-
USCA1 Opinion
For the First Circuit
____________________
No. 96-2326
JAMES A. STEINKE,
Plaintiff, Appellant,
v.
SUNGARD FINANCIAL SYSTEMS, INC.,
Defendant, Appellee.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Richard G. Stearns, U.S. District Judge]
____________________
Before
Stahl, Circuit Judge,
Lynch, Circuit Judge,
and O'Toole,* U.S. District Judge.
____________________
Margaret S. Garvey , with whom Wm. David Byassee , Freeborn & Peters ,
David C. Casey, Thomas A. Bockhorst, and Peckham, Lobel, Casey, Prince
& Tye, were on brief for appellant.
Mark Blondman, with whom Scott F. Cooper, Blank Rome Comisky &
McCauley, and Testa, Hurwitz & Thibeault, LLP, were on brief for
appellee.
____________________
August 6, 1997
____________________
_____________________
*Of the District of Massachusetts, sitting by designation.
STAHL, Circuit Judge. Plaintiff-appellant James A.
Steinke appeals the district court's grant of summary judgment
in favor of defendant-appellee SunGard Financial Systems, Inc.
("SFS") on his breach of contract and promissory estoppel
claims. We affirm.
Background
We state the facts in the light most favorable to the
party opposing summary judgment. See Hoeppner v. Crotched
Mountain Rehabilitation Ctr., 31 F.3d 9, 14 (1st Cir. 1994).
Steinke is a former SFS employee. SFS, a wholly-
owned subsidiary of SunGard Data Systems, Inc., develops and
sells computer software used for investment and financial
purposes. In 1992, SFS decided to create a brokerage division
called "Phase3" to develop software applications for the
securities industry and specifically to compete with Security
Industrial Software ("SIS"). SIS was a multi-service company
whose primary business involved providing software and related
services to self-clearing broker dealers. In 1992, Steinke was
the President and Chief Executive Officer of SIS. In December
1992, Citicorp/Quotron, SIS's parent corporation, decided to
sell SIS to a company called ADP.
1. In April 1993, Phase3 was renamed SunGard Brokerage
Systems. For purposes of clarity, however, we substitute the
name Phase3 for SunGard Brokerage Systems as the relevant
entity throughout this opinion.
-2- 2
When Dr. David Wismer, President and Chief Executive
Officer of SFS, learned of ADP's acquisition of SIS, he thought
Steinke might become available to head Phase3 and immediately
began to recruit Steinke to come to Waltham, Massachusetts to
lead Phase3. SFS's first efforts to recruit Steinke began in
April or May 1992, when Wismer told Steinke that he understood
SIS was well run and that he could use that type of management
at Phase3. Late in 1992, Steinke attended a presentation that
Wismer and James Mann, Chairman and Chief Executive Officer of
SunGard Data Systems, made to Quotron. During this
presentation, Wismer and Mann discussed with Quotron the
possibility of SunGard Data Systems acquiring SIS. Mann also
told Steinke during the meeting that if Steinke was to work for
SFS, he would have one year to get to know the operations of
Phase3 and two years after that to "conquer the ADP market."
In early February 1993, Steinke met with Wismer at
Stapleton International Airport in Denver to discuss possible
employment at SFS. During this meeting, Wismer told Steinke
that he wanted him to fill Phase3's need for professional
management. Wismer informed Steinke that SFS expected him to
take three years to acquire former SIS customers and to reach
Phase3's $50 million annual revenue target.
Later that month, Steinke met with Fraser Chambers,
Executive Vice President of SFS's Eastern Region. Steinke
inquired as to how SFS funded its divisions; Chambers responded
-3- 3
that funding would be available if Steinke returned profits
over a three-year period.
Over the weekend of February 19-20, 1993, Steinke
attended an SFS meeting in Naples, Florida. In Naples, Steinke
met with a variety of SFS personnel, including Wismer,
Chambers, and Mann, in order to finalize the terms of his
employment with SFS. Wismer informed Steinke that he was in
the process of putting together an offer letter for Steinke.
The SFS executives also reiterated that SFS senior executives
were rated by their performance over a three-year period.
Wismer in particular indicated that Steinke would have three
years to "show his mettle" at SFS by achieving the aggressive
financial results SFS demanded of its Phase3 division. Wismer
told Steinke that SFS might not make its numbers in 1992, but
that the plan Wismer had developed was sound and Steinke had
three years to "make his numbers." Wismer reassured Steinke
that if he could make his numbers in that time frame, he would
have a long and successful career at SFS. The following day,
Mann confirmed that SFS operated on a three-year financial
plan.
On February 22, 1993, Wismer sent Steinke a letter
constituting a formal offer of employment. The letter offered
Steinke the position of President of SFS's Phase3 division at
an annual salary of $195,000 plus bonuses and certain expenses.
The letter stated that "[t]his offer is contingent upon your
-4- 4
written acceptance of our [attached] Employee Agreement." The
attached employment agreement contained a provision entitled
"Termination," which provided:
I understand that this agreement does not
contain a guarantee of employment and
that, at any time and for any reason, I
may resign or SFS may terminate my
employment. If I decide to resign, I will
give at least two weeks' prior notice, and
I will remain for the full notice period
unless SunGard instructs me to leave
earlier and pays the remaining salary I
would have earned during the notice
period. In return, if SunGard terminates
my employment after six months without
cause, I will receive at least two weeks'
salary as severance pay.
SFS previously had not informed Steinke that it required its
employees to sign a form agreement before beginning employment.
Prior to executing the relevant documents, Steinke
telephoned Wismer and told him that he was concerned about several
issues in the form agreement, including the termination provision.
Specifically, Steinke expressed concern about the fact that
temporary housing would only last until July 15, 1993 and indicated
that he found SFS's offer of five expense-paid trips per year
between his home in Colorado and SFS's offices in Massachusetts to
be unacceptable. Wismer verbally agreed to modify the term of the
temporary housing and to work with Steinke so that he could take
some additional trips to Colorado. When Steinke asked Wismer
whether or not he had to sign the form agreement, Wismer informed
him it was required of all SFS employees. In his deposition,
Steinke recounted that Wismer responded: "You'll be judged on your
-5- 5
numbers and you've got three years to make them. [E]verybody signs
it. It's not an issue."
Steinke signed the Employee Agreement on February 26,
1993. Although the offer letter indicated "a most desirable start
date" of March 15, 1993, after executing the Employee Agreement,
Steinke informed Wismer that he could not start work before April
19, 1993 due to a non-compete agreement he had negotiated with SIS.
Wismer responded that he wanted Steinke to start work on March 15,
1993. Steinke replied that he would be willing to work in some
unofficial capacity and suggested that he be paid as a consultant.
Wismer objected to this method of payment due to the accounting
difficulties it apparently would occasion and remarked that "in the
scheme of working together for the next five to ten years," Steinke
should consider beginning work on March 15 with compensation for
expenses only until he could officially start with SFS on April 19.
Steinke agreed to this solution. When negotiations resulted in an
acceptable arrangement, Steinke ceased considering alternative
employment opportunities.
On one occasion after Steinke began his employment with
Phase3, Mann told him that he had three years to make his numbers
under SFS's three-year plan. Also after starting his employment,
Steinke learned that Phase3's expenses were running far beyond what
they should be if he was to make a bottom line profit of $6.7
2. Steinke claims that he was reviewing at least two other
employment offers when he accepted SFS's offer.
6
million for 1993. On July 14, 1993, Wismer and Steinke discussed
SFS's financial situation and Wismer informed Steinke that the 1994
numbers would be even more critical. Wismer indicated that it was
Steinke's job to put the Phase3 business plan together to achieve
the goals, reinforcing the perception that Steinke had three years
to make his numbers.
On August 12, 1993, Wismer informed Steinke that his
performance was "excellent." On October 15, 1993, however, SFS
terminated Steinke's employment.
Steinke filed suit against SFS in Massachusetts
Superior Court, alleging breach of contract, breach of implied
contract, fraud in the inducement, negligent misrepresentation, and
promissory estoppel. The gist of Steinke's claims was that SFS was
obligated to compensate him for three years' worth of service based
on its alleged oral representations to him and his subsequent
reliance on these representations. SFS removed the case to federal
district court on the basis of diversity of citizenship. See 28
U.S.C. S 1332(a)(1). On October 18, 1995, SFS filed a motion for
summary judgment. The district court granted SFS's motion as to
the breach of contract and breach of implied contract claims, but
not as to the fraud in the inducement and negligent
misrepresentation claims. The district court dismissed the
promissory estoppel claim, and Steinke, after voluntarily
dismissing the fraud and negligent misrepresentation claims
7
pursuant to Fed. R. Civ. P. 41(a)(2), now appeals the district
court's rulings.
Standard of Review
We review the district court's grant of summary
judgment de novo. See Werme v. Merrill, 84 F.3d 479, 482 (1st Cir.
1996). Summary judgment is appropriate when the record reveals no
genuine issue of material fact and the moving party is entitled to
judgment as a matter of law. See Fed. R. Civ. P. 56(c). A fact
becomes material when it has the potential to affect the outcome of
the suit. See J. Geils Band Employee Benefit Plan v. Smith Barney
Shearson, Inc. , 76 F.3d 1245, 1250-51 (1st Cir.), cert. denied, 117
S. Ct. 81 (1996). We are not "wedded to the district court's
reasoning. Rather, '[w]e are free, on appeal, to affirm [or
reverse] a judgment on any independently sufficient ground.'"
Garside v. Osco Drug, Inc., 895 F.2d 46, 49 (1st Cir. 1990)
(quoting Polyplastics, Inc. v. Transconex, Inc. , 827 F.2d 859, 860-
61 (1st Cir. 1987)).
Discussion
On appeal, Steinke advances three arguments. First, he
asserts that the district court erred in granting summary judgment
on his claim of breach of an express and implied contract because
issues of fact existed concerning the terms of his employment
agreement with SFS, precluding the finding that this agreement
constituted an unambiguous integrated contract. Second, Steinke
maintains that the district court improperly granted summary
8
judgment on his contract claims because "disputed issues of fact
existed regarding whether the written contract was modified to
require employment for a reasonable term." Third, Steinke insists
that the district court improperly dismissed his promissory
estoppel claim. We address these arguments in turn.
Before turning to the merits of Steinke's appeal, we
note that the parties agree that, pursuant to a choice of law
provision in the Employee Agreement, Pennsylvania law governs
contract-based claims arising out of the Agreement. Because we see
no compelling reason to do otherwise, we will honor the parties'
choice of law on all counts upon which they agree. See James L.
Miniter Ins. Agency, Inc. v. Ohio Indem. Co., 112 F.3d 1240, 1245
(1st Cir. 1997); Borden v. Paul Revere Life Ins. Co. , 935 F.2d 370,
375 (1st Cir. 1991).
A. Integrated Contract
The district court found that "the Employment Agreement
and the offer letter constitute[d] a complete expression of the
parties' agreement regarding the terms of Steinke's employment."
Steinke asserts that the district court erred because he and SFS
never executed an integrated employment contract. Specifically,
Steinke contends:
The contract consisted of the oral
representations made to [him] . . . when
he was solicited by SFS to head up its new
brokerage division prior to receipt of the
offer letter; the negotiations with
respect to the term of the contract, the
starting date, the duration of his
temporary housing allowance and the number
9
of trips between Massachusetts and
Colorado prior to his relocation which
were settled after the written documents
were received; and the offer letter and
form agreement.
Because "[t]here was no single document or combination of documents
which fully and completely expressed the parties' agreement with
respect to the employment relationship," Steinke argues that he was
entitled to introduce parol evidence to prove the intent of the
parties.
It is well settled that Pennsylvania law presumes all
employment to be at-will. See Darlington v. General Elec., 504
A.2d 306, 309 (Pa. Super. Ct. 1986) (tracing recognition of
employment at-will doctrine in Pennsylvania to Henry v. Pittsburgh
& Lake Erie R.R. Co., 21 A. 157 (Pa. 1891)); see also Scott v.
Extracorporeal, Inc. , 545 A.2d 334, 336 (Pa. 1988). Specifically,
Pennsylvania law dictates that absent a statutory or contractual
provision to the contrary, it is presumed that either party may end
an employment relationship at any time, for any or no cause. See
Murray v. Commercial Union Ins. Co., 782 F.2d 432, 435 (3d Cir.
1986). An employee attempting to overcome the presumption of at-
will employment in Pennsylvania must demonstrate "facts and
circumstances establishing some tenure of employment." Cummings v.
Kelling Nut Co., 84 A.2d 323, 325 (Pa. 1951). Overcoming the
presumption constitutes "an up-hill battle" in Pennsylvania.
Schoch v. First Fidelity Bancorporation , 912 F.2d 654, 661 (3d Cir.
1990).
10
In this case, no statutory or contractual provision
conflicts with Pennsylvania's presumption of at-will employment.
SFS's offer letter stated that "[t]his offer is contingent on your
written acceptance of our Employee Agreement." The Employee
Agreement provided no fixed term of employment. Instead, the
Employee Agreement stated: "I understand that this agreement does
not contain a guarantee of employment and that, at any time and for
any reason, I may resign or SunGard may terminate my employment."
(emphasis added). The Employee Agreement indicated only that if
Steinke completed six months of employment with SFS, then SFS would
pay him "at least two weeks' salary as severance pay" if it
terminated his employment without cause. "[W]here a contract
purports to be a complete legal obligation without any doubt as to
its object or extent, it is presumed to reflect the whole legal
right of the parties." Lenzi v. Hahnemann Univ., 664 A.2d 1375,
1379 (Pa. Super. Ct. 1995); see Fountain Hill Millwork Bldg. Supply
Co. v. Belzel, 587 A.2d 757, 760 (Pa. Super. Ct. 1991); Levy v.
Leaseway Sys. Inc., 154 A.2d 314, 316 (Pa. Super. Ct. 1959).
Despite the clear language of both the Employee
Agreement and Pennsylvania law, Steinke argues that the Agreement's
object and extent remain in doubt, and points to parol evidence
concerning representations of a fixed three-year term of employment
that various SFS officials made to him prior to the execution of
the Employment Agreement. Steinke places particular emphasis on
the fact that SFS, in response in part to his concerns about the
11
termination provision in the Employment Agreement, indicated that
"everybody signs it. It's not an issue."
"Whether a writing is an integrated agreement, and if
so, whether the agreement is completely or partially integrated are
questions to be decided by the court prior to application of the
parol evidence rule." Greenberg v. Tomlin, 816 F. Supp. 1039, 1053
(E.D. Pa. 1993); see Hershey Foods Corp. v. Ralph Chapek, Inc. , 828
F.2d 989, 995 (3d Cir. 1987). In determining whether an agreement
is integrated, a court must compare both the alleged oral and
written agreements and must determine whether "'the parties,
situated as were the ones to the contract, would naturally and
normally include the one in the other if it were made.'" Mellon
Bank Corp. v. First Union Real Estate Equity & Mortgage Invs. , 951
F.2d 1399, 1405 (3d Cir. 1991) (quoting Gianni v. R. Russel & Co. ,
16 A. 791, 792 (Pa. 1924)); see Crompton-Richmond Co.--Factors v.
Smith, 253 F. Supp. 980, 983 (E.D. Pa. 1966), aff'd, 392 F.2d 577
(3d Cir. 1967) (per curiam). If the alleged oral and written
agreements "'relate to the same subject matter and are so
interrelated that both would be executed at the same time and in
the same contract, the scope of the subsidiary agreement must be
taken to be covered by the writing.'" Ralph Chapek, 828 F.2d at
995 (quoting Gianni, 126 A. at 792). In such case, "'parol
evidence to vary, modify or supersede the written contract is
inadmissible in evidence.'" HCB Contractors v. Liberty Place Hotel
12
Ass'n, 652 A.2d 1278, 1279 (Pa. 1995) (quoting Nicolella v. Palmer,
248 A.2d 20, 22 (Pa. 1968)).
Having compared the alleged oral agreement and the
written agreement in this case, we believe that Steinke and SFS
would "naturally and normally" have included the alleged oral
agreement in the written agreement had they actually made an
agreement establishing three years as Steinke's term of employment.
A provision dictating such a lengthy term of employment would be
integral to an agreement providing an offer of employment and
dictating the terms of such employment, including a specific
termination provision. Moreover, Steinke specifically inquired
about the termination provision and, after SFS informed him that
all employees were required to sign the Employee Agreement as a
condition of employment with SFS, he signed the Agreement without
protest. Furthermore, the alleged oral agreement and the written
3. We believe the fact that Steinke signed the agreement after
inquiring about its terms is particularly telling in this
situation. Over a period of approximately twenty years,
Steinke had worked for many large corporations involved in
finance and high technology, including Merrill Lynch, Shearson
Lehman Brothers, Kemper Securities, and Colgate Palmolive.
Steinke negotiated and signed employment agreements with at
least three of these corporations. Steinke's considerable
experience in the field casts doubt upon his assertion that he
did not expect to be bound by the termination provision. See,
e.g., M/S Bremen v. Zapata Off-Shore Co. , 407 U.S. 1, 11 (1972)
(upholding written contractual provision in part because it was
"made in an arm's-length negotiation by experienced and
sophisticated businessmen"); Beckman v. Vassall-Dillworth
Lincoln-Mercury, Inc. , 468 A.2d 784, 788 (Pa. Super. Ct. 1983)
(rejecting argument that appellant did not intend "no-agency"
clause to be included in his contract, reasoning in part that
appellant "was an experienced businessman, equipped to
understand the meaning of the terms of the agreement he
13
agreement (particularly the termination provision in the Employee
Agreement) both addressed the duration of Steinke's employment with
SFS. We therefore find that the Employee Agreement covered the
scope of, and thus superseded, the alleged oral agreement. See
Mellon Bank , 951 F.2d at 1406-08; Ralph Chapek , 828 F.2d at 996-98;
United Ref. Co. v. Jenkins, 189 A.2d 574, 579 (Pa. 1963); Gianni,
176 A. at 792; Beckman v. Vassall-Dillworth Lincoln-Mercury, Inc. ,
468 A.2d 784, 788 (Pa. Super. Ct. 1983).
"These cases show that under Pennsylvania law, a
written contract which gives one party an unconditional right
precludes the other party from using parol evidence to establish a
condition on the exercise of the unlimited right the written text
contains." Mellon Bank, 961 F.2d at 1407. We thus affirm the
trial court's finding that the offer letter and the Employment
signed").
4. Relying only on Moyer v. Heilveil, 49 A.2d 514, 515 (Pa.
Super. Ct. 1946), Steinke quotes the Pennsylvania Supreme Court
as ruling that "[a] contract may be partly oral and partly in
writing and the written agreement does not supersede the oral
contract unless it is complete in itself, embodying all the
terms orally agreed upon." Id. The Moyer court reached this
conclusion only after it determined that the writing in
question was silent concerning the terms of employment; it
reasoned "[i]t therefore was proper for plaintiff to prove a
prior separate oral agreement not inconsistent with the writing
and unaffected by it, establishing the actual intention of the
parties." Id. (emphasis added). In the context of Steinke's
appeal, Moyer thus dictates that Steinke may not have the
opportunity to prove a separate oral agreement because the
Employee Agreement contained a termination provision which
specifically detailed the "terms of employment."
14
Agreement constituted an integrated agreement. Consequently, we
hold that the district court did not err in applying the parol
evidence rule to bar evidence of alleged oral terms. See HCB
Contractors, 652 A.2d at 1280; International Milling Co. v.
Hachmeister, Inc., 110 A.2d 186, 191 (Pa. 1955).
5. The fact that the offer letter and the Employment Agreement
did not constitute one single document does not affect this
ruling. An integrated agreement may take the form of two
documents, see Kroblin Refrigerated Xpress, Inc. v. Pitterich,
805 F.2d 96, 107 (3d Cir. 1986) ("It is a general rule of
contract law that where two writings are executed at the same
time and are intertwined by the same subject matter, they
should be construed together and interpreted as a whole, each
one contributing to the ascertainment of the true intent of the
parties."); see also Zaidan v. Borg-Warner Corp. , 341 F.2d 391,
392 (3d Cir. 1965); United States v. Goldberg, 136 F. Supp. 34,
37 n.5 (E.D. Pa. 1955), provided it "appears to be a contract
complete within itself, couched in such terms as import a
complete legal obligation without any uncertainty as to the
object or extent of the engagement," Fountain Hill , 587 A.2d at
760. Moreover, "[w]hile the effect of an integration clause is
to make the parol evidence rule clearly applicable, it is not
required." Mellon Bank, 951 F.2d at 1406 n.6 (internal
citations omitted); see Ralph Chapek, 828 F.2d at 998. Thus,
Steinke's argument that neither the offer letter nor the
Employment Agreement contained an integration clause, and,
thus, that there is no integrated contract, is unavailing.
6. Steinke's reliance on McEvoy Travel Bureau, Inc. v. Norton
Co., 563 N.E.2d 188, 191-95 (Mass. 1990), is unpersuasive. As
noted previously, the law of Pennsylvania controls these
issues. McEvoy Travel , furthermore, is distinguishable on its
facts. In McEvoy Travel, the appellant signed a contract
containing a sixty-day termination clause. When the appellant
questioned the clause, the appellee informed him that the
clause was "inoperative" and "meaningless." Id. at 191. The
court held that the written contract was not an integrated
agreement, reasoning as follows:
When parties . . . sign a document and
include in it a provision as to
termination by notice, at the same time
expressly stating that the provision is a
mere "face saving device" never to be
effective, they have not adopted that
15
Apparently determined to circumvent the parol evidence
rule, Steinke argues that the termination provision contained in
the Employee Agreement is ambiguous. Specifically, Steinke
maintains:
If the contract was for "at will"
employment, it would be inconsistent with
the provision of the offer letter that
provides Steinke temporary housing "until
the earlier of July 15, 1993 or your move
into your permanent residence." It would
negate the provision that SFS would
provide storage of Steinke's household
goods "until the earlier of September 15,
1993 or your move into your permanent
residence." . . . It is also at odds with
the fact that Steinke was agreeing to a
covenant not to compete for twelve months
after his termination for any reason.
A finding of ambiguity in the termination provision, according to
Steinke, necessarily would entitle him to submit to a jury evidence
concerning his alleged three-year contract with SFS.
document as a "complete and accurate
integration" of their agreement. Instead
they have [in Williston's words] issued it
"in usual form but limited its terms by
parole agreement."
Id. at 194 n.7 (quoting 3 Corbin on Contracts S 582, at 463
(1960)). In the instant case, SFS never told Steinke that
either the Employee Agreement or the termination provision
contained therein were "inoperative" or "meaningless."
Wismer's remark that signing the Employee Agreement was not "an
issue" does not equate with McEvoy Travel's "never to be
effective" language. Wismer, in fact, informed Steinke both
that SFS required all of its employees to sign the Employee
Agreement and that all SFS employees did so. The offer letter
made this requirement clear with respect to Steinke, stating
that "[t]his offer is contingent on your written acceptance of
our Employee Agreement."
16
In Pennsylvania, "[o]nly if the terms used [in an
agreement] are ambigious [sic] or if the contract is not fully
integrated, should the trial judge allow the finder of fact to
consider evidence that might vary or add to the contract's express
terms." Griesmann v. Chemical Leaman Tank Lines, Inc., 776 F.2d
66, 72 (3d Cir. 1985); see Compass Tech., Inc. v. Tseng Lab., Inc. ,
71 F.3d 1125, 1131 (3d Cir. 1995) ("[I]f the[] [parties'] intent
can be cleanly extracted from the clear and unambiguous words that
the parties have used, it is . . . conventional wisdom that they
are held to those words contained in the contract."); Steuart v.
McChesney, 444 A.2d 659, 661 (Pa. 1982) (holding that when words in
written contract are clear and unambiguous, the intent is to be
discovered only from the express language of the agreement). "In
making the ambiguity determination, a court must consider the words
of the agreement, alternative meanings suggested by counsel, and
extrinsic evidence offered in support of those meanings." Kroblin
Refrigerated Xpress, Inc. v. Pitterich, 805 F.2d 96, 101 (3d Cir.
1986). Having considered the integrated agreement's language, the
meanings that Steinke suggests, and the extrinsic evidence he
offered as evidence of these meanings, we believe that the terms of
the integrated agreement in this case were unambiguous.
As mentioned earlier, the Employee Agreement provided
"this agreement does not contain a guarantee of employment and . .
. at any time and for any reason I may resign or SunGard may
terminate my employment. . . . [I]f SunGard terminates my
17
employment after six months without cause, I will receive at least
two weeks' salary as severance pay." The existence of the words
"at least" in the Employee Agreement in no way clouds or muddles
the terms of the Agreement. It simply indicates that if SFS
terminates an employee without cause after the employee has worked
for six months, then SFS must pay the employee a minimum of two
weeks' salary. At its discretion, SFS may agree to pay the
employee more than two weeks' salary. In this case, Steinke failed
to provide sufficient evidence of an oral agreement committing SFS
to pay him more than two weeks' salary. See Schoch, 912 F.2d at
661 (finding that evidence appellant submitted to demonstrate oral
contract of employment "lack[ed] the clarity and specificity that
Pennsylvania courts require to overcome the presumption of at-will
employment"); Kelling Nut , 84 A.2d at 324 (holding that statements
made by employer regarding future possibilities were nothing more
than "puffing"); Cashdollar v. Mercy Hospital of Pittsburg, 595
A.2d 70, 76 (Pa. Super. Ct. 1991) (explaining that "an expectation
of the prospective employee, however reasonable from his point of
view, does not supply a meeting of the minds"). SFS simply
exercised the discretion that the terms of the Employee Agreement
afforded it in refusing to pay Steinke more than two-weeks salary
as severance pay.
We recognize that in Pennsylvania "[o]ne part of a
contract cannot be interpreted so as to annul another part, and a
contract must be construed, if possible, to give effect to all of
18
its terms." Meeting House Lane v. Melso, 628 A.2d 854, 857-58 (Pa.
Super. Ct. 1993); see Heidt v. Augenbaugh Coal Co., 176 A.2d 400,
401-02 (Pa. 1962); Giuliani Constr. Co. v. School Dist. of
Philadelphia, 217 A.2d 793, 795 (Pa. Super. Ct. 1966). In this
case, the fact that SFS could terminate Steinke's employment "at
any time and for any reason" and pay him only two weeks', rather
than three years' salary neither annuls nor renders inexplicable
the provisions in the agreement that Steinke highlights. If SFS
dismissed Steinke without cause, then pursuant to the agreement it
still would be responsible for providing him temporary housing
"until the earlier of July 15, 1993 or [his] . . . move into [his]
. . . permanent residence;" it would continue to be obligated to
store his household goods "until the earlier of September 15, 1993
or [his] . . . move into [his] . . . permanent residence;" and,
Steinke would be precluded from competing with SFS for a period of
twelve months after his termination. This construction of the
agreement gives effect to all of the terms of the contract.
Moreover, Pennsylvania law provides that contractual obligations
contained in an employment contract may persist after the
employment provided for in the contract is terminated. Cf.
Insulation Corp. of Am. v. Brobston, 667 A.2d 729, 733 (Pa. Super.
Ct. 1995); Wainwright's Travel Serv., Inc. v. Schmolk, 500 A.2d
476, 479 (Pa. Super. Ct. 1985).
Given the terms of the integrated agreement between
Steinke and SFS, considered in the context both of the arguments
19
and evidence Steinke advances and of Pennsylvania law governing the
construction of contracts, we do not believe either that the
agreement was ambiguous or that the district court's interpretation
of the agreement improperly created an ambiguity in the agreement.
See Amoco Oil Co. v. Snyder, 478 A.2d 795, 799 (Pa. 1984);
McChesney, 444 A.2d at 663. The district court, therefore, did not
err in refusing to admit parol evidence to determine the parties'
intent.
B. Modification
Steinke next contends that even if the offer letter and
Employee Agreement constituted an unambiguous integrated contract,
a subsequent oral agreement with SFS modified the written
agreement. Steinke maintains that on several occasions after he
executed the Employee Agreement, SFS executives communicated to him
that SFS would employ him for a fixed term of years. Steinke
further contends that he supported this oral modification with
separate consideration by working without any salary for one month.
The district court found that the evidence Steinke
offered to support his modification argument was "pretty thin."
Consequently, the district court, after "[i]ndulging every nuance
in Steinke's favor, [concluded that] no reasonable finder of fact
could wring from these ruminations on SFS's corporate culture an
affirmative offer to junk Steinke's existing at-will agreement in
favor of a term contract." We agree.
20
In Pennsylvania, a party arguing that an oral agreement
modified a prior written contract must prove the existence of the
oral agreement "by evidence which is clear, precise[,] and
convincing." Pellegrene v. Luther, 169 A.2d 298, 299 (Pa. 1961);
see Gorwara v. AEL Indus., 784 F. Supp. 239, 242 (E.D. Pa. 1992)
(indicating that at-will presumption in Pennsylvania "can only be
overcome by clear and specific evidence showing the parties' [sic]
intended their contract to extend a certain period"). Generally,
vague, broad, or aspirational statements are insufficient under
Pennsylvania law to establish an oral contract modifying an at-will
employment contract. See Green v. Oliver Realty, Inc., 526 A.2d
1192, 1202 (Pa. Super. Ct. 1987); Veno v. Meredith, 515 A.2d 571,
579 (Pa. Super. Ct. 1986); Darlington, 504 A.2d at 312.
Specifically, promises of employment for "broad, unspecified
durations do not overcome the [at will] presumption." Forman v.
BRI Corp., 532 F. Supp. 49, 51 (E.D. Pa. 1982). In this case, we
find the evidence that Steinke brings forth to support his claim of
an oral modification of the written integrated agreement
insufficiently clear and specific to reverse the district court's
award of summary judgment to SFS on this issue.
Steinke asserts that when he informed Wismer that he
could not begin work for SFS until April 19, rather than the
preferred March 15 date specified in the offer letter, Wismer
suggested that he work between these dates for expenses only given
"the scheme of working together for the next five to ten years."
21
In March, during a discussion "over some drinks" in Steamboat
Springs, Colorado, which focused primarily on the success of
another SFS executive, Mann "made comments to the effect that, you
know, you've got three years to make your numbers. You've got to
beat out Simpson." During a dinner conversation on July 14,
according to Steinke, Wismer worried aloud about his own prospects
with SFS, "reinforcing that belief that you have three years to
make your numbers. You can have a bad year, you can even have two
bad years. But since it's a numbers company, three years and your
employment would be at risk." Based on this evidence, in
conjunction with the fact that he consented to work for SFS between
March 15 and April 19 "for expenses only," Steinke concludes that
he was "entitled to have a jury determine whether the post-contract
representations, supported by the consideration of working without
any salary for one month, modified the contract to incorporate the
three year term."
In Marsh v. Boyle, 530 A.2d 491, 494 (Pa. Super. Ct.
1987), the court found that an oral assurance of employment "for at
least two years" lacked the requisite specificity to rebut the at-
will presumption in Pennsylvania. In Darlington, the court
rejected the appellant's argument that the parties had modified an
at-will employment relationship given that the appellant was hired
for a "long range project." See 504 A.2d at 32. The Darlington
court reasoned that the "term long range project is, in and of
22
itself, too vague and unspecified to overcome the [at-will]
presumption." Id.
Similarly, in McMahon v. Impact Sys., Inc., 126 Lab.
Cas. q 57,486, 1992 WL 201004, at 5 (E.D. Pa. 1992), the court did
not find persuasive the plaintiff's argument that a conversation he
had with his employer modified his written at-will employment
contract. During the conversation in question, the employer asked
the plaintiff how long he intended to be employed by the employer.
The discussion then proceeded as follows: "I [the plaintiff] said
I'd like to be employed for three years, then we can renegotiate
where I can at least be suitable with the company, right? She [the
employer] said that would be no problem. That was the agreement."
Id. The court held that "this conversation, without more, [wa]s
not sufficiently clear and definite to overcome the at-will
presumption." Id.; see Extracorporeal, 545 A.2d at 337 (finding
neither oral nor written assurances of permanent employment
sufficiently definite or specific to rebut at-will presumption);
Betts v. Stroehmann Bros. , 512 A.2d 1280, 1281 (Pa Super. Ct. 1986)
(finding oral understanding that employment "was to be long term"
did not alter at-will presumption).
In the instant case, the three conversations Steinke
had with various SFS executives do not provide specific, definite
evidence of both Steinke and SFS's intention to substitute an oral
three-year term contract for Steinke's written at-will agreement.
During these conversations, Wismer and Mann adverted to three,
23
five, and potentially even ten years in reference to Steinke's
future employment with SFS. We believe these references amounted
to nothing more than vague, aspirational statements. Accordingly,
we find that they were insufficient to establish an oral contract
modifying Steinke's written employment agreement.
We note that Steinke argues that by working for SFS
between March 15, 1993 and April 19, 1993 without salary, he
supplied sufficient additional consideration to demonstrate the
existence of an oral modification to his written at-will employment
agreement. In Pennsylvania, separate or additional consideration
may evince contract modification. See Green, 526 A.2d at 1200;
Darlington, 504 A.2d at 314; Nicolella, 248 A.2d at 23. "[A] court
will find 'additional consideration' when an employee affords his
employer a substantial benefit other than the services which the
employee is hired to perform, or when the employee undergoes a
substantial hardship other than the services which he is hired to
perform." Darlington, 504 A.2d at 315.
It does not appear to us that Steinke afforded SFS a
substantial benefit other than the work he contracted to perform
because the offer letter that Steinke accepted specifically
delineated March 15 as his "most desirable start date." It was not
until after he executed the Employee Agreement that Steinke
informed SFS that he could not commence his employment until April
19 due to the restrictions of the non-compete agreement he had
executed with SIS.
24
In addition, it seems unlikely that Steinke suffered
any hardship by working from March 15 until April 19 without salary
because it was his contractual duty to SIS that precluded him from
commencing work as a salaried employee with SFS on March 15. The
record does not reveal any other hardship that Steinke suffered
during this period; for instance, he did not move his family to
Massachusetts until after April 19. See id. (indicating that
additional consideration may be sufficient when individual must
move his family to commence a new employment position). We thus do
not find that Steinke furnished SFS with the necessary separate or
additional consideration to demonstrate an intent to modify his
written at-will employment agreement. See id. at 315; Veno, 515
A.2d at 580; Betts, 512 A.2d at 1281.
Even if we were to find sufficient separate or
additional consideration, this finding would not affect our
analysis. In Pennsylvania, "if the parties specifically agreed
that the employment would be at-will, even though additional
consideration were present, . . . court[s are expected] to construe
the contract according to the parties' stated intention and hold it
to be at-will." Extracorporeal, 545 A.2d at 339. In this case,
the parties agreed that Steinke's employment would be at will; we
reiterate that the Employee Agreement stated: "I understand that
this agreement does not contain a guarantee of employment and that,
25
at any time and for any reason, I may resign or SunGard may
terminate my employment."
C. Promissory Estoppel
Steinke finally argues that even if his at-will
employment agreement was not modified, "under principles of
promissory estoppel, a jury is entitled to determine that SFS is
precluded from claiming that Steinke could be terminated at any
time, without any recourse." Specifically, Steinke insists that he
discontinued negotiations with other
employers in reliance on the
representations that his employment would
be for three years; he sold his house and
his wife quit her job to be able to move
to Massachusetts. Steinke agreed to work
7. Steinke insists that "at a minimum," because he provided
the consideration of working without salary from March 15 until
April 19, he was "entitled to be paid for the period he
performed services for SFS prior to his official start date of
April 19, 1993 on the theory of implied contract." "A contract
implied in fact is an actual contract which arises where the
parties agree upon the obligations to be incurred, but their
intention, instead of being expressed in words, is inferred
from acts in light of the surrounding circumstances." Elias v.
Elias, 237 A.2d 215, 217 (Pa. 1968). In Pennsylvania, "[t]he
law will not imply a different contract than that which the
parties have expressly adopted." Hutchison v. Sunbeam Coal
Corp., 519 A.2d 385, 388 (Pa. 1986). Having determined that
Steinke did not provide additional consideration to evidence a
modified oral contract, we find no merit in Steinke's
contention that he is entitled to be paid for the approximately
four weeks during which he worked for expenses only. Steinke
and SFS specifically agreed that in light of Steinke's non-
compete agreement with SIS, he would not receive salary during
this period.
8. Although the parties and the district court labeled
Steinke's final claim "detrimental reliance," Steinke explains
that it actually constitutes a "cause of action for promissory
estoppel." We agree and thus use this designation in the
discussion that follows.
26
for approximately four weeks without
compensation based upon the further
promises of SFS that in the overall
relationship between the parties, the four
weeks would be insignificant.
The district court dismissed the promissory estoppel claim,
reasoning that it was "simply a restatement of an element of the
fraud claim and not a separate cause of action."
As a preliminary note, we believe that Pennsylvania
rather than Massachusetts law governs the promissory estoppel claim
in this case because promissory estoppel is a "contractually based
cause of action" and thus should "fall[] within the purview of the
choice of law clause." Shelley v. Trafalgar House Pub. Ltd. Co.,
918 F. Supp. 515, 522 (D.P.R. 1996). We need not resolve this
issue, however, because "the outcome is the same under the
substantive law of either jurisdiction." Lambert v. Kysar, 983
F.2d 1110, 1114 (1st Cir. 1993); see Lucker Mfg. v. Home Ins. Co. ,
23 F.3d 808, 813 (3d Cir. 1994).
"[A]s a general rule, [in Pennsylvania] there is no
common law cause of action against an employer for termination of
an at-will employment relationship." Paul v. Lankenau Hosp., 569
A.2d 346, 348 (Pa. 1990); see Clay v. Advanced Computer
Applications, Inc., 559 A.2d 917, 918 (Pa. 1989). Specifically,
"the doctrine of equitable estoppel is not an exception to the
employment at-will doctrine." Paul, 569 A.2d at 349 (emphasis
added); see Dugan v. Bell Tel. of Pa. , 876 F. Supp. 713, 727 (W.D.
Pa. 1994) (holding that employee could not assert claim of
27
promissory estoppel based on reliance on employer's alleged promise
to find him permanent employment); Anderson v. Haverford College,
851 F. Supp. 179, 184 (E.D. Pa. 1994) (instructing that Niehaus v.
Delaware Valley Med. Ctr., 631 A.2d 1314 (Pa. Super. Ct. 1993),
rev'd, 649 A.2d 433 (Pa. 1994), was expressly limited to the facts
of that case and did not revise the long-standing at-will
presumption). Under Pennsylvania law, therefore, Steinke's
promissory estoppel claim necessarily fails because Steinke was an
at-will employee according to the written employment agreement
executed on February 26, 1993.
Under the doctrine of promissory estoppel in
Massachusetts, "'[a] promise which the promisor should reasonably
expect to induce action or forbearance on the part of the promisee
or a third person and which does induce such action or forbearance
is binding if injustice can be avoided only by enforcement of the
promise.'" Veranda Beach Club Ltd. Partnership v. Western Sur.
Co., 936 F.2d 1364, 1380 (1st Cir. 1991) (quoting McAndrew v.
School Comm., 480 N.E.2d 327, 332 (Mass. 1985)); see Chedd-Angier
Prod. Co. v. Omni Publications Int'l, Ltd. , 756 F.2d 930, (1st Cir.
1985) (explaining that Massachusetts has adopted Restatement
(Second) of Contracts S 90); see also Carlson v. Arnot-Ogden
Memorial Hosp., 918 F.2d 411, 416 (3d Cir. 1990) (indicating that
in Pennsylvania, "[p]romissory estoppel allows the court to enforce
a party's promise that is unsupported by consideration where (1)
the promisor makes a promise that he reasonably expects to induce
28
action or forbearance by the promisee, (2) the promise does induce
action or forbearance by the promisee, and (3) injustice can only
be avoided by enforcing the promise"); Murphy v. Burke, 311 A.2d
904, 908 (Pa. 1973) (indicating that Pennsylvania's promissory
estoppel doctrine follows Restatement (Second) of Contracts S 90).
In Massachusetts, "'[a]n element of promissory estoppel is that the
party invoking it must have reasonably relied on the alleged
promise to his detriment.'" Coll v. PB Diagnostic Sys., Inc., 50
F.3d 1115, 1124 (1st Cir. 1995) (quoting Hall v. Horizon House
Microwave, Inc., 506 N.E.2d 178, 184 (Mass. App. Ct. 1987)
(emphasis added in Hall)); see Loranger Constr. Corp. v. E. F.
Hauserman Co. , 374 N.E.2d 306, 311 (Mass. App. Ct. 1978) (dictating
that in the context of a promissory estoppel claim, "attention is
to be focused upon the reasonableness of th[e] reliance"), aff'd,
384 N.E.2d 176 (Mass. 1978); see also Josephs v. Pizza Hut of Am.
Inc., 733 F.Supp. 222, 226 (W.D. Pa. 1989), aff'd, 899 F.2d 1217
(3d Cir. 1990). Courts typically invoke the doctrine of promissory
estoppel when the formal requirements of contract formation are
absent and when enforcing the promise would serve the interests of
justice. See Veranda Beach, 936 F.2d at 1380; see also Carlson,
918 F.2d at 416.
Steinke thus bears the burden of proving that he
reasonably relied to his detriment on a promise that SFS made of a
three-year term of employment. In this case, Steinke indicates
that Wismer alluded to working together over "the next five to ten
29
years." Wismer's remark, even considered in the context of a few
other statements indicating that SFS executives had three years to
"make their numbers," did not constitute a promise upon which
Steinke reasonably could have relied. See Coll, 50 F.3d at 1124-25
(1st Cir. 1995) (holding that employer's failure to "firm up" oral
promise of long-term compensation rendered any reliance on an oral
promise unreasonable); Trifirio v. New York Life Ins. Co. , 845 F.2d
30, 33-34 (1st Cir. 1988) (explaining, in a situation similar to
the instant case, "a reasonable person investigates matters
further; he receives assurances or clarification before relying");
Hall, 506 N.E.2d at 184 (declaring that "[i]nchoate negotiations
are no better basis for reliance than for an action on the
purported contract as such"); see also Burke, 311 A.2d at 400-01
(ruling that the evidence in the case did not support a finding
that there was a promise upon which appellants relied to their
detriment). We thus rule that the district court did not err in
dismissing Steinke's promissory estoppel claim.
Conclusion
For the foregoing reasons, we affirm the district
court's award of summary judgment to SFS both on Steinke's
contractual claims and on his promissory estoppel claim.
Affirmed. Costs to appellee.
30
Document Info
Docket Number： 96-2326
Filed Date： 8/6/1997
Precedential Status： Precedential
Modified Date： 3/3/2016