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RAMSBOTTOM v. FIRST PENNSYLVANIA BANK

August 8, 1989

GENE A. RAMSBOTTOM, Plaintiff,
v.
FIRST PENNSYLVANIA BANK, N.A., Defendant



The opinion of the court was delivered by: RODRIGUEZ

 This matter comes before the court on a motion of defendant First Pennsylvania Bank to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief may be granted. For the reasons stated herein, the motion to dismiss count three of the complaint will be granted and the motion to dismiss counts one and two will be denied. *fn1"

 In this case the following facts alleged are considered true for the purposes of this motion. Plaintiff, Gene A. Ramsbottom was hired by defendant in January of 1984, for the position of divisional vice president, trust controller division. When plaintiff began his employment, he was given a multi-page policy manual which outlined procedures for arriving at a decision to terminate an employee and procedures for effectuating such a termination. Although plaintiff performed his duties well, he was terminated on October 14, 1986. In addition, plaintiff's representative met with outside counsel for defendant who informed the representative that defendant would provide plaintiff's prospective employers with a favorable employment reference. When prospective employers requested information regarding plaintiff they were referred to the personnel department which in turn gave out only the date at which plaintiff left defendant's employment.

 Plaintiff's complaint alleges three causes of action. First, plaintiff alleges that the bank breached its contract by failing to adhere to the termination procedures delineated in the policy manual. Second, plaintiff brings a promissory estoppel claim asserting that he detrimentally relied on the promises contained in the policy manual and on the promises of defendant's representative regarding a favorable reference. Third, plaintiff asserts an intentional interference with contractual relations based on the actions of two employees of the bank who effected plaintiff's firing.

 Defendant moves for dismissal of each count. Specifically, defendant claims that under Pennsylvania law, policies contained in personnel manuals do not rise to the level of contractual obligations and therefore cannot be used as a basis for a breach of contract claim or a claim based on promissory estoppel. Also, defendant claims that it could not reasonably expect the promise of a favorable reference to induce definite action or forbearance on the promisee's part and, therefore, any damage was not the result of detrimental reliance on counsel's alleged promise. Finally, defendant argues that as a matter of law, the bank cannot be liable for tortious interference with its own employment contract.

 I. CHOICE OF LAW

 It is well established that a district court in a diversity action must apply the choice of law rules of the forum state in determining which state's law to apply to the substantive issues before it. Shuder v. McDonald's Corp., 859 F.2d 266, 269 (3d Cir. 1988) (citing Klaxon v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941)). Accordingly, this court will apply New Jersey conflicts of law analysis to determine which state law to apply. Shuder, 859 F.2d at 269.

 In contract cases, New Jersey courts apply the law of the place where the contract is made, "unless the dominant and significant relationship of another state to the parties and the underlying issues dictates that this basic rule should yield." State Farm Mutual Auto. Ins. Co. v. Estate of Simmons, 84 N.J. 28, 37, 417 A.2d 488 (1980); see also McFadden v. Burton, 645 F. Supp. 457, 465 (E.D. Pa. 1986). The assessment of the significant relationship should "encompass an evaluation of important state contacts as well as a consideration of the state policies affected by, and governmental interest in, the outcome of the controversy." State Farm, 84 N.J. at 37.

 Plaintiff argues that the governmental policies behind the different termination at will laws creates a "false conflict," which resolves the applicable law "without a choice between the laws of the two states." Brief by Plaintiff at 6 (citing Morgart v. Union Mut. Life Ins. Co., 644 F. Supp. 934, 935 (D.N.J. 1986) (citation omitted)). Plaintiff claims that the application of Pennsylvania law or New Jersey law will result in the same outcome, and thus a choice of law is unnecessary. *fn2"

 The Supreme Court of New Jersey, in Woolley v. Hoffmann-LaRoche Inc., 99 N.J. 284, 297, 491 A.2d 1257 (1985), held that a termination clause in a policy manual, which included a procedure required before termination, could be found to be contractually enforceable even if the employment is for an indefinite term or would otherwise be terminable at will. The court stated that such provisions should be construed by the courts "in accordance with the reasonable expectations of the employees." Id. at 297-98. The Woolley court modified the rules of at-will termination due to the modern view against such a harsh outcome:

 
This Court has clearly announced its unwillingness to continue to adhere to rules regularly leading to the conclusion that an employer can fire an employee-at-will, with or without cause, for any reason whatsoever.

 Id. at 290-91 (citations omitted). Thus, Woolley clearly announced the New Jersey Court's willingness to modify the law of at-will termination because of the policy of protecting employees from the harsh result of termination for any reason whatsoever.

 Pennsylvania courts have also recognized that a policy manual may be found to be contractually enforceable. See Scott v. Extracorporeal, 376 Pa. Super. 90, 545 A.2d 334, 337 (1988). However, unlike New Jersey, Pennsylvania courts have chosen to adhere to the common law rule of at-will termination with only limited exceptions. See Geary v. United States Steel Corp., 456 Pa. 171, 319 A.2d 174 (1974); Clay v. Advanced Computer Applications, Inc., 522 Pa. 86, 559 A.2d 917, 1989 Pa. LEXIS 264 (Pa. 1989) (Zappalo, J. concurring); but see Clay, 522 Pa. 86 (Nix, C.J. concurring). The exceptions recognized by the court are if the discharge was (1) with the specific intent to harm, or (2) in violation of a clear mandate of public policy. Scott, 545 A.2d at 336; Paul v. Lankenau Hospital, 375 Pa. Super. 1, 543 A.2d 1148, 1155 (1988). Furthermore the ...


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