Paul v. Lankenau Hospital ( 1988 )

CAVANAUGH, Judge,

dissenting:

I dissent because I believe that the majority opinion substantially abrogates the employment at-will doctrine in Pennsylvania and is contrary to established precedent.

THE JOB SECURITY RIGHTS OF AN EMPLOYEE-AT-WILL

The law of Pennsylvania has long been that there is, generally speaking, no cause of action for dismissal of an employee at will.¹ Unless protected by a labor contract or an employment contract from an employer’s absolute right to discharge employees, an employee is considered an employee-at-will and he may be discharged at any time for any or no reason whatsoever. Dismissal for non-protected rights of one in this status is simply not justiciable. This rule is deeply entrenched in our law. While on its face the rule appears harsh — one recoils at the thought of a long-term faithful employee being suddenly turned out at the employer’s whim — it is undoubtedly rooted in the feeling that job security must be a bargained-for employee benefit and that the employee at-will doctrine is merely the reverse of the accepted tenet that an employee may choose to separate from this employment at any time he wishes short of a specific agreement to the contrary. Moreover, one would expect that an employer’s willingness to hire personnel and to locate or expand an enterprise within the Commonwealth would be encouraged by the knowledge that, short of an agreement to the contrary, an employee, once hired, may be discharged without reason. It is probably not too much to say that this doctrine is vitally ingrained into the entire social and economic structure of this Commonwealth.

It is for these reasons that cases dealing with claims involving alleged wrongful discharge are of great importance and must be given careful scrutiny. It is for these reasons that any “development” in the law of wrongful discharge should come as the result of careful and thorough legislative review and action or, if change be by judicial decision, it must come from the highest court in the Commonwealth.

All of this is, of course, not to say that employers or employees may act with impunity in their conduct with each other. Thus, an employee who has a cognizable common-law tort, civil or equitable claim (other than a claim within the purview of the Workmen’s Compensation Act) may pursue that claim in the courts of this Commonwealth. However, it is important that an impermissible wrongful discharge action not withstand judicial scrutiny merely because it enters the courthouse marked as a claim under another label. The case of a cognizable wrongful discharge claim such as an employee with a contract is that the employer has, without acceptable cause, separated the plaintiff from his employment, whereas in other tort claims, say one in defamation, the fact of employment with the defendant-employer is only incidental to the cause of action. Moreover, the damages in a cognizable wrongful discharge case and in another action may at least in part be similar. Thus, if A is defamed by B, he may claim that as part of his damages he was caused to lose his job with C. Similarly, if A is defamed by B and B is also A’s employer, B should not be permitted to claim that there is any immunity from damages for impairment of earning capacity merely because A was an employee-at-will. Rather, the separation from employment may be considered by the jury in the overall question of defamation damages.

It is perhaps because the employer-employee relationship is one of grave economic and social implication, and, in keeping with our tradition of liberty, is one grounded on a concept of mutual consent, that the employment relationship has historically been treated differently from other contractual relations. We have previously commented on this aspect of the law:

The at-will rule had become so firmly entrenched by 1915 that our Supreme Court quoted with approval Professor Labbat’s work on Master and Servant relations. “The preponderance of American authority in favor of the doctrine that an indefinite hiring is presumptively a hiring at will is so great that it is now scarcely open to criticism.” Hogle v. DeLong Hook & Eye Co., 248 Pa. 471, 94 A. 190 (1915) (quoting 1 C. Labatt, Master and Servant § 160 at 519 (1913)). The rule has since been reaffirmed so often that it defies citation.

The rationale justifying the employment at-will rule has been described as follows:

“Professor Farnsworth, reporter to the Restatement (Second) of Contracts, has succinctly stated:

‘Conscious of the traditionally intimate nature of the relationship between employer and employee, courts have regularly found that [there is no language in the contract relevant to termination of the employee] despite absolute promises on both sides. Then by implication, they have almost invariably supplied a term allowing either party to terminate at will.’

E.A. Farnsworth, Contracts 532 (1982) (emphasis added).

“The at-will rule is a legal recognition of the ‘intimate nature’ of the master-servant relationship of which professor Farnsworth wrote, supra. In contrast to the employment setting, consider a sales relationship where a consumer purchases an appliance. It matters not at all whether the consumer and manufacturer get along personally. They usually never even meet. Whereas, it is often crucial to the employment relationship that the parties work well together and trust one another. Because so much depends on the subjective satisfaction of both parties in this area, the law is reluctant to require either to articulate objective 'just cause’ reasons when either decides to sever the relationship. The at-will rule is an articulation of this reluctance. Moreover, the employment relationship is often more complex than other types of contractual relationships. In the case of the sale of an appliance, both buyer and seller can readily articulate objective reasons they might have for dissatisfaction with the other. The seller will be justifiably dissatisfied if the buyer’s check bounces. The buyer will be justifiably unhappy if the product fails to perform to his reasonable expectations. In the employment setting, it may be impossible for either party to state with objective clarity the reasons for his dissatisfaction with the other. (The dissatisfaction may be borne of an accumulation of seemingly trivial things.) However, the law, via the at-will rule, recognizes that this dissatisfaction is as deserving of judicial relief as that in any other contractual setting: Martin v. Capital Cities Media, Inc. supra, [354 Pa. Super 199] 511 A.2d [830] at 837 [1986].

Veno v. Meredith, 357 Pa.Super. 85, 95-96, n. 1, 515 A.2d 571, 576, 577, n. 1. (1986).

THE ESTOPPEL CLAIM

We turn first to the estoppel claim. The majority in this case affirms the reduced verdict on the basis that the recovery is supported under the claim of promissory estoppel. We will assume that it is proper for an appellate court to enunciate and articulate the legal foundation for a claim in a way that was not espoused by the plaintiff at trial nor discussed by the court below.² We will assume this even though the majority states that Paul proceeded in his complaint at trial and on appeal on a general estoppel theory and failed to distinguish equitable estoppel from promissory estoppel (thus allowing this court to select either theory). The fact, however, is that in his brief before this court en banc Paul argues strenuously that the theory supporting his recovery is equitable estoppel and not promissory estoppel thus arguing against the theory upon which the majority affirms the award.

The majority draws a distinction between equitable estoppel (which may, during the course of litigation, be raised by either party to preclude the other party from denying or asserting a claim) and promissory estoppel. Promissory estoppel is the same legal tool put to use as the basis of a cause of action, rather than being ancillary to the assertion of another cause of action. Thus, it would be equitable estoppel if Paul used the promise of the refrigerators as a defense to a claim by the hospital for the return of the refrigerators, or, if Paul, had a just cause employment contract that he asserted was breached by his separation from employment, and used the promise to a defense asserted by the hospital that there was good cause for his discharge. Rather, the estoppel here is not ancillary to another cause of action, but is the actual gravamen of the cause of action. The jury found that a lower level employee, David D’Urbanis, supervisor of a supply storeroom, gave permission to Paul to take the refrigerators (which Paul later advertised and sold from his house). Promissory estoppel is an extraordinary doctrine in that it may be employed to enforce a promise unsupported by consideration in order to avoid a manifest injustice. See Utility Appliance Corp. v. Kuhns, 393 Pa. 414, 143 A.2d 35 (1958). It is most important to recognize, as I submit, the majority has failed to do, that promissory estoppel makes a promise binding if injustice can be avoided only by enforcement of the promise. Restatement, Second, Contracts § 90. The only modification of this remedy recognized by the Restatement is a recognition of the possibility of partial enforcement. Restatement, Second, Contracts § 90 and Reporters Note. Pennsylvania cases applying the so called promissory estoppel doctrine are limited to enforcement of the promise. Berliner v. Bee Em Manufacturing Co., 383 Pa. 458, 119 A.2d 65 (1956); Fried v. Fisher, 328 Pa. 497, 196 A. 39 (1938); Robert Mallery Lumber v. B & F Associates, 294 Pa.Super. 503, 440 A.2d 579 (1982); Straup v. Times Herald, 283 Pa.Super. 58, 423 A.2d 713 (1980); Langer v. Superior Steel Corp., 105 Pa.Super. 579, 161 A. 571 (1932); Green v. Interstate United Management Services Corp., 748 F.2d 827 (3rd Cir.1984). Fair enough, if the suit was by Paul to get or retain the refrigerators his claim of promissory estoppel, believed by the jury, is sufficient for him to prevail. However, the crux of the cause of action can only be the refrigerators in question and their entitlement.³ The majority, however, by reason of its finding, elevates Paul from his incontestable position as an employee at will to one who may be discharged only for cause and proceeds to affirm the award of substantial wrongful discharge damages. To justify such a result under the promissory estoppel theory the jury, I submit, would have to have found that D’Urbanis promised Paul that he could have the refrigerators and in addition advised him that he was also authorized by management to tell Paul that he has been elevated from his status as an at-will employee, and that henceforth he could only be discharged from Lankenau upon a showing of just cause.

Our courts have adhered to the principle that the discharge of an employee-at-will generally will not be reviewed in a judicial forum and, therefore, the threshold question in any given case is whether or not the employment was at-will. This is the analysis that our court (en banc) undertook in Banas v. Matthews International Corp., 348 Pa.Super. 464, 502 A.2d 637 (1985). Before comparing Banas, which was an employee suit based on breach of contract, it is important to recall that in our case the “estoppel” claim by Paul (analyzed by the majority to have been a promissory estoppel claim) was not for entitlement to the five refrigerators, but sought damages for his loss of employment. Thus, though designated a cause of action in estoppel, the suit sought (and received) a jury verdict for damages arising out of his discharge from Lankenau. Thus, the majority decision is in direct conflict with Bañas. Mr. Bañas, an employee, was discharged for using his employer’s supplies and equipment to make a grave marker. The employee claimed that he had permission to do the work and the employer denied that he had permission. The jury found that the employee did have permission, but our court denied relief for damages arising out of discharge finding that the fact that the employee had permission to do what he did was irrelevant since he was an employee-at-will and could be discharged for any or no reason.⁴ We held,

There is no merit to this argument. To be sure, according to appellee, and according to the jury, Campbell gave appellee permission to make the grave marker. But according to appellant, Campbell did not give permission. Given the jury’s verdict, we may take it as fact that Campbell did give permission. But that fact is irrelevant. Appellant’s handbook nowhere provided that an employee would be dismissed only if the facts warranted it.

As an employee-at-will, he could be dismissed, as he was dismissed, because appellant believed that he had made the grave marker without permission and knowing that to make it was against long-settled company policy. Whether appellant’s belief was correct —i.e., in accordance with fact — has nothing to do with the case; that it has nothing to do with the case is of the essence of appellee’s status as an employee-at-will, who may be dismissed “for any or no reason.” Geary v. United States Steel Corp., supra.

Banas v. Matthews, 348 Pa.Super. at 484-486, 502 A.2d 637 at 647-648.

Similarly, in our case, Paul claimed and the jury agreed, that he had permission to take the refrigerators. He does not claim, nor could he, that he had an agreement from Lankenau to be dismissed only if the facts warranted it. He could (like Bañas) be discharged whether or not his employer’s belief was correct, since he could be dismissed for any reason or no reason. As in Bañas, there is under the law no basis for the jury verdict since appellant was an employee-at-will. I submit that the majority decision in this case, in effect, overrules our en banc decision in Bañas as it elevates an employee who acts in accordance with an employer’s promise to the status of an employee with contractual rights in his continued employment.

THE ATTEMPT TO DISTINGUISH BAÑAS

The majority’s attempt to distinguish Banas is based on a serious misreading of that case. The majority differs Banas since in Banas “the employee had exceeded the scope of his permission (in making a grave marker)” whereas in the present case the jury found that Paul had permission to take the material in question and that he utilized it for a purpose which provided neither benefit to him nor harm to his employer. Since Paul advertised and sold the refrigerators for personal profit the “benefit” aspect of the majority’s statement is plainly in error. More importantly, however, the majority makes a serious error in concluding, as a distinguishing factor, that Banas, in making the marker, had exceeded his permission. This crucial conclusion is wrong. In Banas the jury found that Bañas was correct in his allegation that his employee handbook and supervisors’ assent gave him permission to make the grave marker. See Banas 502 A.2d at 647.

The majority’s second basis for attempting to distinguish Banas is also patently in error. It is claimed that because Banas relied upon a handbook, the permission from a supervisor to make a grave marker made no difference to the outcome of the case. However, Banas’ evidence accepted by the jury was that his handbook gave him permission to use the employer’s equipment and waste materials for personal work and that his supervisor, Campbell, had given him permission to make the grave marker. Thus, the conclusion that somehow the form of the promise makes the difference and (questionably) that an oral promise conveyed to an employee is of greater efficacy than one conveyed in an employee handbook, is without foundation.

Finally, the majority concludes that while it is clear that Lankenau did not promise to fire Paul only for just cause “from its permission to Paul to remove the equipment, it promised not to fire him for removing the equipment.” Banas sought the same relief and our court denied it to him since he was an employee at-will, but the present majority casts aside the deeply ingrained doctrine of the non-justiciability of dismissal , of employees at will by concluding that one may be elevated to job security status by mere inference from the statement of a stockroom employee which did not purport, in any way, to deal with employee status.

THE MAJORITY RESULT

The conclusion reached points up the legal incongruity to which the attempt to distinguish the sound reasoning of Banas has now lead. It is stated that "... from its permission to Paul to remove the equipment, it promised not to fire him for removing the equipment. Obviously, it was free to fire him for any other reason.” Thus, now given evidence of any employer’s broken “promise” no matter how or by whom conveyed and believed by the jury to have been sufficient for estoppel, the jury may sit in judgment of any dismissal of the promised employee. Remarkably, as the majority concedes, the employer may still dismiss the employee for “any reason” (which, of course, may include ones which are good, bad or indifferent) or for no reason, but not for the unkept promise and this will be for the jury to decide.

Other cases where there has been a threshold determination that an employee is in an at-will status illustrate that we are not free to examine the “justice” of the job termination. In Darlington v. General Electric, 350 Pa.Super. 183, 504 A.2d 306 (1986), the court, after determining the at-will status of the employee, found that there could be no basis for recovery despite employee’s good faith belief that he did not knowingly engage in expense account violations. In Veno v. Meredith, 357 Pa.Super. 85, 515 A.2d 571 (1986), once it was determined that the matter involved an employee-at-will, there was no basis for recovery even though the contention was that newspaper’s managing editor was discharged wrongfully for publication of material. In Martin v. Capital Cities Media, Inc., 354 Pa.Super. 199, 511 A.2d 830 (1986) an employee found to be in at-will status was not entitled to court review of her dismissal even though employee handbook provided for employee discipline for “just causes”. It would appear that these cases and others would have been decided differently if presented under the expanded promissory estoppel theory which the majority creates. See, e.g., Reilly v. Stroehmann Bros. Co., 367 Pa.Super. 411, 532 A.2d 1212 (1987); Ross v. Montour Railroad Co., 357 Pa.Super. 376, 516 A.2d 29 (1986); Betts v. Stroehmann Bros. Co., 355 Pa.Super. 195, 512 A.2d 1280 (1986); Muscarella v. Milton Shoe Manufacturing Co., Inc., 352 Pa.Super. 158, 507 A.2d 430 (1986).

DEFAMATION

It is clear that Paul has not stated a cause of action in defamation. There is no evidence that any publication of allegedly defamatory communication took place. This is the plaintiffs burden. 42 Pa.C.S.A. § 8343. Moreover, it is for the court to determine if a communication is capable of defamatory construction. Veno v. Meredith, supra; Vitteck v. Washington Broadcasting Co., 256 Pa.Super. 427, 389 A.2d 1197 (1978). In addition, aside from lack of publication and no defamatory construction, if we were to accept Paul’s resignation under pressure as the defamatory act, it is nothing more than an opinion — that Lankenau believed in good faith (D’Urbanis said he never gave Paul permission to take the refrigerator) that the refrigerators were taken by Paul without permission. See Braig v. Field Communications, 310 Pa.Super. 569, 456 A.2d 1366 (1983). There is no intimation of undisclosed defamatory facts. Beckman v. Dunn, 276 Pa.Super. 527, 419 A.2d 583 (1980).

Finally, Berg v. Consolidated Freightways, 280 Pa.Super. 495, 421 A.2d 831 (1980) is inapposite. In that case the theft investigation was, unlike the present case, publicized. Moreover, there were no arrests, and Lankenau did not communicate any reasons for Paul’s resignation.

I would grant appellant Lankenau’s motion for judgment N.O.V. and affirm the trial court’s grant of nonsuit as to all other counts of the complaint.

1 . The exceptions are if the discharge was made with a specific intent to harm or is contrary to clear mandate of public policy. Geary v. United States Steel Corporation, 456 Pa. 171, 319 A.2d 174 (1974).

2 . But see Ross v. Montour Railroad Co., 357 Pa.Super. 376, 516 A.2d 29 (1986) a suit for breach of employment contract and wrongful discharge from employment where we stated:

We note that appellant has presented evidence of detrimental reliance on the promise, however, he has not argued or pled a theory of promissory estoppel and we cannot raise it for him.

357 Pa.Super. at 381, n. 1, 516 A.2d at 31, n. 1.

3 . In Banas v. Matthews International Corp., 348 Pa.Super. 464, 502 A.2d 637 (1985) (en banc) we noted in f.n. 12 with respect to promissory estoppel that "Recovery on the theory of promissory estoppel is ordinarily limited to recovery of amounts lost and expended on the promise in order to place the plaintiff in the position he would have occupied had the promise never been made.” (Citations omitted.)

4 . The Bañas court, as in the case sub judice, charged the jury on the issue of estoppel.