United States District Court, D. New Jersey
KEVIN McNULTY, District Judge.
This case arises out of an allegedly false accusation of assault in the workplace. Anthony Villar reported to his employer that his supervisor, plaintiff James Barrett III, had struck him. The employer, defendant Walgreens Inc., was unable to substantiate Villar's allegations. Walgreens nevertheless elected to transfer Barrett out of his usual store. That transfer, Barrett alleges, made his job far less desirable: his new assignment offered fewer hours, provided less job security, and required him to work in a more dangerous neighborhood. Rather than accept the transfer, Barrett essentially stopped working for Walgreens.
Barrett, claiming that he never assaulted Villar, has sued both Villar and Walgreens. Defendants Walgreens and Villar have moved for summary judgment as to all counts, and for sanctions.
Barrett denies the assaults, and Walgreens' investigator inspected security camera footage that is inconsistent with Villar's account. That is sufficient to defeat Villar's motion for summary judgment as to the counts asserted against him: defamation (Count Four) and tortious interference with economic advantage (Count Five). I will grant the motion for summary judgment, however, as to the claims asserted against Walgreens: breach of the implied covenant of good faith and fair dealing (Count One), wrongful discharge (Count Two), and violation of wage payment laws (Count Three). Walgreens' motion for Rule 11 sanctions will be denied.
The plaintiff, James Barrett III, worked part-time at a Walgreens store in Fort Lee, New Jersey. (Counterst.,  ¶ 4). At the time of the incidents in question, he was one of several assistant managers. (Id. at ¶ 4). He worked for Walgreens for more than two decades, but had no written employment contract. (Id. at ¶¶ 4, 27, 31).
One of the employees under Barrett's supervision was a store clerk named Anthony Villar. Villar testified that on several occasions Barrett mistreated him: once Barrett allegedly "yelled at" Villar, and on several occasions Barrett allegedly punched Villar. (Villar Dep., 11, 16-17, 22). Villar reported these incidents to Walgreens. He said, for example that he was "repeatedly punched in the arm three times by James Barrett"; that Barrett "pushed me really so violently that I felt sorry for myself"; that Villar "got punched one more time violently really hard also"; and that Barrett "punched my right shoulder down as he walked away." Things allegedly came to a head on July 12, 2012. (Villar Letter, 1-2). On that day, according to Villar, he and Barrett were working at adjacent cash registers. Barrett "moved toward" Villar "rapidly as he screamed ahhh!, " then "placed his right hand around my neck and slowly moved it toward my chest, smacked me three times each time less hard and ended with soft smacks." Id. at 2. Barrett's actions frightened Villar: "I was actually scared to move, I thought I was going to get hurt." Id.
Villar described the July 12, 2012 incident, as well as the earlier ones, in a letter to his store manager, Steven Johnson. (Villar Letter). He also shared his allegations with three assistant managers, and with some members of his family. (Counterst., ¶ 15). From its Loss Prevention Department, Walgreens dispatched Franklin Romero to investigate Villar's claims. Romero's investigation did not turn up any evidence to corroborate Villar's allegations. Romero first interviewed Villar, who acknowledged that there were no witnesses to any of the alleged assaults. Id. at ¶ 16. Romero then interviewed Barrett, who essentially denied Villar's allegations. (Romero Dept, 30-33). Barrett did explain that "I kid around with him [illegible] but in a friendly way." (Barrett Voluntary Stmt., 1). He stated, "If I punched him in the arm it would be out of fun not harm." (Barrett Voluntary Stmt., 1). Romero also reviewed the security camera footage for July 12, 2012, and neighboring dates. He saw "no physical contact" between Barrett and Villar. (Romero Dep., 26). As Romero explained it, "nothing that was alleged regarding this punching and slapping could be substantiated by myself." Id.
Barrett claims that, after the investigation was conducted, Romero and Johnson said he would receive only a warning. (Counterst., ¶ 19). However, Walgreens subsequently informed Barrett that he would be transferred out of the Fort Lee store. Initially, they explained, he would be assigned to a store in Fair Lawn. After a short stint there, however, Barrett would likely become a floating manager, working in different stores as needed. Id. at ¶¶ 18-24. Barrett claims that those stores were less desirable than his usual Fort Lee store. They offered fewer hours and little job security, or they were located in unsafe areas. Id. at ¶¶ 19, 21. Barrett admits that Walgreens did not explicitly terminate him and acknowledges that he accepted the reassignment to Fair Lawn. (Barrett Dep., 120; Counterst., ¶ 18). Barrett alleges, however, that the new arrangement was so unfavorable to him that he essentially stopped working at Walgreens. (Barrett Dep., 204-06).
Barrett brought suit against Walgreens in New Jersey state court in August of 2012. The case was removed to federal court, and Villar was added as a defendant. ( See ECF Nos. 1, 11).
This court has diversity jurisdiction under 28 U.S.C. § 1332(a)(1). Barrett is a citizen of New Jersey. The defendants allege that Villar is a citizen of New York, and Barrett does not contest this. (Counterst., ¶¶ 1, 3). According to the notice of removal, Walgreens Inc. (properly identified as Walgreen Eastern Co., Inc.) is a New York corporation with its principal place of business in Deerfield, Illinois. ( See id. at ¶ 2; Notice of Removal, ECF 1 at 2 ¶5). The claimed damages, though not specified, would appear to exceed $75, 000. (Id. at 2-3 ¶6)
The currently operative amended complaint contains five counts. (ECF 11) Against Walgreens, Barrett claims breach of the implied covenant of good faith and fair dealing (Count One), wrongful discharge (Count Two), and violations of New Jersey law for failure to pay him for unused sick and vacation time (Count Three). Against Villar, Barrett makes two claims: defamation (Count Four) and tortious interference with economic advantage (Count Five).
The defendants have filed a motion for summary judgment with respect to all five counts of the complaint.
I. Breach of the implied covenant of good faith and fair dealing
Count One of the complaint alleges a breach of the implied contractual covenant of good faith and fair dealing. That cause of action requires an underlying contract. Barrett had no formal written employment contract with Walgreens, but alleges that they were nevertheless in a contractual relationship, for two reasons.
First, Barrett argues that Walgreens represented in "various writings" that it would treat employees fairly. Those representations, says Barrett, were contractual, and that contract contained an implied covenant of good faith and fair dealing. Walgreens allegedly violated that covenant when it transferred Barrett to a new store based on false allegations of assault. (Compl., ¶¶ 21-22).
Second, Barrett argues that his manager, Steven Johnson, and a manager from the Loss Prevention Department, Franklin Romero, represented to him that the only discipline he would face was a warning. That representation, Barrett argues, created a contract. When Walgreens subsequently transferred him, they breached the implied covenant of good faith and fair dealing inherent in that contract. (Opp., 52).
Neither of those theories withstands scrutiny. Summary judgment will be entered in favor of Walgreens on Count I.
A. Representations made in "various writings"
An implied covenant of good faith and fair dealing inheres in every contract. Wade v. Kessler Inst., 798 A.2d 1251, 1259 (N.J. 2002). That presupposes the existence of a contract of which the covenant is a part. Id. at 1262. One might suppose that a decades-long employment relationship would create a contract (or implied contract) between the employer and the employee. As a matter of New Jersey law, however, one would be wrong.
In the employment context, New Jersey courts have created a default rule: Unless the parties agree otherwise, an employment relationship is at-will. Such an at-will relationship can be terminated by either party for any reason or for no reason (so long as the reason does not independently violate public policy). See Wade, 798 A.2d at 1258-59. Absent a contrary agreement, then, there is no contract, and no implied covenant of good faith and fair dealing, inherent in the employment relationship.
As a prerequisite to his claim of breach of the implied covenant of good faith and fair dealing, Barrett will need to show that he and Walgreens entered into an agreement that transformed his presumptively at-will employment relationship into a contractual relationship.
Barrett argues that Walgreens created such a contract by making representations to him in "various writings, " including "personnel policies and procedure manuals, retirement plans, employee guidelines, " and "letters of intent." (Counterst., ¶ 21). Those documents, Barrett contends, represented to Barrett that the company would treat him "fairly and equitably." (Compl., ¶ 21). And such representations, he claims, are contractual in nature. (Counterst., ¶ 21-22). Transferring Barrett to a new store and reducing his hours allegedly prevented him from performing his duties and enjoying the fruits of that contract. (Compl., ¶ 22). Walgreens thus violated the implied covenant of good faith and fair dealing inherent in that contract.
An employer's representations in a widely distributed publication like an employee manual may indeed give rise to enforceable obligations. When the manual, fairly read, provides that certain benefits are an incident of employment, an implied contract between the employer and the employee is created. Woolley v. Hoffman-La Roche, Inc., 491 A.2d 1257, 1264 (N.J. 1985). And such a contract, like ...