Kunda v. Caremark PHC, L.L.C.
119 F. Supp. 3d 56
| E.D.N.Y | 2015Background
- Runda was employed by CVS from 2006 and served as Store Manager at Mattituck until his termination in March 2014 after an investigation into an alleged workplace interaction captured on video.
- CVS suspended Runda pending investigation; after viewing the video, CVS terminated him on March 5, 2014; Runda alleges the video showed no harassment or physical altercation and that he was wrongfully terminated.
- Runda’s complaint asserts breach of contract based on CVS’s Employment Handbook, which lists examples of conduct that may lead to discipline or termination.
- The Handbook contains an explicit disclaimer stating it is only management guidelines, does not create an employment contract, reserves the right to change policies, and affirms at-will employment; Runda signed an acknowledgement of the Handbook in 2009.
- Runda filed suit in state court alleging arbitrary/improper termination; CVS removed the case to federal court and moved to dismiss under Fed. R. Civ. P. 12(b)(6).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CVS’s handbook terms created an implied-in-fact employment contract limiting termination | Runda contends the Handbook’s disciplinary list shows he did not engage in listed misconduct and thus CVS breached contractual protections | CVS argues the Handbook contains disclaimers and at-will language negating any contractual promise and contains only non‑exhaustive examples | Court held no implied-in-fact contract: the Handbook’s explicit disclaimers and at-will language preclude contract formation |
| Whether plaintiff alleged sufficient mutual assent to convert handbook into binding contract | Runda relies on the Handbook being incorporated into the complaint as evidence of contractual terms | CVS emphasizes lack of any explicit limitation on its termination rights and the Handbook’s statement that it is not a contract | Court held plaintiff failed to plead mutual assent or an express limitation that would overcome presumption of at‑will employment |
| Whether reliance on internal policies can support wrongful termination claim under NY law | Runda argues reliance on the Handbook’s policies shows improper termination | CVS contends New York requires an express written policy limiting discharge and detrimental reliance to state such a claim, which are absent here | Court held New York law’s pleading burden not met; routine manuals with disclaimers cannot be converted into binding agreements |
| Whether the Handbook’s list of terminable offenses creates a mandatory or exclusive termination policy | Runda treats the listed offenses as the basis for permissible termination criteria | CVS notes the list is prefaced as examples and explicitly non‑exhaustive; the Handbook warns employees they can be terminated for violations elsewhere | Court held the list is non‑exclusive and does not limit CVS’s right to terminate, so it cannot form the basis for breach of contract |
Key Cases Cited
- Maas v. Cornell Univ., 94 N.Y.2d 87 (N.Y. 1999) (handbook disclaimers prevent implication of binding employment contract)
- De Petris v. Union Settlement Assn., 86 N.Y.2d 406 (N.Y. 1995) (breach-of-contract based on employer policy requires express written limitation and detrimental reliance)
- Baron v. Port Auth. of N.Y. & N.J., 271 F.3d 81 (2d Cir. 2001) (elements for implied contract via employer writings; manuals not easily converted into contracts)
- Lobosco v. N.Y. Tel. Co./NYNEX, 96 N.Y.2d 312 (N.Y. 2001) (disclaimer in manual preserves at‑will employment and forecloses breach claim)
- Brown v. Daikin Am., Inc., 756 F.3d 219 (2d Cir. 2014) (employee must show an express limitation in the employment agreement to rebut at‑will presumption)