Towson University v. Conte , 384 Md. 68 ( 2004 )

RAKER, J.

In this case, we must decide whether or to what extent a jury may examine or review the factual bases of an employer’s decision to terminate an employee in the absence of an express directive from the employment contract. That question has been answered in this jurisdiction with regard to two different types of employees, the employee at-will and the employee subject to a satisfaction employment contract. We determine the answer with regard to a third type of employee, the employee who may be fired only for just cause.

I.

The controversy surrounds an employment agreement between Michael Conte, the employee, and Towson University (the University), the employer. In 1996, the University hired Dr. Conte to become the director of the Regional Economic Studies Institute at Towson University (RESI). The University and Dr. Conte executed an employment contract that enumerated Dr. Conte’s duties as the new director of RESI, as well as his compensation, period of employment, and the causes for which he could be terminated.

In 1998, several events came to the attention of the University and led to the decision to terminate Dr. Conte. Most of these events centered around RESI’s relationship with the State Department of Human Resources (DHR), RESI’s primary revenue source. As the owner of RESI’s computer database and software, under federal regulations, DHR was entitled to compensation for any income generated by RESI’s use of DHR equipment. Dr. Conte was responsible for developing an acceptable methodology for compensating DHR. In June 1998, DHR complained to Dr. Conte about RESI’s accounting of that compensation, which was, according to DHR, inconsistent and incomprehensible. Troubled by RESI’s accounting procedures, DHR hired a private accounting firm to review them and tried to resolve its issues with RESI through Dr. Conte. None of these attempts was successful, and the relationship between DHR and Dr. Conte deteriorated until the University Provost John Haeger was informed of the dispute and intervened. Although the University eventually was able to save the contract and settle the disputed costs with DHR, it became extremely dissatisfied with the manner in which Dr. Conte had handled the issues and blamed him for the accelerated reduction in DHR’s contract by $2,300,000.00 the following fiscal year.

Having lost confidence in Dr. Conte, the University initiated an internal investigation into RESI’s activities and accounting procedures. In August of 1998, the University President Hoke Smith directed the University’s auditor to examine RESI’s records and to determine whether RESI had properly accounted for its expenditures and costs. A preliminary report of the audit in November revealed that personnel costs were documented improperly, in violation of University and federal regulations. In addition, the audit showed that the timekeeping procedures used by RESI attributed to DHR personnel costs which were unrelated to DHR’s contract.

In November of 1998, President Smith convened a meeting to discuss RESI’s status. The meeting included RESI’s associate director, an assistant director, and a former assistant director who had raised concerns about Dr. Conte’s management of RESI. Shortly after the meeting, President Smith asked the University’s counsel to investigate whether the University had just cause to terminate Dr. Conte. During the investigation, various other problems with RESI came to the University’s attention, including irregularities in the services provided to other clients and Dr. Conte’s alleged attempt to convert RESI into a private entity. After the meeting, Dr. Conte was informed of the University’s intent to terminate him and its request for him to resign.

Because Dr. Conte refused to resign, Provost Haeger sent him a detailed letter explaining the causes for his termination. Alleging “incompetence” and “wilful neglect of duty” — two of the just causes for termination enumerated in Dr. Conte’s employment contract — the University cited Dr. Conte’s handling of the DHR contract, which resulted in an approximate $2,300,000 revenue loss for the fiscal year 1999; RESI’s estimated operating losses of $930,000 for the period between July and December 1998; RESI’s failure to abide by federal, state, and University regulations in its record-keeping practices; the dissatisfaction of other clients with RESI’s work product; the dissatisfaction of several RESI employees who complained about Dr. Conte’s management style; as well as various other reasons for the termination. Dr. Conte disputed these allegations and said that they did not constitute incompetence or wilful neglect of duty as required by the contract. After a brief hearing before the University President with his counsel, Dr. Conte was formally terminated from his position as director on January 26,1999.

Dr. Conte filed a complaint in the Circuit Court for Baltimore County against the University, alleging, inter alia, that the University had wrongfully discharged him and breached his employment contract. He sought damages for his alleged wrongful termination as director of RESI, the University’s refusal to pay him additional compensation as defined by his employment agreement,¹ and the University’s failure to appoint him to the faculty after his termination as director as required by the agreement. The University responded to the complaint with several defenses, including the defense that the University had just cause under the contract to terminate Dr. Conte.

In September 2001, trial commenced before a jury in the Circuit Court for Baltimore County. At the close of the evidence and testimony of several witnesses, the trial judge instructed the jury that the “University has the burden to prove by a preponderance of the evidence that one or more of the [causes in Dr. Conte’s] contract existed for the plaintiffs termination” (emphasis added). The trial judge refused the University’s request to instruct the jury that, in the event they find just cause to be required under the contract, the University was nevertheless permitted to terminate Dr. Conte for “common law cause” or cause that goes to the “essence of the contract.” The jury returned with a verdict in Dr. Conte’s favor, finding that the University did not prove by a preponderance of the evidence that just cause existed under the contract to fire Dr. Conte, and awarding him $926,822.00 in damages.

The University noted a timely appeal to the Court of Special Appeals, arguing that the trial court had erred when it instructed the jury that the University was required to show just cause for the termination and when it refused to instruct the jury on common law cause. The Court of Special Appeals, in an unreported opinion, agreed with the Circuit Court and affirmed the judgment.

The University filed a petition for writ of certiorari in this Court to consider two questions.² 376 Md. 543, 831 A.2d 3 (2003). Slightly rephrased, the principal question raised in the petition is whether or to what extent a jury may examine or review the factual bases of an employer’s decision to terminate an employee. The second question is whether Dr. Conte’s employment contract was exclusive in its enumeration of the just causes for which Dr. Conte could be terminated, thereby prohibiting termination based upon any other cause, such as common law cause.³

II.

From petitioner’s perspective, a jury’s role in disputes involving just cause employees is not to determine whether just cause in fact existed, but to determine whether the employer acted in good faith, and not arbitrarily or capriciously, when it decided there was just cause to fire the employee. Put another way, provided the University genuinely believed that Dr. Conte was incompetent or wilfully neglectful of his duties as director, whether Dr. Conte was actually incompetent or wilfully neglectful is irrelevant to the jury’s inquiry. According to petitioner, then, the jury’s inquiry must center on the employer’s motive and state of mind, not on the actions of the employee and whether they constitute just cause for termination.

Underlying petitioner’s position is the strong judicial policy against interfering with the business judgment of private business entities. See Sadler v. Dimensions, 378 Md. 509, 526-27, 836 A.2d 655, 665 (2003). To that end, petitioner relies heavily on a Court of Special Appeals case, Elliott v. Board of Trustees, 104 Md.App. 93, 655 A.2d 46 (1995). Writing for the panel, Judge Cathell, now on this Court, noted that courts and juries should refrain from becoming involved in an employer’s personnel decisions, lest they become “super personnel officers,” second-guessing an employer about its own business needs. The Elliott court gleaned from Maryland precedent that “absent evidence of bad faith on the part of an employer, courts should be reluctant to overturn an employer’s decision to discharge an employee when the employer has complied with its own procedures for resolving matters such as this.” Id. at 108-109, 655 A.2d at 53. Petitioner argues that this rule is applicable to the University’s decision to terminate Dr. Conte.

Supplementing the argument, petitioner also asserts that Dr. Conte’s employment contract expressly reserved to the University, not to a trial court or jury, the right to determine whether just cause existed, i.e., the fact-finding prerogative. Petitioner reasons that because Paragraph 6.2 of the employment contract establishes a procedure for appeal from the employer’s decision to terminate, that procedure necessarily implies that the University had the sole authority to determine whether just cause existed. Relatedly, petitioner argues that absent any express provision assigning the fact-finding prerogative to a third-party or jury, the trial court should not have permitted the jury to determine de novo whether just cause had been proved by a preponderance of the evidence. Petitioner urges this Court to “confirm, as have a number of decisions from other states, that an employer reserves the right to terminate an employee for cause unless the employment agreement expressly contracts away its fact-finding prerogative.” In short, petitioner proposes a legal presumption that, in the interpretation of employment contracts, an employer retains all fact-finding prerogatives, absent an express provision stating otherwise.

In response to petitioner’s arguments, respondent asserts that petitioner essentially wants to transform an express, just cause employment contract into an at-will employment contract. The cases relied upon by petitioner are almost all in the context of “implied” employment contracts, as in contracts implied from employee handbooks, or “satisfaction” contracts, in which the employer expressly reserves the right to terminate if it deems the employee’s performance unsatisfactory. None of the cases deal "with an express contract sans a satisfaction clause, like the one agreed to by both parties to this litigation.

Furthermore, respondent states that petitioner’s reading of the contract distorts its plain meaning, which indicates the intention by both the University and Dr. Conte to permit termination only for just cause. Paragraph 6.2 of the contract merely promises a perfunctory hearing before the President, basically a “rubber-stamp” of the decision to terminate after it unquestionably had been determined already. Respondent argues that under Maryland law, one party is not permitted to retain the ultimate fact-finding prerogative with respect to a breaching event, unless the contract expressly grants the fact-finding prerogative to one of the parties. Respondent cites Foster-Porter Enterprises v. De Mare, 198 Md. 20, 81 A.2d 325 (1951), for the proposition that the party asserting a breach of contract must prove the breach actually occurred, not that it was reasonable to believe it occurred. Respondent would have us adopt a rule permitting the jury to second-guess the University’s factual determination that it had cause to fire Dr. Conte.

Notably, neither party points to Maryland case law that deals squarely with the jury’s role in deciding wrongful termination cases. Both parties rely mainly on cases from other jurisdictions that have considered this issue and balanced the judicial policy of noninterference with business judgment with that of enforcing contracts meant to ensure job security. In this issue of first impression, we shall consider external authorities, but also our own case precedent, which provides a pathway for our decision.

III.

A.

Our analysis begins, as it should, with the language of the employment contract at issue. The interpretation of a contract, including the determination of whether a contract is ambiguous, is a question of law, subject to de novo review. Sy-Lene v. Starwood, 376 Md. 157, 163, 829 A.2d 540, 544 (2003); Calomiris v. Woods, 353 Md. 425, 434-35, 727 A.2d 358, 362-63 (1999). Maryland courts follow the law of objective interpretation of contracts, Atlantic v. Ulico, 380 Md. 285, 301, 844 A.2d 460, 469 (2004); Sy-Lene, 376 Md. at 166, 829 A.2d at 546, giving effect to the clear terms of the contract regardless of what the parties to the contract may have believed those terms to mean:

“[A court is to] determine from the language of the agreement itself what a reasonable person in the position of the parties would have meant at the time it was effectuated. In addition, when the language of the contract is plain and unambiguous there is no room for construction, and a court must presume that the parties meant what they expressed. In these circumstances, the true test of what is meant is not what the parties to the contract intended it to mean, but what a reasonable person in the position of the parties would have thought it meant. Consequently, the clear and unambiguous language of an agreement will not give away to what the parties thought that the agreement meant or intended it to mean.”

Calomiris, 353 Md. at 436, 727 A.2d at 363 (quoting General Motors Acceptance v. Daniels, 303 Md. 254, 261, 492 A.2d 1306, 1310 (1985)).

Paragraph 6 of the employment contract between Dr. Conte and the University governs termination of employment and provides, in pertinent part, as follows:

6. Termination:

6.1 The University may terminate this appointment for cause which shall include:

(a) the intentional violation of University of Maryland

System Regulations or University regulations

(b) wilful neglect of duty

(c) insubordination

(d) incompetence

(e) misconduct

(f) criminal conduct

(g) long-term physical or mental condition which renders

Dr. Conte unable to perform the duties essential to the

Director’s position

6.2 In the event the University terminates this Appointment, for the above reasons, it shall notify the Director, in writing, of the cause for which termination is sought and the right of the Director to request a hearing by the University President or the President’s designee. The hearing must be requested within 30 days of the Director’s receipt of the written termination notice. In the event no such hearing is requested, the termination shall become immediately effective.

Two legal consequences relevant to our discussion can be drawn from the language of the contract.

First, Paragraph 6.1 of the contract makes clear that Dr. Conte was not an “at-will” employee. The University could not fire Dr. Conte on a whim, nor could it avail itself of the various legal protections afforded employers who terminate at-will employees. Although employment in Maryland is presumptively at-will, see Porterfield v. Mascari, 374 Md. 402, 421-22, 823 A.2d 590, 601-02 (2003); see also S. Mazaroff & T. Horn, Maryland Employment Law, § 3.01 (2d. ed.2004), a contract, whether express or implied, may overcome that presumption and create an employment relationship whereby the employee may be terminated only for just cause. See 19 Williston on Contracts § 54:41 (4th ed.2001). While the language of the contract itself may express a just cause requirement, a contractual delineation of the length of the employment period will also create a just cause employment relationship because by specifying the length or term of employment, the employer usually is considered to have surrendered its ability to terminate the employee at its discretion. See Shapiro v. Massengill, 105 Md.App. 743, 661 A.2d 202 (1995); Chai Management v. Leibowitz, 50 Md.App. 504, 439 A.2d 34 (1982); cf. Gill v. Computer Equip. Corp., 266 Md. 170, 179, 292 A.2d 54, 58 (1972) (refusing to find a just cause employment relationship in a contract that did not delineate specific term of employment); McCarter v. Baltimore Chamber of Commerce, 126 Md. 131, 94 A. 541 (1915) (same). Dr. Conte’s contract contains a provision that permits termination only for cause and a provision that sets the time period of his employment,⁴ both of which independently establish he was not an at-will employee. The trial court found that he was not an at-will-employee and neither party has appealed this finding.

Second, the language of the contract is ambiguous as to whether the fact-finding prerogative lies with the University. On the one hand, we note the glaring absence of express language directing the fact-finding prerogative to the University. Paragraph 6.2 provides a procedural safeguard for Dr. Conte — a hearing before the President of the University before termination may take effect. But it does not say the President’s decision is final, nor does it intimate that the traditional judicial remedy was foreclosed to Dr. Conte if he disagreed with the President’s decision. The contract is silent as to adequate investigation, fact-finding, or arbitration in the event of dispute, and it provides no semblance of procedural or evidentiary safeguards that would imply that adjudicatory discretion is reserved to the University. Cf. Murphy v. Duquesne University, 565 Pa. 571, 777 A.2d 418, 433-34 (2001) (noting that it would be unreasonable to believe that an employment contract intended that a carefully elaborated procedure for termination of a tenured professor could be completely circumvented by the filing of a civil action). Rather, all that is promised is a hearing, a meeting, essentially, with the President before termination takes effect, and that is all that Dr. Conte received. It is difficult to read into Paragraph 6.2 an intention by the parties to exclude the traditional remedy in court for contractual disputes.

On the other hand, it is just as difficult, if not more difficult, to understand Paragraph 6.2 as having a rational basis for existence unless it was meant to reserve, at some level, the fact-finding prerogative for the University. If the parties intended to permit the relitigation of every fact related to Dr. Conte’s termination, why was it necessary to grant Dr. Conte the right to a hearing in the first place? One response is that Dr. Conte’s hearing provides an avenue whereby a factual dispute or mistake might be resolved by the parties before resorting to the expensive measure of litigation. But that response is not persuasive with regard to Paragraph 6.2, which grants Dr. Conte the “right” to a hearing. Resolving disputes privately does not require giving the employee the right to a hearing as a condition for effective termination. That avenue always exists, even in the absence of a provision like Paragraph 6.2. In other words, a hearing would accomplish nothing that would not be accomplished in court before the jury. Paragraph 6.2 would be rendered superfluous, and courts do not interpret contracts in a manner that would render provisions superfluous or as having no effect. See Walker v. Dept. of Human Resources, 379 Md. 407, 421, 842 A.2d 53, 61 (2004) (stating that “[w]e also attempt to construe contracts as a whole, to interpret their separate provisions harmoniously, so that, if possible, all of them may be given effect”).

Fortunately, we need not address which interpretation is more persuasive because we find that, under either interpretation of the contract, the University retains the fact-finding prerogative. If petitioner’s reading of the contract prevails, and the contract expressly reserves the right to the University, then the University retains the fact-finding prerogative, and it was error for the lower courts to permit the jury to be the fact-finder in this case. Nevertheless, because the contract is ambiguous, we will assume, without deciding, that respondent’s reading is correct, and that the contractual language does not speak either way on the issue of fact-finding prerogative.

In that case, we must decide, in the employment law sphere, who should presumptively retain the fact-finding prerogative. We have already addressed this issue with regard to two different types of employees, the employee at-will and the employee subject to a satisfaction employment contract. We now address this issue with regard to a third type of employee, who, like Dr. Conte, may be fired only for just cause.

B.

In order to glean guidance on this issue, we start with an analysis of the presumptive fact-finder in the types of employment relationships for which this question has already been answered. In the at-will employment context, we have held that a jury may not review any aspect of the employer’s decision to terminate and that the employer may, absent a contravening public policy, terminate an employer for any reason, even a reason that is arbitrary, capricious, or fundamentally unfair. See Porterfield, 374 Md. at 422, 823 A.2d at 602; Suburban Hospital v. Dwiggins, 324 Md. 294, 310, 596 A.2d 1069, 1077 (1991) (declining the invitation “to impose a general requirement of good faith and fair dealing in at-will employment situations”); Adler v. American Standard Corp., 291 Md. 31, 35, 432 A.2d 464, 467 (1981). For our purposes, the significant point is that courts and juries may not review either the employer’s (1) motivation or (2) factual bases for termination in the context of an at-will employment relationship.

A jury’s review, however, is ratcheted up one step when the employment is pursuant to a “satisfaction” employment contract. See, e.g., H & R Block, Inc. v. Garland, 278 Md. 91, 100, 359 A.2d 130, 134 (1976) and cases cited therein. A satisfaction employment contract typically conditions employment on the employer’s satisfaction. As we intimated when we first explained satisfaction employment contracts in Ferris v. Polansky, 191 Md. 79, 59 A.2d 749 (1948):

“In a contract where the employer agrees to employ another as long as the services are satisfactory, the employer has the right to terminate the contract and discharge the employee, whenever he, the employer, acting in good faith is actually dissatisfied with the employee’s work. This applies, even though the parties to the employment contract have stipulated that the contract shall be operative during a definite term, if it provides that the services are to be performed to the satisfaction of the employer. It is not necessary that there exist grounds deemed adequate by the trier of facts for the employer’s dissatisfaction. He is the judge as to whether the services are satisfactory. However, this dissatisfaction, to justify the discharge of the employee, must be real and not pretended, capricious, mercenary, or the result of a dishonest design. If the employer feigns dissatisfaction and dismisses the employee, the discharge is wrongful. The employer in exercising the right of dismissal because of dissatisfaction must do so honestly and in good faith.”

Id. at 85-86, 59 A.2d at 752 (emphasis added). Polansky teaches that when an employee is subject to a satisfaction contract, the jury may not review the employer’s factual bases for termination, but the jury is permitted to review the employer’s motive for termination — specifically, the employer’s subjective motivation. Subjective motivation means whether the employer was genuinely or honestly dissatisfied with the employee’s services or merely feigning dissatisfaction. Id. In contrast to at-will employment in which a jury may review neither the motivation nor the factual bases of the employer’s decision, a satisfaction employment contract permits a jury to review (1) the employer’s motivation, limited to his subjective motivation,⁵ but not (2) the factual bases for termination, the prerogative of which remains with the employer. Id.; H &R Block, 278 Md. at 100, 359 A.2d at 134; Volos, Ltd. v. Sotera, 264 Md. 155, 170, 286 A.2d 101, 109 (1972) (noting that the usual rule is that subjective, not objective, standard of review applies to sufficiency of performance issues in satisfaction employment contracts).

Finally, there are employment contracts that grant a greater level of protection from termination than both the at-will and satisfaction employment contracts, by which we mean the just cause employment contract. To what extent may a jury review an employer’s decision to terminate when the employer has promised not to terminate except for just cause? At-will employment contracts permit review of neither the employer’s motivation nor the factual bases for termination. Satisfaction employment contracts permit review only of the employer’s motivation, limited to his or her subjective motivation, but not the factual bases for termination. Just cause employment contracts, such as in the case sub judice, logically permit the jury to review with greater scrutiny the employer’s decision to terminate than do satisfaction contracts. Does a just cause employment contract require, as respondent posits, a jury’s review of the factual bases in addition to the employer’s motivation? Or, as petitioner argues, is a just cause contract similar to a satisfaction contract, permitting review of the employer’s “good faith,” but nothing more?

While we disagree that just cause employment contracts should be treated like satisfaction contracts, we will not take the extraordinary step — precluded by our case law in all the employment contracts we have so far encountered — of permitting the jury to scrutinize the factual bases for the decision to terminate. Therefore, we hold that the jury may not review whether the factual bases for termination actually occurred or whether they were proved by a preponderance of the evidence submitted for its review. Instead, the proper role of the jury is to review the objective motivation, i.e., whether the employer acted in objective good faith and in accordance with a reasonable employer under similar circumstances when he decided there was just cause to terminate the employee. The jury’s inquiry should center on whether an employer’s termination was based upon any arbitrary, capricious, or illegal reason, or on facts not reasonably believed to be true by the employer. But the fact-finding prerogative remains with the employer, absent some express intention otherwise. This view, which is in accord with the majority of our sister states that have encountered this precise issue, brokers an appropriate balance between the two views advocated by the parties. See, e.g., Life Care Centers of America v. Dexter, 65 P.3d 385 (Wyo.2003); Almada v. Allstate Ins. Co., 153 F.Supp.2d 1108 (D.Ariz.2000); Thompson v. Associated Potato Growers, 610 N.W.2d 53 (N.D.2000); Cotran v. Rollins Hudig Hall Intern., Inc., 17 Cal.4th 93, 69 Cal.Rptr.2d 900, 948 P.2d 412 (1998); Southwest Gas v. Vargas, 111 Nev. 1064, 901 P.2d 693 (1995); Braun v. Alaska Com. Fishing & Agr. Bank, 816 P.2d 140 (1991); Baldwin v. Sisters of Providence in Washington, 112 Wash.2d 127, 769 P.2d 298 (1989); Kestenbaum v. Pennzoil Co., 108 N.M. 20, 766 P.2d 280 (1988); Simpson v. Western Graphics Corp., 293 Or. 96, 643 P.2d 1276 (1982); cf. Gaudio v. Griffin Health Services Corp., 249 Conn. 523, 733 A.2d 197, 208 n. 13 (1999); Wilde v. Houlton Regional Hosp., 537 A.2d 1137, 1138 (Me.1988) (refusing to infer term into contract limiting employer’s fundamental right to reduce his work force, absent some express provision to the contrary, due to essential business prerogatives and market forces).

In a minority of jurisdictions, the role of the jury is to determine whether the alleged misconduct actually occurred. The leading case for this position is Toussaint v. Blue Cross & Blue Shield of Mich., 408 Mich. 579, 292 N.W.2d 880 (1980), in which the Michigan Supreme Court held that the trier of fact, not the employer, determines whether there was cause sufficient to warrant the employee’s termination. That court reasoned that an employer’s promise to discharge only for just cause would be rendered meaningless and illusory if the employer was the final arbiter of the discharge. Id. at 895. Therefore, an employer’s good faith belief that there was just cause to terminate could not by itself supply cause. In other words, under the Toussaint holding, the factual bases of the just cause asserted by the employer must be proven by a preponderance of the evidence to the trier of fact. See, e.g., Raymond v. International Business Machines, Corp., 954 F.Supp. 744, 751-52 (D.Vt.1997); cf. Schuessler v. Benchmark Marketing and Consulting, Inc., 243 Neb. 425, 500 N.W.2d 529, 538 (1993) (“If the employer produces sufficient evidence, the employee may rebut, and if in controversy, the issue goes to the trier of fact; however, the ultimate burden of proving wrongful termination remains with the employee”); Sanders v. Parker Drilling Co., 911 F.2d 191 (9th Cir.1990) (applying Alaska law, cast into doubt sub silentio by Braun, 816 P.2d 140); Alegria v. Idaho First Nat. Bank, 111 Idaho 314, 723 P.2d 858, 875 (1986).

Following closely on the heels of Toussaint, however, a case by the Oregon Supreme Court implicitly rejected the Tous-saint holding. Simpson v. Western Graphics Corp., 293 Or. 96, 643 P.2d 1276, a case involving the disputed nature of threatening remarks made to a co-worker, held that when an employer contracts to discharge only for just cause, it does not, absent indication of some other intent, contract away its inherent right to be the ultimate fact-finder in determining whether just cause existed. Therefore, to justify its decision to terminate, the employer need not prove to the jury that the misconduct or just cause actually occurred by a preponderance of the evidence. 643 P.2d at 1278. As stated by that court: “In the absence of any evidence of express or implied agreement whereby the employer contracted away its fact-finding prerogative to some other arbiter, we shall not infer it.” Id. at 1279. In other words, that court, in the absence of a contrary contractual provision, presumptively designated the fact-finding prerogative to the employer.

We agree with the Oregon Supreme Court that absent some express indication otherwise, an employer does not contract away his core function as ultimate fact-finder with regard to an employer’s workplace performance. We will not interpret Dr. Conte’s employment contract as granting a third-party, the jury, the authority to review the factual bases of the University’s decision to terminate him — especially in light of our previous holdings, with regard to satisfaction and at-will employment relationships, that have consistently attributed the fact-finding prerogative to the employer. As Judge Cathell, then on the Court of Special Appeals, aptly warned, “[t]o hold otherwise would be to put the courts in the position of making ... personnel decisions, acting as a super personnel officer, or of second-guessing a company’s decisions.” Elliott, 104 Md.App. at 110, 655 A.2d at 54 (citation and quotations omitted). Echoing Judge Cathell’s admonition, another supreme court that encountered this precise issue has said:

“[Allowing a jury to trump the factual findings of an employer with regard to just cause] would create the equivalent of a preeminent fact-finding board unconnected to the challenged employer, that would have the ultimate right to determine anew whether the employer’s decision to terminate an employee.... This ex officio ‘fact-finding board,’ unattuned to the practical aspects of employee suitability over which it would exercise consummate power, and unexposed to the entrepreneurial risks that form a significant basis of every state’s economy, would be empowered to impose substantial monetary consequences on employers whose employee termination decisions are found wanting.”

Vargas, 901 P.2d at 699. We are in agreement with these concerns.

This premise that the employer, not the jury, retains the fact-finding prerogative does not render “illusory” the promise not to terminate except for just cause. In Cotran v. Rollins Hudig Hall, the California Supreme Court also agreed with the Simpson holding that the jury’s role did not encompass that of fact-finder in a wrongful termination case, and it disagreed with the Toussaint court that this would render the promise meaningless. Instead, the jury’s role was to assess the “objective reasonableness” of the employer’s factual determination that just cause existed. 948 P.2d at 419. To flesh out the meaning of objective reasonableness in the employment context, the court explained that just cause required (1) that the employer act in objective good faith (meaning, as we have already stated, good faith from the perspective of a reasonable employer, not of the individual employer), id. at 420, and (2) that the employer base its decision on a reasoned conclusion supported by substantial evidence. Id. (citing Baldwin, 769 P.2d at 304). Such an approach, said the court, achieved a middle ground between the Toussaint rule and a toothless just cause doctrine. The Cotran court supported its decision with policy considerations it found persuasive in the personnel context:

“As several courts have pointed out, a standard permitting juries to reexamine the factual basis for the decision to terminate for misconduct — typically gathered under the exigencies of the workaday world and without benefit of the slow-moving machinery of a contested trial — dampens an employer’s willingness to act----

“Equally significant is the jury’s relative remoteness from the everyday reality of the workplace. The decision to terminate an employee for misconduct is one that not uncommonly implicates organizational judgment and may turn on intractable factual uncertainties, even where the grounds for dismissal are fact specific. If an employer is required to have in hand a signed confession or an eyewitness account of the alleged misconduct before it can act, the workplace will be transformed into an adjudicatory arena and effective decisionmaking will be thwarted. Although these features do not justify a rule permitting employees to be dismissed arbitrarily, they do mean that asking a civil jury to reexamine in all its factual detail the triggering cause of the decision to dismiss — including the retrospective accuracy of the employer’s comprehension of that event-months or even years later, in a context distant from the imperatives of the workplace, is at odds with an axiom underlying the jurisprudence of wrongful termination. That axiom ... is the need for a sensible latitude for managerial decisionmaking and its corollary, an optimum balance point between the employer’s interest in organizational efficiency and the employee’s interest in continuing employment.”

Id. at 420-421 (citation omitted). The majority of high courts that have considered the issue are in agreement with California, see supra, and so are we.

As outlined above and in addition to the logical progression of our precedent, the practical considerations of running a business overwhelmingly favor a legal presumption that an employer retain the fact-finding prerogative underlying the decision to terminate employment. Indeed, this case is a good example as to why a jury should not be permitted to review the factual bases for termination in the employment context. Because of the strict evidentiary rules of a judicial proceeding, the University was barred from admitting into evidence hearsay statements relied upon by the University in its termination decision. Nevertheless, employers often “rely on hearsay, on past similar conduct, on their personal knowledge of people’s credibility, and on other factors that the judicial process ignores,” indicating that “|w]hat works best in a judicial proceeding may not be appropriate in the employment context.” Waters v. Churchill, 511 U.S. 661, 676, 114 S.Ct. 1878, 1888, 128 L.Ed.2d 686 (1994). Similarly, the University alone was in the best position to determine whether there were facts sufficient to constitute “incompetence” and “wilful neglect of duties,” the two just causes outlined by the contract as the basis for Dr. Conte’s termination. Whether an employee was “incompetent” or in “wilful neglect of duties” is a question that not only requires the special knowledge of the employer, but it is also so overbroad and vague in its terminology that a jury’s attempt to figure out what those terms mean — especially in the context of a highly competitive and complex research institute involving, among other things, various private clients and public interests, interlocking federal and state regulations, and the complex accounting protocol of a large public university — is an endeavor doomed to failure or gross uncertainty.

Respondent refers us to two Court of Special Appeals cases, Tricat v. Harper, 131 Md.App. 89, 748 A.2d 48 (2000), and Foster-Porter Enterprises v. De Mare as support for the opposite position that the employer was required to prove “actual” cause by a preponderance of the evidence. We do not find these cases relevant to the issue of the jury’s role as fact-finder. Tricat did not address the issue of a jury’s role or “actual” cause, but instead dealt with the proper placement of the burden of proof, an issue not presented in this case, see supra n. 3. Respondent fares no better with the Foster-Porter case, which does not deal with the employee-employer relationship (although it has occasionally been cited in that context for a different proposition, see infra Part IV). Instead, it involved a standard breach of contract dispute between a distributor and manufacturer.

Finally, we are unpersuaded by respondent’s argument that many of the cases that have held, as we do, that the presumption of fact-finder lies with the employer apply only to the implied contract case. Cf Cotran, 69 Cal.Rptr.2d 900, 948 P.2d at 414 n. 1 (noting that “ [wrongful termination claims founded on an explicit promise that termination will not occur except for just or good cause may call for a different standard, depending on the precise terms of the contract provision” (second emphasis added)); Khajavi v. Feather River Anesthesia Medical Group, 84 Cal.App.4th 32, 100 Cal.Rptr.2d 627 (2000) (holding that unlike wrongful discharge based on an implied contract, employment for a specified term may not be terminated prior to the term’s expiration based upon employer’s honest but mistaken belief of misconduct), rehearing and review denied. First, respondent’s premise is incorrect. See, e.g., Thompson, 610 N.W.2d at 57-59 (adopting the Cotran holding in the context of an express just cause contract); Manning v. Alaska R.R. Corp., 853 P.2d 1120, 1125 n. 2 (Alaska 1993) (applying the same definition of just cause to collective bargaining agreement that expressly stated the employer may take disciplinary action against an employee for “just cause” because this is the “appropriate” standard for just cause discharges). Second, and perhaps more importantly, the reasoning of the cases that adhere to the objective good faith standard in the context of implied contracts apply with equal force in the context of express contracts. Respondent offers no reason why the two should be distinguished. Perhaps respondent and other jurisdictions do not provide rationales for treating differently implied contracts from express contracts because the two do not differ in substance or effect, but only in the manner in which they are formed. Regarding that difference in contract formation, the comment to the Restatement of Contracts explains, “Contracts are often spoken of as express or implied. The distinction involves, however, no difference in legal effect, but lies merely in the mode of manifesting assent.” Restatement (Second) of Contracts § 4 cmt. a (1981) (emphasis added).

In sum, we agree with the majority of jurisdictions that have considered this issue and hold that a jury’s role in a wrongful discharge case does not include that of ultimate fact-finder. Instead, in the just cause employment context, a jury’s role is to determine the objective reasonableness of the employer’s decision to discharge, which means that the employer act in objective good faith and base its decision on a reasoned conclusion and facts reasonably believed to be true by the employer.

IV.

Although Part III of this opinion resolves the dispute and will require a new trial, we will give guidance on the second question presented, as it will undoubtedly arise again in the litigation. This issue is whether Dr. Conte’s employment contract was exclusive in its enumeration of the just causes for which Dr. Conte could be terminated, thereby prohibiting termination based upon any other cause, such as common law cause. We hold that it was not exclusive. This interpretation of Dr. Conte’s employment contract is required by its clear terms, which are unambiguous with regard to this issue and which are reproduced, in pertinent part, as follows:

6. Termination:

6.1 The University may terminate this appointment for cause which shall include:

(a) the intentional violation of University of Maryland System Regulations or University regulations

(b) wilful neglect of duty

(c) insubordination

(d) incompetence

(e) misconduct

(f) criminal conduct

(g) long-term physical or mental condition which renders Dr. Conte unable to perform the duties essential to the Director’s position

* * *

6.3 The appointment shall terminate for the following reasons:

(a) The Director’s acceptance of other employment; the Director’s resignation, or the Director’s retirement.

(b) Pursuant to Maryland law, if funds are not appropriated or otherwise made available to support continuation of this position on or after July 1, 1997, and the Director chooses not to operate RESI on a self-supporting basis.

(c) The Director’s death.

7. Faculty Appointment:

In the event the Director is terminated for reasons other than those provided in paragraph 6.1(a) through (g) and 6.3(a), or if this Appointment is not renewed, the Director shall be appointed Professor of economies, with tenure, subject to the University of Maryland System Appointment, Rank and Tenure Policies and Procedures and University Policies and Procedures on the appointment of tenured faculty, as amended from time to time.

Because we find these provisions clearly and unambiguously manifest an intent by the parties not to limit the just causes for which Dr. Conte could be terminated, we will enforce those terms.

Dr. Conte’s contract does not limit the causes for his termination to those enumerated by 6.1(a) — (g) because the language in Paragraph 6.1 of the contract is clear and unambiguous. “The University may terminate this employment for cause which shall include [the enumerated seven causes].” This language does not expressly or impliedly make those causes exclusive. The word “include” ordinarily means “comprising by illustration and not by way of limitation.” Group Health Ass’n v. Blumenthal, 295 Md. 104, 111, 453 A.2d 1198, 1203 (1983), cited with approval in State v. Wiegmann, 350 Md. 585, 593, 714 A.2d 841, 845 (1998). There is nothing in the language of the contract — such as “shall include only”— that would refute this ordinary understanding of the term and make the seven listed causes exclusive. See also Thompson, 610 N.W.2d at 57 (addressing the identical issue, and finding that the list of causes was not exclusive).

This interpretation is further supported by the word “may” in Paragraph 6.1. Connoting a permissive, discretionary action, the word “may” indicates that the University, at its discretion, could terminate Dr. Conte for the seven enumerated causes, but it did not require the University to do so. Cf. Board of Physician v. Mullan, 881 Md. 157, 848 A.2d 642 (2004); Spencer v. Maryland State Board of Pharmacy, 380 Md. 515, 846 A.2d 341 (2004); Maryland-National Capital Park and Planning Comm. v. Silkor Corp., 246 Md. 516, 229 A.2d 135 (1967) (interpreting the word “may” to signal the ordinary meaning of permission unless the context or the purpose of the statute shows that it is meant to be imperative). Paragraph 6.1 manifests an intention to describe the types of causes for which Dr. Conte could be terminated, but there is no language signaling the parties intended to limit those causes to the ones mentioned.

Second, and perhaps even more compellingly, the textual context of Paragraph 6.1 plainly indicates that the enumerated causes of that paragraph were not exclusive. Paragraph 7 states that, “[i]n the event the Director is terminated for reasons other than those provided in paragraphs 6.1(a) through (g) and 6.3(a),” Dr. Conte will be appointed a professor at the University. At the very least, Paragraph 7 anticipates that some causes were not listed in Paragraph 6.1.

Respondent argues that the causes “other than those provided for in Paragraph 6.1(a) through (g) and 6.3(a)” refer to 6.3(b) alone and do not imply that “other” just causes might exist. We find this explanation unpersuasive and objectively unreasonable. If the parties had truly intended such a thing, a much more logical, simple, and intuitive way of articulating their intent would have been to use language such-as “for the reason stated in 6.3(b) of this contract.” Indeed, the plain language of the contract refutes respondent’s interpretation, for it uses the plural, “reasons,” indicating that the singular reason stated in 6.3(b) is not the only reason for termination contemplated by the contract. To adopt respondent’s understanding of the contract would belie common sense.

Therefore, the claim that the contract intended the causes of Paragraph 6.1 to be exclusive is unpersuasive. The implication for petitioner is that the University may base its cause for termination on reasons other than those listed in the contract. See Regal Savings Bank v. Sachs, 352 Md. 356, 364, 722 A.2d 377, 381 (1999) (holding that, in the context of employment contracts, unless a provision for termination is in terms exclusive, it is a cumulative remedy and does not bar the ordinary remedy of termination for “a breach which is material, or which goes to the root of the matter or essence of the contract” (quoting Foster-Porter, 198 Md. at 36, 81 A.2d at 333) (citations and internal quotations omitted)).

This understanding of the contract does not transform Dr. Conte into an employee at-will. As we have already stated, the contract establishes, and it is conceded, that Dr. Conte could be terminated only for just cause. Thus, as long as the University bases its termination on just cause, it can do so regardless of whether that specific just cause is included in the contract. However, petitioner concedes that termination based on a cause subject to Paragraph 7 will result in Dr. Conte being appointed to a tenured professorship.

In this case, the University could base its termination on “common law cause” — which permits an employer to terminate an employee for a “material breach” of the contract, one that goes “to the essence” of the contract itself — even though that cause is not mentioned in the contract. See id. But it could not terminate Dr. Conte at its discretion or for any other reason that would not satisfy the just cause requirement.

In his dissent, Judge Eldridge raises two jurisdictional or quasi-jurisdictional issues — that Dr. Conte’s only available judicial remedy was to seek judicial review of the administrative decision by the President of Towson, and that his breach of contract action was filed beyond the one year allowed by Maryland Code, § 12-202 of the State Government Article. On the state of the record before us, neither of those issues appears apposite.

Towson University is part of the University System of Maryland. See Maryland Code, § 12-101 of the Education Article. Section 12 — 104(j)(2) of the Education Article makes clear that, except with respect to grievance appeals under Title 13, subtitle 2 of the Education Article, of which this action is not one, the contested case provisions of the Administrative Procedure Act do not apply to the University, and there is, accordingly, no statutory provision for any administrative hearing to which Dr. Conte would be entitled or any APA-type of judicial review of administrative proceedings provided for in his contract.

Although, under our case law, the courts have inherent authority, by mandamus or injunction, to review administrative decisions alleged to be arbitrary, capricious, or unlawful in some way (see, e.g., Criminal Inj. Comp. Bd. v. Gould, 273 Md. 486, 331 A.2d 55 (1975) and cases cited therein), we have never held that such an action is, in all cases, the sole remedy available or that resort to that avenue of judicial review is a jurisdictional requirement. Dr. Conte was not seeking a Gould-type of judicial review of any administrative decision by the President of Towson but was, instead, seeking damages for common law breach of contract. Every breach of contract action against the State involves, to some extent, an allegation that a State agency or official acted improperly and unlawfully in failing to comply with the contract, but this Court has never suggested that, in the absence of an applicable statutory administrative procedure, the plaintiffs only remedy is to seek judicial review of the administrative decision not to comply with the contract through an action for mandamus or injunction.

With respect to Conte’s alleged failure to comply with the one-year limitations period provided in § 12-202 for bringing a breach of contract action against the State, it would appear that his action was, in fact, timely. His contract and employment were formally and effectively terminated on January 26, 1999, and his action was filed on January 24, 2000. Whether Dr. Conte could have sued for injunctive relief prior to January 26, 1999, to preclude Towson University from terminating his contract or for an anticipatory breach of contract — an issue that is not before us — his cause of action for the actual breach did not and could not arise until the contract was, in fact, terminated.

Citing and relying upon Delaware State College v. Ricks, 449 U.S. 250, 101 S.Ct. 498, 66 L.Ed.2d 431 (1980) and Chardon v. Fernandez, 454 U.S. 6, 102 S.Ct. 28, 70 L.Ed.2d 6 (1981) (per curiam), the dissent maintains that the statute of limitations begins when notice of termination is issued by the employer and not when the termination is effective. Dissenting op. at 116, 862 A.2d at 969. Ricks claimed that the College discriminated against him on the basis of national origin in violation of Title VII and 42 U.S.C. § 1981. The Supreme Court held that the only alleged discrimination occurred at the time the tenure decision was made and communicated to Ricks, and hence, the filing limitations period commenced at that time. 449 U.S. at 258, 101 S.Ct. at 504. In Chardon, plaintiff Fernandez filed a complaint alleging that his termination from the Puerto Rico Department of Education violated 42 U.S.C. § 1988. Applying the holding in Ricks that the proper focus is the time of the alleged discriminatory act, the Supreme Court held that the time for filing began to run when plaintiff received his letter of termination because there was no allegation of any discriminatory act after that date. 454 U.S. at 8, 102 S.Ct. at 29. Ricks and Chardon are inapposite to the case at bar. There is no allegation of discrimination or deprivation of civil rights.

JUDGMENT OF THE COURT OF SPECIAL APPEALS REVERSED. CASE REMANDED TO THAT COURT WITH DIRECTIONS TO REVERSE THE JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE COUNTY AND TO REMAND THE CASE TO THAT COURT FOR A NEW TRIAL. COSTS IN THIS COURT AND IN THE COURT OF SPECIAL APPEALS TO BE PAID BY RESPONDENT.

BELL, C.J. and ELDRIDGE, J., dissent.

1 . While discovery was proceeding, the Circuit Court dismissed, on limitation grounds, Dr. Conte's claim for additional compensation for fiscal years 1997 and 1998.

2 . We denied Dr. Conte's cross-petition for certiorari. 376 Md. 543, 831 A.2d 3 (2003).

3 . Petitioner argues that the burden of proving just cause or the absence thereof lies with Dr. Conte, and that the trial court erred when it assigned the burden to the University. While this issue was raised and argued before the trial and intermediate appellate courts, the issue is not contained in the petition for certiorari, and we will not consider it. See Maryland State Police v. Zeigler, 330 Md. 540, 562-63, 625 A.2d 914, 925 (1993)

4 . Section 2 of Dr. Conte's employment contract provides a set employment period from April 1, 1996 to June 30, 1999.

5 . We do not intimate that the subjective standard applies to satisfaction contracts outside the employment sphere. See First National v. Warren-Ehret, 247 Md. 652, 658-659, 233 A.2d 811, 814 (1967) (noting that there are different types of satisfaction contracts, dealing with different subject matters, and that the courts have not applied the same rule to all of them).