Michael King v. TFE, Inc.

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
MICHAEL KING,
Plaintiff/Appellant,
)
)
) Maury Circuit No. 6503
FILED
) September 1, 1999
VS. ) Appeal No. 01A01-9711-CV-00624
) Cecil Crowson, Jr.
TFE, INC., ) Appellate Court Clerk
)
Defendant/Appellee. )
APPEAL FROM THE CIRCUIT COURT OF MAURY COUNTY
AT COLUMBIA, TENNESSEE
THE HONORABLE JIM T. HAMILTON, JUDGE
JOHN W. PALMER
THE PALMER LAW FIRM
Dyersburg, Tennessee
Attorney for Appellant
KIM B. KETTERING
HARDIN, PARKES & KETTERING, PLLC
Columbia, Tennessee
Attorney for Appellee
AFFIRMED
ALAN E. HIGHERS, J.
CONCUR:
W. FRANK CRAWFORD, P.J., W.S.
HOLLY KIRBY LILLARD, J.
In this action filed against TFE, Inc. (hereafter “TFE”), Michael King appeals the trial
court’s grant of summary judgment to TFE as related to King’s claims for breach of an
alleged employment contract. The trial court granted TFE’s motion for summary judgment
based on the court’s conclusion that an employee handbook distributed by TFE did not
constitute an employment contract. For the reasons hereafter stated, we affirm the trial
court’s grant of summary judgment.
FACTS AND PROCEDURAL HISTORY
King began working for TFE as a truck driver on November 5, 1988, at which point
TFE provided to King a copy of an employee manual, which was titled “TFE Professional
Staffing.” During King’s employment with TFE, this employee manual was occasionally
updated either by replacement pages or by supplemental additional pages that were sent
to King. At least as of the time period relevant to this lawsuit, this manual was divided into
three separate sections: (1) Employee Handbook; (2) Schedule Wages & Fringes; and (3)
Employee Notices.
On March 25, 1993, King was involved in a traffic accident while driving a truck (the
tractor only) during the course of his employment. Apparently, this accident occurred when
a city garbage truck pulled out in front of King, at which time King attempted to avoid the
truck by going around its rear, but lost control and ran off the road. During King’s
deposition, he described the events surrounding this accident as follows:
Q What was the weather like?
A It was sprinkling rain, drizzle.
....
Q Okay. You didn’t have a trailer hooked onto the tractor part.
A Yes, I was bob-tailing.
Q Just tell me what happened, or what -- you’re coming down the
road,what caused the wreck to happen?
A The City garbage truck pulled out in front of me.
....
Q And when this vehicle pulled out or whatever, what did you do?
A I applied my brakes. He proceed to back off the road. I proceed to
let off the brakes. He stopped, clearing the path where I could
accelerate. When I accelerated again, that’s all I -- I done my
knowledge -- to avoid the wreck any way possible, and I swayed to go in
behind him. As soon as the truck hit the shoulder of the road where I could
hopefully get part of the garbage truck or go completely around him, the
shoulder gave way. The next thing I know, the truck was upside down.
After this traffic accident, King was taken to a hospital. Thereafter, during the course of
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medical treatment and recovery, King was paid temporary workers’ compensation disability
benefits up through February 25, 1994, at which point he was released by his treating
physician to return to work. On Monday, March 7, 1994, King spoke with Richard Gilbert,
who was King’s regional manager and driver supervisor, on the telephone. During this
conversation, Gilbert informed King that King’s employment was being terminated, and he
referenced and drew King’s attention to a provision within the employee manual which
explained that TFE employees could be “subject to discharge” for a “major chargeable”
accident. The next day, on March 8, 1994, Gilbert provided to the Tennessee Department
of Employment Security (and to King, who applied for and ultimately drew unemployment
compensation) a copy of a “separation notice,” which explained that King’s “discharge” was
based upon his involvement in a “major preventable accident.” On this same date, Gilbert
sent to King a letter that explained the following:
As discussed, TFE, Inc., has carefully reviewed all relevant data concerning
your March 25, 1993, accident, and found that it meets the definition of a
major preventable (chargeable) accident.
For this reason, TFE, Inc., elects to terminate your employment under the
provisions of Rule 1A, as published in your copy of the Driver Handbook.
In closing, please be advised that any request to have the Drivers’
Committee review this matter, and to thereafter make a recommendation as
to whether the company should reconsider this action, should be submitted
in accordance with procedures also contained within the Driver Handbook.
Thereafter, King, through his attorney, requested that a driver committee hearing be held
to review King’s termination. This driver committee, which is the initial avenue for review
of disciplinary action according to the “Employee Handbook” under the heading “Rules and
Regulations” and under the sub-heading “Appeal of Company Disciplinary Action,” is a
committee that is essentially comprised of popularly elected driver employees. This driver
committee hearing took place on April 30, 1994, at which time the driver committee opined
and “recommended” that King’s accident be deemed “non-preventable,” and that King’s
employment should not have been terminated. After the April 30, 1994 driver committee
hearing, King never heard from or spoke with TFE again about his employment, and his
employment was not reinstated.
On March 6, 1995, King commenced this action against TFE, alleging that King’s
employment with TFE was wrongfully terminated in violation of contractually binding terms
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and conditions set forth in TFE’s employment manual, and alleging that TFE terminated
King’s employment in retaliation of King’s workers’ compensation claim. On March 10,
1997, TFE filed a motion for summary judgment, which came to be heard by the trial court
on August 21, 1997. In addition to the pleadings, depositions from both King and Gilbert
were filed with the trial court for its consideration on TFE’s motion for summary judgment.
Thereafter, on October 3, 1997, the trial court entered an order that granted TFE’s motion
for summary judgment. In this order, the trial court explained, among other things, that the
provisions within TFE’s employee manual that related to disciplinary procedures did not
contain any specific language indicating a guarantee or binding commitment from TFE.1
1. The provisions that are found within TFE’s employee manual that pertain to disciplinary procedures, as
related to the instant case, are as follows:
DISCIPLINARY PROCEDURES
[T]o insure [sic] that we protect and preserve the excellent reputation we have established,
management has developed a guideline of violations of professional performance standards
and reasonable disciplinary penalties that may be imposed upon proven violations of these
standards.
....
The follow ing R ules and R egu lation s app ly to all employees who have completed their 90-day
familiarization period.
The Company retains th e rig ht to m odify , add to or e limina te wo rk ru les at any t ime a s it
deems nec essary .
RULES AND REGULATIONS
The following rules and regulations and the penalties to be charged for violations of the same
are set forth as guidelines so that all employees may know what is expected of them in the
general condu ct of the C omp any’s bus iness. This list of violations is not inclusive and the
com pan y ma y add to or m odify it at an y time .
Protests of discipline must be filed within ten (10) days after notice is received by employees.
1. ACCIDENTS:
A. Major Chargeable as defined by DOT 1st offense-Subject to discharge
....
8. FAMILIARIZATION PERIOD EMPLOYEES:
During the first ninety (90) days of employment new employees may be discharged
at management’s discretion without regard to the above procedures.
9. APPEAL OF COMPANY DISCIPLINARY ACTION:
[T]he drive r com mitte e is you r ave nue of ap pea l for an y complaint you may have
regarding your treatment. The m anagem ent of TFE, Inc., will give every
consideration to their recommendations and findings.
....
Employees objecting to the disciplinary action taken will have ten (10) days to file a
notice to that effect in writing with TFE, Inc. In the absence of such protest, such
actio n sha ll be de em ed fin al.
INVOLUNTARY TERMINATION
In the event an em ployee is invo lunta rily terminated from employment with TFE, Inc., and the
employee exhausts the company’s internal appeal provisions, at the employees request TFE
will consider submitting the matter to an Arbitrator for a final and binding remedy. The
request for arbitr atio n should be made by the employee . . . within ten (10) days of the
emp loyee being notified of ter mina tion. . . . .
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On appeal, King has asserted no error regarding the trial court’s entry of summary
judgment as related to King’s retaliatory discharge claim. The sole issue that he has
presented for this Court’s consideration is as follows:
Does a factual dispute exist that creates a genuine issue for trial as to
whether the employment of [King] was terminated by . . . TFE, Inc. in
violation of contractually binding provisions of the “TFE Professional Staffing”
manual?
ANALYSIS
As in prior similar cases, we begin our analysis of this issue with the well-established
rule “that a contract for employment for an indefinite term is a contract at will and can be
terminated by either party at any time without cause.” Rose v. Tipton County Public Works
Dept., 953 S.W.2d 690, 691 (Tenn. App. 1997); Bringle v. Methodist Hosp., 701 S.W.2d
622, 625 (Tenn. App. 1985). “Because Tennessee continues to adhere to the foregoing
‘employee-at-will’ rule, a presumption arises in this state that an employee is an employee
at will.” Rose, 953 S.W.2d at 691-92 (citing Davis v. Connecticut Gen. Life Ins. Co., 743
F. Supp. 1273, 1280 (M.D. Tenn. 1990). During King’s deposition in the instant case, he
was asked, “with regard to TFE, were you under -- is it your position or your contention that
you had -- you were under some contract for a term with them?” King’s direct response
to this specific question was “no.” King essentially contends, however, that his “at-will”
status was changed by TFE’s promulgation and issuance of its employee manual. In this
regard, this Court has previously stated and summarized the following:
Even in the absence of a definite durational term, an employment contract
still may exist with regard to other terms of employment. Williams v.
Maremont Corp., 776 S.W.2d 78, 80 (Tenn. App. 1988); accord Hooks v.
Gibson, 842 S.W.2d 625, 628 (Tenn. App. 1992). In this regard, this Court
has recognized that an employee handbook can become a part of an
employment contract. Smith v. Morris, 778 S.W.2d 857, 858 (Tenn. App.
1988) (citing Hamby v. Genesco, Inc., 627 S.W.2d 373 (Tenn. App. 1981));
accord Davis v. Connecticut Gen. Life Ins. Co., 743 F. Supp. 1273, 1278
(M.D. Tenn. 1990). In order to constitute a contract, however, the handbook
must contain specific language showing the employer's intent to be bound
by the handbook's provisions. Smith v. Morris, 778 S.W.2d at 858. Unless
an employee handbook contains such guarantees or binding commitments,
the handbook will not constitute an employment contract. Whittaker v.
Care-More, Inc., 621 S.W.2d 395, 397 (Tenn. App. 1981). As stated by one
court, in order for an employee handbook to be considered part of an
employment contract, "the language used must be phrased in binding terms,
interpreted in the context of the entire handbook, and read in conjunction
with any other relevant material, such as an employment application."
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Claiborne v. Frito-Lay, Inc., 718 F. Supp. 1319, 1321 (E.D. Tenn. 1989).
Rose, 953 S.W.2d at 692. While we have previously recognized that “an employee
handbook” can become a part of an employment contract in some cases, our concern in
the instant case is limited to the specific provisions set forth within TFE’s employee manual
that govern TFE’s “Disciplinary Procedures,” “Rules and Regulations,” and “Involuntary
Termination.”2 Our review of these provisions reveals that the pertinent language clearly
reflects TFE’s intent not to be bound either by particular procedures described therein, or
by the “recommendation” of the driver committee.3 Under the heading “Disciplinary
Procedures,” TFE’s manual explains that its management “has developed a guideline of
violations of professional performance standards and reasonable disciplinary penalties.”
TFE thereafter states, “The Company retains the right to modify, add to or eliminate work
rules at any time as it deems necessary.” An employer’s reservation of a unilateral right
to modify such provisions within an employee handbook generally precludes such
provisions from being considered part of the parties’ employment contract. See Rose, 953
S.W.2d at 693-94 (citing Claiborne v. Frito-Lay, Inc., 718 F. Supp. 1319, 1321 (E.D. Tenn.
1989)). Under the heading “Rules and Regulations,” TFE’s manual again explains that the
“rules and regulations and the penalties to be charged for violations of the same are set
forth as guidelines, and that the “list of violations is not inclusive and the company may add
to or modify it at any time.” Under the rules and regulations sub-heading “Appeal of
Company Disciplinary Action,” TFE’s manual explains that “the driver committee is your
avenue of appeal,” but that the management of TFE will only “give every consideration to
2. See supra note 1.
3. We note, however, that King’s brief places considerable reliance upon one particular provision within the
employee manual, which states:
Following the rules set forth in the American Trucking Association’s safety awards program,
TFE will make the initial determinations regarding an accident’s status. A driver may appeal
a finding of “p reventa ble” to one of the ex isting driver s afety com mittees . Either TFE or the
driver may appeal a driver committee decision to ATA’s panel of safety experts whose
decision shall be final and binding.
W e need not resolve whether this provision reflects an intent to be bound, however, because this particular
provision does not per tain to TFE’s “disciplinary procedures,” “rules and regulations,” and “involuntary
termin ations.” Inste ad, th is pro vision pertains to and is a s ub-hea ding of T FE’s “S afety Awa rd Prog ram ,”
which, as re vised , is se t forth within the second part of TFE’s employee manual, titled “Schedule Wages &
Fringes .” This “S afety Awa rd Prog ram ” provides emp loymen t benefits relatin g to a drive r’s pay scale, which
increases over time and/or mileage traveled in the absence of the driver having a preventable accident. “A
prev enta ble accident will not cost a driver increases previously earned under this program. However, a driver
having a pre venta ble ac cide nt will serve a penalty period during which the driver cannot progress to a higher
level.”
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their recommendations and findings.” Lastly, under the heading “Involuntary Termination,”
TFE simply states that it will simply “consider submitting the matter to an Arbitrator” upon
an employee’s request after submission to the driver committee. Therefore, as we have
stated above, the language of the pertinent provisions within TFE’s employee manual
clearly reflects TFE’s intent not to be bound either by particular procedures described
therein, or by the “recommendation” of the driver committee. Moreover, as these
provisions within TFE’s employee manual must be “read in conjunction with any other
relevant material,” we find it relevant to further note that King signed a document upon
receipt of TFE’s employee manual that acknowledged, among other things, that the
manual in no way created or established an employment contract.
CONCLUSION
Accordingly, we hereby affirm the trial court’s grant of summary judgment to TFE.
Costs are taxed to Michael King, for which execution may issue if necessary.
HIGHERS, J.
CONCUR:
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CRAWFORD, P.J., W.S.
LILLARD, J.
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