Opinion
98 Civ. 4210 (MBM)
March 19, 2001
NEAL BRICKMAN, ESQ., New York, NY, for Plaintiff
ALLEN I. FAGIN, ESQ., New York, NY, for Defendant
OPINION ORDER
Plaintiff Jerold K. Hoerner sues Metropolitan Life Insurance Company ("MetLife") for breach of contract. This court has jurisdiction under 28 U.S.C. § 1332 (1994), based on the parties' diversity of citizenship. MetLife moves under Fed.R.Civ.P. 56 for summary judgment. For the reasons stated below, MetLife's motion is denied.
Although MetLife does not raise the point, Hoerner pleads only residency in Ohio. However, 28 U.S.C. § 1332 requires diversity of citizenship, not merely residence. See Canady v. Liberty Mut. Ins., 126 F.3d 100, 103 (2d Cir. 1997). This decision of MetLife's motion for summary judgment is contingent on Hoerner's amendment of the allegation of jurisdiction pursuant to 28 U.S.C. § 1653 to establish diversity of citizenship. A failure to amend will result in dismissal for lack of subject matter jurisdiction.
I.
The following facts are presented in the light most favorable to the plaintiff. In 1984, Hoerner was hired as President of MetFirst, a subsidiary of MetLife located in Oklahoma City, Oklahoma. (MetLife Rule 56.1 Statement ¶ Al) Prior to accepting the position at MetFirst, Hoerner was given a copy of MetLife's Management Guide to Human Resources April, 1982 (the "Management Guide" or the "1982 Guide"). (Hoerner Rule 56.1 Statement ¶ A3) Hoerner also was informed by a representative of MetLife that the Management Guide contained the rules, standards, policies and procedures for conducting business at MetLife. (Id.)
The Management Guide's introduction states that "it is of utmost importance" that the policies and procedures discussed in the Management Guide "be clearly understood and uniformly administered." (MetLife Rule 56.1 Statement, Ex. 30) Section 22 of the Management Guide, titled "Termination of Employment," then sets out the policies and procedures for termination of employment. (Id.) That section provides only two mechanisms for termination of employment: voluntary resignation and termination for cause. (Id.) Additionally, Section 22 states that the procedures for firing an employee for cause are set forth in Section 6 of the Management Guide, which establishes a detailed disciplinary procedure, involving multiple meetings with an employee who is said to be deficient, communications with his supervisors and other steps preceding dismissal. (Id.) This section further provides that "[t]ermination . . . is recommended when all other efforts to effect necessary improvement fail," and that "[e]xcept in unusual circumstances, principally those involving serious misconduct, termination should NOT be considered unless the employee has previously received a final warning." (Id.)
According to Hoerner, he accepted the presidency of MetFirst in reliance on the policies and procedures set forth above. (Hoerner Rule 56.1 Statement ¶ A2) Hoerner acknowledges that his employment at MetFirst was governed also by the terms of an agreement between the parties, reflected in a May 1, 1984 letter. (Id.) Among other things, the letter provided that if Hoerner was fired "without cause" during the first year of employment, MetFirst would pay Hoerner one year's salary as severance pay. (MetLife Rule 56.1 Statement, Ex. 6)
In 1987, Hoerner executed a new employment agreement with MetFirst. (Hoerner Rule 56.1 Statement ¶ A7) This agreement provided that either Hoerner or MetFirst could "terminate the term of employment under this Agreement at any time at will, upon giving the other thirty (30) days notice." The 1987 agreement stated further that it "[c]onstitue[d] the full and complete agreement between [Hoerner] and [MetFirst]." (MetLife Rule 56.1 Statement ¶ A7)
In or about March, 1989, MetFirst merged with another MetLife subsidiary, MetMor Financial, Inc., and Hoerner was appointed President, Chief Executive Officer and Director of the newly merged entity ("MetMor"). (Id. ¶ All) When he accepted the new position, Hoerner's 1987 employment agreement was terminated. (Id. ¶ A12) Hoerner remained at MetMor until August, 1993, when he agreed to relocate to New York to work as President, Chief Executive Officer and Director of MetLife Realty Group, Inc. ("MRG"), yet another subsidiary of MetLife.(Id. ¶ B9) According to Hoerner, before he accepted the position at MRG, Jerry Clark, an Executive Vice President of MetLife and a member of MRG's Board of Directors, and Sheila Baumrucker, a Human Resource representative, told Hoerner that he would be fired only for cause. (Hoerner Aff. ¶ 48) Hoerner also asserts that Baumrucker gave him a copy of the Management Guide discussed above. (Id. ¶ 47)
In September, 1993, one month before Hoerner began at MRG, MetLife issued an Employee Handbook and a new version of its Management Guide (the "1993 Guide"). (MetLife Rule 56.1 Statement ¶ C3) Both the Employee Handbook and the 1993 Guide provide for employment at will.(Id. ¶¶ 4-6)
Hoerner began working at MRG in October, 1993 for compensation and benefits that were significantly higher than those he received at MetMor. (Id. ¶ B5) Shortly thereafter, on December 23, 1993, MRG's Board of Directors, including Hoerner, approved the following bylaw:
Any officer may be removed at any time by the Board of Directors, with or without cause, and any officer appointed by the chief executive officer may be removed by the chief executive officer at any time, with or without cause.(Id. ¶ B10) (emphasis added)
Hoerner claims that, during his time at MRG, his relationship with his immediate supervisor, Jerry Clark, became strained. (Hoerner Aff. ¶ 61) In particular, Hoerner asserts that Clark was displeased with, among other things, Hoerner' s independence in relocating MRG's offices, Hoerner's speaking engagements, and Hoerner's allocation of bonuses to lower level employees. (Id. ¶¶ 62-82; Smith Decl. ¶¶ 22-24)
In July, 1994, Janice Stanton, an MRG employee, complained that Hoerner had made insensitive and degrading statements about women and minorities. (MetLife Rule 56.1 Statement ¶ Dl) Hoerner denied making these statements. (Id. ¶ D4) Following Stanton's complaint, several MRG employees who were interviewed by Thomas O'Brien, MetLife's Corporate Ombudsman, corroborated Stanton's allegations. (Id. ¶ D8)
Hoerner was confronted with the results of O'Brien's inquiry at a July 28, 1994 meeting with Jerry Clark and Anne Hayden, the Senior Vice President of Human Resources at MetLife. (Id. ¶ Dll) Again, Hoerner denied making the statements. (Id. ¶ D13) Nevertheless, Hoerner was told he had two options: (i) to apologize to his staff, attend sensitivity training courses and submit to future monitoring of his conduct, or (ii) be fired. (Id. ¶ D12)
On August 8, 1994, Carl Robert Henrickson, MetLife's Senior Vice President in charge of Pensions, wrote a letter to Jerry Clark discussing Hoerner' s conduct and recommending that Hoerner not be exposed to Henrickson's pension clients. (Id. ¶ D18) The following day, Hoerner was informed that the first option discussed at the July 28, 1994 meeting was no longer available to him and that, unless he resigned, his employment would be terminated. (Id. ¶ D20) Hoerner refused to resign, and was fired on August 30, 1994. (Id. ¶ D23)
II.
MetLife argues first that it is entitled to summary judgment because Hoerner was employed at will. As discussed below, genuine issues of material fact exist regarding Hoerner's employment status. Under New York law, absent an agreement establishing a fixed duration, an employment relationship is presumed to be at will, terminable by either party at any time. Sabetay v. Sterling Drug, Inc., 69 N.Y.2d 329, 332, 514 N.Y.S.2d 209, 211 (1987). However, this is a rebuttable presumption and an employee may recover for breach of implied contract by establishing (1) that the employer made him aware of the employer's express written policy limiting its right of discharge, and (2) that the employee was induced to leave other employment in reliance on the policy. See DePetris v. Union Settlement Assoc., Inc., 86 N.Y.2d 406, 410, 633 N.Y.S.2d 274, 278 (1995); Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458, 465-466) (1982). Moreover, in determining whether the presumption of employment at will is overcome, the trier of fact is instructed to consider "the totality of the circumstances, including the writings, the situation, the course of conduct of the parties and their objectives." Marfia v. T.C. Ziraat Banski, 147 F.3d 83, 88 (2d Cir. 1988) (internal quotations and citation omitted)
The parties' briefs assume that New York law controls, and as such "implied consent . . . is sufficient to establish choice of law."Tehran-Berkeley Civil Envtl. Eng'rs v. Tippetts-Abbet-McCarthey-Stratton, 888 F.2d 239, 242 (2d Cir. 1989)
Here, MetLife argues that, based on the totality of the circumstances, it is clear that Hoerner' s employment was at will. MetLife cites: (i) Hoerner's previous employment agreements designating him as an at-will employee; (ii) MRG's bylaws, approved by Hoerner, that provide for the removal of officers "with or without cause"; and (iii) the 1993 Guide and Employee Handbook which provide for at-will employment. Although persuasive, this evidence is insufficient to establish that MetLife is entitled to summary judgment. First, a reasonable jury could conclude that Hoerner' s employment status was not governed by MRG's bylaws because he was hired prior to their enactment. Similarly, the 1993 Guide and Employee Handbook were issued after Hoerner accepted his job at MRG. In addition, Hoerner has adduced facts which make summary judgment inappropriate. For example, Hoerner asserts that, prior to accepting the job as President and CEO of MRG, both Jerry Clark and Sheila Baumrucker represented to him that he would be fired only for cause. (Hoerner Aff. ¶ 48) Hoerner also claims that Baumrucker gave him a copy of the 1982 Guide containing statements which, as I have previously held, could be read as an express written policy limiting MRG's right to fire its employees. (Hoerner Aff. ¶ 47; see also May 5, 1999 Ruling at 4) In addition, Hoerner asserts that he accepted his job at MRG in reliance on the policies contained in the 1982 Guide. (Hoerner Aff. ¶ 40) These assertions, when viewed with the evidence submitted by MetLife, present genuine issues of material fact regarding Hoerner' s employment status at MRG. Summary judgment therefore is inappropriate. See Fed.R.Civ.P. 56 (c).
MetLife argues also that summary judgment should be granted because Hoerner cannot show reliance as a matter of law. Specifically, MetLife argues that, because Hoerner was promoted, he was not induced to leave "other employment." MetLife is correct that a promotion is insufficient to establish reliance under New York law. See D'Avino v. Trachtenburg, 149 A.D.2d 401, 402, 539 N.Y.S.2d 755, 756 (2d Dep't 1989) ("In accepting the promotion to a management position the plaintiff was not `induced' to leave other employment. . . ."). However, in this case, Hoerner' s job at MRG was not a "promotion". First, MRG and MetMor were separately incorporated subsidiaries of MetLife, and Hoerner occupied the same position — President and CEO — at both companies. Moreover, contrary to MetLife's assertions, the increased salary and benefits Hoerner received at MRG are consistent with either a promotion or a job with a new company. All these facts, taken together, suggest that Hoerner' s job at MRG was not a promotion, but rather a new position with a new employer. At the least, this is a disputed issue of material fact.
Finally, MetLife argues that, even if Hoerner overcomes the presumption of at-will employment, summary judgment is appropriate because Hoerner was fired "for cause." I disagree because, once again, disputed issues of material fact exist regarding the reasons for Hoerner' s termination.
Where a contract provides that employment may be terminated only "for cause," an employer may rebut a wrongful discharge claim by producing evidence that shows some basis for dissatisfaction with the employee's work. See Golden v. Worldwide Enterprises, Inc., 133 A.D.2d 50, 51 (1st Dep't 1987). The employee then has the burden to prove that the employer's dissatisfaction was not genuine. (Id.) Here, MetLife has produced evidence showing that it was dissatisfied with Hoerner's work because of alleged inappropriate comments about minorities and women. However, Hoerner has produced evidence to show that MetLife's purported dissatisfaction was not genuine. First, Hoerner claims that he never made many of the statements attributed to him. (Hoerner Aff. ¶¶ 98-125) Also, Hoerner asserts that he was fired because of personal and professional disagreements with Jerry Clark regarding a number of issues, including the relocation of MRG's offices, the allocation of bonuses to lower-level employees and Hoerner's speaking engagements. (Hoerner Aff. ¶¶ 61-82; Smith Decl. §§ 22-24) Based on this evidence, a reasonable jury could conclude that MetLife's dissatisfaction with Hoerner's performance was not genuine. Summary judgment therefore is inappropriate.
* * *
For the reasons set forth above, MetLife's motion for summary judgment is denied.