70 Mass. App. Ct. 634 | Mass. App. Ct. | 2007
The defendant, the Massachusetts Turnpike Authority (authority), appeals from summary judgment entered in favor of its former employee, Robert LeMaitre, on count I of
1. Facts. The following material facts are not disputed. Le-Maitre, a nonunion engineer, began his employment with the authority on February 9, 1975, and worked there until he retired on November 30, 2002. At all relevant times, the authority offered an incentive program to “encourage employees to use their sick leave credit only when absolutely necessary, and to reward employees who have unusually good attendance records.” The authority had complete discretion in updating and revising the incentive program and did so on several occasions between 1975 and 1996. Its employees were informed of the terms and conditions of the policy and also of the occasional modifications through a succession of handbooks, personnel policy and procedure bulletins, and policy directives (collectively, “personnel manuals”).
When LeMaitre was first hired in 1975, the medical benefit was calculated at twenty-five percent of a retiree’s accrued, unused sick leave. At some point during 1978 or 1979, the authority increased the medical benefit to fifty percent of accrued sick leave.
It is undisputed, on the other hand, that the cash payment provision was in place by December 31, 1979, and was to be
The parties agree that LeMaitre had an exceptional record of attendance with the authority for close to twenty-eight years. During that entire time, LeMaitre used only 14.5 days of sick leave, often reporting for work even when the use of a sick day would have been justified.
2. Discussion. On appeal, the authority contends that the judge erred in relying on O’Brien v. New England Tel. & Tel. Co., 422 Mass. 686 (1996), in concluding that the personnel •manuals constituted an implied contract. Thus, according to the authority, LeMaitre was paid the proper amount, as he had no contractual right to payments under the earlier provisions of the incentive program, which the authority had discontinued by the time he retired.
Whether a contract exists is a question of fact. Jackson v.
It is well settled in Massachusetts that the terms of a personnel manual may become an implied part of an at-will employee’s employment contract, and the authority does not argue otherwise. See, e.g., Pine River State Bank v. Mettille, 333 N.W.2d 622, 627 (Minn. 1983) (cited approvingly in O’Brien v. New England Tel. & Tel. Co., 422 Mass. at 693) (“personnel handbook provisions, if they meet the requirements for formation of a unilateral contract, may become enforceable as part of the original employment contract”). See also Jackson v. Action for Boston Community Dev., Inc., 403 Mass. at 13, citing Hobson v. McLean Hosp. Corp., 402 Mass. 413, 415 (1988); Weber v. Community Teamwork, Inc., 434 Mass. 761, 780-781 (2001); Ferguson v. Host Inti., Inc., 53 Mass. App. Ct. 96, 101-102 (2001). The authority instead argues that any offer contained in the personnel manuals was unenforceable because the authority retained an implied right to (and did on many occasions) modify the terms of the incentive program. Consequently, the authority asserts, because the offers contained in the personnel manuals could be modified at its own election, LeMaitre obtained no vested right to his áccrued, unused sick leave pay. In any event, the authority claims that even if LeMaitre obtained a contractual right to his accrued sick leave, LeMaitre assented to forfeiting those rights as evidenced by his continued employment with the authority after changes were announced that “superseded” previous policies.
a. The existence of an offer. Apparently relying on Jackson v. Action for Boston Community Dev., Inc., 403 Mass. at 14-15, the authority claims that any offers or promises made by the express terms of the incentive program were “illusory,” and thus nonbinding, solely because the authority made frequent unilateral changes to the provisions in the personnel manuals. See Graphic Arts Finishers, Inc. v. Boston Redev. Authy., 357 Mass. 40, 43 (1970) (“a promise that binds one to do nothing at all is illusory and cannot be consideration”), citing Gill v. Richmond Co-op. Assn., 309 Mass. 73, 79-80 (1941).
According to the authority, even though it was not expressly stated in the personnel manuals, LeMaitre was nevertheless aware that the authority retained the right to alter the incentive program whenever it chose to do so. Recognizing that O’Brien v. New England Tel. & Tel. Co., supra, “call[ed] for the provisions of [personnel] manuals to be enforced to the extent that they instill a reasonable belief in the employees that management will adhere to the policies therein expressed,” Ferguson v.
The authority regularly distributed the personnel manuals, which spelled out in explicit detail the terms of each version of the incentive program in effect at different times during the course of LeMaitre’s employment. LeMaitre and presumably other employees were even required to sign for them. See O’Brien v. New England Tel. & Tel. Co., supra at 694, quoting from Woolley v. Hoffmann-La Roche, Inc., 99 N.J. at 299 (“the manual’s preparation and distribution is, to us, the most persuasive proof that it would be almost inevitable for an employee to regard it as a binding commitment, legally enforceable, concerning the terms and conditions of . . . employment”). Moreover, as to the express terms of the incentive program, the authority does not argue that they were meant only to provide guidance to its employees. See, e.g., Jackson v. Action for Boston Community Dev., Inc., 403 Mass. at 14-15 (noting that “[t]he personnel manual’s language that it is provided for ‘guidance’ as to the defendant’s ‘policies’ ” is some indication “that any ‘offer’ made by the defendant in distributing the manual was illusory”). Indeed, the authority admits the incentive program was intended to encourage employees to decline the use of sick time that they might otherwise be eligible to use. Additionally, the authority’s explicit promises to make future cash and medical payments conditioned on employees’ remaining with the authority for at- least ten years was an inducement for LeMaitre
Moreover, had the authority intended to make no legally binding promises, it should have included in the personnel manuals “in a very prominent position ... an appropriate statement that there is no promise of any kind by the employer contained in the manual; that regardless of what the manual says or provides, the employer promises nothing . . . .” Ferguson v. Host Intl., Inc., 53 Mass. App. Ct. at 103, quoting from Woolley v. Hoffmann-La Roche, Inc., 99 N.J. at 309. None of the materials in the record before us contains any language that comes close to satisfying this requirement.
“It would be unfair to allow an employer to distribute a policy manual that makes the workforce believe that certain promises have been made and then to allow the employer to renege on those promises. What is sought here is basic honesty: if the employer, for whatever reason, does not want the manual to be capable of being construed by the court as a binding contract, there are simple ways to attain that goal.”11
Ferguson, supra, quoting from Woolley, supra.
At all relevant times, each version of the incentive program offered a specified future economic reward in exchange for an employee’s good attendance. Indeed, the explicit purpose, as stated in the personnel manuals, was to “encourage employees to use their sick leave credit only when absolutely necessary, and . . . reward employees who have unusually good attendance records.” Of necessity, however, good attendance requires continued employment, and implicit in the program’s generous terms and ten-year service requirement is an intent to attract qualified applicants and to induce employees to remain with the
We therefore agree with the motion judge that where it is undisputed that LeMaitre, in reliance on the promises of future payment for his accrued, unused sick leave, completed the requisite ten years of service, exhibited an exemplary attendance record over a career with the authority that spanned nearly three decades, and otherwise complied with the terms and conditions called for under each version of the incentive program, his performance constituted a valid acceptance of the authority’s successive offers, thus meeting all the requirements for the formation of a binding unilateral contract in each instance.
3. Calculation of damages on remand. As previously noted, see note 8, supra, LeMaitre’s damages award pursuant to the cash payment provision did not reflect the judge’s findings. Additionally, both parties acknowledge on appeal that the calculation of the amount awarded to LeMaitre under the medical coverage provision was in error. See, e.g., note 6, supra. Consequently, the matter must be remanded for the judge’s recalculation of damages.
4. Conclusion. As to count I, alleging breach of contract, there was no error in the denial of the authority’s motion for summary judgment and the allowance of LeMaitre’s motion therefor. The judgment as to count I is vacated, and the matter is remanded solely for a determination of damages owed Le-Maitre consistent with this opinion. LeMaitre’s request for costs is allowed. See Mass.R.A.P. 26(a), as amended, 378 Mass. 925 (1979).
So ordered.
LeMaitre did not challenge the authority’s calculation of amounts owed him for sick leave accrued from 1996 until the date of his retirement.
The judge allowed summary judgment for the authority as to count II of LeMaitre’s complaint, alleging violation of G. L. c. 149, §§ 148 and 150 (the Wage Protection Act). LeMaitre does not appeal from that ruling, and it is thus not before us.
In 1981,1989, and 1996, LeMaitre signed certificates of receipt acknowledging that he had read the sick leave policy and confirming “that the Authority is directing me to read and comply with each policy,” including the sick leave incentive program.
In the top right-hand comer of the first page of each bulletin, the authority
In his brief, LeMaitre acknowledges that when the judge calculated damages due on the medical benefit, he valued it at fifty percent commencing on February 9, 1975, LeMaitre’s date of hire, even though the benefit then was set at only twenty-five percent. An issue arises, however, as to when the rate changed from twenty-five to fifty percent, the resolution of which cannot be made on this record. In any event, the ambiguity of the record on this point is not material to our conclusion that LeMaitre is due some amount under the medical coverage provision, notwithstanding its elimination in October, 1996. See discussion, infra.
The record on appeal does not indicate whether LeMaitre met the eligibility criteria for the authority’s 1996 early retirement program. In any event, he remained with the authority until 2002.
LeMaitre claimed that the cash benefit was already in place when he commenced employment with the authority in 1975. The motion judge found that the incentive program contained no cash benefit provision until December 31, 1979. However, as the damages award was not consistent with the judge’s findings, the award must be corrected on remand.
For example, on one occasion, LeMaitre had surgery to insert a steel pin in his right hand, which limited his ability to drive. He nevertheless managed to get a ride to work so he did not use any sick time. On another, he dislocated his shoulder, yet worked rather than use sick time. Additionally, so as to avoid using sick time, he scheduled medical, eye care, and dental appointments after work hours and frequently came to work despite an earache, cold, or flu symptoms.
The authority also argues that LeMaitre’s breach of contract action is barred by the relevant statute of limitations, a claim we conclude to be without merit. “The general rule is that a contract action accrues at the time the
Although the authority claims that its use and placement of the single word “supersedes” in the upper right-hand comer of the first page of each bulletin accomplished this goal, we conclude otherwise. On its face, it does nothing more than announce a change from the previous bulletin. At best, the word “supersede” is ambiguous, and must be construed against the authority as the drafter. See Electronic Data Sys. Corp. v. Attorney Gen., 440 Mass. 1020, 1021 (2003). Moreover, a single word buried in the top comer of one page contained in multi-page bulletins conveys no strong statement indicating that the authority makes “no promise of any kind” in the incentive program. Compare Ferguson v. Host Intl., Inc., 53 Mass. App. Ct. at 99 n.5, 101, 103 (text hidden in obscure section of personnel manual providing that the employer “reserves its rights to modify, change, disregard, suspend or cancel at any time without written or verbal notice all or any part of the [manual’s] contents” was “functional equivalent of fine print” and thus insufficient to make terms
Glynn v. Clerk of the Superior Ct. for Criminal Business in Suffolk County, 404 Mass. 1002 (1989), is not to the contrary. There, unlike here, without the protection of either a statute or proof of an enforceable contract, the employee could not establish that he “had a reasonable expectation in the circumstances shown on the record that. . . future benefits [under a prior sick leave policy] were guaranteed.” Id. at 1003, citing Foley v. Springfield, 328 Mass. 59, 61 (1951), and McCarthy v. Sheriff of Suffolk County, 366 Mass. 779, 782, 784 (1975).
Retirement was therefore not a condition precedent to each offer’s ripening into an enforceable contract, as the authority suggests. Rather, retirement was merely the event that triggered the authority’s time to perform under each legally binding agreement. Moreover, our conclusion that the authority failed to indicate that any policy changes were to have retroactive effect, see note 11, supra, also disposes of the authority’s argument that LeMaitre forfeited any rights he may have had by continuing on the job after changes were made to the incentive program.