Lead Opinion
Oscar Darlington appeals from the judgment n.o.v. entered on September 30, 1983 in the Court of Common Pleas of Philadelphia County. We affirm.
Darlington had been employed as an engineer for General Electric for fifteen years when, in 1976, he was accused of
Our scope of review in this case is as follows: “On an appeal from the entry of a judgment n.o.v., all of the evidence and the reasonable inferences therefrom must be viewed in the light most favorable to the verdict-winner.” Handfinger v. Philadelphia Gas Works,
In the instant case, appellant Oscar Darlington contends that his employment at General Electric was not “at-will” and that his discharge was in contravention of an employment contract entered into at the time he was hired. He also alleges that the manner in which the company effected his discharge constitutes a wrongful discharge.
The facts, viewed in the light most favorable to the appellant as verdict winner, are as follows. In late 1961, appellant and General Electric entered into an employment contract. Appellant, a professional engineer was already several years into his career when he was recruited to work for General Electric. At his job interview with the Manager of Professional Recruitment, Anthony J. Marini, a discussion ensued concerning appellant’s intent to settle into a
Appellant alleges that his discharge was in contravention of an employment contract entered into at the time he was hired in 1961 which provided that the term of his employment was to be for a reasonable length of time. If such a contract existed, and if the reasonable time had not passed, appellant’s employment could not have been terminated at-will but could only have been rightfully severed with “just cause.” Before assessing the merits of this controversy, we must first briefly examine the history of employment at-will.
Since at least 1891, Pennsylvania courts have recognized the rule that, absent a contract, employees may be discharged at any time, for any reason, or for no reason at all. Henry v. Pittsburgh & Lake Erie Railroad Co.,
“The modern reality of relative immobility in the labor market, encouraged by a web of ties that bind the employee to the job, places in question a doctrine that rests on a theoretical non-mutuality of obligation, and may have the effect of empowering the employer to work considerable unfairness in particular cases or to use the discharge weapon to subvert established policies.
“Some commentators have urged that all employees in this country should enjoy general protections against discharge without ‘just cause.’ Such a change would be most appropriately accomplished by legislation.” (Emphasis added.)
Even had we been asked to review the question of whether the at-will presumption should be abrogated, we are not at liberty to so hold given our Supreme Court’s stance on the issue. See Geary v. United States Steel Corporation,
The first issue we must address is whether the discharged employee, Oscar Darlington, has overcome the at-will presumption by presenting evidence which, when viewed in the light most favorable to him as verdict winner, shows that he and General Electric contracted for something other than at-will employment, and that he is entitled to relief based on such contract.
Appellant argues that he and General Electric entered into a contract for a reasonable length of time. In support of this, he cites the following: Appellant sought a professional position at General Electric and was offered employment in a program involving a new space engineering facility which dealt with long-term government projects. “Flexibility” on the part of his employers was stressed, as was an employer commitment to work through any employer-employee problem which might arise. When a problem did arise (the alleged account violations), appellant was asked to provide explanations for some of his suspect conduct. This company action, according to appellant, serves to clarify the parties' intent that he could only be discharged for just cause. Moreover, Mr. Marini, Manager of Professional Recruitment, testified that his role was to insure that appellant was given a fair hearing.
At trial, Marini disclaimed authority to bind the company to a contract for any specific duration. However, he testified that he had the authority to state the terms of salary and project assignment to the new employee. Even if General Electric did not afford Marini express authority to bind the company to a contract for a specific duration, it may have clothed him with apparent authority to do so. “Apparent authority may ... arise because the agent has been placed in such a position that a person of ordinary prudence, who was conversant with the nature of the particular business and its usages, would be justified in believing that the agent was authorized.” W.E. Sell, Sell on Agency § 35 (1975). However, we need not inquire as to whether
“There is much litigation in service contracts over the length of the term of employment. This is due to the fact that employment contracts ... are usually very informal, with brevity in wording and much uncertainty in meaning.” 3A Corbin, Contracts § 684 (1960). “The formation of the relationship of master and servant or employer and employee is in general determined by the principles governing the formation of other contracts.” 53 Am.Jur.2d Master and Servant § 17 (1970).
“[I]t is the intention of the parties which is the ultimate guide, and, in order to ascertain that intention, the court may take into consideration the surrounding circumstances, the situation of the parties, the objects they apparently have in view, and the nature of the subject matter of the agreement. Thus, contracts which do not fix a definite time for the duration of the relationship which they create are sometimes construed as providing for a reasonable time or some particular period inferred from the nature and surrounding circumstances of the undertaking.”
Price v. Confair,
Rather than singling out any lone factor, appellant contends that the totality of circumstances surrounding his hiring evinces the parties’ intent that the employment was
The fact that appellant was hired to fill a professional position offers no indicia whatsoever that the parties intended to overcome the at-will presumption. Were we to
The fact that appellant was hired to work on long-term government projects is not helpful to his allegation that he could only be discharged for cause.
Whether a particular employment contract is terminable-at-will is a question of interpretation.
“The question of interpretation of language and conduct — the question of what is the meaning that should be given by a court to the words of a contract, is a question of fact, not a question of law.”
“We must bear in mind, however, that this question of fact is like other questions of fact in this: it may be a question that should be answered by the judge rather than by the jury.”
“[I]f the evidence is so clear that .no reasonable man would determine the issue before the court in any way but one, the court will itself determine the issue.”
3 A. Corbin, Corbin on Contracts (1960). (Emphasis added). If the meaning is “so clear ... a jury’s verdict to the contrary would be set aside.” Id.
The term long range project is, in and of itself, too vague and unspecified to overcome the presumption. “Generally, employment contracts for broad, unspecified durations do not overcome the [at will] presumption.” Forman v. BRI Corporation,
Courts also find that terms such as employment will continue so long as performance is satisfactory are too ambiguous to overcome the presumption. Fleming v. Mack Trucks,
“Although we endorse the applicability of the good faith and fair dealing principle to employment contracts, its essence is the fulfillment of the reasonable expectations of the parties. Where employment is clearly terminable at will, a party cannot ordinarily be deemed to lack good faith in exercising this contractual right.”
Definiteness is required to overcome the at-will presumption. Professor Farnsworth has written:
“Conscious of the traditionally intimate nature of the relationship between employer and employee, courts have regularly found that [there is no language in the contract relevant to termination of the employee] despite absolute promises on both sides. Then by implication, they have almost invariably supplied a term allowing either party to terminate at will.”
E.A. Farnsworth, Contracts 532 (1982) (emphasis added). It is, of course, an established principle that an employer and an employee can effectively contract for a specific duration, (for example, when they agree that the employment is to last for two years). No such contract exists presently. Courts are highly reluctant to make definite
Appellant also contends that the fact that General Electric asked him to provide explanations for some of his suspect conduct is relevant to clarifying the parties’ intent that the contract could be terminated only for just cause. The parties’ own interpretation of a contract, as shown by their acts and declarations, “will ordinarily be adopted by the court.” Armstrong v. Standard Ice Co.,
In Adams v. Budd Co.,
Appellant also maintains that there was sufficient additional consideration present which, by itself, was sufficient to overcome the at-will presumption. He argues that he had previously been employed at Honeywell where he was being urged to assume a supervisory position and that General Electric solicited him to work for it. Moreover, while at General Electric, he was asked to perform additional duties which included teaching a course at Penn State (without additional time to prepare) and. a heavy travel schedule (which forced him to remain away from his family, and for which he was paid no overtime — even when he sometimes worked double shifts). These additional duties, he contends, cost him time and money but put him no further ahead in General Electric’s evaluation or compensation of his job performance.
Since at least 1946, Pennsylvania courts have recognized that even contracts for an indefinite duration can be brought out of the at-will presumption by a showing that the employee gave his employer additional consideration other than the services for which he was hired. See Lucacher v. Kerson, supra. The term “consideration” is not used here as it is in the usual contractual context to signify a validation device. The term is used, rather, more as an
A classic example of the effect of sufficient additional consideration is found in a lower court case, Huguet v. Foodsales, Inc., 19 Pa.D. & C.3d 376 (1980). There, the employee was hired “for so long as he could ‘cut the mustard.’ ” Id. at 379. Despite this vague contractual language, which itself is clearly insufficient to overcome the at-will presumption, the court found that the contract was not terminable at-will because the new employee gave consideration additional to his services incident to his hiring. The additional consideration was the sale of employee’s business to the employer. The presence of sufficient additional consideration indicates that the employee has come to the employment relation with bargaining strength greater than that of the usual employee. When additional consideration is present, courts infer that the parties intended that
In Bravman v. Bassett Furniture Industries, Inc., 552 F.2d 90 (3d Cir.1977), Mr. Bravman, an established furniture manufacturer’s representative, gave up representation of all other furniture manufacturers in return for the exclusive right to solicit orders for certain Bassett products. During the employment relationship, at Bassett’s insistence Bravman hired an associate at his own expense. Prior to his employment with Bassett, Bravman had been able to offer his customers a full line of furniture but had to forego that luxury when he went to work for Bassett. During his employment with Bassett, Mr. Bravman personally guaranteed the credit worthiness of many of the accounts from whom Bravman solicited orders. Bravman turned down other opportunities to represent other manufacturers. When Bassett attempted to deprive Mr. Bravman of his representation of their product lines, the trial court sustained a directed verdict in Bassett's favor. The appellate court reversed, however, holding among other things, that a jury could have found the presence of additional consideration.
Additional consideration will also be regarded as sufficient when the new employee must undergo a substantial hardship such as moving his family to take the new position. See Lucacher v. Kerson, supra.
Thus, a court will find “additional consideration” when an employee affords his employer a substantial benefit other than the services which the employee is hired to perform, or when the employee undergoes a substantial hardship other than the services which he is hired to perform. “If the circumstances are such that a termination of the relation by one party will result in great hardship or loss to the other, as they must have known it would when they made the contract, this is a factor of great weight in inducing a
In the instant case, we find that appellant did not render additional consideration sufficient to overcome the at-will presumption. The fact that appellant decided to forego any opportunity at Honeywell, his former employer, to assume a supervisory position when he went to work for General Electric appears to us not to be a sufficient detriment to constitute sufficient additional consideration, but rather was simply a reasoned choice of a new career goal. Termination by General Electric fifteen years into his service does not qualify as “great hardship or loss” to appellant which both parties contemplated at the time the contract was made. See 3 A. Corbin, Corbin on Contracts § 684 (1960).
Nor do the additional duties performed by appellant, including a heavy travel schedule and teaching a course at Penn State, constitute additional consideration. The heavy travel schedule, which forced appellant to be away from his family and for which he was not paid overtime even when he worked double shifts, seems to be a detriment commensurate with that incurred by all manner of salaried professionals. And, appellant does not allege that had he refused to teach the course, his position with General Electric would have been in jeopardy.
In short, appellant did not bargain from the enhanced position that we would require of one who has given his employer sufficient additional consideration. He has not incurred an extraordinary detriment or bestowed an extraordinary benefit beyond the normal services for which he was hired. Thus, the at-will presumption has not been overcome by evidence of additional consideration.
The additional consideration rule usually does not offer relief from the at-will presumption to the typical, lower echelon employee who brings nothing beyond his skills to the employment. Nor does it offer relief to the typical white collar professional such as appellant. However, do
Appellant also contends that prior to being hired at General Electric, he inquired as to the procedures that would be followed in case he encountered a problem with his employers. Appellant testified that he was given a small manual containing the procedures to be followed in the event such a problem arose. He further argues that, even if the manual was not part of the bargained-for contract of employment, he relied-on it. In DeFrank v. County of Greene,
Professor Henry Perritt has given succinct articulation to the question confronting us.
[T]raditional unilateral contract doctrine requires that the employee prove that the promise alleged was communicated to him or her under circumstances that the employer should have known would induce reliance, and that the employee reasonably relied on the promise to his or her detriment. Then, having established an enforceable promise, the plaintiff-employee must show a breach, with reference to the terms of the promise. For example, a termination without good cause is not a breach, unless the employer promised to discharge only for cause; breach of a promise to follow certain procedures in terminating employees is shown only by proving that the procedures were not followed. In the latter case, whether or not there was cause for dismissal is immaterial.
Appellant presented a company handbook as evidence of the procedures to be utilized in case a problem arose. In Richardson v. Charles Cole Memorial Hospital,
*205 If the employer made a promise, either express or implied, not only to pay for the service but also that the employment should continue for a period of time that is either definite or capable of being determined, that employment is not terminable by him ‘at will’ after the employee has begun or rendered some of the requested service or has given any other consideration (or acted in reliance on the promise in such a manner as to make applicable the rule in Restatement, Contracts, § 90). This is true even though the employee has made no return promise and has retained the power and legal privilege of terminating the employment ‘at will.’ The employer’s promise is supported by the service that has been begun or rendered or by the other executed consideration or action in reliance.
1 A. Corbin, Contracts § 152.
Appellant also argues that General Electric lacked sufficient cause to discharge him and that it acted unreasonably and in bad faith. He further alleges that during the period of time for which he was being investigated by the company, he was not represented by anyone acting in his interest. There was, according to appellant, an “arbitrariness” about the investigation, with the company hurriedly trying to force him to resign or face accusations of criminal wrongdoing. Moreover, he alleges that the investigation should have been handled in such a way as to allow him access to questioned items and an opportunity to be heard in his own defense. In short, he alleges that the manner in which the investigation was carried out cries out for us to hold the discharge “wrongful.”
The handbook procedures cited by appellant do not guarantee a new employee that General Electric will decide employment disputes by referring to the rules applied in the judicial forum. Nor do they guarantee that the procedural protections so highly cherished in this court will be followed in the corporate arena when decisions to terminate are made. They simply state a procedure to be followed when a dispute arises between employer and employee. The guide
Appellant cites Yaindl v. Ingersoll-Rand,
In recent times, courts have become more willing to examine the circumstances of a discharge to see if it contravenes certain notions of “public policy” and to afford relief accordingly. However, the aura of certainty engendered by the at-will presumption has not been significantly disrupted
The public policy exception has at times been called a contractual remedy. “Any contract, including a contract at will, which is terminated for a reason contrary to the public policy of Pennsylvania gives rise to a claim for breach of contract.” McGinley v. Burroughs Corporation,
It may be granted that there are areas of an employee’s life in which his employer has no legitimate interest. An intrusion into one of these areas by virtue of the employer’s power of discharge might plausibly give rise to a cause of action, particularly where some recognized facet of public policy is threatened. The notion that substantive due process elevates an employer’s privilege of hiring and discharging his employees to an absolute constitutional right has long since been discredited. But this case does not require us to define in comprehensive fashion the perimeters of this privilege, and we decline to do so. We hold only that where the complaint itself discloses a plausible and legitimate reason for terminating an at-will employment relationship and no clear mandate of public policy is violated thereby, an employee at*208 will has no right of action against his employer for wrongful discharge.
Pennsylvania state appellate courts have dealt with “wrongful discharge” in only a handful of published opinions since Geary. See Comment, The Role of Federal Courts in Changing State Law: The Employment At Will Doctrine in Pennsylvania, 133 U.Pa.L.Rev. 227 (1984). Pennsylvania recognizes a cause of action for wrongful discharge “only in the absence of a statutory remedy and only when important and well recognized facets of public policy [are] at stake.” Rettinger v. American Can Co.,
In the instant case, we have been presented no specific allegation that General Electric discharged Mr. Darlington with the specific intent of harming him. More
As for whether the discharge calls for a remedy due to a violation of public policy, we first note the reluctance of courts to allow recovery based on novel theories of public policy. See Callahan v. Scott Paper Co.,
“Public Policy” is a term difficult to define. In Cisco v. United Parcel Services, Inc.,
A clear statement of what public policy actually consists is hindered by its varying manifestations. As the Supreme Court of New Jersey observed:
The sources of public policy [which may limit the employer’s right of discharge] include legislation; administrative rules, regulation, or decision; and judicial decision. In certain instances, a professional code of ethics may contain an expression of public policy____ Absent legislation, the judiciary must define the cause of action in case-by-case determinations.
Pierce v. Ortho Pharmaceutical Corp.,84 N.J. 58 , 72,417 A.2d 505 , 512 (1980), in Pierce, Mann, Roberts, “Employee Termination at-Will: A Principled Approach,” 28 Villanova L.R. 1, 26 (1982).
Pennsylvania courts have held that employees may not be discharged for serving jury duty, Reuther v. Fowler & Williams, Inc., supra; nor for their refusal to submit to a polygraph test (as a statute forbids such testing), Perks v. Firestone Tire & Rubber Co.,
On balance, even assuming that the manner of effecting the discharge in the instant case was accomplished in an arbitrary fashion and that appellant was not given an adequate chance to defend against evidence which was stacked against him, he has not shown that any statutory exception to the at-will rule applies, nor has he shown any public policy violation. It may even be that the employer simply wanted to be rid of appellant and so did not give him a fair hearing. This does not rise to the level of a public policy violation. The policy underlying the a't-will presumption mandates that where there is no contract to rebut the at-will presumption, and where no public policy has been violated by the discharge, we must weigh the employer’s interest in running his business more heavily than all the
We conclude that the evidence failed to demonstrate any legal basis for recovery and that the trial court’s entry of judgment n.o.v. was correct.
Judgment affirmed.
Concurrence Opinion
concurring:
I agree with the majority’s conclusion that the trial court should be affirmed because appellant has failed to establish that General Electric breached a contract when it discharged him. However, I write separately to address certain ramifications of at-will employment which the majority touches but does not emphasize.
In this case appellant sought to remove himself from the status of at-will employment by establishing an enforceable employment contract and its breach. First, appellant contends that the dealings between the parties show that he was promised employment in a “long range program” which created a contract of employment for a “reasonable length of time.” The majority is correct when it states that such expressions as “permanent employment,” “reasonable length of time” and “long range” do not create a contract for a specific tenure (length) of employment. The issue was decided in Richardson v. Charles Cole Memorial Hospital,
The majority’s thorough opinion addresses the general requirements for converting at-will employment into something more. The majority correctly concludes that the “additional consideration rule usually does not offer relief from the at-will presumption to the typical, lower echelon
However, the majority’s comprehensive discussion does not address whether employees can establish rights beyond at-will employment by means other than the additional consideration rule. I think they can.
Relying on an employment manual or handbook provided by the employer, an employee can establish contractual rights which prevent his being treated as an at-will employee subject to dismissal for any reason whatsoever or for no reason at all.
Provisions in a. handbook or manual can constitute a unilateral offer of employment which the employee accepts by the continuing performance of his or her duties. See Banas v. Matthews International Corp.,
In most of the cases applying the unilateral contract theory, the employee has used the terms of an employee manual as the source of the promises on which he bases his contractual claim. See Banas v. Matthews International Corp., (Beck, J., concurring and dissenting). Appellant unsuccessfully makes a similar claim in the case sub judice. Appellant contends that certain provisions in General Electric’s Handbook for Exempt Employees entitled “Problem Solving” constituted contractual obligations which were breached by General Electric. The majority does not actually decide whether the handbook had contractual significance, but concludes that even if it did, it did not create a contract whereby appellant could be dismissed only for cause.
I would add to the majority’s conclusion my conviction that the handbook has contractual significance although appellant has no enforceable right under it for continued employment. I would so hold based on the well-reasoned decisions of our sister states, especially the unanimous holding of the New Jersey Supreme Court in Woolley.