MARILYN KELLY, J.
This is a wrongful discharge case between plaintiff, John Hammond, and his former employers, defendants United Cable Television of Oakland County and others. Defendants appeal by leave granted from a circuit court order granting in part and denying in part their motion for summary disposition.
Defendants argue on appeal that plaintiff is precluded from bringing a breach of contract action, because he failed to tender back severance benefits he received upon resigning. They further contend that the trial court erred in finding a factual issue existed over whether plaintiff was constructively discharged. Lastly, defendants argue error in the court's recognition of a cause of action for breach of a covenant of good faith and fair dealing. We affirm in part and reverse in part.
Plaintiff was employed by defendants from February, 1983 to April, 1986. At the time he left, plaintiff was manager of programming services.
Plaintiff alleged that, when he was hired, Jim Anderson, defendants' then-general manager, promised him that he would be a long-term employee; he would have a position with defendants as long as he did a good job. Plaintiff also alleged that defendants' employee handbook established a
In October, 1985, Anderson was replaced by a new general manager, John Gash. Gash dismissed several managers hired by Anderson. On April 20, 1986, after hearing rumors that Gash might fire him, plaintiff asked Gash if his job was secure. According to plaintiff, Gash assured him that, because his performance was good, he would not be discharged.
However, the next day, Gash called plaintiff into his office and advised him that his position was being eliminated. Plaintiff alleged that Gash coerced him into signing a resignation document by "brandishing a knife." Plaintiff further alleged that, after he resigned, his position was not eliminated; other individuals later served as manager of programming services.
Plaintiff filed a complaint alleging multiple theories of liability including: breach of contract; breach of covenant of good faith and fair dealing; constructive discharge; discharge in violation of public policy; negligent discharge; fraud; and retaliatory discharge. The trial court granted defendants' motion for summary disposition except for the claims of breach of contract, constructive discharge and breach of covenant of good faith and fair dealing. MCR 2.116(C)(8) and (10). With respect to the good faith and fair dealing theory, the court explained:
Defendants assert that plaintiff's breach of contract claim should have been dismissed; plaintiff failed to rescind his resignation by tendering back the severance pay and benefits he received as consideration. We disagree.
If an employee, upon leaving a job, releases his employer from liability in exchange for consideration, he must tender back the consideration before suing the employer. Stefanac v Cranbrook Educational Community (After Remand), 435 Mich. 155, 163; 458 N.W.2d 56 (1990); Leahan v Stroh Brewery Co, 420 Mich. 108, 112; 359 N.W.2d 524 (1984). The employee must place the employer in the position it was in prior to the settlement. Stefanac, 164 (quoting Kirl v Zinner, 274 Mich. 331, 334-335; 264 NW 391 ). A plaintiff is not entitled to retain the benefit of an agreement and at the same time bring suit in contravention of it. Id., 177.
For example, in Stefanac, the plaintiff signed a release stating that in exchange for two weeks' severance pay, she would
In the instant case, the document that plaintiff signed on his last day of work did not release defendants from liability. It simply provided that plaintiff was submitting his resignation and that he understood that he would receive two months' severance pay plus extended insurance benefits. It stated:
Since there was no provision in the document releasing defendants from a potential lawsuit, there was no requirement that plaintiff tender back the severance pay before filing a lawsuit. Defendants do not contend that the money was paid in exchange for an agreement that plaintiff not sue. Therefore, defendants remain in the position they were in prior to the signing of the document. Stefanac, 164. Furthermore, plaintiff is not bringing an action in contravention of the document; he never agreed not to sue. Stefanac, 177.
We also reject defendants' contention that the trial court erred in finding that a genuine issue of fact remained over whether plaintiff was constructively discharged. A constructive discharge occurs when an employer deliberately makes an employee's working conditions so intolerable that the employee is forced into an involuntary resignation. Mourad v Auto Club Ins Ass'n, 186 Mich.App. 715, 721; 465 N.W.2d 395 (1991).
In the instant case, plaintiff presented an affidavit stating that, at the time Gash fired him, Gash "was agitated and brandishing a knife and told me that I had no choice but to sign the [resignation] document." He further alleged that his resignation was not voluntary. Viewing these allegations in the light most favorable to plaintiff, a juror could reasonably conclude that plaintiff was forced to resign. MCR 2.116(C)(10); Farm Bureau Mutual Ins Co v Stark, 437 Mich. 175, 184-185; 468 N.W.2d 498 (1991); Mourad, 721.
At trial, defendants may introduce the resignation document and the fact that plaintiff received severance pay as evidence that he was not constructively discharged but rather resigned voluntarily. However, the fact that plaintiff received severance pay or that he never returned his severance pay does not, as a matter of law, defeat his constructive discharge claim.
We turn next to defendants' argument that plaintiff failed to state a claim for breach of the covenant of good faith and fair dealing. MCR 2.116(C)(8). Initially, we note that neither plaintiff nor defendants define this covenant. It has been
This Court has been unwilling to recognize a cause of action for breach of an implied covenant of good faith and fair dealing in cases involving at-will employment relationships. See Cockels v Int'l Business Expositions, Inc, 159 Mich.App. 30, 36-37; 406 N.W.2d 465 (1987), and cases cited therein. Moreover, contrary to the trial court's holding, we have refused to recognize the cause of action in cases involving just cause employment relationships as well. Dahlman v Oakland University, 172 Mich.App. 502; 432 N.W.2d 304 (1988). Accordingly, to the extent that the trial court held that plaintiff properly stated a cause of action for breach of the covenant of good faith, we reverse. MCR 2.116(C) (8).
Although Michigan has not recognized the covenant in the employment context, an employer's attempt to injure an employee's rights may be highly relevant in a standard breach of contract case. As suggested in the seminal case of Toussaint
If, in this case, it is established that a just cause employment contract existed, the jury will be required to determine what Gash's true motive was in discharging plaintiff. If the jury determines that Gash was not acting in good faith when alleging that he was eliminating plaintiff's position, plaintiff may be entitled to damages for breach of contract.
Affirmed in part, reversed in part and remanded for proceedings consistent with this opinion. We do not retain jurisdiction.