Cook telephoned him in New Jersey. Pancza also argues that
Remco's practice of shipping through the Port of Newark without
being licensed to do business in New Jersey was illegal, and
that New Jersey's public policy mandate to protect its citizens
from acts of foreign corporations illegally conducting business
in New Jersey dictates a choice of New Jersey law. Finally,
Pancza suggests that New Jersey law should apply because he has
applied for unemployment benefits from the State of New Jersey.
A federal court must apply the conflict of laws principles of
the forum state. Rohm & Haas Co. v. Adco Chemical Co.,
689 F.2d 424, 429 (3d Cir. 1982), citing Klaxon Co. v. Stentor Electric
Manufacturing Co., 313 U.S. 487, 496-97, 61 S.Ct. 1020,
1021-22, 85 L.Ed. 1477 (1941). Therefore, New Jersey conflict
of laws principles will determine which law governs Pancza's
contract and tort claims.
Contract Claim. The New Jersey Supreme Court has adopted the
Restatement standard (significant contacts) to determine which
law governs contract claims. State Farm Mut. Auto. Ins. Co. v.
Estate of Simmons, 84 N.J. 28, 34, 417 A.2d 488 (1980). As
articulated by the Third Circuit in Rohm & Haas, New Jersey
looks to the jurisdiction "having the most significant relation
and closest contacts with the occurrence and the parties". Rohm
& Haas, 689 F.2d at 429.
In applying this standard to the insurance contract in
State Farm, the New Jersey Supreme Court balanced the factors
which it considered inherent in the significant relationship
test (the domicile of the parties, the place of contracting,
the place of performance, and the location of the subject
matter) against the reasonable expectations of the contracting
parties and the governmental and legislative interests of each
The Court noted that the prior choice of law rule, place of
contracting, still had meaning, since the rule furnishes
certainty and consistency in the choice of law. Id. 84 N.J. at
37, 417 A.2d 488. However, the Court cautioned against granting
this rule controlling effect, holding that a court should also
consider the relationship of each state with the parties and
the transaction. Id.
The following facts are undisputed and constitute significant
contacts with New York: Pancza's oral employment contract was
formed in New York; the contract was to be performed in New
York; the alleged breach of contract occurred in New York; and
the defendants are incorporated in, and conduct their business
from, New York. New Jersey's only contact is Pancza's residence
in New Jersey.*fn3 While Pancza points to receiving telephone
calls from Cook in New Jersey as another New Jersey contact,
this is only because of his residence in New Jersey. With
respect to an employment contract, New York has far more
significant contacts than New Jersey. Thus, in accordance with
New Jersey's choice-of-law rule governing contract claims, New
York has the most significant relation and closest contacts
with Pancza's employment and breach of contract claim.
Therefore, New York law applies to Pancza's breach of contract
Tort Claims. In tort cases, New Jersey has adopted a
governmental-interest analysis in choice-of-law questions.
Veazey v. Doremus, 103 N.J. 244, 248, 510 A.2d 1187 (1986);
Barco Auto Leasing Corp. v. Holt, 228 N.J. Super. 77,
548 A.2d 1161 (App. Div. 1988). The court must determine the state which
has the greatest interest in applying its law to the particular
issue. The first step involves determining whether there is a
conflict in the law of the interested states. This analysis is
performed on an issue-by-issue basis. Veazey, 103 N.J. at 248,
510 A.2d 1187.
If a conflict exists, the court must identify the
governmental policies underlying the law of each state, and how
they are affected by each state's contacts with the
case and the parties. If a state's contacts are unrelated to
the policies underlying the law, then the state lacks an
interest in applying its law. Veazey, 103 N.J. at 248,
510 A.2d 1187. The qualitative nature of the contacts is the touchstone
for deciding which law applies. Id.
There is conflict between New Jersey law and New York law as
to the issues in this case. New York presumes an at-will
employment relationship absent an explicit agreement, and
precludes claims for wrongful discharge couched in terms of
tortious infliction of emotional distress. Buffolino v. Long
Island Sav. Bank, FSB, 126 A.D.2d 508, 510 N.Y.S.2d 628, 630
(App. Div. 1987). The Buffolino court stated that a plaintiff
could not "evade" the at-will contract rule by claiming
tortious infliction of emotional distress. Id. New Jersey
permits a claim of intentional infliction of emotional distress
arising out of an employment context for outrageous conduct,
and permits a cause of action for negligent infliction of
emotional distress where it is reasonably foreseeable that the
tortious conduct will cause genuine and substantial emotional
distress or mental harm to average persons. A tortious
interference with contract claim under New York law requires a
plaintiff to establish intentional and improper interference
with a contract with a third party. Intentional interference
with contract or with future contractual relations is
actionable in New Jersey, even for at-will employees. In New
Jersey and New York, an employer has qualified immunity for
defamatory statements made in the course of recommendations.
Rogozinski v. Airstream by Angell, 152 N.J. Super. 133, 154,
377 A.2d 807 (Law Div. 1977); Payne v. Kathryn Beich & Nestle,
697 F. Supp. 612, 615 (E.D.N.Y. 1988). Thus, New Jersey law
concerning Pancza's emotional distress and to a lesser extent
concerning interference with contract claims conflicts with New
Pursuant to Veazey, the next step is identification of the
governmental policies underlying the law of each state and how
those policies are affected by each state's contacts with the
litigation and the parties. In Veazey, a Florida plaintiff sued
his wife and the other driver for personal injuries sustained
in an automobile accident which occurred in New Jersey. In
applying the governmental interest test, the New Jersey Supreme
Court reviewed the governmental policies behind each state's
law. Florida provided interspousal immunity, the purpose of
which was to foster marital harmony. Id. 103 N.J. at 249,
510 A.2d 1187. New Jersey's interest was highway safety. The court
noted that application of interspousal immunity would not
affect New Jersey's interest in highway safety. Id.
Next, the court examined the contacts of each state to the
cause of action. Florida's contacts were directly related to
interspousal immunity, since the couple were domiciled in
Florida. Id. at 251, 510 A.2d 1187. New Jersey's contacts were
as the forum state, and as the situs of the accident, which
were unrelated to the issue of immunity. Id. at 250,
510 A.2d 1187. Therefore, the court concluded that Florida law governed
the tort action.
In this action, application of New Jersey law would clearly
undercut New York's limitations on an employee's ability to sue
for tortious conduct relating to discharge from employment. New
York has an interest in governing employment relations, as does
New Jersey. However, New Jersey's interest in compensating tort
victims generally does not outweigh New York's specific
interest in governing its employment relations, especially in
light of the fact that New York has the relevant contacts to
the employment relation and the alleged tort emanating
therefrom. New York is the situs of the alleged tort, the situs
of the employment and the state of incorporation and situs of
the defendant-employer. New Jersey's only contact is as the
domicile of the plaintiff, the alleged victim of the tort.
Therefore, I conclude that New York has the "greatest interest"
in applying its law to the issues involved in Pancza's tort
claims and New York tort law will be applied.*fn4
To prevail on a motion for summary judgment, the moving party
must demonstrate the absence of an issue of material fact and
its entitlement to judgment as a matter of law.
Fed.R.Civ.P. 56(c). This burden may be "discharged by showing .
. . that there is an absence of evidence to support the
non-moving party's case." Celotex Corp. v. Catrett,
477 U.S. 317, 323-25, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986).
Once the moving party has met its burden, the burden shifts
to the non-moving party to "show that there is a genuine issue
of fact for trial." Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The non-moving
party may not rest on the allegations in its pleadings, but
must set forth specific facts to establish a genuine issue for
trial. Fed. R.Civ.P. 56(e).
BREACH OF EMPLOYMENT CONTRACT
In Count One of his complaint, Pancza alleges that he was
discharged without just cause and in breach of an express or
implied employment contract. It is undisputed that no written
contract exists. Rather, Pancza bases his entire position on a
conversation which allegedly occurred during his interview with
Ezra Hamway and Marvin Azrak. Pancza claims that they stated
"[a]s long as you performed well, you would always have a job
with this company". See Pancza Dep. at 179-180.
Remco argues that this conversation cannot form the basis for
a contract terminable only for "just cause", since Pancza was
aware that his employment would be reviewed after 30 days,
thereby affording Remco the right to terminate Pancza at that
time. See Pancza Dep. at 181. Moreover, Remco asserts that the
alleged statement is legally insufficient, under New York law,
to establish a "just cause" contract.
Absent an agreement fixing a specified duration, New York law
presumes an employment-at-will relationship. Murphy v. American
Home Products Corp., 58 N.Y.2d 293, 461 N.Y.S.2d 232, 237,
448 N.E.2d 86, 91 (1983). An at-will employee is terminable at any
time, for any reason or no reason at all. Id. Accord, Kelly v.
Chase Manhattan Bank, 717 F. Supp. 227, 234 (S.D.N.Y. 1989).
Pancza must establish the existence of an express agreement
which limited Remco's ability to discharge him for any reason
or no reason.
Vague assurances of long-term employment are insufficient to
meet the "express limitation" requirement under New York law,
or to transform at-will employment into a long-term employment
contract. Kelly, 717 F. Supp. at 234. In Kelly, the court held
that an employer's statement that good employees would have
jobs with the company was insufficient, as a matter of law, to
create an express employment contract, or to limit the
company's right to terminate its at-will employees. Id.
The New York Court of Appeals recognizes an express
limitation on an employer's right to discharge an at-will
employee. Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458, 457
N YS.2d 193, 443 N.E.2d 441 (1982). In Weiner, no fixed term
of employment existed, but McGraw had assured the plaintiff
during his interview that the firm's policy was to discharge
only for just cause. In addition, the plaintiff signed an
employment application which specifically referred to this
policy. Finally, McGraw's personnel policy and procedure manual
stated that employees would be dismissed "for just and
sufficient cause only".
The court found consideration to support an employment
contract with termination only for just cause. Id. at 197, 443
N.E.2d at 445. The court found the following factors to be
1. McGraw's inducement of the plaintiff by
assurance of discharge only for cause;
2. this assurance was incorporated into the
3. the plaintiff had rejected other offers of
employment in reliance on this assurance;
4. the plaintiff had been instructed by his
supervisors to strictly adhere to the personnel
manual when recommending the termination of his
subordinates, since the firm had a policy of
discharge only for just cause. The plaintiff was
told that failure to follow the policy could
subject McGraw to litigation.
Weiner, 457 N.Y.S.2d at 198, 443 N.E.2d at 446.
In Murphy, the New York Court of Appeals further elaborated
on the showing necessary to come under the protection of
Weiner. A plaintiff must provide an "appropriate evidentiary
showing" of an express limitation on an employer's right to
terminate an at-will employee which is contained in the
employment contract or in an employee handbook or personnel
policy and procedure manual. Murphy, 461 N.Y.S.2d at 237, 448
N.E.2d at 91. Since the plaintiff in Murphy failed to provide
evidence that such an express limitation existed in an employee
handbook or personnel policy manual, the court dismissed the
plaintiff's breach of contract claim for failure to state a
cause of action.*fn5 Id. Accord Diskin v. Consolidated Edison
Co., 135 A.D.2d 775, 522 N.Y.S.2d 888 (App. Div. 1987), appeal
denied, 72 N.Y.2d 802, 530 N.Y.S.2d 554, 526 N.E.2d 45 (1988)
(no enforceable contract was created by an employer's alleged
oral promise to discharge only for cause, absent the factors
set out in Weiner); Buffolino, 510 N.Y.S.2d at 630; Dalton v.
Union Bank of Switzerland, 134 A.D.2d 174, 520 N.Y.S.2d 764,
766 (App. Div. 1987) (plaintiff failed to demonstrate, under
Weiner, an express limitation on the employer's right to
discharge in employee manuals, or reliance).
Pancza conceded that the term of his employment was never
discussed, nor were the bases for termination ever raised by
either party. See Pancza Dep. at 88-90 and 179-181. As the
court noted in Diskin:
The plaintiff's breach of contract cause of action
in effect rests on little more than alleged oral
assurances by upper management personnel that he
would be discharged for cause. Those assurances
are insufficient to bring this case within the
limits of Weiner. (citations omitted).
Diskin, 522 N.Y.S.2d at 890.