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Shebar v. Sanyo Business Systems Corp.

Decided: August 4, 1988.


On certification to the Superior Court, Appellate Division, whose opinion is reported at 218 N.J. Super. 111 (1987).

For affirmance -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern, Garibaldi and Stein. For reversal -- None. The opinion of the Court was delivered by Garibaldi, J.


[111 NJ Page 279] Plaintiff brings this case against his employer for breach of oral contract of employment. Specifically, plaintiff claims that defendant's oral promises to him, on which he relied, contractually obligated the employer to terminate his employment only for cause. After defendant terminated plaintiff's employment, plaintiff sued, alleging breach of contract, fraud, tortious interference, outrage, and defamation. The trial court granted summary judgment for defendant on all five counts, and plaintiff appealed. The Appellate Division affirmed the dismissal of the defamation and outrage counts but reversed the dismissal of the breach of contract, fraud, and tortious interference counts. 218 N.J. Super. 111 (1987). We granted certification. 108 N.J. 667 (1987).


In viewing the record on the motion for summary judgment, we give the plaintiff the benefit of all reasonable inferences that may be drawn in his favor. Savarese v. Pyrene Mfg. Co., 9 N.J. 595, 599 (1952). Defendant, Sanyo Business Systems Corp., a Delaware corporation, hired plaintiff, Arthur Shebar, as National Sales Manager for its Computer Division on December 14, 1981. Sanyo's parent is a Japanese firm. The principal place of business for Sanyo's U.S. operations is in New Jersey.

When defendant initially hired plaintiff, the parties did not execute an employment contract. The terms of plaintiff's employment were outlined in a Sanyo memo to him that stated his annual salary was to be $35,000, with an additional amount of $10,000 as a bonus. Plaintiff continued to work for Sanyo for several years.

The parties disagree over plaintiff's job performance in the years following his employment. Plaintiff asserts that his performance was good and that he received regular salary increases. He claims Sanyo repeatedly commended him for his efforts and accomplishments. Plaintiff states that in June 1984, Dr. Nakahara, defendant's Director of Factory Operations in Guma, Japan, congratulated him for a large sale of Sanyo products to the Internal Revenue Service. Further, plaintiff asserts that on numerous occasions, Mr. Yamazaki, Sanyo's President, and Mr. Yamashita, Sanyo's Executive Vice President, congratulated him on his division's sales record and his own specific accomplishments. In early 1984, defendant apparently won some sort of industry award, and plaintiff claims he was principally responsible for that award. Plaintiff insists that throughout his tenure as sales manager, he regularly received positive reviews, increased responsibilities, and increased remuneration.

Defendant on the other hand asserts that plaintiff's performance was unsatisfactory during 1982, 1983, and 1984. According to Sanyo, plaintiff's superiors informed him on several

occasions by memoranda of his unsatisfactory performance in repeatedly failing to meet sales and profit quotas established by himself and by defendant. According to plaintiff, his Sanyo superiors insisted the critical memos he received were not meant to chastise him but rather were intended to push him and the division he headed to their "utmost." Additionally, he maintains that Sanyo created his sales quotas, and that Sanyo did so without his input and "without regard to the company's ability to effect sales." Shebar claims that he was told by his superiors that the "Japanese" procedure was to establish sales forecasts and objectives "which were not only extraordinarily high but, frankly, incapable of fulfillment." In his certification below, plaintiff asserted that the

theory behind this practice, it was explained to me, was to push managers and their subordinate sales personnel to strive to achieve sales objectives which they otherwise would never even bother to attempt to attain. I was told frequently that this admittedly unrealistic practice was a standard 'Japanese' business practice which was accepted by defendant as good business.

Plaintiff concluded by September 1984 that Sanyo's business practices were not sound practices for use in this country. According to plaintiff, he was particularly dismayed by Sanyo's practice of "unilaterally establishing unrealistical[ly] high sales goals." Plaintiff also felt that Sanyo primarily promoted Japanese nationals to its senior management positions and thus the company would by-pass him in filling senior positions in its American operations in the future. At around this same time, plaintiff communicated with an executive search firm to discuss other job opportunities. The firm arranged an interview for plaintiff at the Sony Corporation.

The officers of Sony to whom plaintiff spoke assured him that Sony's sales practices "were strictly American." Plaintiff knew that Sony had many American vice presidents. Sony offered plaintiff a position as national sales manager with an express assurance that he would become a vice president within a reasonable period of time.

The critical events allegedly occurred on October 1, 1984, when plaintiff accepted the Sony offer and tendered his written resignation to Sanyo. According to Shebar's certification, Sanyo's president, Mr. Yamazaki, called him into his office after he received plaintiff's letter of resignation. When plaintiff went into Mr. Yamazaki's office, Mr. Yamashita, executive vice president of Sanyo, was also present. According to plaintiff, Mr. Yamashita told him that he was personally insulted by his resignation, that his performance was exceptionally good, that plaintiff should have brought any problems or dissatisfaction to his attention, and that the company did not want plaintiff to resign, but rather wanted to eliminate any problems that existed. Yamazaki apparently agreed with Yamashita. Yamazaki held the resignation letter, ripped it to shreds, and said "I will not accept your resignation. We will solve your problems."

Plaintiff claims that Yamazaki and Yamashita expressly stated to him that Sanyo does not fire its managers. They told him, plaintiff contends, that he had a job for the rest of his life, and that Sanyo had never fired, and never intended to fire, a corporate employee whose rank was manager or above. Plaintiff acknowledges that they did not discuss money at this meeting, but maintains that they assured him that he would receive a substantial raise in March 1985.

As a result of this meeting and in reliance on the assurances made to him there, plaintiff revoked his acceptance of Sony's offer. Thereafter, he informed Mr. Yamashita that he had rejected the Sony offer. According to plaintiff, Yamashita congratulated him on a wise decision, and again assured him that he was "married" to Sanyo and no divorce was allowed.

A few days later, plaintiff communicated with the executive search firm that had arranged the Sony interview and explained why he rejected Sony's offer. Plaintiff's contact at the firm, Mr. Stephen Mersand, was very surprised by plaintiff's account of the assurances that had been made to him by his Sanyo

superiors. Mersand stated he was aware that Sanyo was actively seeking to replace him.

Subsequently, plaintiff confronted Yamashita with the information he received from Mersand. Yamashita, according to plaintiff, responded that Mersand was lying, that Sanyo was not seeking to replace him, and that Mersand just ...

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