Nor do we depart from the concept that the presumption of employment at will is a rule of construction rather than a substantive limitation. As Justice RYAN acknowledged in his dissent in Toussaint, supra, p 645, "[w]e have no doubt that circumstances could exist in which an employer's written policies
In determining whether a reasonable factfinder can find a promise of job security implied in fact, we look to all the facts and circumstances to evaluate the intent of the parties. As stated in Miller v Stevens, 224 Mich. 626, 632; 195 NW 481 (1923):
In deciding whether there was mutual assent to a just-cause provision, we use an objective test, "looking to the expressed words of the parties and their visible acts." (Emphasis added.) Goldman v Century Ins Co, 354 Mich. 528, 535; 93 N.W.2d 240 (1958); Stark v Kent Products, Inc, 62 Mich.App. 546; 233 N.W.2d 643 (1975).
The starting point in analyzing oral statements for contractual implications is to determine the meaning that reasonable persons might have attached to the language, given the circumstances presented. In our analysis, we agree with the federal district court in Carpenter v American Excelsior Co, 650 F.Supp. 933, 936, n 6 (ED Mich, 1987):
Consequently, the court stated that any orally grounded contractual obligation for permanent employment "must be based on more than an expression of an optimistic hope of a long relationship." Id. (Emphasis added.)
Along the same lines, Justice GRIFFIN'S remarks in Bullock, supra at 517, are instructive:
To be sure, because of the difficulty in verifying oral promises, the statements must clearly permit a construction which supports the asserted meaning. The "overreaching principle of contract interpretation" is that the court looks to all the relevant circumstances surrounding the transaction, including all writings, oral statements, and other conduct by which the parties manifested their intent. Farnsworth, Contracts, § 7.10, p 492.
We thus look to the facts in Toussaint to guide us in evaluating the oral statements implicated in the case before us. Both of the plaintiffs, Mr. Toussaint and Mr. Ebling, "negotiated specifically regarding job security with the persons who interviewed and hired them." 408 Mich. 612. Prior to being hired, Toussaint had several interviews with the cotreasurer of the company, and the position he sought was assistant to the treasurer. Toussaint claimed he was promised he would not be terminated "'as long as I did my job.'" Further, upon inquiring about job security, he was handed a manual which expressly confirmed that he could be released "`for just cause only.'" Id. at 613.
Ebling also had several interviews prior to being hired. He was interviewed by the executive vice president and the general manager about a marketing director position. He expressed concerns specifically about job security to the vice president.
In the instant case, plaintiff was interviewed for the job by Vern Harryman, sales manager of the appliance department. Although defendant had been advertising to attract salespersons, plaintiff told Harryman "'Well, I hadn't seen the ad, I just kind of stumbled in there....'" With regard to representations pertinent to job security, plaintiff testified that "[h]e said that he needed somebody to sell sewing machines and vacuum cleaners and that this job would involve selling, and as long as I sold, I would have a job at Montgomery Ward." (Emphasis added.)
Unlike Toussaint, plaintiff did not engage in preemployment negotiations regarding security. She simply "stumbled" into the store one day and had one interview before being hired. Nor is there any testimony suggesting that plaintiff inquired about job security. Therefore, Harryman's statements could not have been addressed to any inquiry regarding job security. In short, no objective evidence exists that their minds met on the subject of continued employment. In addition, we note that in Toussaint, the plaintiffs were applying for singular, executive job positions. That the positions were unique supports the finding that the terms were specifically negotiated. Here, plaintiff was one of many departmental salespersons. The fact that plaintiff applied for one of several identical positions militates against the likelihood that the contract terms were negotiable and suggests that company policy was more likely to govern.
Furthermore, in Toussaint, in response to inquiries
Lastly, we find that Harryman's testimony was insufficient to support an agreement of termination only for just cause. As suggested by our holding in Lynas, supra, and supported by this Court's treatment of the facts in Toussaint and Ebling, an employee who seeks to establish from conduct a promise implied in fact must meet a higher standard than an employee who relies on express language. Logic compels the conclusion that where parties expressly negotiate with offers and counteroffers, it is more reasonable to anticipate mutual assent. Conversely, there is less chance that the parties desired or intended the result prayed for where, as here, conduct and oral statements are claimed to create a promise of job security implied in fact. See DiBonaventura v
Thus, we conclude that the oral statements of job security must be clear and unequivocal to overcome the presumption of employment at will. As stated by Justice RYAN in his separate opinion in Toussaint, supra at 632-633:
Harryman's words were couched in general terms, more akin to stating a policy as opposed to offering an express contract. His words were vague when discussing termination (e.g., "generally, as long as they generated sales and were honest ... they had a job at Wards"; "about the only way that you could be terminated would be if you failed to make your draw...."). (Emphasis added.) We find that these words do not clearly indicate an intent to form a contract for permanent employment. Rather, the context of Harryman's comments suggests that they were merely intended to emphasize the number one priority of plaintiff's job — sales.
We also reject plaintiff's contention that the "Rules of Personal Conduct" created a contract to terminate only for cause. In signing the sheet,
Having concluded that the employer's oral statements and the "Rules of Personal Conduct" did not form contracts for permanent employment, we must next decide whether the disciplinary guidelines promulgated by defendant gave rise to an employment contract providing termination only for just cause where defendant concurrently issued sign-off sheets containing an employment-at-will policy. We find that plaintiff cannot maintain an action for breach of contract on the basis of the disciplinary guidelines because the last handbook which plaintiff received clearly set forth an employment-at-will policy.
In Toussaint, this Court held that an employer's written policy statements announcing a policy of termination only for cause may create contract rights if the statements give rise to "legitimate expectations" of just-cause employment in the employee. In that case, the Court determined a jury question was presented regarding whether a policy manual created such expectations. The Court stated:
Referring to the just-cause provision, the Court stated:
In In re Certified Question, supra, the Sixth Circuit Court of Appeals certified the following question to this Court:
In responding to the certified question, this Court held that a company's written policy statements, which created legitimate expectations in the employee of discharge for cause only, could be unilaterally
The Court also required that the notice be uniformly given to employees affected by the policy change.
Much of the same documentation as in the case before us was involved in Dell v Montgomery Ward & Co, Inc, 811 F.2d 970, 972 (CA 6, 1987). In Dell, the plaintiff sued for breach of contract after he was terminated by the defendant. The plaintiff alleged a contract terminable only for cause arose out of the defendant's Progressive Discipline Reference Guide (PDRG). The PDRG was designed to give supervisors a procedure to follow when punishing employees. However, within the PDRG, it was stated that "[t]his procedure does not form an employment contract." (Emphasis deleted.) Also, the defendant's Human Resources Policy Manual contained a provision that discharge could be with or without cause, and also that discipline procedures did not constitute employment contracts. Furthermore, the plaintiff signed a sheet in 1982 which stated that employment could be terminated with or without cause. Writing for the court, Judge Ryan determined that there was no contract making employment terminable only for cause:
In the instant case, plaintiff received handbooks containing disciplinary guidelines.
However, similar to the "sign-off sheet" in Dell, in the instant case the 1983 handbook
Whatever the nature of plaintiff's expectations with regard to termination prior to the issuance of the 1983 manual, the last handbook distributed to plaintiff, we find that the 1983 manual clearly and unambiguously notified plaintiff of the company's termination-at-will policy. We are persuaded therefore that the 1983 manual would have succeeded in modifying any prior expectations of termination only for cause.
Furthermore, we reject plaintiff's argument that she did not have reasonable notice of the policy. In addition to the May, 1983, manual, the two earlier sign-off sheets distributed in 1982 asserted a termination-at-will policy.
Moreover, we find the fact that plaintiff did not
In light of our findings, we would hold that upon receiving the May, 1983, manual, plaintiff could no longer harbor any legitimate expectations of a discharge-for-cause policy. Defendant expressly and clearly reserved the right to discharge employees at will.
Justice LEVIN'S lengthy dissent clearly evidences an insistence that this Court broaden the reach of his majority opinion in Toussaint which we elect not to do.
Thus, we respond — briefly — noting:
— In his dissenting opinion, Justice LEVIN relies on § 32 of the Restatement of Contracts, stating:
While we acknowledge the Restatement as persuasive authority on the subject of contracts, this Court is not, nor is any other court, bound to follow any of the rules set out in the Restatement. Moreover, even assuming, as Justice LEVIN urges, that our ruling is inconsistent with the Restatement, the writings of the American Law Institute do not control the rulings of this Court, nor is the contract law of this state necessarily written to be consistent with the Restatement.
— In section II(F) of his opinion, Justice LEVIN remarks that "[c]ourts generally regard `as long as' contracts as considerably more than expressions of a `hope and noncontractual wish,' but, rather, as expressing a durational term." Post, p 694.
However, 56 CJS, Master and Servant, § 31, p 414, states:
The Lynas Court analogized that case to Lord v Goldberg, 81 Cal. 596, 597-598; 22 P 1126 (1889). In Lord, it was
The court determined that the agreement was for an indefinite term and terminable at the will of either party.
In illustrating its holding, the Lynas Court also cited Rape v Mobile & ORR Co, 136 Miss. 38, 45; 100 So 585 (1924), where the plaintiff was promised to have permanent and steady employment "`as long as he was able and willing to perform such services properly.'" The court found that there was no durational term and the agreement was terminable at will.
In another case cited as illustrative by the Lynas Court, Arentz v Morse Dry Dock & Repair Co, 249 N.Y. 439, 441; 164 NE 342 (1928), the plaintiff alleged that he was orally promised a permanent position, or a lifetime employment contract. In
The history behind the Lynas case teaches us that "as long as" statements do not necessarily provide durational terms, and contracts providing for permanent employment should be specific and definite with regard to duration.
— Many of the cases cited by Justice LEVIN in section II(F) of his opinion are distinguishable from this case. Of the ones that are not distinguished here, none are controlling with respect to this Court.
— The following cases cited in Justice LEVIN'S opinion are distinguishable from this case because they are not employment contract cases: City of Superior v Douglas Co Telephone Co, 141 Wis. 363; 122 NW 1023 (1909); Caplis v Monroe, 228 Mich. 586; 200 NW 123 (1924); Long Beach Drug Co v United Drug Co, 13 Cal.2d 158; 88 P.2d 698 (1939); Fuchs v United Motor Stage Co, Inc, 135 Ohio St. 509; 21 N.E.2d 669 (1939); Phelps v Shawprint, Inc, 328 Mass. 352; 103 N.E.2d 687 (1952); Big Spring v Texas Bd of Control, 404 S.W.2d 810 (Tex, 1966);
— In the following cases, the contract provisions outlining durational terms are clearly and specifically set out in writing so that the parties' intent is more easily discernible. Of course, in the instant case, we must attempt to ascertain the parties' intent from vague oral statements: Fuchs; Long Beach Drug Co; Big Spring, supra; McMullan v Dickinson Co, 60 Minn. 156; 62 NW 120 (1895); Kirkley v FH Roberts Co, 268 Mass. 246; 167 NE 289 (1929).
In Diggs IV v Pepsi-Cola Metropolitan Bottling Co, Inc, 861 F.2d 914 (CA 6, 1988), the court found an enforceable oral promise that as long as the plaintiff's performance was satisfactory, he would have a job. However, in Diggs, the promise was made in response to the plaintiff's direct inquiries about job security. In the instant case, plaintiff made no inquiries about job security. Whether the parties to a contract negotiate or specifically discuss a subject is relevant to a determination regarding mutual assent. Furthermore, the court in Diggs mischaracterizes the district court's decision in Carpenter, supra. The court in Diggs states that "[u]nlike Carpenter, Diggs did not sign an `employment-at-will' clause." 861 F.2d 918. However, the plaintiff in Carpenter also did not sign the employment application containing the clause.
In Ehrenworth v Stuhmer & Co, 229 N.Y. 210; 128 NE 108 (1920), the plaintiff agreed to exclusively sell black bread made by the defendant, and the defendant agreed to furnish the plaintiff with all his black bread requirements. The agreement
In State v Orkin Exterminating Co, Inc, supra, p 199, pest control services were "for the lifetime of the treated structure so long as the customer paid a specified annual renewal fee." The court focused on the phrase the "lifetime of the structure" in finding the term definite and ascertainable. However, in this state, lifetime employment contracts are indefinite and terminable at will.
— In section VII of his opinion, Justice LEVIN incorrectly determines that plaintiff did not assert that the 1983 manual, or procedures found therein, provided a basis for a finding of just cause employment.
Virtually the same disciplinary guidelines are found in each of the manuals. Plaintiff's brief sets out what it refers to as "four major evidentiary features" in the case: (1) the 1982 handbook, (2) the 1983 handbook, (3) the "sign-off" sheet, and (4) the testimony of Mr. Harryman and 1976 Rules of Conduct.
Further, the plaintiff's brief later states:
Plaintiff also argued in the Court of Appeals that the disciplinary classifications found in the manuals supported an agreement for just-cause employment. The Court of Appeals stated:
Along the same lines, Justice LEVIN argues that we incorrectly framed the issue. In so arguing, he states that "Rowe's express contract claim for wrongful discharge does not depend at all on Montgomery Ward's `written policy statements' or on terms left to inference,"
In summary, we find the oral statements relied on by plaintiff insufficient to rise to the level of an agreement providing termination only for just cause. Moreover, the circumstances do not support a finding of mutual assent on a provision for permanent employment.
We also find that the "Rules of Personal Conduct" did not create a contract terminable only for cause.
Finally, plaintiff cannot maintain an action for breach of contract on the basis of the disciplinary guidelines because the last handbook which plaintiff received clearly set forth an employment-at-will policy. Thus, we would affirm the decision of the Court of Appeals.
BRICKLEY and GRIFFIN, JJ., concurred with RILEY, J.
Disciplinary Action Guidelines
Counter Productive Behavior
Use or Possession of Deadly Weapons
Trafficking or Use of Drugs/Alcohol
Aiding and Abetting Gross Violations
Reporting to Work in Unfit Condition
Violation of Uniform or Dress Regulations
Violation of Company Policy
BOYLE, J. (concurring).
I agree with the affirmance of the decision of the Court of Appeals and parts I, II and III of Justice RILEY'S opinion.
I read part I of the opinion to stand for the
Professor Epstein explains that rules of construction are adopted to reflect "the dominant practice in a given class of cases and because that practice is itself regarded as making good sense for the standard transactions it governs." Epstein, In defense of the contract at will, 51 U Chi L R 947, 951 (1984). It has not been demonstrated that the dominant practice of employment-at-will arrangements in the oral promise employment context has shifted sufficiently to warrant determination that the practice no longer makes sense and to reject the rule of construction that presumes employment at will.
Drawing on the facts of Toussaint and Ebling,
As Toussaint and Ebling illustrate, reliance or special consideration as a result of bargaining is an objective indication that the existence of job security is more probable than not. Otherwise stated, it is circumstantial evidence that the omitted durational term that the court would otherwise infer (employment at will) does not reflect the parties' intent. Thus, while the oral contract prong of Toussaint and Ebling recognizes that validation devices
As Professor Perritt states,
This is not to say that consideration in addition to rendering services is essential to enforceability in employment cases; it is to say that the more ambiguous the circumstances, the more appropriate it is to look for objective indications of assent.
Professor Farnsworth likewise observes, when determining whether circumstances constitute an offer,
Even under the liberalized requirement of definiteness under the Uniform Commercial Code
In most employment arrangements, the durational term is central to the agreement because it is inseparable from the threshold question whether a commitment could reasonably be understood to be a promise.
I agree with Justice RILEY'S conclusion that
It is black letter law that enforceable obligations may arise from "explicit" promises, Perritt, supra, § 4.1, p 173, from promises implied in fact, or obligations implied in law (such as the policy or legitimate-expectations prong of Toussaint v Blue Cross & Blue Shield). An enforceable obligation under the contract prong of Toussaint can arise from an explicit promise or can be inferred from words or other conduct.
When the communication between parties has more than one possible meaning and that formulation
Thus, even in employment contracts where courts have been much more reluctant to cure indefiniteness in duration, if the amount of work to be done is definite, a term that it must be done within a reasonable time will be supplied and enforced, Browne & Co v Sharkey Co, 58 Or. 480; 115 P 156 (1911), as would a reference to a measurable time period such as, "`as long as' John Engler is Governor, or MICHAEL F. CAVANAGH is Chief Justice," LEVIN, J., post, p 700, which clearly refers to an external standard of durational measure.
Farnsworth describes the process by which a court analyzes a dispute over an omitted term by observing that in order to determine what the parties have not said, it is first necessary to determine what they have said. Farnsworth, Disputes over omission in contracts, 68 Colum L R 860, 874 (1968).
Thus, the process of supplying omitted terms begins with an incipient dispute over expression, for finding an omitted term "is itself an exercise in
In this case, to determine what the parties have not said, we examine the language "as long as she sold," which the dissent finds is a "definite term of employment." (Post, p 688. Emphasis added.) The dissent eschews interpretation of the language in question, and characterizes the language as an absolute promise that would terminate only on the happening of a condition or event, i.e., failure to sell the quota.
It is apparent, however, that the "as long as" language can be interpreted two ways: either in a temporal sense or in a qualitative sense,
Since, in this case, there is more than one
If this problem is analyzed as a dispute over interpretation, i.e., the meaning of "as long as," I read Justice RILEY'S opinion as fully consistent with the rule of construction, acknowledged in Toussaint, that the Court's task is "to construe `permanent' consistent with the circumstances surrounding the formation of the contract...." Id., p 609.
If analyzed as a case of an omitted term, Farnsworth, supra, § 7.17, pp 531-532, the result is also fully consistent with courts that have regularly found that an agreement that is silent with respect
When one party seeks to terminate an agreement that is silent with respect to termination, the other party may claim that silence is not omission and that, since the promises of the parties are absolute, the agreement admits of no termination. Despite the superficial appeal of this argument, courts have had little difficulty in resolving the threshold problem of interpretation so as to find an omitted case. Farnsworth, supra, § 7.17, pp 531-532. Farnsworth emphasizes that although this dispute arises frequently in the employment context, "[c]onscious of the traditionally intimate nature of the relationship between employer and employee, courts have regularly found that termination is an omitted case, despite absolute promises on both sides. Then by implication they have almost invariably supplied a term allowing either party to terminate at will." Id., p 532.
Farnsworth explains that, just as modern courts conclude that promises in a bilateral contract are not absolute, but include constructive conditions of exchange, they conclude that the promise relied on here cannot be read to supply a durational term. In the seventeenth century, early common-law courts held that bilateral promises were absolute unless one of the parties explicitly qualified the promise. Thus, if one party failed to perform, the other party "could not escape liability merely because the other party had not performed what he had promised in return." Farnsworth, 68 Colum L R 863. Later common-law courts concluded that
According to Farnsworth, modern courts do not follow a literal approach to contract construction but "take greater liberties in defining its [the contract's] scope." Farnsworth, 68 Colum L R 863. Rather than interpreting the promises as absolute, modern courts conclude that each promise defines the party's performance, but does not necessarily address the conditions of performance. Thus, the courts conclude that they are dealing with an omitted term, the conditions of performance. The same reasoning applies when courts consider language such as the "as long as she sold" statement upon which the plaintiff predicates her claim.
Despite the fact that modern courts reject this literal approach and conclude that neither party intended the language to cover the duration or scope of the obligation, Farnsworth, supra, § 7.17, pp 531-532, the dissent would read the words as absolute, resulting in an obligation conceivably extending for the plaintiff's life. The approach confirms the accuracy of the observation that the dissent "clearly evidences an insistence that this Court broaden the reach of ... Toussaint," RILEY, J., ante, p 651, an observation that is further supported by comparing the analysis here with that of the Toussaint majority.
In Toussaint, the majority assumed the validity of precedent that a contract for "permanent" employment was for an indefinite term, Lynas v Maxwell Farms, supra, and found that an employee hired for an indefinite term may nonetheless have an enforceable obligation of "for cause" discharge. In this case, despite the recognition in Toussaint of the fact that our precedents require
Finally, I read Justice RILEY'S opinion as consistent with the modern view of 1 Restatement Contracts, 2d, § 33 and the UCC 2-204(3), that indefiniteness regarding material terms does not prevent a contract from existing,
While holding that the law would imply that a reasonable time was the durational term intended by the parties and that the contract was not too indefinite to be enforced, the court specifically stated:
In sum, I read part I of the opinion to be fully consistent with the black letter rule that where the parties have failed to set forth a material term, the court must interpret the language and conduct to determine the parties' intent.
The plaintiff relied on a promissory theory of liability and the implied-in-law policy prong of Toussaint. In the context of employment arrangements, a promissory theory of liability is analyzed in light of the presumption of employment at will, a procedural device that, like other presumptions, is simply a legal recognition of the normal expectations
Because I agree that on this record the "defendant's commitment-making actions do not predominate," id., p 577, I agree that the decision of the Court of Appeals should be affirmed.
The following opinion was filed with the Clerk of the Supreme Court on August 2, 1991, after the release of the opinion of the Court on July 31, 1991 — REPORTER.
LEVIN, J. (dissenting).
The lead and concurring opinions misstate the issue, and proceed on the basis of a mistaken assumption.
The mistaken assumption concerns a fundamental point of law. It is assumed that statements made to Mary Rowe, corroborated by the person who hired her, advising that "as long as I sold, I would have a job at Montgomery Ward," did not provide a durational term for the contract of employment that most assuredly was entered into when Rowe went to work for Montgomery Ward.
Section 32 of the first Restatement of Contracts stated that "a method is provided for determining the length of the engagement" — and, thus, a durational term — where A promises B to employ him,
Clearly, Professor Samuel Williston, the reporter, and Professor Arthur L. Corbin, the special advisor, and other luminaries
The misstatement of the issue appears in the following sentence of the lead opinion:
A claim for wrongful discharge predicated on "oral statements directed at plaintiff" — e.g., "as long as I sold, I would have a job at Montgomery Ward" — seeks recovery on the basis of an express promise, not a promise implied in fact. A claim that is based on an employer's "written policy
The signers of the lead opinion err in combining two inquiries:
— Did the "oral statements directed at" Rowe give rise to an express contract; and
— Did Montgomery Ward's "written policy statements" "imply in fact" a promise not to terminate except for cause?
In thus misstating the issue, the majority asks the wrong question, and perforce reaches the wrong answer.
Rowe's express contract claim for wrongful discharge does not depend at all on Montgomery Ward's "written policy statements"
Since the promise made to Rowe stated a durational term and required no performance of Rowe other than that she sell, then, absent a term inferred for the benefit of the employer that she could be discharged for a cause not stated in the Rules of Personal Conduct, Rowe could be discharged only for nonperformance, i.e., failure to sell, or a cause stated in the Rules of Personal Conduct.
When Montgomery Ward discharged Rowe it did not claim that she had ceased to be able to do the work, i.e., to sell. On the contrary, Rowe's sales record was exemplary.
Contracts with "as long as" durational terms are express contracts. The majority concludes that to maintain an action on an express "as long as" promise of employment, a promisee must establish an implied promise by the promisor not to discharge at will. The conclusion that a promisor may renege at will unless he impliedly promised not to renege at will is without support in the cases,
The majority compounds the errors in misstating the issue (subpart A, p 677), and in proceeding to decision on the mistaken assumption that the promise made to Rowe did not state a durational term (subpart B, p 678), by donning the mantle of trier of fact.
On the basis of its subjective intuition that
Under the traditional objective approach, the correct focus is not on what the promiser, Montgomery Ward, actually intended, but on what a reasonable person in the position of the promisee, Rowe, would conclude the offer meant.
The lead opinion begins with a comment about Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich. 579; 292 N.W.2d 880 (1980), stating that there this Court "extended job security to nonunionized employees."
Toussaint did not, however, extend job security to nonunion employees. It simply ruled that promises of job security that had been extended — not by the courts, but rather by employers — were enforceable in a court of law. In Valentine v General American Credit, Inc, 420 Mich. 256, 258; 362 N.W.2d 628 (1984), a unanimous Court said:
Toussaint, thus, did not create entitlement to job
Montgomery Ward, apparently responding to Toussaint, has required all persons newly hired since 1982 to "sign off" any claim of job security by acknowledging in writing that no promise of job security was made. Rowe was hired, however, before new employees were required to so sign, and refused to sign when asked to do so.
The majority also mischaracterizes the promise made to Rowe as one for "permanent" or "lifetime" employment.
A contract of employment is ordinarily deemed to be terminable at will if the parties do not agree on the duration of the employment, or agree on "permanent" or "lifetime" employment.
The signers of the lead opinion erroneously equate an "as long as" durational term with a "permanent employment" term.
Such a promise is not an "extraordinary"
Rowe did not allege that she was promised permanent
The "issue" dealt with in part II of the lead opinion was not briefed or argued by Rowe, the appellant, in this Court, and may not now properly be addressed by this Court.
Rowe has not advocated the position dealt with by the majority adversely to other employee litigants who are not now before the Court, but whose cases are pending in this Court on applications filed by employers for leave to appeal from decisions of the Court of Appeals.
A correct statement of the question presented is: Does the evidence tending to show that Rowe was hired by Montgomery Ward on the understanding that, subject to Rules of Personal Conduct enumerating grounds for discharge, she would have a job "as long as [she] sold," sufficiently support the finding that her contract of employment was not terminable at the will of Montgomery Ward?
I would hold, contrary to the majority, that
— An offer by an employer to employ a person for stated compensation "as long as" the person "is able to do the work" — here to "sell" a sufficient amount of appliances to earn commissions at least equal to the weekly draw — defines clearly, specifically, and unambiguously the work to be done, the compensation to be paid, and a durational term of the contract, so that the trier of fact may find, upon acceptance of the offer, an express contract
— Since the contract provides a method for determining the length of the engagement, namely, the length of time the employee is able to do the work, the duration of the contract is determinable. The duration is therefore sufficiently definite, although it is uncertain how long the employee will be able to do the work and, thus, when the contract will terminate.
— The promise made by such an employer to the employee — to provide the employee with work at a stated compensation for as long as the employee is able to do the work — is express and not implied.
— The "presumption" of employment at will is overcome by such an express promise for a determinable and, hence, a sufficiently definite term of employment.
— An offeror's intention will be held to be what a reasonable person in the position of the other party would conclude the offer meant.
The correct inquiry in this case, therefore, is what a reasonable person in Rowe's position would conclude the offer of a job for "as long as she sold" the requisite amount of appliances, subject to Rules of Personal Conduct that enumerated grounds for discharge, meant with regard to whether her employment was terminable at the will of Montgomery Ward or only for cause.
The focus therefore should be on what Rowe could reasonably have concluded the offer meant with regard to termination of employment, and not on whether Montgomery Ward actually intended
It is undisputed that Vernon Harryman, when he hired Rowe, made the promissory statements or "manifestations" that they both related at the trial, when they testified that she was told that as long as she sold she would have a job at Montgomery Ward, and that Rowe signed Rules of Personal Conduct enumerating grounds for discharge.
Reasonable jurors could properly conclude on that basis that Montgomery Ward intended to provide employment not terminable at its will but only for cause, because that is what a reasonable woman in Rowe's position might reasonably conclude Montgomery Ward meant by its promissory statements or manifestations.
— The answer to the question whether the words used by the parties are sufficient to support a finding that a contract of employment was entered into does not depend on whether the words are set forth in a writing or are expressed orally. There is no rule of law requiring "objective support," in the form of a manual, other writing or other corroborative evidence, for an oral term of a contract of employment.
— A durational term of an employment contract is not negated, as a matter of law, by evidence that the employee did not, when hired, inquire about, or "negotiate" for, job security, or by evidence that the employee was seeking a sales position rather than a "singular, executive job position."
Rowe and Montgomery Ward indisputably entered into an express oral contract of employment when Montgomery Ward offered to employ Rowe for a stated compensation for as long as she was able to do the work, selling appliances in an amount that would earn commissions at least equal to her weekly draw, and Rowe accepted the offer and began work.
The question whether an "as long as" term is sufficiently certain to be enforceable has been considered by courts in a number of contexts. The author of one treatise on the law of contracts has summed up the pertinent case law as follows:
Section 32 of the first Restatement of Contracts spoke of the need for certainty in expression, and specifically included promises of employment.
Employment contracts are generally oral. The illustrative contract set forth in § 32 of the Restatement of Contracts is an employment contract. Nothing there suggests that such a contract must be in writing, or that the contract formed by the promissory exchange between A and B was in writing.
Nor could a distinction properly be drawn between "as long as I am able to do the work" and "as long as I am able to sell." Rowe's work was selling — that is all she was hired to do. "As long as I sell" has the same meaning in her contract of employment as "as long as I am able to do the work."
Samuel Williston, the reporter for, and Arthur Corbin, the special advisor to the Restatement of Contracts, are the authors of the leading multivolume treatises of the law of contracts
The lead opinion relies on obiter dictum in a footnote that characterizes "`as long as you do the
The author of the lead opinion in this case also wrote the lead opinion in the companion case of Dumas v Auto Club Ins Ass'n, 437 Mich. 521; 473 N.W.2d 652 (1991). There the Court considers the enforceability of a promise to pay a seven percent renewal commission to sales representatives for "as long as they were employed by the Auto Club," or "forever," or "always," or "words to that effect." (Emphasis added.) The signers of the lead opinion do not, as here, say that such a promise is unenforceable because it constitutes nothing more than an expression of a "hope and noncontractual
Proceeding on the apparent premise that such a promise, if made, would be enforceable, the signers of the lead opinion in Dumas conclude that
— the one hundred thirty-nine sales representatives comprising Group A could not recover because the "as long as" promise there alleged was not "expressly" made, not because an "as long as" promise in an oral employment contract is not enforceable;
— the twenty sales representatives comprising Group B could not recover because the promise was not capable of performance within one year and was not in writing;
— the twenty sales representatives comprising Group C could not recover because the promise was not made when they were hired, but after they began work, and the circumstances did not demonstrate mutual assent.
Courts generally regard "as long as" contracts as considerably more than expressions of a "hope and noncontractual wish," but, rather, as expressing a durational term.
This Court, in Caplis v Monroe, 228 Mich. 586, 588; 200 NW 123 (1924), held that an oral leasehold was for a term not exceeding one year, and, hence, not violative of the statute of frauds, on the basis of the tenant's testimony that the landlord told him that "`as long as I paid the rent that I could stay there until she sold the property....'" This Court said:
The United States Court of Appeals for the Sixth Circuit,
The highest courts of Minnesota and Massachusetts dealt with nonfinite durational terms in written employment contracts. The Minnesota court held that the durational term was "sufficiently defined" where defendant agreed to employ the plaintiff during the time "the business of said corporation should be continued, not exceeding the term of the existence of said corporation ...."
The highest court of New York held that an oral agreement providing that the plaintiff was the exclusive distributor of pumpernickel bread "as long as" both the plaintiff and the defendant remained in business was not "interminable" because it would last at most only as long as the plaintiff and the defendant were both in business.
In a case that may be seen as the mirror image of an exclusive distribution agreement, New York's intermediate appellate court held that a sufficient durational term was provided where the
The United States Supreme Court held that an oral agreement by a railroad to "`put down the iron rails and maintain the switch for the plaintiff's benefit for shipping purposes as long as he needed it'" was not within the local statute of frauds applicable to "an `agreement ... not to be performed within ... one year....'"
The Supreme Judicial Court of Massachusetts found that a promise by the individual defendants to pay the plaintiff "$100 a month, so long as [the individual defendants] should be connected with the defendant corporation, if [the plaintiff] should succeed in having the [individual defendants] sell their shares to them," "carried its own measure of time ... even though it is impossible to predict precisely when the contingency will occur that will bring the contract to an end."
"As long as" durational terms have also been found to be sufficiently certain in requirements contracts.
The signers of the lead opinion cite no authority for the view that Rowe's claim of an oral "as long as" contract of employment is lacking in "objective support,"
The signers of the lead opinion state that "because of the difficulty in verifying oral promises, the statements must clearly permit a construction which supports the asserted meaning."
It is again relevant that the parties indisputably entered into a "contractual relationship." The only dispute concerns the enforceability of a single term of that relationship, the "as long as" durational
Nor do the signers of the lead opinion cite authority for their view that words used to express oral contract terms must, more so than the words used in a written contract, "clearly permit a construction which supports the asserted meaning." The contract was oral in Caplis,
In all events, this Court, in Caplis, held that an oral lease for "`as long as I paid the rent'" and "`until [the landlord] sold the property'" constituted a concise agreement "in plain terms of contingent but determinative duration. That is certain in law which can be made certain."
To be sure, the formality of a writing may provide some additional assurance. In a case such as this, however, where there is no dispute concerning what was said, and where the words clearly would be sufficient to add an "as long as" durational term to the contract were it in writing, it cannot properly be said that the "as long as" term is not sufficient because it is oral.
Manifestly, if a collective bargaining agreement provided that the members of a labor union would be employed "as long as" John Engler is Governor, or MICHAEL F. CAVANAGH is Chief Justice, the durational term would be reasonably certain and the agreement enforceable.
The emphasis in the concurring opinion on the absence of a durational term suggests recognition that where there is a durational term the employee ordinarily cannot be discharged during the duration of the contract except for cause.
The concurring opinion asserts that "it does not follow that a promise to continue employment until cause existed for termination must be inferred" from an "express statement of job security," such as "for `as long as I sold.'"
Both of the contracts of employment considered in Toussaint were for "as long as" the employee did the job. Toussaint held that the trier of fact may find on the basis of an "as long as I do the job" promise of employment that the employment will continue until there is cause for termination.
The author of the concurring opinion appears to acknowledge that "for `as long as I sold'" is an "express statement of job security."
The "express statement of job security, for `as long as I sold'" gave rise to an express, not an implied, contract of employment. Putting aside whether "as long as" constitutes a durational term, there is no suggestion in the cases discussed in part II-F
There is no suggestion in the cases there discussed that a term might properly be inferred permitting such a promisor to renege "at will," or that the promisee must, as a predicate of recovery, establish an implied promise not to renege "at
"Contract law" becomes another oxymoron if a promisee must establish as a predicate to recovery that the promisor promised not to renege at will.
The author of the concurring opinion finds persuasive the analysis of the lead opinion on "the threshold issue of intent."
The concurring opinion cites Professor Perritt's statement that an "informal promise" of employment security should not be "taken seriously by the law" unless the employee demonstrates that "both parties meant for their deal to be enforced."
The doctrinal thesis adopted by the majority appears to be that an employee seeking to enforce a contract of employment — in contrast with any other person who asserts that he entered into a contract with another person — has the burden of showing, with evidence other than the usual promissory "manifestations," that the employer actually intended to be bound.
The general rule, however, as stated by Professors Calamari and Perillo, is that "a party's intention will be held to be what a reasonable man in the position of the other party would conclude his manifestation to mean."
Professor Farnsworth similarly wrote that the prevailing view is that the standard is objective and not subjective. The "promisee" is not required to show that the "promisor" made the promissory statement "with the intention of assenting to an agreement. It is enough that the other party had reason to believe that the first party had that intention."
The signers of the lead opinion quote with approval from this Court's opinion in Goldman v Century Ins Co, 354 Mich. 528, 535; 93 N.W.2d 240 (1958).
The signers of the lead and concurring opinions appear to have adopted the subjective view, requiring evidence that "both parties intended to be bound,"
The majority, in effect, announces a new rule of law requiring corroboration or something akin, that an employer, acting through a subordinate such as Harryman,
The use of the quotations from Professor Perritt's treatise on Employee Dismissal Law and Practice in the concurring opinion is misleading.
If one reads on, it appears that "[t]he most common validation device is consideration: something given in return for a promise. This may be a return promise or it may be conduct. It may be any benefit or detriment that is given in exchange for a promise." Perritt, Employee Dismissal Law & Practice (2d ed), § 4.12, p 198. Read in context, it is manifest that Professor Perritt's statement does not support the notion that there must be an actual meeting of the minds.
Professor Perritt's true views become clear on reading the following:
Professor Epstein's strictures are addressed to those who would impose by operation of law — statute or judicial decision — independently of the agreement of the parties, a just-cause term generally in employment relationships, with the result that, whether bargained for or not, employees would generally have tenure.
Professor Epstein's views are clarified in reading the following passage, which the majority should
Although the majority calls for "objective" evidence corroborating Montgomery Ward's actual intention to provide job security, it trivializes that search by focusing on inconsequential distinctions, urged by counsel for Montgomery Ward, said to distinguish the instant case from Toussaint but which, in another case, may be of little or no importance, because the record will show that the employee did not "stumble in," and did inquire about job security.
The signers of the lead opinion state that Rowe "did not engage in preemployment negotiations regarding security. She simply `stumbled' into the store one day and had one interview before being hired. Nor is there any testimony suggesting that plaintiff inquired about job security."
The analysis of the lead opinion suggests that if, instead of "stumbling" into the store one day, Rowe had answered a help-wanted advertisement Montgomery Ward was then running, or if she had "inquired" about job security, a different result might be justified.
The record, indeed, does not indicate how the subject of job security arose during the preemployment interview. But somehow or other the subject came up. When Harryman was asked whether he had informed Rowe of the "reasons for which she may be terminated," Harryman testified, "[t]heft or, you know, obviously, murder, or something like that; theft of any company properties, or so on." Also, Rowe signed the Rules of Personal Conduct, which enumerated grounds for discharge.
Since the record provides at least an issue properly submissible to the jury regarding whether Rowe and Harryman discussed job security, it should not be of any importance whether Rowe "inquired" about job security before Harryman brought it up and described the current policy as he understood it.
Yet, even if Rowe had "inquired" about job
The record does not, however, indicate that there was a "company policy" contrary to Rowe's and Harryman's testimony. The Montgomery Ward manager who discharged Rowe testified that she would have had to rely, at the time she was hired, on what Harryman told her and what the Rules of Personal Conduct provided.
The lead opinion does not state or describe the "company policy" adverted to in the opinion. Thus, in addition to assessing, as trier of fact, the "likelihood that the contract terms were negotiable," and finding that "company policy was more likely to govern," the lead opinion appears to hypothesize or posit, without record support, an unstated and undescribed "company policy" that was neither consistent with Harryman's statements to Rowe nor reflected in the Rules of Personal Conduct.
The lead opinion states that "[u]nlike Toussaint, plaintiff did not engage in preemployment negotiations regarding security."
Toussaint dealt with the consolidated appeals in
Ebling dealt directly with the executive vice president of Masco, and did indeed specifically "negotiate" for job security. The Toussaint opinion does not, however, indicate that Toussaint negotiated for job security any more than did Rowe.
Ebling is distinguishable in this regard from Rowe, but Toussaint is not. Toussaint may have been a higher level employee than Rowe, but nothing in the Toussaint record suggests that the terms of Toussaint's employment with BCBSM were any more negotiable than the terms of Rowe's employment.
The effort to distinguish Toussaint on the basis of negotiations for job security does not bear analysis insofar as the case of Charles Toussaint is concerned.
The concurring opinion adverts to "the circumstances identified as objective indications of intent"
The author of the concurring opinion postulates still another rule of construction:
This suggests that providing job security for commissioned salespersons for as long as they sell might have been beyond the means of Montgomery Ward. There is nothing in the record to support such a finding, and under the circumstance that commissioned salespersons are paid only when they sell, it is unlikely that this rule of construction has any application on this record.
In this connection, especially noteworthy are the decisions of the Supreme Courts of Texas and California, and of the Louisiana Court of Appeal,
The "issue" dealt with in part II of the lead opinion was not briefed or argued by Rowe, and hence cannot properly be decided at this time.
This issue is addressed in two cases pending in this Court on applications by employers for leave to appeal, Henry v Montgomery Ward, Docket No. 90134, and Schippers v SPX Corp, Docket No. 90702.
The first paragraph of part II of the lead opinion reads:
The "last handbook" was issued in 1983.
While Rowe argued that the Rules of Personal Conduct, which she signed in August, 1976, when she was hired, were part of her express contract of employment and gave rise to reasonable expectations of termination only for cause, she did not assert that the procedure set forth in the 1983 manual or handbook — the sign-off sheet which she did not sign — gave rise to an implied promise of termination only for cause. Rowe did not assert that she could, in the words of the lead opinion, "maintain an action for breach of contract on the basis of the disciplinary guidelines" set forth in the 1983 handbook.
Rowe's brief did not claim rights under the 1983
It appears from the Court of Appeals opinions on this issue, in Langeland v Bronson Methodist Hosp, 178 Mich.App. 612; 444 N.W.2d 146 (1989), Dalton v Herbruck Egg Sales Corp, 164 Mich.App. 543; 417 N.W.2d 496 (1987), Henry, supra, and Schippers, supra, that the issue is not free from doubt.
In Keasey v Engles, 259 Mich. 178, 181; 242 NW 878 (1932), this Court said:
CAVANAGH, C.J. (dissenting).
I am in substantial agreement with the analysis of my Brother LEVIN'S dissenting opinion, with the exception of parts II(E) and VII, ante, pp 693-694, 715-719. Justice LEVIN persuasively demonstrates why the majority's analysis is simply erroneous with regard to the law, and constitutes a virtual overruling of Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich. 579; 292 N.W.2d 880 (1980). I add only the following observations:
First, my Brother LEVIN, in part IV(C), ante, pp 712-713, demonstrates why the majority's reliance on the fact that Rowe did not specifically "negotiate" for job security, see ante, pp 641-642, fails
Second, my Brother LEVIN demonstrates that the majority confuses the issue whether Rowe's claim is supported by express contractual statements with the separate issue whether her claim is supported by the employer's written policy statements, see ante, pp 678-682 (part I[B]), and that, to the extent "objective support" for the express oral contract in this case is relevant, such factors support Rowe, see ante, pp 713-714 (part V). I agree and would point out that the majority's newly invented requirement of "objective support" for such an express oral contract from policy manuals or statements, see ante, p 644, plainly alters and misapplies this Court's holding and reasoning in
Finally, I would note that the majority in this case, despite its disclaimers, effectively takes upon itself the role of jury and factfinder. See, generally, ante, pp 640-646. The majority makes quite clear that, were it sitting as the jury in this case, it would not be convinced that a just-cause contract of employment was entered into. It is well established, however, by a fifty-year-old line of controlling precedents (unbroken until now) that whether two parties have, by express oral statements, entered
The majority has not demonstrated how the oral just-cause employment contract in this case — which clearly enjoys sufficient factual support to justify the jury's verdict — is barred or precluded by any supervening principles of contract law, properly analyzed. This case, for all relevant and dispositive purposes, is legally and factually indistinguishable from Toussaint. I therefore dissent from the majority's overturning of the jury's verdict.
MALLETT, J., took no part in the decision of this case.
As 3 Corbin, Contracts, § 554, pp 223-225, observes, "If the words of agreement, whether oral or written, are definite and undisputed, and if there is no doubt as to the relevant surrounding circumstances, the interpretation of the words is ordinarily held to be a matter for the court."
In the 1991 supplement to § 554A, p 274, Professor Kaufman observes:
Where there are two fairly reasonable interpretations of the situation or where the proper interpretation of a contract requires a determination of credibility, summary disposition is inappropriate.
Harryman discussed with plaintiff the terms of her employment:
In further discussing the conditions of employment, Harryman stated:
Like the manual in Toussaint, the Rules of Personal Conduct also may be analyzed under the policy prong of Toussaint to determine whether it gives rise to legitimate expectations, an obligation implied in law. See RILEY, J., part II, ante, pp 646-651.
Rowe's assertion that the Rules of Personal Conduct gave rise to legitimate expectations that she would not be discharged at will, suggests that she was seeking recovery on an implied promise not to terminate her employment except for cause. But the majority's conclusion that no such promise can be inferred does not reach or decide the question whether the promise of employment at a stated compensation as long as she sold gave rise to an express employment contract when she accepted the offer. If, as the jury found, that promise and acceptance formed a contract, the resulting contract was express, not implied.
This sheet becomes a permanent part of the employee's file.
When Rowe was hired, she was interviewed by Vernon Harryman, the manager of the appliance department. Rowe testified that Harryman explained the requirements of the job and said, "as long as I sold, I would have a job at Montgomery Ward." Harryman testified that he informed Rowe that if she did not make the amount of her draw against commission for two consecutive months, she would be reviewed and that such failure would be grounds for dismissal.
Harryman testified that commissioned salespersons were different from hourly employees: "[G]enerally, as long as they generated sales and were honest, why, they had a job at Wards, and that's the way we used to hire our people." He said that Rowe would have to sell approximately $2,000 of sewing machines a week to make her draw, and that was the number one thing, condition of employment, and that, if she failed to generate such sales for two months, her employment would be subject to termination.
In deciding whether Rowe was properly discharged for cause, the jury was not, however, limited to an inquiry whether she had violated the particularized grounds of discharge set forth in the Rules of Personal Conduct. Rowe acknowledged that an employee may ordinarily be discharged for cause without regard to whether such a term is expressed at the time of hiring. But, if such a term is not expressed, it is the employer who will later seek to establish by implication a term that he may discharge for cause although the employee otherwise has duly performed the work.
Insofar as Montgomery Ward sought to justify Rowe's discharge on the basis of a cause not stated in the Rules of Personal Conduct, it was Montgomery Ward who sought to establish by implication a term — i.e., that Rowe could be discharged for any "cause," not only cause stated in the Rules of Personal Conduct — rather than Rowe who was seeking, as the signers of the lead opinion erroneously declare, to infer a promise that her employment could not be terminated except for cause.
Rowe was scheduled to work between 1:00 P.M. and 9:00 P.M. on a Saturday in March, 1984. At about 2:00 P.M., a Montgomery Ward "loss prevention officer" observed Rowe leave through an unauthorized exit. Upon checking her time card, he observed that she had not punched out. Rowe returned about 6:00 P.M. Rowe made no notation on her time card of her extended absence from the store.
Rowe testified that another salesperson, Marie Morris, asked Rowe to switch shifts with her so that Morris could visit a terminally ill friend in the hospital. Rowe agreed, but added that she might have to attend to a personal matter on Saturday afternoon and had even considered taking all day Saturday off. Rowe also testified that the commissioned employees switched their shifts back and forth from time to time. Rowe had attempted on the previous evening to reach her supervisor to tell him of the switch, but he did not work on Friday and did not come in on Saturday. Morris confirmed Rowe's testimony about trading shifts in general, and specifically with respect to the trade that occurred that Saturday.
Rowe testified that she was familiar with the staffing needs of the department, and that she did not leave the store without assuring herself that there was an adequate number of persons staffing the major appliance department. Another employee confirmed her testimony.
Harryman testified that while all employees were required to punch in and out, these policies frequently changed. He indicated that they really had little application to commission salespersons. He said, "The number one thing was to work, attain those draw figures. It was sales. Sales covered a multitude of sins. That was our favorite slogan at Wards." He said that Rowe was the best commission salesperson he had ever worked with.
When Rowe returned to work, a security guard was waiting for her and escorted her to the office of the store manager. Rowe was told that she had violated a company policy. She responded that she honestly did not know which policy they were talking about. When Rowe was told that she had left the store without punching her time card and had cost the company money, she responded that she worked on commission and had more sales than anyone that day. Rowe added that she was sorry that she did not punch out while gone, and would do so in the future.
Rowe said that she was asked to sign "another paper" and that she should "read it over and write down what happened and sign it." Rowe refused. The manager was then called in and said that he had no choice but to dismiss Rowe. When she responded that he would be losing the best salesperson he had, he responded, "Yes, I know," and then said something to the effect that he had no choice.
Rowe testified that she had left on that Saturday afternoon to assist her elderly and ailing father with housekeeping chores in preparing her parents' home for the return of her mother, who had been away for a number of months.
Sometime after August 1982, Montgomery Ward issued an "Employee Guide" that included an introductory letter from the company president and CEO, as well as other introductory materials suggesting that the manual was directed to new employees. A slightly different version of the manual, also directed to new employees, was issued in May, 1983.
Each version of the manual had a final "tear-out" or "cut-out" page which was labeled "Employee Sign-off Sheet," which the employee was asked to sign and return to the immediate supervisor or personnel representative for inclusion within the personnel file of the employee. The sign-off sheet stated that employment at Montgomery Ward was at will.
Rowe testified that she refused to sign this sign-off sheet when it was presented to her. The back of the document contains the inscription: "Read & do not wish to sign. 5-20-82 [/s/] Mary Rowe." Rowe testified that she said she would not sign the form, and she "didn't really think it was right to come along in 1983 and ask me to sign a new employee handbook."
According to Rowe, the following conversation occurred between her and a person in the personnel department:
A panel of the United States Court of Appeals for the Sixth Circuit commented on Carpenter as follows:
Rowe did not, when hired, agree in writing or orally that her employment was at will. When she was later asked to sign such a writing, she refused. This case also presents "a specific promise coupled with a performance standard." The evidence showed that Rowe was hired with the understanding that she would have a job at Montgomery Ward as long as she generated sufficient sales to cover her weekly draw.
The court quoted with approval the following statement:
In another case, the defendant agreed, under a written contract, to "furnish plaintiff steam `while in the building occupied and used by them as a steam laundry....'" The Wisconsin Supreme Court held that the term "while" clearly expressed duration, and thus the terms of the contract "indicate[d] that the time of the contract [was] dependent upon the event of use and occupancy of the building by plaintiff as a laundry." Accordingly, the contract was not void for indefiniteness with regard to time. American Steam Laundry Co v Riverside Printing Co, 171 Wis. 644, 647; 177 NW 852 (1920).
The court held that the contract was of the type that provides for termination or cancellation upon the occurrence of a specified event, and that it was enforceable.
An exception for cause would ordinarily be implied in fact for the benefit of the employer. There may, however, be a case where it would not be appropriate to infer an exception permitting the employer to discharge for cause other than that the employee is no longer able to do the work.
[BOYLE, J., ante, pp 663-664.]
But, as acknowledged in Darlington v General Electric, 350 Pa.Super. 183, 200; 504 A.2d 306 (1986), quoted with approval in the concurring opinion, the "`sufficient additional consideration'" validation device "may be nothing more than a legal fiction ...."
Professor Perritt continues:
Harryman testified that he described what constituted "selling." He said that sales persons were generally expected to generate roughly $2,000 a week or more in sales. Clearly, the question what constituted "selling" was not left at large. The contract was clear, specific, and unambiguous insofar as what constituted "selling."
Nor was there ambiguity or an absence of clarity or specificity regarding the grounds for termination. In addition to Harryman's spelling out the work performance expected of Rowe — selling sufficient merchandise to make her weekly draw — the Rules of Personal Conduct provided that she would be immediately dismissed for "[t]heft, [de]struction or misappropriation of property, [v]iolation of accepted moral standards, [m]anipulating, altering or falsifying Company records (including employment application), or [d]ishonesty of any kind."
The terms of the contract of employment were, thus, clear and specific, and there was no ambiguity.
Whether there were specific negotiations for job security. While the record does not indicate whether it was Rowe or Harryman who brought up the question of job security, the question of job security was discussed and the subject of a writing, the Rules of Personal Conduct signed by Rowe.
Whether, if policy statements are relied on, they support or undercut a reasonable belief that a promise of job security was being extended. The Rules of Personal Conduct signed by Rowe spoke of "[g]rowth, [p]rofit, [s]ecurity," and "[s]uccessful career" (emphasis added) and stated that theft and other dishonesty could result in immediate dismissal. The Rules of Personal Conduct tended to reinforce the oral promise of job security.
The mere assertion that the 1982 handbook provided one of three separate bases for Rowe's "objective expectancy" without any supporting argument or advocacy whatsoever did not raise the issue dealt with in part II, and does not provide an appropriate basis for a pronouncement by this Court on an issue pending in a separate application for leave to appeal in this Court where there is adversary briefing.
The court rules require that a brief contain a "statement of questions involved...." MCR 7.212(C); MCR 7.306(A). Neither Rowe's application for leave to appeal nor her brief on appeal in this Court stated as a question presented for review (MCR 7.302[A][b]) or involved whether the jury's verdict in her favor could be sustained solely on the basis of the 1982 handbook.
It is well established that this Court will not ordinarily review questions not separately stated in the statement of the questions presented for review or where leave to appeal has been granted in the statement of questions involved. See 7A Callaghan's Michigan Pleading & Practice (2d ed), § 57.24, p 305.
While Rowe did refer to Court of Appeals decisions, Langeland and Dalton, that address the issue dealt with in part II of the lead opinion, it is clear from the foregoing that Rowe was not seeking to predicate a right of recovery on the basis of the 1983 manual or handbook, but rather stated an alternative reason for finding that the 1983 manual or handbook did not apply to her.
Rowe's brief also asserted that, assuming the "at-will" language in the 1983 handbook applied to her, which she denied, Montgomery Ward did not provide her with reasonable notice of its "attempted unilateral change to an `at-will' policy." This argument was prompted by this Court's decision in In re Certified Question, Bankey v Storer Broadcasting Co, 432 Mich. 438; 443 N.W.2d 112 (1989), decided after the decision by the Court of Appeals in the instant case.
Rowe observed that in Certified Question, this Court said that "`reasonable notice of the change must be uniformly given to the affected employees.'" It is apparent that Rowe was concerned that this Court might extend the concept set forth in Certified Question, permitting unilateral change of a policy manual, to a unilateral change of an express contract.