and that NYNEX employees are third-party beneficiaries of that contract. He further claims that his termination violated the decree because it resulted from his efforts to clarify and rectify NYNEX's breaches of the decree, and that as a third-party beneficiary he is entitled to recover. That claim, too, must fail.
First. Plaintiff's claims to third-party beneficiary status rest on a provision of the consent decree (Section V) requiring the Regional Companies to advise employees on their obligations under the decree. This provision is one of a number intended to ensure compliance with the decree. While it requires employees to comply with the decree, there is nothing in Section V, anywhere else in the decree, or in the Court's explanations of the decree,
to provide, or even to suggest, that employees of the Regional Companies were intended to benefit from it, as distinguished from being required to comply with it.
Second. Even if there were some merit to the decree analysis, plaintiff could still not prevail, for it is well established that a private party cannot sue as a third-party beneficiary of a government consent decree. Control Data Corp. v. IBM Corp., 306 F. Supp. 839, 846-48 (D.Minn. 1969), aff'd sub nom. Data Processing Financial & General Corp. v. IBM Corp., 430 F.2d 1277, 1278 (8th Cir. 1970); Cinema Service Corp. v. Twentieth Century-Fox Film Corp., 477 F. Supp. 174, 178 (W.D.Pa. 1979); May Department Stores Co. v. First Hartford Corp., 435 F. Supp. 849, 852-53 (D.Conn. 1977); National Union Electric v. Emerson Electric Co., [1981-82] Trade Cas. para. 64,274 (N.D.Ill. 1981). See also, Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 750, 44 L. Ed. 2d 539, 95 S. Ct. 1917 (1975); Federal Trade Commission v. Owens-Corning Fiberglas, 853 F.2d 458, 464 (6th Cir. 1988) (Clayton Act does not create a private enforcement remedy).
Plaintiff's arguments to the contrary misrepresent the law and are otherwise unpersuasive. Thus, plaintiff quotes Control Data as declining to express an opinion on the issue of whether the decree conferred rights on third-party beneficiaries. Not only is the language plaintiff purports to quote (Opposition at 24) taken wholly out of context, but Control Data categorically rejected the third-party beneficiary theory after discussing it thoughtfully and at some length.
Equally unhelpful are plaintiff's citations to third-party beneficiary cases involving consent agreements under the civil rights statutes and other areas of the law, given the ample authority in the antitrust area itself. Indeed, several of the cited cases expressly recognize the well-settled law in the antitrust area and do not contest that authority. See, e.g., Coca-Cola Bottling Co. v. Coca-Cola Co., 654 F. Supp. 1419, 1437-39 (D. Del. 1987) ("cases involving antitrust consent decrees have hewed closely to the Blue Chip rule barring any person not directly participating in the consent decree from suing to enforce its terms"); Virgo v. Local Union 580, 107 F.R.D. 84, 91 (S.D.N.Y. 1985).
The second count will be dismissed.
IV Third Claim: Written Employment Contract
Plaintiff claims next that he entered an oral two-year non-cancellable employment contract with the defendants which they breached by terminating him without cause. Defendants argue that the claim should be dismissed because there is no written contract or memorandum satisfying the Statute of Frauds.
For purposes of this motion, it is undisputed that the plaintiff and James Jewett, president of Telco, entered an oral employment contract on April 30, 1986 that specified a $ 70,000 salary plus bonuses and required Rafferty not to compete with Telco for at least three years if he left the company. In a deposition, Jewett acknowledged that there was a contract, but he disagreed with Rafferty about its terms. Specifically, he maintained that the contract was terminable at will,
while Rafferty asserts that for the first two years he could not be terminated except for cause.
Jewett's deposition testimony waives any application of the Statute of Frauds by admitting that there was, indeed, a contract. Wemhoff v. Investors Management Corp., 455 A.2d 897, 899 (D.C. App. 1983); Hackney v. Morelite Construction, 418 A.2d 1062 (D.C. App. 1980). To waive application of the Statute of Frauds, the admission need not include all of the terms of the contract, but only those sufficient to conclude that an agreement existed. Wemhoff v. Investors Management Corp., 528 A.2d 1205, 1207-08 (D.C. App. 1987).
Even without that admission, defendants could not assert the Statute of Frauds because of the doctrine of equitable estoppel. Tauber v. District of Columbia, 511 A.2d 23, 27 (D.C. 1986). Equitable estoppel bars a party from asserting the Statute of Frauds when its own fraud is responsible for the absence of a written agreement. Jewett's alleged promise to reduce the contract to writing "as soon as possible" and his subsequent failure to do so, brings the contract within the doctrine for purposes of a motion for summary judgment.
For these reasons, the Court will deny defendants' summary judgment motion with respect to the claim for breach of employment contract.
V Fourth Claim: Oral Contract Modification
Plaintiff's next claim is based upon an alleged modification of the oral contract discussed supra. Plaintiff alleges that Engkvist promised him in an August 29, 1986 telephone conversation that if his division were ever closed, he would be offered employment with another NYNEX company, but that when Telco was later closed no such offer was forthcoming.
Even if these assertions are factually correct -- which the Court will assume for purposes of the motion -- they fail to state a claim cognizable at law. Plaintiff does not contend that there was a bargained-for exchange.
Engkvist did not ask Rafferty to do anything in return for the promise, and Rafferty made no offer to do so. At most, Engkvist made a gratuitous promise, and it is therefore not enforceable. See Price v. Mercury Supply Co., 682 S.W.2d 924, 932 (Tenn.App. 1984); Murray v. Lichtman, 119 U.S. App. D.C. 250, 339 F.2d 749, 751-52 (D.C.Cir. 1964).
Under Tennessee law, the rule is that an oral contract for lifetime, permanent, or indefinite employment is a hiring terminable at will when the employee furnishes no consideration other than the services required in the agreement. Savage v. Spur Distributing Co., 33 Tenn. App. 27, 228 S.W.2d 122, 124 (1950).
The fourth count will be dismissed.
VI Fifth Claim: Misrepresentation
Rafferty alleges that NYNEX and Telco made two misrepresentations to him: (1) Engkvist told him that the Department of Justice had approved and authorized the NYNEX's acquisition of Telco; and (2) Jewett told him through an executive recruiter that Telco's consulting division had revenues of $ 1 million a year.
The claim based on these alleged misrepresentations must likewise be dismissed.
In the first place, plaintiff's memorandum in opposition to the motion for summary judgment offers no rebuttal to defendants' assertion that the claim should be dismissed because it fails to state any legally cognizable injury. On that basis, plaintiff may be deemed to have conceded the issue, and since there was therefore a failure to assert an injury recognized by law, the claim may be deemed to be fatally defective.
However, in order not to penalize plaintiff for his inexperience (see pp. 326-327, supra), the Court has examined the complaint to determine whether the claim could survive defendants' motion. This examination reveals that nothing in that complaint or in plaintiff's other voluminous filings supports the notion of a legally-recoverable injury.
The complaint does allege that the misrepresentations exposed him to potential criminal liability, resulted in his precipitous termination, damaged his professional reputation, and violated his principles. Amended Complaint, paras. 47, 48.
The claim for exposure to criminal liability is plainly too uncertain and too speculative for recovery; Rafferty has never been charged with anything related to this case, and there is not the slightest indication that he ever will be.
Similarly, nothing in the record support Rafferty's claim of damage to reputation; indeed, the record refutes the assertion.
The claim that these misrepresentations caused his termination founders on the fact that the dismissal left Rafferty exactly where he asserts he would have been without the misrepresentation: without a job at Telco. Finally, as concerns the claim of injury to his principles, which plaintiff characterizes as "most important" of all, it is of course, not an injury cognizable at law.
VII Sixth Claim: Wrongful Discharge
Plaintiff finally asserts that NYNEX officials caused Jewett to discharge him because he sought legal advice as to the application of the decree and because they knew that he would not conduct or participate in unlawful activities for which he was an essential participant. He further maintains that the manner of his termination constituted retaliation for his refusal to participate in these illegal activities or to conceal them from the Department of Justice. Defendants argue that these allegations do not state a claim upon which relief may be granted.
Wrongful discharge is an evolving tort, and the status of the law varies substantially from state to state.
In Tennessee, an exception to the at-will termination doctrine for retaliatory discharges appears to be recognized at the present time (although only with respect to certain relatively narrow situations). Chism v. Mid-South Milling Co., 762 S.W.2d 552 (Tenn. 1988). See also, Watson v. Cleveland Chair Co., 1 BNA IER CAS 1780, 122 L.R.R.M. 2076, 2078 (Tenn. App. 1985). On the other hand, "the District of Columbia does not currently recognize a public policy exception to the at-will termination doctrine." Hall v. Ford, 272 U.S. App. D.C. 301, 856 F.2d 255, 267 (D.C. Cir. 1988).
But see, Buttell v. American Podiatric Medical Ass'n, 700 F. Supp. 592, 600 (D.D.C. 1988); Alder v. Columbia Historical Soc., 690 F. Supp. 9, 16 (D.D.C. 1987); Wemhoff v. Investors Management Corp., supra, 528 A.2d at 1208 n. 3; and see Edwards v. Habib, 130 U.S. App. D.C. 126, 397 F.2d 687 (D.C.Cir. 1968).
In view of the failure of the parties to take unequivocal stands on and properly to brief the choice of law issue which may govern resolution of the substantive question (which is itself not entirely clear in either of the two jurisdictions), the Court will deny the motion for summary judgment, without prejudice to its renewal on the basis of further briefing.
VIII Punitive Damages
The complaint asks for punitive damages
under the second, fifth, and sixth claims.
The issue needs to be considered only with respect to Count Six, the wrongful discharge claim, since the other relevant claims are being dismissed.
There is no question but that punitive damages may be awarded in egregious circumstances, in cases of fraud, malice, oppression, reckless disregard for the rights of others, or indifference to the consequences,
where a contract claim merges with one for tort or violation of public policy.
While the Court has not rendered a final decision with respect to the wrongful discharge claim since both the proper choice of law and the appropriate substantive standard to be applied are still in doubt (see Part VII, supra), at least for present purposes it is clear that the punitive damage claim should not be dismissed.
Plaintiff has alleged that various officials connected with defendants saw to it that he was discharged because he would not participate in or cover-up activities which violated the AT & T decree or were otherwise unlawful. He also claims that retaliatory measures were taken when he would not cooperate in these unlawful activities. These steps by defendants, if they can be proved, would be sufficiently egregious as well as oppressive of the rights of others
that a jury might be justified in awarding punitive damages therefor.
To be sure, punitive damages are not automatically available in every wrongful discharge case, or even in every case where the discharge is effected as retaliation for the exercise of lawful activities; however, assuming that plaintiff's claims in that respect are supported by the facts, the Court will not rule out such damages at the summary judgment stage.
For the reasons stated,
it is hereby
ORDERED that the first, second, fourth, and fifth claims be and they are hereby dismissed; and it is further
ORDERED that defendants' motion for summary judgment be and it is hereby denied with respect to the third and sixth claims; and it is further
ORDERED that defendants' request for a dismissal of the claim for punitive damages be and it is hereby denied.