Opinion
01 Civ. 5563 (BSJ)
May 16, 2003
OPINION AND ORDER
I. Introduction
Plaintiff Joseph Mirabella commenced this action on October 23, 2000 by filing a complaint in the Superior Court of New Jersey, Law Division, Ocean County, alleging breach of an implied obligation of good faith and fair dealing, breach of an employment contract, and defamation. Defendant Turner Broadcasting Sales, Inc., incorrectly pled as Turner Broadcasting Systems, Inc., ("Turner" or the "defendant") removed the action to the United States District Court for the District of New Jersey on the basis of diversity pursuant to 28 U.S.C. § 1332. Defendant filed a motion to dismiss the complaint for lack of personal jurisdiction and alternatively for a change of venue to the Southern District of New York. Additionally, the defendant moved for summary judgment with respect to the breach of good faith and covenant of fair dealing and breach of contract claims, and for dismissal of the defamation claim.
On June 15, 2001, Judge Mary L. Cooper held that the defendant was not subject to personal jurisdiction in New Jersey and transferred the action to this Court pursuant to 28 U.S.C. § 1406(a). On August 20, 2001, this Court permitted the defendant to refile and serve its motion for summary judgment and dismissal. For the reasons set forth below, defendant's motion for summary judgment with respect to the breach of good faith and covenant of fair dealing and breach of contract claims is granted, and defendant's motion to dismiss the defamation claim is denied.
1. Breach of Implied Covenant of Good Faith and Fair Dealing
"It is well settled [under New York law] that absent an agreement establishing employment of a fixed duration, an employment relationship is presumed to be a hiring at will, terminable at any time by either party." Gill v. Pathmark Stores, Inc., 655 N.Y.S.2d 623, 624 (2d Dep't 1997). Furthermore, New York law does not impose a duty of good faith and fair dealing with respect to termination of an at-will employment agreement. See Nunez v. A-T Fin'l Info., Inc., 957 F. Supp. 438, 443 (S.D.N.Y. 1997); Knudsen v. Quebecor Printing (U.S.A.) Inc., 792 F. Supp. 234, 238 (S.D.N.Y. 1992). However, New York courts and the Second Circuit have created an exception to an employer's right to terminate an employee at-will in some limited circumstances. In Wakefield v. N. Telecom, Inc., 769 F.2d 109 (2d Cir. 1985), the Second Circuit held that an at-will employee could recover under a breach of covenant of good faith and fair dealing theory if the employee could demonstrate that his employment was terminated so that the employer could avoid paying him earned commissions on completed sales.
The parties appear to agree that New York law applies to the claims in this action. Consequently, the Court will apply New York law. See Int'l Bus. Machines Inc. v. Libert Mut. Fire Ins. Co., 303 F.3d 419, 423 (2d Cir. 2002).
In the instant case, plaintiff contends that the defendant breached an implied covenant of good faith and fair dealing because he was terminated so that the defendant could "avoid paying him commissions and bonuses he had earned." (Am. Compl. §§ 28-29). However, the Court finds that this case does not fall within the limited exception to employment at-will recognized by the Second Circuit in Wakefield because "where no fixed amount was due at the time of termination, courts have refused to place a restriction on employer's unfettered discretion to fire an at-will employee at any time." Plantier v. Cordiant PLC, 97 Civ. 8696, 1998 U.S. Dist. LEXIS 15037, at *7 (S.D.N.Y. Sep. 1998) (holding that no implied covenant of good faith and fair dealing existed because plaintiff's bonus was discretionary and "none was due when she was terminated.").
In this case, the 1999 performance incentives for which plaintiff was eligible were entirely discretionary. The March 8, 1999 memo that describes the incentives clearly stated that "[a]ll performance incentives are allocated at the discretion of [defendant's] senior management." (McLane Decl. Ex. E) Consequently, no fixed amount could have been due to the plaintiff at the time of his termination, and thus the defendant remained free to terminate plaintiff at-will.
Plaintiff's contention that the achievement of the sales goal for the year meant that he was entitled to "substantial incentive pay" is belied by the clear discretionary language of defendant's 1999 Account Executive Compensation Plan, issued on March 8, 1999. (McLane Decl. Ex. E).
2. Breach of Contract
Plaintiff also contends that his termination violated what plaintiff refers to as defendant's "Compliance Program," which states that employees are responsible for "reporting violations of the Code of Ethics". (Am. Compl. ¶ 38; McLane Supplemental Decl. Ex. A). Additionally, plaintiff claims that his termination violated defendant's "Open Door Policy," which provides a procedure for "employment-related issues to be reviewed through a specific chain of management personnel" and which states that an employee will not be retaliated against for use of the process. (Am. Compl. ¶ 34; McLane Supplemental Decl. Ex. A). Finally, plaintiff alleges that his termination violated the defendant's "Discipline and Discharge Policy" because plaintiff was terminated without a final written warning and without a chance for improvement. (Am. Compl. ¶¶ 37, 40; McLane Decl. Ex. C).
Plaintiff concedes that the "Compliance Program" is also referred to as "Code of Ethics and Business Conduct". (Pl.'s Supplemental Certification; McLane Supplemental Decl. Ex. A).
Although employment in New York is at-will unless otherwise agreed, an action for breach of contract may lie where a plaintiff can show that the employer made its employee aware of an express written policy limiting the right to discharge upon which the employee relied when accepting employment to his detriment. See Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458, 465 (N.Y. 1982). Plaintiff contends that the Code of Ethics, Open Door Policy, and Discipline and Discharge policies were express written policies that limited defendant's right to discharge him. The Court disagrees for a number of reasons.
The New York Court of Appeals has held that an express disclaimer of contractual rights in an employee manual bars an action for breach of contract based on the terms of the manual. Lobosco v. New York Tel. Co./NYNEX, 96 N.Y.2d 312, 317 (N.Y. 2001). In so holding the Lobosco court stated that Weiner, the case relied on by plaintiff here, stands only for the proposition that a personnel manual that states that employees can only be terminated for cause may support a breach of contract claim if the employee detrimentally relied upon that limitation when accepting employment. Lobosco, 96 N.Y.2d at 317 (stating that where a policy manual contains "conspicuous disclaiming language, . . . such disclaimer prevents the creation of a contract and negates any protection from termination plaintiff may have inferred from the manual's no reprisal provision.")
Here, the Policy Manual itself clearly stated
The policies and rules stated in this manual are intended as guidelines for Company employees and managers, and do not create a contractual obligation. [Defendant] is an "at will" employer and can terminate an employee's employment at any time without notice, for any reason, with or without cause, unless an employee has a written employment agreement or is covered by a collective bargaining agreement which expressly limits the Company's right to terminate the employee's employment at will.
McLane Supplemental Decl. Ex. A). Each provision relied upon by plaintiff, namely, the Compliance Program (or Code of Ethics), Open Door Policy, and Discharge and Discipline Policy appears under the "Table of Contents" of defendant's Policy and Procedure Manual. (McLane Supplemental Decl. Ex. A). Consequently, this express disclaimer applies to each of those provisions contained in the manual and bars a claim for breach of contract based on the terms of the manual.
Additionally, the Discipline and Discharge provision states, in bold and at the top of the page: "This policy is not intended to restrict or interfere with the Company's right to terminate or suspend employment in accordance with the terms of written employment contracts, or on an `at-will' basis, without "I cause and without notice. (McLane Decl. Ex. C).
Further, in addition to the express disclaimer contained in the Policy Manual itself, plaintiff signed a separate Employee Acknowledgment Statement around the time he was hired, which stated
I am aware that the policies and procedures contained in the Policy Manual DO NOT constitute a contract of employment. The Company does not guarantee anyone employment for any specific duration or for any specific hours per week. I understand that employment with this company is on an at-will basis for an indefinite period unless terminated at any time by myself or by the Company, or unless altered by a written Employment Agreement between myself and the Company which is signed by the President of the Company or an authorized officer of the Company. I also understand that employees hired by this company may voluntarily leave employment, and may be terminated by the employer at any time and for any reason.
(McLane Decl. Ex. B). For this additional reason, the Court finds that none of the provisions of the manual could have imposed a contractual obligation upon the defendant.
Finally, it is also worth noting that the plaintiff's claim for breach of contract is also insufficient because plaintiff has failed to properly allege that he relied on any of these provisions at the time he accepted employment with defendant. Instead, plaintiff alleges that he relied on these provisions when he challenged the behavior of his superiors.
3. Slander
Plaintiff's final claim is for slander. Specifically, plaintiff alleges that Frank Scrizzi, a Turner sales employee, told Kris Magel, a media buyer at Optimedia, that plaintiff "made a mess of his accounts." (Am. Compl. ¶ 45). Plaintiff also contends that in or about early 2000, an unidentified Turner sales employee told Kathy Clinton of the Weather Channel that plaintiff "had not performed in his position at Turner and relayed other negative comments about [plaintiff]," and that plaintiff was not hired by the Weather Channel as a direct result. (Am. Compl. ¶ 46). Finally, plaintiff alleges that Linda Yaccarino, plaintiff's former supervisor, told Scott Silverstein, the Advertising Sales Manager at Sci Fi Channel, that plaintiff "had not performed in his position at Turner and made other negative comments about [plaintiff]." (Am. Compl. ¶ 47). Plaintiff contends that all of the above statements "were knowingly false when made and/or were made in reckless disregard of their truth or falsity." (Am. Compl. ¶ 48).
Although the plaintiff labels his third cause of action as one for defamation, the Court notes that the claim is one for slander because it involves spoken defamatory statements.
To establish a claim for slander under New York law, a claimant must allege "(i) a false and defamatory statement of fact, (ii) of or concerning the claimant, (iii) publication to a third party, and (iv) injury to the claimant as a result." Scholastic, Inc. v. Stouffer, 124 F. Supp.2d 836, 849 (S.D.N.Y. 2000) (citations omitted). The "injury" element is presumed "when the defamatory statement takes the form of slander per se." Weldy v. Piedmont Airlines, Inc., 985 F.2d 57, 62-63 (2d Cir. 1993). Additionally, "statements . . . that tend to injure the plaintiff in his or her trade, business or profession" are slanderous per se. Albert v. Loksen, 239 F.3d 256, 271 (2d Cir. 2001).
Moreover, "[i]t is well settled that the test of a complaint's sufficiency is whether it is detailed and informative enough to enable defendant[s] to respond and that plaintiffs need not plead the allegedly defamatory statements in haec verba." Holt v. Welch Allyn, Inc., 95 CV 1135, 1997 U.S. Dist. LEXIS 5896, at *16 (N.D.N.Y. Apr. 15, 1997) (citations and quotations omitted). The Court finds that the plaintiff's allegations are sufficient to meet this standard.
The defendant contends that the slander claim must be dismissed because the statements at issue are entitled to a qualified privilege. Under New York law, a qualified privilege is available to a defendant when "[a] communication [is] made by a person with an interest or duty to make the communication and sent to a person with a corresponding interest or duty." Weldy, 985 F.2d at 61 (citations omitted). In this case, the Court is unable to assess whether the defendant was entitled to a qualified privilege with respect to the statements at issue because neither party provides information regarding the circumstances and purpose of the alleged conversations. Consequently, at this stage of the pleadings, the plaintiff's claim cannot be dismissed on the basis of defendant's qualified privilege.
Moreover, even if the Court could say at this point that the defendant was entitled to a qualified privilege, the Court rejects the defendant's argument that the slander claim must be dismissed because plaintiff failed to allege malice. A plaintiff may rebut a defendant's assertion of a qualified privilege by proving that a defendant made the statement knowing that it was false or with reckless disregard as to its truth. Weldy, 985 F.2d at 62 (stating that "[a] plaintiff may demonstrate abuse of the privilege by proving that the defendant acted (1) with common law malice . . . or (2) outside the scope of the privilege . . . or (3) with knowledge that the statement was false or with a reckless disregard as to its truth.") (citations omitted).
Although plaintiff did not comply with Fed.R.Civ.P. 15(a), the Court grants the plaintiff leave to file his amended complaint with respect to the slander claim only.
II. Conclusion
The defendant's motion for summary judgment with respect to the breach of covenant of good faith and fair dealing claim and the breach of contract claim is granted, and those claims are dismissed. The defendant's motion to dismiss the slander claim is denied. The case is referred to the Magistrate Judge assigned to this case for general pre-trial supervision.