Plaintiff, a periodontist, appeals a summary judgment for defendant, a professional corporation engaged in the practice of dentistry, in this action for breach of an employment contract. The trial court held that defendant had reasonable grounds for determining that plaintiff had consistently failed to meet contractually required standards оf treatment and that it therefore did not breach the contract in terminating him. Plaintiff argues that there are material issues of fact on whether he in fact failed to meet those standards and that he is entitled to a judicial determination of whether the grounds for his termination were correct. We generally agree with plaintiff and therefore reverse.
In August 1994, plaintiff and defendant entered into a written employment contract under which defendant agreed to employ plaintiff as a periodontist. Paragraph 2 of the agreement described the standards that plaintiff agreed to meet:
“Dentist will treat all patients in a professional manner and in compliance with all professional standards and in accordance with Company satisfaction and policies, especially gentleness. Dentist will maintain a high standard of professional appearance during office hours at Company offices and treat all Company employees with utmost respect and team spirit. Dentist agrees to abide by all policies and expectations of the Depаrtment of Periodontology.”
Paragraph 5 of the agreement established its term and the grounds for termination before the term ended:
“The term of this agreement is from October 1, 1994 to September 30, 1996. This agreement shall be automatically renewеd for unlimited similar time periods unless advance written notice is given by either party, to the other, at least twelve (12) months prior to the termination date(s). Company may immediately terminаte this agreement prior to its natural expiration if Dentist consistently fails to render proper treatment to dental patients or adhere to written policies.”
Plaintiff received a copy of the Department of Perio-dontology Policy Manual (the Manual) shortly before signing the contract. The Manual contained a number of departmental policies and described a disciplinary process and specific grounds for termination. It also provided that “[e]mployment is at the will of the Chief [of the department] and cаn be terminated at any time if the employee’s presence is considered detrimental to Gentle Dental or The Department of Periodontology.”
During plaintiffs employment, dеfendant received a number of complaints about his attitude toward patients and pain management and about his general appearance. According to defendant, those complaints were the basis for its decision to terminate plaintiffs employment in May 1996, before the expiration of the period provided in the written employment contract. At the trial court, defendant originally relied on those complaints for proof that plaintiff had in fact acted in a way that justified his termination. However, when plaintiff objеcted to the evidence as hearsay, defendant asserted that it was relevant to show defendant’s state of mind at the time of the termination, not for the truth of the matter assertеd. It maintains that position on appeal. In addition, plaintiff submitted evidence that tends to show that he did not act inappropriately. There is, thus, a genuine issue of material
Defendant states its position suсcinctly in its brief: “As a matter of law, an employer retains the unilateral right to make the factual determination of whether an employee has failed to meet its standards — in this case, proper treatment and adherence to written policies — absent an agreement to the contrary.” It further argues that neither the written employment contract nоr the Manual assigned the responsibility to anyone else. The foundation for defendant’s argument is its understanding of the Supreme Court’s decision in Simpson v. Western Graphics,
On appeal, the Supreme Court affirmed. It held that the employee handbook restricted the employer’s otherwise unlimited authority to terminate an employeе at will. Under the handbook, the employer had to have just cause in order to terminate an employee. The handbook did not, however, limit the employer’s right to determine whethеr the facts constituting just cause existed. That decision, therefore, was for the employer, not the courts. In reaching that conclusion, the court emphasized the unilateral nаture of an employee handbook:
“Although an employer’s statement of employment policy has a degree of contractual effect * * *, its terms are not necеssarily to be construed in the same way as those of a negotiated labor contract. The handbook was not negotiated. It is a unilateral statement by the employer of self-imposed limitations upon its prerogatives. It was furnished to plaintiffs after they were hired and the evidence affords no inference that they accepted or continued in еmployment in reliance upon its terms. In such a situation, the meaning intended by the drafter, the employer, is controlling * *
The obvious, and decisive, distinction between Simpson and this case is that plaintiffs right not to be terminated does not come from a unilaterally adopted employee handbook, which formed no basis of the employeе’s decision to accept employment, but from a bilateral employment contract that the parties executed as part of the hiring process. In that contract, defendant gave up its prerogative to make factual determinations about termination in a way that the employer in Simpson did not. Under paragraph 5 of that contract, defеndant may terminate plaintiff before the contract’s natural expiration only if he “consistently fails” to render proper treatment or to adhere to written policies. There is no reason to treat that contract differently from every other contract, including plaintiff’s right to a judicial determination of all factual issues related to whether he hаd consistently failed to do what the contract required or whether, in contrast, defendant breached its provisions when it terminated his employment.
To support its position, defendаnt relies on paragraph 2 of the contract, under which plaintiff agreed “to abide by all policies and expectations of the Department of Perio-dontology.” It аsserts that the Manual contains those policies and expectations and that
Because there are genuine issues of material fact on whether the complaints on which defendant based its actions were valid and whether they justified termination under the employment contract, the trial court erred in granting summary judgment to defendant.
Reversed and remanded.
Notes
We need not decide whether plaintiff is entitled to the progressive discipline provisions of the Manual to the extent that they are not inconsistent with the employment contract.