The opinion of the court was delivered by: MODARELLI
This is an action to recover damages for breach of a written contract of employment. Plaintiff, Alton S. Sawyer, was employed as superintendent of edible production by the defendant, E. F. Drew & Co., Inc., at its Boonton, New Jersey, plant for a period of five years, commencing January 3, 1949. He was discharged on July 27, 1950, after serving for one year and seven months, and he claims he was discharged without justifiable cause. The case was tried without a jury.
The issue is single: Was termination of contract by employer for justifiable cause?
The applicable law can be stated in brief:
'The servant owes the master the duty of faithfulness, whether expressed in the contract of employment or not. It is an implied, if not an express, term thereof. It follows that any conduct on his part which amounts to unfaithfulness * * * is misconduct calling for a discharge.' Carpenter Steel Co. v. Norcross, 6 Cir., 1913, 204 F. 537, 541.
Misconduct prejudicial to a master's interests is good cause for discharge, but the misconduct must be gross, e.g., insubordination, exerting a bad influence over other servants, producing injury to the employer's business. Lubriko Co. v. Wyman, 3 Cir., 1923, 290 F. 12; Allen v. Aylesworth, 1899, 58 N.J.Eq. 349, 44 A. 178; Kellems Products, Inc., v. Coley, Ch. 1932, 160 A. 639, 10 N.J.Misc. 695; and Carpenter Steel case, supra.
Unless the contract of employment is one which can be terminated at will, the employer cannot arbitrarily discharge an employee, but any misconduct inconsistent with the relation of employer and employee, or which is prejudicial or likely to be prejudicial to the interests of the employer, is good ground for an employee's discharge. In re Nagel, 2 Cir., 1921, 278 F. 105, 109. The refusal to obey reasonable lawful instructions constitutes grounds for discharge, though an employee cannot be held to literal standards of absolute obedience. Compania Constructora Bechtel-McCone v. McDonald, 9 Cir., 1946, 157 F.2d 749, 753. See also Keserich v. Carnegie Illinois Steel Corporation, 7 Cir., 1947, 163 F.2d 889.
Where the facts are in dispute, as in the instant case, what constitutes a ground for discharge is a question for the jury. Lubriko Co. v. Wyman, supra; Accord Stoffel v. Metcalfe Construction Co. 1945, 145 Neb. 450, 17 N.W.2d 3.
The burden of proving justification for the discharge rests upon the employer. The law will not assume that an employee has been derelict in his duty from the fact that he has been discharged. 35 Amer. Juris., Section 59. See 49 A.L.R. 488 et seq.
Stripped of non-essentials, the evidence discloses the following facts:
Plaintiff commenced his duties under the contract on January 3, 1949. His extensive experience with Lever Bros. Co., a large producer of vegetable oils, was utilized by defendant in setting up the new refinery. Plaintiff's immediate supervisor was Peter Kalustian, the general production superintendent. Mr. Volpp, the vice president of production, was their superior. The president of the company was Ernest F. Drew.
The chief engineer of the company, Seymour Faulkner, worked with plaintiff on the refining process but was neither above nor below plaintiff in the chain of command. Faulkner and plaintiff did not enjoy a friendly relationship with one another and their friendship was not heightened by the fact that in May of 1950 Faulkner was instrumental in securing one John A. Preston, a former colleague, to replace plaintiff as superintendent of edible production. Plaintiff was given subordinate responsibility and title. Defendant now had two $ 15,000 a year men of similar ability in the same division.
Plaintiff was experienced in this field, and defendant admittedly drew upon his valuable advice and suggestions. Just three weeks prior to plaintiff's discharge, President Drew characterized plaintiff as 'well qualified as a manufacturing executive' in an inter-office letter to Mr. Preston, plaintiff's successor.
Plaintiff testified that there were two official tests, the first in October 1949 and the second in January 1950. Defendants allege that a third test was made in May 1950, but defendant's Refinery Summaries for the months of April and May 1950 state 'Sharples did not operate' for that period. Testimony also showed that certain parts of the equipment were sent back to the Sharples people for repair or replacement at that time, so that obviously the equipment was not capable of ...