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Schwartz v. Leasametric Inc.

Decided: March 23, 1988.


On appeal from the Superior Court of New Jersey, Law Division, Bergen County.

Shebell, Gaynor and Arnold M. Stein. The opinion of the court was delivered by Shebell, J.A.D.


[224 NJSuper Page 22] Plaintiff Neil Schwartz appeals the dismissal on summary judgment of his suit against defendants Leasametric, Inc. and James Brown for wrongful termination and slander. We affirm the dismissal of his slander claims but reverse the summary judgment entered on his wrongful termination claims.

The first and fourth counts of plaintiff's complaint alleged that Brown, an agent of Leasametric, slandered plaintiff. Plaintiff alleged that Brown spoke to him "in [such] a manner as to embarrass and harass the plaintiff in front of his fellow workers" and "to give the impression that the plaintiff was dishonest and not trustworthy." Plaintiff alleged that these remarks "injured his good name, character and reputation, and brought [him] into public scandal, infamy and disgrace." In count two, plaintiff alleged that Leasametric "had a set procedure for informing employees of problems existing in their employment, and had a set procedure for termination," and that this procedure was not followed in his case. In the third count, plaintiff alleged that he was entitled to the return from Leasametric of his company car ("a new General Motors Monte Carlo") or damages equal to its value, "due to the fact that this was part of his compensation which he was offered in his employment with defendant corporation." The fifth count repeated the wrongful termination allegation from count two and demanded damages from Brown.

Brown and Leasametric contend that plaintiff's employment was terminated for insubordination to a supervisor and defend on the following grounds: (1) as an employee at will, plaintiff's employment was subject to termination at any time with or without cause; (2) the termination did not violate any expressed public policy, and (3) plaintiff's insubordinate conduct toward a supervisor constituted just cause for termination.

The facts, viewed most favorably to plaintiff, are as follows. By letter dated January 12, 1981, Leasametric offered plaintiff the position of "Senior Account Representative, Test Instruments." Plaintiff was to receive salary, quarterly performance bonuses and a company car. The letter also stated that he would be given "an employees and benefits handbook."

Leasametric's policy manual provided the following three-step procedure for disciplining poor job performance or minor acts of misconduct which applied to all employees:

A. Normal Disciplinary Procedures

The progressive disciplinary procedure is used to correct poor job performance or minor acts of misconduct. The procedure has three phases, for which a date must be set for the correction of each problem. They are as follows:

Phase 1 -- Verbal Counseling Session, with memo to file.

Phase 2 -- Second Counseling Session, with memo to file.

Phase 3 -- Recommendation for termination through your Department Manager and Personnel Manager.

The manual further indicated that certain acts were grounds for immediate termination:

The company would like to foster an environment which is professional, cooperative, kind, and friendly, therefore, even relatively minor misconduct which detracts from this atmosphere, may be grounds for immediate termination. Depending upon the severity of the act of misconduct, employees may be subject to discipline or immediate termination . . . due to:


This is not exhaustive. Supervisors should exercise their discretion in deciding to recommend discipline for other types of employee misconduct.

The manual also indicated that disciplinary procedures could be accelerated, and that "[s]evere situations may require immediate termination or acceleration." In these severe situations, the manager was instructed to "contact the Personnel Manager to determine appropriate action."

Plaintiff started working for Leasametric in January 1981. His first immediate supervisor gave him a positive evaluation. After his first supervisor left the company, a second supervisor of three or four months also gave plaintiff a positive evaluation on December 11, 1981. Defendant Brown took over as sales manager in late January 1982.

Plaintiff testified that from January up until June 1982, he had "[n]o difficulty" with Brown, and plaintiff did not detect any "hostility" or "bad feeling[s]." On about June 18, 1982, plaintiff detected a change in Brown's attitude which emanated ...

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