Plaintiff appeals as of right from the trial court’s November 13, 1987, order granting defendant’s motion for summary disposition pursuant to MCR 2.116(C)(7) and (10). We reverse.
On January 25, 1983, plaintiff wаs terminated from his employment with defendant, Michigan Consolidated Gas Company. Plaintiff was one of five shift supervisors. Three of the shift supervisors were white. Plaintiff and the other supervisor are black. There is no dispute that plaintiff’s termination was the result of a work force reduction. In January, 1983, defendant underwent a significant reduction of operations due to its economic position. As a result, two of the five supervisory positions were eliminated. Plaintiff and the other black supervisor were both laid off.
Before January, 1983, defendant formulated a policy establishing guidelines for the anticipated termination of several hundred nonunion employees due to the economically motivated work force reductions. Defendant’s policy provided that, where a position had multiple incumbents and the number of slots were reduced, the selection of employees to be released was tо be based on business-related criteria including performance ratings, presence or absence of skills critical to the organization, and dеpendability. Plaintiff and the other supervisors had equivalent performance ratings and were equally dependable.
Plaintiff claimed that he was improperly selected for release from employment since he possessed a third-class refrigeration license that defendant had stated wаs required for the job while one white supervisor was retained even though he did not have such a license. It is undisputed that *534 the retained supervisors had substantially more seniority than plaintiff.
On November 19, 1985, plaintiff filed a complaint in Wayne Circuit Court, alleging racial discrimination in violation of the Civil Rights Act, MCL 37.2101
et seq.;
MSA 3.548(101)
et seq.,
a 42 USC 1981 claim, and а breach of contract claim based on
Toussaint v Blue Cross & Blue Shield of Michigan,
On December 19, 1985, defendant had this action removed to federal court based on the 42 USC 1981 claim. On Februаry 5, 1987, the federal district court declined to exercise pendent jurisdiction over plaintiff’s state law claims and remanded the state Civil Rights Act claim and thе Toussaint claim back to Wayne Circuit Court. The federal district court retained jurisdiction over the § 1981 claim. Neither party appealed the federal сourt’s order of remand.
The 42 USC 1981 claim was tried before a federal jury in February, 1987, and the jury returned a verdict of no cause of action. In reaching its verdict, the jury determined that defendant did not intentionally discriminate against plaintiff in deciding to terminate him.
On August 4, 1987, defendant moved for summary disposition on the remanded stаte claims in Wayne Circuit Court. Defendant argued that plaintiff’s state Civil Rights Act claim was barred by res judicata and that the Toussaint claim failed as a matter of law.
On November 6, 1987, the trial court ruled that plаintiff’s state Civil Rights Act claim was barred by res judicata since the federal jury had already found in its verdict form that defendant did not intentionally discriminate against plаintiff in terminating him. The trial court further granted
*535
defendant’s motion on the
Toussaint
claim, based on
Friske v Jasinski Builders, Inc,
On appeal, plaintiff first argues that his state Civil Rights Act claim is not barred by the doctrine of res judicata. We agree.
Res judicata is the doctrine which bars a subsequent action between the same parties when the facts or еvidence essential to the maintenance of the two actions are identical, and applies only when the issues and the parties or their privies in the prior action are identical.
Roberts v City of Troy,
There are three prerequisites to the application of the doctrine of res judicata: (1) thе prior action must have been decided on its merits; (2) the issues raised in the second case must have been resolved in the first; and (3) both actions must have involved the same parties or their privies.
Roberts, supra.
A summary judgment is a judgment on the merits which bars relitigation on the basis of res judicata.
Id.
A federal court dismissal without prejudiсe, however, does not comprise an adjudication on the claims made and res judicata will not bar the plaintiff from later bringing the claims in a state court.
Annabel v C J Link Lumber Co,
In the present case, plaintiff brought the 42 USC 1981 claim, the state Civil Rights Act claim, and the Toussaint claim in his complaint in Wayne *536 Circuit Court. This case was then removed to federal court but the fеderal judge declined to exercise pendent jurisdiction over the state Civil Rights Act and Toussaint claims and remanded those claims back to state court. Sinсe plaintiffs state Civil Rights Act claim was not decided on the merits and was not dismissed with prejudice by the federal court, that claim should not be barred by the doсtrine of res judicata. The federal court’s decision in declining to exercise jurisdiction over the pendent state law claims in this case did not cоnstitute an adjudication on the merits and should not create a situation in which the plaintiffs remanded state claims may be barred by the doctrine of res judiсata. In this case, plaintiff did not split his causes of action and prudently raised all of his claims in one complaint. Accordingly, we find that the doctrine of res judicata is not applicable under the facts of this case and that the trial court erred in holding that plaintiffs state Civil Rights Act claim was barred by res judicata.
Plaintiff also argues that the trial court erred in granting defendant’s motion for summary disposition on plaintiffs contract claim under Toussaint. We agree.
Oral and written statements by an employer of its personnel policies and procedures can give rise to contractual rights to an employee. Toussaint,
supra,
pp 598-599;
Dixon v W W Grainger, Inc,
Although, as in Friske, supra, the termination of an employee due to economically motivated business reductions ordinarily does not give rise to a wrongful discharge claim, a wrongful discharge claim under Toussaint may arise where an employer establishes procedures for the reduction of its work force and fails to comply with those procedures in terminating an employee. Based upon our careful review of the record in this case, we find that plaintiff adequately alleged a breach of contract claim under Toussaint and that the trial court erred in granting defendant’s motion for summary disposition since questions of fact remained аs to whether plaintiff was properly terminated pursuant to defendant’s policies and procedures.
Reversed and remanded for further proceedings. We do not retain jurisdiction.