April 9, 2009
KEITH GREENE, PLAINTIFF-RESPONDENT,
J.B. HUNT TRANSPORT, INC., DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Middlesex County, SC-1502-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted March 18, 2009
Before Judges Stern, Rodríguez and Ashrafi.
Defendant appeals from an "order for entry of Judgment" in the amount of $3,000, plus costs, following a bench trial in the Special Civil Part - Small Claims Section. Defendant contends that "[t]he trial court erred in determining that [its] driver's manual created a contract of employment" and "erred in finding that [it] unlawfully terminated [plaintiff's] employment". We reverse the judgment.
The facts developed at trial included the following. Plaintiff became employed by defendant in February 2008 as a commercial driver. On February 20, 2008, he signed a "Certificate of Understanding and Agreement," which stated:
I certify that I have received a copy of the J.B. Hunt Transport Driver's Manual published June 1, 2005. I have read and understand the provisions outlined in this manual and agree to follow them. I also understand that the provisions in this manual by no means constitute all the rules, policies and benefits, both written and unwritten, as business requires. Neither these rules, policies and benefits, nor any other written or oral statement are contracts of employment and both the employee and the Company understand that employment may be terminated by either at any time for any reason.
Further, I understand that should I become liable for any fines or charges, I hereby authorize J.B. Hunt Transport to deduct the pay adjustment(s) from my base wage as outlined in the Payroll section of this manual.
I certify I have read and understand the policy on Accident Reporting as outlined in the Driver's Manual. I agree to abide by this policy.
I certify I have read and understand the actions, as presented in orientation, which may result in Automatic Termination on the first offense, with no review.
This is to verify that I have been issued and instructed to keep in my possession, or in my truck, a complete copy of the Department of Transportation Federal Motor Carrier Safety Regulations. (FMCSR)
I have been instructed by J.B. Hunt Transport, Inc. to familiarize myself with the contents of the Department of Transportation Federal Motor Carrier Safety Regulations. (FMCSR)
I certify that I have completed J.B. Hunt Transport's E.E.O. Training and Awareness Program (Non-Discrimination Policy) as outlined in the Driver's Manual.
The next day, plaintiff executed defendant's "Driver Application-Certifications, Disclaimers, and Acknowledgements."
The first paragraph thereof provides:
1) General Disclaimers:
I understand that J.B. Hunt Transport, Inc., hereafter "J.B. Hunt", is under no obligation to hire me, that any employment I am offered will not be for any specified period of time, that my employment is terminable by either party at will with or without notice or cause, and that no representative of J.B. Hunt has authority to enter into any agreement with me contrary to the foregoing. I understand that nothing contained in my employment application, or in granting of an interview, is intended to create an employment contract between J.B. Hunt and myself for either employment or for the providing of any benefit. I understand that none of the benefits or policies in any handbook issued to me by J.B. Hunt are intended by reason of its publication to confer any rights or privileges to any benefits or policies, or entitle me to remain employed by J.B. Hunt, or to change my status as an "at will" employee (as permitted by law). I understand that all statements and provisions in the handbook are procedure or are a guideline and that J.B. Hunt has the right to change any policy, benefit, or procedure at any time without notice.
Plaintiff testified that he and the other drivers in his orientation class received a 2008 drivers' manual. That manual included "Disciplinary Guidelines," which embodied "[a]ctions which may result in disciplinary action or termination." That section of the manual read:
This manual contains highlights of policies, procedures, guidelines, benefits and rules but by no means constitutes all policies, procedures, guidelines and rules of J.B. Hunt for Company Drivers. No written statements in this driver manual, or oral statements, are contracts of employment, and both the employee and the company understand that employment may be terminated by either at any time, for any reason. This Driver Manual does not guarantee employment for any definite period of time. The Company has the right to modify its policies, procedures, guidelines and benefits, both written and unwritten, as business requires. . . . .
Actions Which May Result in Disciplinary Action or Termination. There are certain other serious actions that may result in the termination of your employment. These offenses include, but are not limited to:
● Excessive or serious violations on your motor vehicle record. ● Failure to comply with J.B. Hunt policies and procedures, federal, state, or local laws or regulations. ● Overall performance, conduct, and attitude not in the best interest of J.B. Hunt or which is deemed to damage the reputation of the company. This includes, but is not limited to misconduct of any kind that results in a customer's request to remove or disallow an employee from a customer site. ● DOT preventable collision or multiple minor preventable collisions. ● Failure to notify your supervisor or Safety Claims Department immediately upon receipt of a traffic violation. ● Serious misconduct of any kind. ● Insubordination. ● Refusal of a dispatch that can be safely and legally delivered. ● Deviation from an assigned work area or dispatch. ● Unauthorized passenger. Authorization for passengers must be in writing from J.B. Hunt for any company vehicle (see Authorized Passenger Policy). Parking in an unauthorized location, or leaving a work location without authorization is prohibited.
There is no dispute that plaintiff was involved in three accidents or "safety events" between May 6 and June 13, 2008. According to plaintiff, he was wrongfully terminated by defendant after the "three incidents," and he advised defendant that its termination policy was violated. He testified he received the 2008 drivers' manual and declined to participate in the "accident review" after the third accident because he had been terminated in violation of the appropriate "accident review policy." Plaintiff argued that the first and third accidents should not have been used against him based on the fact the first was found "non preventable" by defendant and because the police report regarding the third reflected he was not at fault, and the company failed to do a proper investigation. In other words, according to plaintiff, he could not be terminated because only one accident was "preventable."
Carl De Brizzi, defendant's account manager, testified that "[o]n reviewing the driver's history obviously three events as we outlined here in less than 30 days, two within one week, . . . met the criteria as far as frequency, accidents and their frequency which resulted in a termination formality and process." He said the termination "was based on the frequency of the event in such a short period of time." According to De Brizzi, "it wasn't a matter of preventable/non-preventable, it was frequency." He said that even if he had reviewed the report of the third accident, he would still find it "preventable."
Defendant argued there was no excuse that plaintiff "declined" to appear for the final review, whereas plaintiff claimed he did not have to participate because he had already been improperly terminated.
The judge found, "as a matter of fact," that plaintiff "was not given a copy of the 2005 agreement, but rather he was given a copy of the 2008 agreement." The judge also found that plaintiff was given a copy of the 2008 drivers' manual. The judge then concluded that the Woolley disclaimer in the manual "does not meet the requirements subsequently [en]unciated by the Supreme Court and the Appellate Division's interpreting the [Woolley] case." See Woolley v. Hoffmann-La Roche, Inc., 99 N.J. 284, modified, 101 N.J. 10 (1985). He found "that the disclaimer contained in the handbook [is] . . . insignificantly drawn and it's on a page mixed up with other things that it would not draw the attention to the average person and I find that it is totally ineffective." The judge therefore found "that the manual constitutes a contract of employment, which is designed to govern the employment of the plaintiff and was relied on by the plaintiff for that purpose." The judge concluded the same with respect to the driver application certification and acknowledgement, and that the first paragraph thereof was "not effective" because it was in "very fine print," "not highlighted, not bold type, not prominently displayed and not . . . designed to attract the attention of the employee."
The judge also concluded that the driver of the other vehicle cut plaintiff off in the third accident so that "the third one was not preventable because the plaintiff had already stopped and the other driver cut in front of him and he couldn't have prevented it." The judge concluded that the termination was, therefore, "not in accordance with the disciplinary guidelines of multiple minor preventable condition" because "[m]ultiple is really more than two" and the "termination of the plaintiff was in violation of [defendant's] responsibility under the agreement." As plaintiff made more than $1,000 a week and was unemployed for more than three weeks, the judge awarded the maximum damages that could be awarded.
On May 6, June 10, and June 13, 2008 plaintiff was involved in separate accidents. The first was deemed "N/P incident" on defendant's form. The second was deemed "preventable," and he was suspended two days, and placed on probation for 60 days with special training. The company's "Safety Event Review" report on the third indicated that "driver refused to sign document" as he left the company. The "Safety Event Review" indicated "inattention on the driver's part."
The issue before us is whether the documents received by plaintiff gave rise to a contractual right to employment which would be terminable only for the reasons stated in the drivers' manual. We agree with plaintiff that "if an employee can prove that an employee manual containing jobsecurity and termination procedures could reasonably be understood by an employee to create binding duties and obligations between the employer and its employee, the manual will constitute, in effect, a unilateral offer to contract that an employee may accept through continued employment." Under Woolley, an implied promise is enforceable unless the manual contains a clear and prominent disclaimer. Woolley, supra, 99 N.J. at 285-86. We find no basis for disturbing the judge's fact finding that plaintiff signed for and received the 2005 certificate and 2008 manual. See Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474 (1974).
An implied contract to discharge only for cause or for the reasons stated in a manual nullify the rule that employees may generally be fired at will. The employment relationship is "at- will unless specifically stated [otherwise] in explicit, contractual terms." Bernards v. IMI Sys., Inc., 131 N.J. 91, 106 (1993). See also, e.g., Shebar v. Sanyo Business Sys. Corp., 111 N.J. 276, 284-90 (1988); Velantzas v. Colgate- Palmolive Co., 109 N.J. 189, 191-92 (1988). As stated by Justice Handler in Witkowski v. Thomas J. Lipton, Inc., 136 N.J. 385, 392-93 (1994):
An employment manual providing terms and conditions of employment that include grounds and procedures for dismissal can create an employment contract. This Court held in Woolley that "absent a clear and prominent disclaimer, an implied promise contained in an employment manual that an employee will be fired only for cause may be enforceable against an employer even when the employment is for an indefinite term and would otherwise be terminable at will." 99 N.J. at 285-86. Therefore, the Court ruled that the termination clause of the company's employment handbook, including the procedure required before termination, could be contractually enforced.
The Court in Woolley explained that "[a] policy manual that provides for job security grants an important, fundamental protection for workers." Id. at 297. In that case, the termination policy was "definite," id. at 305 n.12, "explicit and clear," id. at 306, and provided "a fairly detailed procedure," id. at 287 n. 2. Hence, the Court reasoned "job security provisions contained in a personnel policy manual widely distributed among a larger workforce are supported by consideration and may therefore be enforced as a binding commitment of the employer." Id. at 302.
The key consideration in determining whether an employment manual gives rise to contractual obligations is the reasonable expectations of the employees. "When an employer of a substantial number of employees circulates a manual that, when fairly read, provides that certain benefits are an incident of the employment (including, especially, job security provisions)," courts should continue and enforce that manual "in accordance with the reasonable expectations of the employees." Id. at 297-98.
In sum, under Woolley, the basic test for determining whether a contract of employment can be implied turns on the reasonable expectations of employees. A number of factors bear on whether an employee may reasonably understand that an employment manual is intended to provide enforceable employment obligations, including the definiteness and comprehensiveness of the termination policy and the context of the manual's preparation and distribution.
The conclusion that the disclaimer was not prominent, adequate, or that the manual gives rise to a contract presents a question of law. See Manalapan Realty v. Manalapan Twp. Comm., 140 N.J. 366 (1995). "Actions which may result in disciplinary action or termination" in the 2008 drivers' manual include a "DOT preventable collision or multiple preventable collisions." The record does not explain any difference between a "DOT preventable collision" and any other "preventable" collisions. Plaintiff does not contend that the second accident, as found by defendant, was not a "preventable collision," much less a "DOT preventable collision." Defendant states that the discharge was authorized "[p]ursuant to the Federal Motor Carrier Safety Administration" because whether an accident is "preventable" "can be based on a company-adopted definition, thus allowing the company to establish a goal for its safety management programs." Unfortunately, in support of that proposition it merely cites to a website without a particular reference, and contends that "J.B. Hunt's determination of whether or not [plaintiff's] collisions were preventable is in accordance with the procedure established by the FMCSA."*fn1 While the defendant does not explain the reason for that conclusion, we are nevertheless satisfied that the defendant's discharge of plaintiff after his third accident in approximately five weeks, including two over a seven-day period, was indisputably based on "frequency" and done in good faith, and the "disciplinary guidelines" in the 2008 drivers' manual, read as a whole, does not prevent that action.
In other words, assuming the 2008 drivers' manual was circulated widely enough and did not have sufficiently prominent disclaimers, such that the manual became an enforceable agreement as to the basis and procedure for terminating a driver, the proofs do not permit a finding that the manual prevents plaintiff's discharge where he was involved in what the company could reasonably consider to be two preventable accidents.
Accordingly, we reverse the judgment of the Special Civil Part and order the entry of a judgment for defendant.