The opinion of the court was delivered by: PENN
JOHN GARRETT PENN United States District
The case is presently before the Court on defendant's motion for summary judgment and plaintiff's cross motion for partial summary judgment, to consider the existence, conditions and duration of plaintiff's employment contract with defendant. Specifically, the parties move the Court to determine whether the employment contract guaranteed Mr. Minihan a permanent position with American Pharmaceutical Association. The complaint alleges that the defendant denied the plaintiff annual leave and terminated him in bad faith. Defendant asserts that all of these issues can be disposed of on its summary judgment motion. After careful consideration of the motion, the opposition thereto and the record in this case, the Court grants defendant's summary judgment on the contract and punitive damages issues and grants summary judgment, sua sponte, for plaintiff on the issue of annual leave.
The facts are as follows. Plaintiff, Cornelius J. Minihan, a specialist in journalism and publications, applied for a position as Director of Publications with the American Pharmaceutical Association. Prior to this, Mr. Minihan was unemployed. Minihan Deposition at 10-12.
On March 23, 1982, Dr. William Apple, then defendant's president, interviewed Mr. Minihan and offered him a position as Director of Publications. The letter of employment, which purportedly confirmed the agreement, stated that Mr. Minihan would have "full-time; permanent" employment, at an annual salary of $40,000. Defendant Exhibit 1. The letter and allegedly Dr. Apple's comments referred to the conditions of employment at the Association as set forth in the "American Pharmaceutical Association Personnel Policy Manual (Manual)." Defendant's Exhibits 1 and 2, Minihan at 20. Mr. Minihan believed that "permanent" meant he was guaranteed employment for as long as he satisfactorily performed and he concluded that Dr. Apple's statements "supported this view." Minihan at 24. In late September or early October, Dr. Apple informed Mr. Minihan he intended to dissolve the Publications Division due to budgetary economies and staff reorganization. Although plaintiff was assured that he had performed commendably, his employment was scheduled to terminate on December 31, 1983. Minihan at 32, 33.
At this same time, a memorandum dated September 28, 1983 notified all personnel of a change in the annual leave policy outlined in the manual. Employees were required to choose either to receive a lump sum payment of any annual leave in excess of 40 hours or have it deposited in a special medical account. Lack of appropriate notification would result in the annual leave automatically charged to the medical account and consequently not accessible upon termination. Defendant Exhibit 5. Mr. Minihan asserts that, in a conversation subsequent to the letter's circulation and after oral notice of termination, Dr. Apple requested that he "stay on as a favor . . ." until he could find a comparable job somewhere else. In addition, Dr. Apple allegedly assured plaintiff that arrangements would be made for his annual leave. Minihan at 34.
Dr. Apple died on December 17, 1983. Plaintiff then confirmed in writing his understanding of Dr. Apple's promise for further employment and guaranteed annual leave. Defendant's Exhibit 9. After Dr. Apple's death, his successor Maurice Q. Bectel, advised Mr. Minihan, in a letter dated December 30, 1983, that he intended to pursue Dr. Apple's original plan for reorganization. As a result, Mr. Minihan would be terminated on December 31, 1983 and paid an additional two weeks salary without any work obligation. Defendant's Exhibit 10.
It is uncontested that Mr. Minihan performed his duties adequately. The focus of the dispute is whether the defendant could, by the terms of the employment agreement, terminate Mr. Minihan "without cause". Plaintiff contends that the employment contract guaranteed him a position unless he performed unsatisfactorily. Minihan Complaint para. 6.
Both parties agree that for the purposes of this motion, the Manual merges with the employment letter to form the employment agreement. In addition, it is uncontested that Dr. Apple, as president of the Association, offered Mr. Minihan "full-time; permanent" employment. Plaintiff's evidence, primarily consisting of Ms. Weschler's and his deposition, is in substantial agreement with the defendant's. Plaintiff, avers that Dr. Apple made statements from which plaintiff understood the term "permanent" to mean he would continue employment with the defendant as long as he performed his job satisfactorily. See Plaintiff's Statement of Material Facts About Which There Is No Genuine Dispute, para. 7. This conclusion or belief, however, does not evince Dr. Apple's intent.
More than a plaintiff's belief in the permanence of employment is necessary to raise a material issue of fact. Sullivan v. Heritage Foundation, 399 A.2d 856, 859 (D.C. 1979). After careful reading of the evidence, the Court concludes that there are no genuine issues of material fact and therefore, the summary judgment motion turns upon the applicable substantive law.
In employment situations, though the classic legal assumption is that the parties intend a contract of indefinite term, to be terminated at will, it is clear that parties may contract otherwise. The dispositive element is the parties' intent. Hodge v. Evans Financial Corp., 228 U.S. App. D.C. 161, 707 F.2d 1566, 1568 (D.C. Cir. 1983). To deduce the parties' intent the Court must consider the express terms of the contract, the circumstances surrounding its making and the consideration furnished. Id. at 1569.
In this case the express terms of the Manual and the employment latter categorize plaintiff's position as "full-time permanent". The Manual defines full-time as "an employee hired to work the Association's normal work week on an ongoing basis until the employment is terminated by either the employee or the Association". Defendant Exhibit 2, Section 201.1. The converse category, part-time, is defined as "an employee hired to work less than the Association's normal work week on an ongoing basis until employment is terminated by either the employee or the Association." Defendant's Exhibit 2, Section 201.2. A temporary employee "is either a full-time or part-time employee hired other than on an ongoing basis, usually for a predetermined period of time or for the completion of a particular project." Defendant's Exhibit 2, Section 201.3 (emphasis the Court's). Although the term permanent is not explicitly defined in the Manual, in its common usage the term infers an ongoing, continuous or non-temporary state. The question is whether the term permanent in the employment letter can be construed to represent anything more than the usual business contract for continuing employment, terminable at will by either party. After analyzing the relevant case law, the Court concludes that the ordinary construction is mandated.
In the context of an oral agreement, the Court of Appeals in Littell v. Evening Star Newspaper Co., 73 App. D.C. 409, 120 F.2d 36 (D.C. Cir. 1941), reasoned that in the absence of clearly expressed intent, the "assumption will be that even though [the parties] speak in terms of 'permanent' employment the parties have in mind merely the ordinary business contract", terminable at the will of either party. Id. at 37. Plaintiff urges this Court to conclude that because the word permanent is undefined in the Manual, its presence in the employment letter intimates a special meaning. Contracts are to be read by reference to the norms of conduct and common usages surrounding similar contracts. Greene v. Howard University, 134 U.S. App. D.C. 81, 412 F.2d 1128, 1135 (D.C. Cir. 1969); Howard University v. Best, 484 A.2d 958, 967 (D.C. 1984). Employment contracts for life are by their binding nature unusual contracts and logically not envisioned as ordinary business practice. Smith v. Beloit Corp., 40 Wis. 2d 550, 162 N.W. 2d 585, 587 (1968).
Recently, the Court of Appeals classified a contract that promised employment until retirement and termination only for good cause, as "extremely unusual, almost inexplicable as a matter of business practice". Albert Z. Hodge v. Evans Financial Corporation, 778 F.2d 794, ...