Opinion
No. 47127
Decided March 29, 1984.
Employer and employee — Alleged breach of employment contract — May show employment agreement for one year where annual compensation specified and position of value given up to obtain the employment — Defamation — Qualified privilege not applicable where publication is to one outside the privilege or done with actual malice.
O.Jur 3d Employment Relations §§ 28, 30.
1. If an employee has given up a position of some value in order to enter the employment of another, such fact may be considered, in conjunction with an employment contract which provides for an annual rate of compensation, to show an employment agreement for a one-year period.
O.Jur 3d Defamation §§ 91, 92.
2. A communication, when made in good faith on a matter of common interest, between an employer and an employee or between two employees concerning a third employee is protected by a qualified privilege. Where the defamation is published to someone not within the qualified privilege or is done with actual malice, the privilege will not protect an individual.
APPEAL: Court of Appeals for Cuyahoga County.
Mr. John E. Duda, for appellant.
Mr. Marc W. Freimuth, for appellees.
Plaintiff, Peter Stearns, brought this action alleging the breach of an employment contract and libel and slander on the part of defendants Ohio Savings Association (OSA) and Laurence Cohn, a vice-president at OSA. On June 16, 1983, the court granted summary judgment for defendants. For the following reasons we reverse and remand.
Plaintiff was employed as a computer operator by Shaker Savings Association (predecessor to OSA) from February 1975 to December 1979. At that time, Shaker Savings closed its computer center, thus eliminating plaintiff's position. Plaintiff then worked for Lubrizol Corporation.
In mid-1980, OSA decided to revive the computer center. Plaintiff was contacted by Systemation, Inc., a company that had been retained by OSA to assist it (OSA) with restarting OSA's computer center. Plaintiff was interviewed by Frank Zombek of OSA and offered the position of lead computer operator at a salary of $17,500 per year. Plaintiff accepted this offer and commenced work at OSA on August 25, 1980 after leaving Lubrizol. No written agreement or contract of employment was offered or requested by either party. Stearns further admitted in his deposition that no one at OSA represented to him that he was being given an employment contract for a year or any other period of time except by way of the annual salary.
In December 1980, Cohn, OSA's Data Center Manager, recommended that plaintiff be given a $350 per year merit/incentive raise effective January 1, 1981.
During January 1981, Cohn became unhappy with plaintiff's performance and advised other OSA officials of this concern including plaintiff's access to OSA's valuable computers. Cohn indicated to Frank Zombek that he wished to terminate plaintiff's employment with OSA.
On February 7, 1981, Cohn fired plaintiff as of that day. Cited as reasons were plaintiff's lack of ability to supervise subordinates, his lack of communicative skills, failure to carry out directives, poor organization, exceeding authority, and questionable learning capability. Plaintiff later met with Cheryl Cooper, manager of employee relations at OSA, to discuss the reasons for his termination.
In response to an inquiry from a prospective employer of plaintiff, OSA sent a written response indicating only the position plaintiff had held and the dates of his employment with OSA. Cohn also responded to another inquiry orally.
Based on this evidence the court granted defendants' motion for summary judgment. Plaintiff appeals citing one assignment of error.
Assignment of Error
"The common pleas court erred in granting defendants-appellees' motion for summary judgment."
Summary judgment may only be granted where, construing the evidence most strongly in favor of the party against whom the motion is made, reasonable minds can come to but one conclusion and that conclusion is adverse to the non-moving party. Civ. R. 56(C).
Appellant first contends that the court erred in granting summary judgment against him on his claim for breach of an employment contract. The rule in Ohio is that in the absence of facts and circumstances which indicate that the agreement is for a specific term, an employment contract which provides for an annual rate of compensation, without making provision as to the duration of the employment, is terminable at will by either party. Henkel v. Educational Research Council (1976), 45 Ohio St.2d 249 [74 O.O.2d 415]. In stating what additional facts and circumstances were important to determining whether there was a valid employment contract, the court in Henkel, supra, cited with approval 2 Restatement of the Law 2d, Agency (1958) 339-340, Section 442, Comment b, which pertinently states:
"However, the fact that payment is to be made in accordance with a time unit is evidence, in connection with other relevant facts, indicating that the agreement is for such unit. Thus, an agreement for the period of time mentioned as that for payment, or as the basis for payment, is indicated if one party pays consideration aside from his promise to employ or to serve; or if the agency is an important one and of a kind such that a temporary appointment would not be likely to be made; or if, as the principal has notice, the employee has made an important change in his general relations in order to accept the position, such as the removal of himself and his things to a new place; or if he has given up a position of some value in order to enter the employment. * * *" (Emphasis added.)
In the instant case, appellant stated in his affidavit that in August 1980 he was employed at Lubrizol when Systemation, Inc., on behalf of OSA, approached and offered him the position of operations manager subject to approval by OSA. Appellant stated that he met with Frank Zombek of OSA and explained to him his salary and benefits at Lubrizol. He informed Zombek that he would not leave Lubrizol for less than $17,500 per year. Zombek agreed to this and also told appellant that he (appellant) would have hiring responsibility for the computer staff. Appellant's affidavit additionally indicates that he was given a merit/incentive raise in December 1980.
Looking at this evidence most strongly in appellant's favor, as we are bound to do, there is a question of fact whether the employment was for a term of at least one year. OSA was aware that appellant had given up a valuable position with Lubrizol in order to accept their offer. See Henkel, supra. Moreover, OSA openly recruited appellant, bolstering his reliance on their offer particularly in view of his past satisfactory experience with OSA. Hence, appellant has presented evidence, in addition to the annual salary, which presented a question for the trier of fact. Accordingly, the trial court erred in granting summary judgment on the issue of the breach of an employment contract.
Appellant also contends that the court erroneously granted summary judgment on his claims for libel and slander. These allegations are set out in appellant's affidavit. Appellant states that Cohn disseminated a written notice to other OSA employees notifying them of the reasons for appellant's termination. He also alleges spoken statements by Cohn to Zombek and Randy Garlock (another OSA vice-president) to the effect that appellant was going to damage millions of dollars of computer equipment if he were not terminated.
These reasons were: lack of ability to supervise, lack of communicative skills, failure to carry out directives, poor organization, exceeding authority, and questionable learning capacity.
Usually, such communication, when made in good faith on a matter of common interest, between an employer and an employee or between two employees concerning a third employee are protected by a qualified privilege. Gray v. General Motors Corp. (1977), 52 Ohio App.2d 348 [6 O.O.3d 396]. However, where the defamation is published (including spoken or written) to someone not within the qualified privilege or is done with actual malice, the privilege will not protect an individual. Gray, supra.
In the case at bar, appellant states in his affidavit that these notices and statements, while directed to persons normally within the qualified privilege, were also made to others outside the qualified privilege and that these representations were maliciously made. Hence, an issue of fact is raised precluding the granting of summary judgment.
Appellant's assignment of error is sustained.
Judgment is reversed and remanded.
Judgment reversed and cause remanded.
JACKSON, J., concurs.
PARRINO, P.J., dissents.
I respectfully dissent.
The syllabus of Henkel v. Educational Research Council (1976), 45 Ohio St.2d 249 [74 O.O.2d 415], states:
"In the absence of facts and circumstances which indicate that the agreement is for a specific term, an employment contract which provides an annual rate of compensation, but makes no provision as to the duration of the employment, is not a contract for one year, but is terminable at will by either party."
The court, in the body of the opinion, also cited with approval 2 Restatement of the Law 2d, Agency (1958) 339-340, Section 442, Comment b, which is quoted by this court in the majority opinion. That comment states that if the employee has given up a position of some value to enter the employment such fact may be considered to show that the setting of a salary for a time unit indicates an employment agreement for that period of time. The facts set forth by appellant in the instant case, however, preclude such a finding. Appellant stated in his deposition that no one told him or led him to believe that he was to be employed for a stated period of time and further it was not until after he was discharged that someone told him since he had been hired at a yearly salary he had in fact been hired for one year. I do not construe Henkel so broadly as to require a trial for breach of contract simply because appellant was fired less than a year after he was hired and he was hired away from another company with his rate of pay set as an annual salary.
Appellant has also failed to adequately allege non-privileged publication of defamatory statements. Appellant was unable to name any person outside the qualified privilege to whom the alleged defamatory statements were made. Further, the mere allegation that the statements were made maliciously to persons within the qualified privilege is insufficient to raise a question of fact.
I would affirm the grant of summary judgment as to both causes of action.