UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY
October 8, 2003
CAROL RENART, PLAINTIFF,
CHARTWELLS, A CORPORATE SUBSIDIARY OF COMPASS GROUP, A CORPORATION, XYZ PARTNERSHIP, ABC CORPORATION, JOHN DOES 1 THROUGH 10 INCLUSIVE, FICTITIOUS NAMED DEFENDANTS, JOINTLY, SEVERALLY AND IN THE ALTERNATIVE, DEFENDANTS.
The opinion of the court was delivered by: Honorable Joseph E. Irenas
Presently before the Court are Defendant Chartwells' Motion for Summary Judgment and Motions in Limine filed May 29, 2003. Defendant seeks summary judgment on Plaintiff's claim that Defendant breached an implied contract when her employment was terminated without cause and without adherence to the termination procedures outlined in the employee handbook.
On May 25, 2001 this Court dismissed Plaintiff's claims against Defendant for breach of the implied covenant of good faith and fair dealing and intentional and negligent infliction of emotional distress This Court granted Chartwell's Motion for Summary Judgment on Plaintiff's remaining claim for wrongful discharge under the Family Leave Act on May 17, 2002, but granted Plaintiff leave to file an amended complaint asserting a claim for breach of implied contract. Plaintiff filed her amended complaint on May 31, 2002. Defendant now moves for summary judgment on Plaintiff's claim for breach of implied contract. For the reasons set forth below, Defendant's Motion for Summary Judgment is GRANTED.
Plaintiff Carol Renart was employed full time as a cook with Defendant Chartwells ("Chartwells") at Richard Stockton College in Pomona, New Jersey, from November 6, 1998 until she was discharged on November 5, 1999 for excessive and/or unexcused absences. Plaintiff alleges that because of implied promises in the employee handbook, she could be terminated only for cause and only after the procedures set forth in the handbook were followed. Plaintiff claims that Chartwells failed to follow the termination procedures outlined in the employee handbook.
When Plaintiff began her employment with Defendant, she signed a statement in conjunction with her employment application that declared: "[I] understand my employment and compensation can be terminated with or without cause or notice, at any time, at the option of either the company or myself." (Decl. of Eric Savage at Ex. B). This page of the application contained language directing Plaintiff to: "PLEASE READ VERY CAREFULLY BEFORE SIGNING BELOW." Id. Plaintiff does not dispute that she read and signed the application.
Plaintiff claims, however, that Chartwells' Associate Handbook, distributed to her at the start of her employment, trumps the employment application, and contractually obligates Chartwells to follow the progressive disciplinary procedures contained therein before terminating an employee on the basis of excessive and/or unexcused absences.
The Associate Handbook includes the following disclaimer on the first page, which is distinguished from the remainder of the text by bold-faced italic type on a shaded background:
This handbook is not intended to be nor does it
constitute an express or implied contract of any
kind in favor of associates nor shall any associate
or applicant for employment have any contractual
rights, claims or privileges against the Company by
virtue of this handbook. Moreover, nothing in this
handbook is intended to create any type of agreement
for employment or continued employment or guaranteed
hours of work.
(Decl. of Eric Savage at Ex. F).
The Handbook describes the company's policies and procedures on a variety of topics, including attendance and lateness. (Decl. of Eric Savage at Ex. F). The company's "Attendance and Lateness Policy", establishes a graduated process for disciplining employees who have accumulated an excessive number of absences. These disciplinary procedures provide for a series of warnings, and vary depending on the employee's status as a probationary or non-probationary employee.
Plaintiff alleges that, despite the explicit language of the Handbook's first page, the Handbook creates implied contractual obligations that Defendant breached when Plaintiff was terminated without the benefit of these progressive disciplinary procedures.
"[S]ummary judgment is proper `if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (quoting Fed.R.Civ.P. 56(c)).
In deciding a motion for summary judgment, the court must construe the facts and inferences in a light most favorable to the non-moving party. Pollock v. American Tel. & Tel. Long Lines, 794 F.2d 860, 864 (3d Cir. 1986). The role of the court is not "to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). "[A] party opposing a properly supported motion for summary judgment may not rest upon the mere allegations or denials of his pleading, but...must set forth specific facts showing that there is a genuine issue for trial." Id. at 248. (internal quotations and citations omitted).
We find no breach of implied contract in this case. Plaintiff could not have reasonably expected her employment to be terminable only for cause when she had specifically agreed to an employment- at-will relationship in her employment application. Plaintiff's signed employment application represents an individual employment contract that supercedes any implied contractual obligations that may have been created by Chartwells' Associate Handbook.
Although New Jersey courts have been willing to recognize a cause of action for breach of implied contract arising from an employer's failure to abide by statements as to termination made in employee handbooks, implied contracts in employment handbooks can be overcome by a "clear and prominent disclaimer" or "some other similar proof" that employment is at-will. See Woolley v. Hoffman-La Roche, Inc., 491 A.2d 1257, 1258, 1271 (N.J. 1985), modified on other grounds, 499 A.2d 515 (N.J. 1985). Here, there is both a clear and prominent disclaimer and, more importantly, a declaration in the employment application signed by Plaintiff as proof of the at-will employment relationship with Defendant. Thus, because Plaintiff's express agreement to an employment-at-will relationship trumps any implied contract, we grant summary judgment on those grounds and need not reach the analysis of the clear and prominent disclaimer issue.
Plaintiff's reliance on Woolley to establish that Chartwells made implied promises in this case is misplaced for two reasons. First, Plaintiff was an at-will employee because the employment application overcomes any potential implied contract that could arise from the employee handbook. Second, Plaintiff could not have reasonably expected that Chartwells could only terminate her for cause in light of the employment application expressly agreeing to at-will employment.
Plaintiff's signed employment application is an express individual employment contract and, thus, supercedes any implied contract that could arise from Chartwells' Associate Handbook.
In the Third Circuit and in New Jersey, there is a strong presumption that all employment relationships are terminable at-will by either party unless otherwise specified. See Varrallo v. Hammond Inc., 94 F.3d 842, 845 (3d Cir. 1996)(citing Witkowski v. Thomas J. Lipton, Inc., 643 A.2d 546, 552-53 (N.J. 1994)). However, New Jersey recognizes certain circumstances in which an at-will presumption can be overcome, such as an implied contract created by an employee handbook. See, e.g., Woolley, 491 A.2d at 1258 ("absent a clear and prominent disclaimer, an implied promise contained in an employment manual that an employee would be fired only for cause may be enforceable against an employer even when the employment . . . would otherwise be terminable at will"). Despite Woolley's allowance for exceptions to the at-will presumption, however, the Woolley court still recognized the need to protect the presumption and clearly stated that where employers show express proof that an employee is at-will, implied contracts do not overcome the presumption. Id. at 1271.
The Third Circuit recognizes the binding effect of terms in an employment application that set forth an at-will employment relationship. For example in Radwan v. Beecham Laboratories, the Plaintiff had signed an employment application in which he agreed that he could be discharged from his employment at any time. 850 F.2d 147, 150 (3d Cir. 1988). The Radwan court granted Defendant employer's motion for summary judgment against an employee's breach of an employment contract claim where the employee had accepted terms on an employment application that provided, without qualification, that he could be terminated at any time without previous notice. Id.
The Radwan court distinguished its case from Woolley, because "the question of the employee's tenure was specifically dealt with when he was hired, for [plaintiff] in his employment application agreed that he could be discharged at any time without previous notice." Id. According to the Third Circuit, Woolley does not "require that disclaimers of an intent to bind an employer not to discharge an employee must be in the employees manual and not in an individual agreement." Id.
Similarly, here, the Plaintiff executed an employment application that specifically stated Plaintiff's employment with Defendant could be terminated by either party at any time, with or without cause. Plaintiff read and signed the employment application that included a provision that states that her employment is at-will. The signed employment application explicitly establishes that an at-will employment relationship exists between Plaintiff and Chartwells.
In light of Plaintiff's signed employment application declaring that her employment with Chartwells could be terminated by either party with or without cause, Plaintiff could not have reasonably expected her employment to be terminable only for cause based on provisions in the employee handbook.
As the Woolley court noted, one of the most important criteria for determining if employment is at-will, is whether or not the employment manual created "reasonable expectations" in the employee about employment status. Woolley, 491 A.2d at 1264-65. In analyzing the reasonable expectations of an employee, the Third Circuit held in Radwan that "in view of [plaintiff's] acceptance of a term of employment providing without qualification that he could be terminated at any time without previous notice, he could hardly have any reasonable expectation that [the employer's] manual granted him the right only to be discharged for cause." 850 F.2d 147, 150 (3d Cir. 1988). The New Jersey Appellate Division similarly found that employees should reasonably expect "that their employment relations [are] not governed by any personnel manual but rather . . . by individual employment contracts." Ware v. Prudential Ins. Co., 531 A.2d 757, 761 (N.J.Super. 1987) (held that a management employee did not have a reasonable expectation that the policies set forth in an employee manual conferred employee benefits when he had an individual written employment contract expressly stating that his employment was at-will). *fn1
In the case at hand, analysis of the "reasonable expectations" of an employee must factor in the fact that Plaintiff signed an employment application that amounts to an individual employment contract providing for termination by either party at any time, with or without cause. When Chartwells' Associate Handbook is read in light of the signed employment application declaring that employment is at-will, no reasonable employee could think that they could only be fired for cause as a result of the Handbook. The employment application states that employment "can be terminated with or without cause or notice, at any time, at the option of either the company or myself" and expressly creates an employment-at-will relationship. This express agreement supercedes any implied contract that could stem from the employee handbook. Thus, because Plaintiff cannot establish an implied contract that has not been disclaimed or otherwise overcome by Defendant, summary judgment for Defendant is proper.
Because we find that the employment application creates an at-will employment relationship that prevents a reasonable employee from relying on the separate employment handbook as an implied contract, there is no need to reach the issue of whether or not the disclaimer in the employment manual itself meets the Woolley test for prominence and clarity. Also, because of the express at-will employment relationship created by the employment application, Chartwells need not show cause to terminate Plaintiff and we need not address the issue of whether or not Plaintiff was entitled to further disciplinary proceedings or if immediate termination was justified. Additionally, because we are granting Defendant's Motion for Summary Judgment, Defendant's alternative Motions in Limine are dismissed as moot.
For the reasons set forth above, the Court will enter summary judgment for Defendant on Plaintiff's claim for breach of implied contract, and will dismiss Defendant's Motions in Limine as moot. The Court will issue an appropriate order.
JOSEPH E. IRENAS, S.U.S.D.J.