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PANZINO v. SCOTT PAPER CO.

May 24, 1988

Frank Panzino, Joseph Polak and Anthony Fornari, Plaintiffs
v.
Scott Paper Company, Defendant



The opinion of the court was delivered by: GERRY

 This is an action for wrongful discharge from employment. The three plaintiffs were employed by defendant at its Landisville, New Jersey facility. They were terminated in 1984 as part of Scott's "reduction in force" at Landisville.

 The parties stipulate many of the facts. At the time of their termination, plaintiffs held the position of shift supervisor (Panzino & Fornari) or of area maintenance supervisor (Polak). They had no written employment contract of any kind with the defendant, nor was there a written agreement that plaintiffs would be entitled to "bump" hourly non-supervisory employees should they (plaintiffs) be terminated from their supervisory positions. The parties agree that plaintiffs were terminated because of the reduction in force; unacceptable job performance is not alleged.

 The disputed facts follow: plaintiffs contend that shortly before they were laid off they were told, individually, that they would not lose their jobs as a result of the reduction in force. Rather, they would at worst have the opportunity to move to hourly wage positions. Plaintiffs assert that they relied on these promises, in ways which will be specified below. Defendant denies that the assurances were made.

 This court has already dismissed two of the three counts of the complaint. Count I was for breach of an implied oral contract of employment for an indefinite period, terminable only for cause. We granted summary judgment as to that claim by unpublished opinion and order of April 21, 1987. On June 1, 1987 the court approved a stipulation of dismissal with prejudice as to Count III of the complaint.

 Count II states a claim for wrongful discharge under New Jersey law. When the court granted summary judgment as to Count I we also granted summary judgment as to one of plaintiffs' two wrongful discharge theories, the claim that defendant breached the implied covenant of good faith and fair dealing when it laid off plaintiffs. See [Slip op. at 8-9]. The remaining theory of recovery is that because defendant assured plaintiffs continued employment, and plaintiffs relied on these assurances to their detriment, defendant was equitably estopped from laying plaintiffs off as part of the reduction in force. In denying defendant's motion to the estoppel theory we rejected the argument that equitable estoppel does not represent a clear mandate of New Jersey public policy and thus may not serve as the basis for a wrongful discharge claim under the public policy exception to the employment-at-will doctrine. [Slip op. 6-8.] However, we expressed no opinion as to whether the factual elements of the claim were present in the instant matter.

 ANALYSIS

 Presently before the court is defendant's renewed motion for summary judgment as to Count II of the complaint, the claim that the plaintiffs discharge violated a clear mandate of the public policy of New Jersey. Defendant makes two arguments. First, Scott contends that no equitable estoppel theory can be made out here because there is no claim that plaintiffs were terminated because they relied on assurances which the defendant later breached. Second, defendant argues that the record will not support two essential elements of estoppel: (1) detrimental reliance and (2) knowledge on the part of Scott Paper of such reliance.

 A. Equitable estoppel generally has three elements:

 
1) a representation (or misrepresentation);
 
2) knowledge, by the representor, that a second person is acting on the basis of the representation; and
 
3) substantial detrimental reliance by the second person on the representation.

 See Carlsen v. Masters, Mates & Pilots Pension Plan Trust, 80 N.J. 334, 339, 403 A.2d 880 (1979), Atlantic City Housing Authority v. State of New Jersey, 188 N.J. Super. 145, 149, 456 A.2d 534 (App. Div. 1983).

 Defendant contends that to make out a claim under the public policy exception to the employment at will doctrine an equitable estoppel theory must add a fourth element: a causal connection between the actions taken in reliance and the discharge. This fourth element, defendant suggests, is present in the reported cases of estoppel in the wrongful discharge context. e.g., Crowell v. Transamerica Delaval, Inc., 206 N.J. Super. 298, 502 A.2d 573 (Law Div. 1984) (Employee's supervisor led him to believe that company wished him to ignore manufacturing defects, and employee was later discharged after permitting manufacture of defective pieces of equipment.) Courts have rejected, defendant contends, equitable estoppel/public policy exception claims where there is no causal link between the actions taken in reliance and the discharge. e.g., Brunner v. Abex Corp., 661 F. Supp. 1351 (D.N.J. 1986). In Brunner the plaintiff chose to relocate from New York to New Jersey after her employer moved its office there. Nevertheless, the employer discharged plaintiff right after she relocated, saying that her position had been eliminated as part of a reduction in force. The court dismissed the complaint, implying that without an allegation that the actions in reliance caused ...


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