Beetel, J.c.c., Temporarily Assigned.
This is a suit by a former employee for breach of employment contract and by the same employee and by his wife (also employed but without an employment contract), for defamation arising from letters written to the Unemployment Compensation Commission pursuant to a request for separation information.
Plaintiff Andrew Rogozinski sued Airstream by Angell, Inc. and Emmett Angell, its president, in a three-count complaint. In the first count he sued for breach of employment contract. By the second count he charged defamation resulting from a letter written by Emmett Angell in response to a request for separation information by the Unemployment Compensation Commission. In the third count plaintiff Ginger Rogozinski sued Emmett Angell for libel arising from a similar letter written to the Unemployment Compensation
Commission pursuant to a request for separation information as to her.*fn1
Defendant claims that the dismissal of Andrew Rogozinski was justified and that the letters written to the Unemployment Compensation Commission were not defamatory, or at least that the truth constitutes the defense or that the public duty to give such information provides a privilege.
Defendant's proofs centered around the damage allegedly done to the Service Department and Body Department by Andrew Rogozinski and in the Parts Department by Ginger Rogozinski during their tenure in these respective posts. Andrew Rogozinski allegedly handled customers and employees badly, failed to return warranty parts to Airstream's insurance carrier, Caravan Insurance Company, for credit and failed to complete paper work for the purpose of obtaining reimbursement for insurance repair work. Andrew Rogozinski offered conflicting proofs.
Defendant alleged that Ginger Rogozinski caused a drop in sales during her operations, but this, it was shown, was based largely upon data that was incomplete for the period during which she was in charge of the Parts Department. Indeed, she testified convincingly that she was merely laid off for financial reasons. She was not immediately replaced.
At trial there were no proofs of personal liability on the part of Emmett Angell. In addition, Airstream By Angell was found to be a corporation of the State of New Jersey, and consequently all liability for a breach of contract or libel arising in the scope of employment of Emmett Angell would relieve him of individual liability. This court finds that Emmett Angell is not individually liable. Defendant Airstream By Angell, Inc. denied liability for breach of contract and for libel on all counts. In addition, defendant counterclaimed for interference with contract and business advantage. At trial there was no evidence of interference with
contract or with business, and although Andrew Rogozinski admittedly removed certain records from premises upon departure for the purpose of obtaining certain payments allegedly due under contract, defendant counterclaimant offered no proof that these records had any substantial effect on business. The counterclaim is therefore dismissed.
Plaintiff Andrew Rogozinski had been an employee of the manufacturer of Airstream Trailer associated companies since at least 1971. At one time he had been employed for the purpose of visiting various dealers to encourage the use of a flat-rate manual he had written for Airstream's insurance carrier, Caravan Insurance Company. Immediately prior to his employment by defendant, Andrew Rogozinski had been employed by May Trailer Sales, Irving, Texas, where he ran three service departments. May Trailer Sales gave up its franchise in 1974 and plaintiff called various Airstream dealers seeking work. He called Emmett Angell in October 1974 by phone. In early December 1974 he went to Bloomsbury, New Jersey, the place of business of Airstream By Angell, Inc., and employment was agreed upon. The original employment salary was agreed upon at $2,000 a month for husband and wife. The husband was to be in charge of the Service Department, parts and store. Andrew Rogozinski was to receive $1,500 of the $2,000 and Ginger Rogozinski $500 a month. The $1,500 a month was memorialized in a written contract dated December 23, 1974. Prior to beginning actual employment Andrew Rogozinski arranged for the disposition of certain glass possessed by defendant for an agreed-upon commission of 20% of the wholesale price. In the contract December 16, 1974 was listed as the date of employment, although Andrew Rogozinski admits he did not start until January. This additional payment of salary was compensation for the unliquidated claim regarding the glass. No further reference will be made to the glass incident.
In May or June 1975 John Angell, brother of Emmett Angell and former owner of Airstream By Angell, Inc., came into Airstream by Angell, Inc. as a Service Manager. On
July 28, 1975 a written agreement was produced which assigned Andrew Rogozinski to the Body Shop only. The agreement provides for Andrew Rogozinski to receive 50% of labor and 10% of parts as a commission. By separate agreement two-thirds of the labor commission went to Andrew Rogozinski and the other one-third to Vern Ainslee, Andrew's employee. Basic compensation was paid as a $320 draw to Andrew Rogozinski and a $160 draw to Vern Ainslee. In no case would the draw exceed 80% of the amount credited.
Andrew Rogozinski was terminated by Emmett Angell on September 2, 1975. Ginger Rogozinski was terminated the same day. Andrew and Ginger applied for unemployment compensation on September 15, 1975 and September 16, 1975, respectively. The Unemployment Compensation Commission sent Airstream by Angell, Inc. a request for wage and separation information on Form BC-2. Block 15, "Information Required," contains Item I, a reason for separation. Two blocks are provided: one, "Lack of Work" and the other, "Other (Explain in detail, continue on reverse side if necessary)." Several lines are then provided. Regarding Ginger Rogozinski, Emmett Angell checked "Other" and wrote on the BC-2 Form: "A drastic reduction in the sales in the store from the time she took that job indicated a lack of capability on her part to adequately accomplish the tasks at hand." Regarding Andrew Rogozinski, Angell checked "Other" and wrote "Discharge for Cause (see letter of this date)." Angell wrote the following in an accompanying letter:
Mr. Rogozinski was dismissed for a cause so serious as to affect the company's integrity in the industry as well as its relationship with its current service customers and suppliers.
Since his hiring he has been progressively reduced from a position of higher responsibility to one of little responsibility. He continued to antagonize both our customers and our employees. He had to be continually watched and reminded with respect to collection of monies, ordering of parts and supplies, and treatment of customers. In sum, we could no longer depend upon him to represent our best interests.
This letter was written to the Unemployment Insurance Claims Office and testimony indicates that, pursuant to the statutory confidentiality provided by N.J.S.A. 43:21-11(g), it could be expected to be read only by Unemployment Compensation Commission personnel and those of seven or eight other government agencies for official purposes only. No evidence of further publication of the letters was offered at trial.
Following his dismissal Andrew Rogozinski sought other work, utilizing his prior connections in the Airstream distribution system. He apparently concentrated on opportunities outside New Jersey because of his perception of the influence of Emmett Angell in the immediate area. He claimed that he sought work as a service manager at various Airstream dealerships, but the defendant offered testimony that Andrew was not seeking to mitigate damages by looking into the same type job but was in fact seeking an Airstream franchise. Considering the proofs, it is not inconceivable that Andrew Rogozinski was seeking either or both. This court concludes that Andrew did attempt to mitigate damages. Considering his experience and his difficulty in obtaining work as a service manager, his seeking a franchise was not, as a matter of law, an inappropriate method of mitigating damages. At best, defendant's proofs on this subject showed that of the trips undertaken by Andrew Rogozinski in seeking work, only one was clearly a franchise-seeking excursion.
Andrew Rogozinski incurred expenses totalling $3,758.97 during trips associated with seeking work. He was unable to obtain work until April 10, 1976, when he obtained his present employment at Orlando Travel Center, Orlando, Florida. This job pays $250 a week. Andrew claims wage losses of at least $320 a week, less $250 a week after April 10, 1976.
Andrew Rogozinski claims that his July 28 contract provided for employment "in perpetuity," and therefore seeks
damages for breach of this "perpetual" contract. Although that language was used by Rogozinski, who prepared the contract, Emmett Angell's testimony nevertheless indicates that he was aware of the existence and significance of the terms used. The prospect of perpetuity comported with Airstream By Angell, Inc.'s expectations and with defendant Emmett Angell's, if Rogozinski's work proved satisfactory.
It should be noted that the contract does not provide for permanent employment per se , but only for a "perpetual" contract. The inference might be drawn that the "perpetual" aspect of the agreement relates only to the unchanging nature of the terms of the contract and not with the term of employment. Emmett Angell's testimony, however, indicates that this perpetual aspect related, in his mind, to the term, not the perpetual nature of the terms.
Corbin on Contracts , § 684 at 228, provides:
Sometimes there is a promise of "permanent employment." The quoted word is a strong one; but it does not mean employment forever or employment for life. When it is used, the court should usually find that the employment was not intended to be terminable at will; but whether there is a contract for a definite period must depend upon accompanying factors.
In Savarese v. Pyrene Mfg. Co. , 9 N.J. 595 (1952), the court recited the prevailing rule as follows:
However, the court continues:
Where the employee has given consideration additional to the services incident to the employment, or, as it is sometimes stated, where the employee purchases the employment, in the absence of a
statute, other terms in the contract, or circumstances to the contrary, the contract for permanent employment, for life employment, or for other terms purporting permanent employment, is valid and enforceable and not against public policy, and continues to operate as long as the employer remains in the business and has work for the employee, and the employee is able and willing to do his work satisfactorily and does not give good cause for his discharge, a discharge without cause constituting a breach of such contract entitling the employee to recover damages therefor
Deeming them to be at variance with general usage and sound policy, the courts have shown a marked reluctance to enforce contracts for life employment.
Agreements of this nature have not been upheld except where it most convincingly appears it was the intent of the parties to enter into such long-range commitments and they must be clearly, specifically and definitely expressed. [at 600-601]
The court went on to hold that a corporate officer's statement, "You will have a foreman's job for the rest of your life," partook more of the nature of a "friendly assurance of employment" than of a binding contract for life employment.
Shiddell v. Electro Rust-Proofing Corp. , 34 N.J. Super. 278 (App. Div. 1954), reviews the Savarese decision and concludes that although these contracts are difficult to prove, they are not unenforceable or against public policy. The court concluded that, under the circumstances before it, wherein allegations, if proven, "would most convincingly establish clearly, specifically and definitely that it was the intent of the parties to enter into long-term commitments," and that the plaintiff may have "purchased his employment," summary judgment in favor of the employer was inappropriate.
In the instant case the contract, by its terms, indicates that the clearly expressed intention of the parties contemplated permanent employment. More importantly, the surrounding circumstances indicate that, at least as to the second contract, there was an equality of bargaining power and a considerable sacrifice of important economic advantage
in the substitution of body shop duties for those of the service manager. By testimony from both sides it appears that the change in positions entailed substantial risk to Andrew Rogozinski but offered substantial returns as well, had Rogozinski ...