Opinion
99 Civ. 2955 (JSM)
January 19, 2001
Roosevelt Seymour, Brooklyn, NY, for plaintiff.
Rory McEvoy, Littler Mendelson, P.C., New York, NY, for defendant.
OPINION and ORDER
Gloria Jelks ("Plaintiff") brings this action claiming that Citibank, N.A. ("Defendant") fraudulently induced her into accepting a position as Technical Specialist in the Global Risk Reporting division and breached an implied contract of employment when it terminated her position. Defendant moves for summary judgment. For the reasons set forth below, Defendant's motion is granted.
I. BACKGROUND
In 1997, Plaintiff was happily employed as a Senior Analyst at a consulting firm called Automatic Data Concept ("ADC"). In August or September 1997, Plaintiff learned through a friend who worked at Citibank, Patricia Samuels ("Samuels"), of a job opening for a Technical Specialist in the Global Risk Reporting department. Pursuant to conversations with Samuels and her supervisor, Barbara Freitas ("Freitas"), Plaintiff "reluctantly" agreed to apply for the job in October 1997. In a telephone call with Plaintiff, Freitas discussed the terms of the position, which included an annual salary of $65,500, eligibility for annual bonuses, an Assistant Vice President title, a staff, an executive diner's card, and car service for the nights she worked late. Plaintiff formally interviewed for the job later that month.
In early December 1997, Plaintiff received an offer letter from Freitas. Plaintiff accepted the job in mid-December and informed Freitas that her start date would be January 12, 1998. On December 16, 1997, Plaintiff filled out an employment application; this application provided that it was not a contract of employment and indicated that Plaintiff would be an at-will employee who could be terminated for any reason. (McElvoy Aff., Jelks Dep. Ex. 2.) Plaintiff also received a Citibank Employee Guide ("Employee Manual") which indicated that she was employed at-will and could be terminated at any time "for any reason not expressly prohibited by law." (McElvoy Aff., Jelks Dep. Ex. 3.)
On January 12, 1998, Plaintiff began employment at Citibank. The Global Risk Reporting department maintains a data warehouse of credit risk information, collected from computer systems world-wide, that can be accessed by internal and external users. In her position as Technical Specialist, Plaintiff was responsible for maintaining a computer system called Hewlett Packard Information Manager, which was designed to eliminate the need for users seeking information about credit risk to speak with human employees. Plaintiff was charged with configuring and modifying the software to produce reports customized to reflect the user's requests. Plaintiff claims that upon her arrival at Citibank, her computer did not have the software she needed in order to perform her job, and that she was not given an appropriate computer until June 1998. Plaintiff was therefore forced to use Samuels' computer when it was available. Plaintiff also claims that she was not provided with a staff.
Because the Hewlett Packard system was performing poorly, Citibank's goal in early 1998 was to stabilize the program, and accordingly external users, as opposed to internal users, were instructed to refrain from making data requests until April 1, 1998. After reading a memo to this effect, Plaintiff questioned Freitas and Samuels about the freeze, apparently because she thought that the entire system had been frozen. She was told that enhancements would nevertheless continue, and Plaintiff acknowledges that she continued to make enhancements for internal users during that period. Requests from external users comprised only ten percent of Plaintiff's regular workload.
Defendant claims that it decided to halt further development of the Hewlett Packard program in July or August 1998. Defendant states that it made this decision due to the data warehouse's slow response time, the time and money spent on making changes to the system, frequent changes in vendors, and the current vendor's refusal to comply with Defendant's Y2K policies. As a result of this decision, all changes and modifications to the software were allegedly ceased, and the system was frozen in its present state. Defendant claims that in late 1998 or early 1999, the need for the system was eliminated altogether when users were able to directly connect to the information system.
The decision to freeze development of the Hewlett Packard program impacted on Plaintiff's job, as her primary responsibilities involved changing and modifying the data warehouse. Accordingly, in September 1998, Freitas informed Plaintiff that her job was being discontinued because there would be no further enhancements to the data warehouse. Later that same day, Plaintiff met with Koula Angelinas ("Angelinas"), Human Resources Specialist, regarding her severance package. Plaintiff was given a Notice of Job Discontinuance that described Plaintiff's separation benefits and options, including the ability to apply for relocation at Citibank. As to the latter option, Angelinas told Plaintiff to contact the Resource Center for assistance in finding another job within Citibank. Plaintiff never visited the Resource Center despite an initial telephone call for instructions on how to proceed.
Plaintiff brings this action claiming that Defendant never intended to employ her as a Technical Specialist, and that she gave up her prior job in reliance on Defendant's promise to do so. She also claims that her job was not terminated for a "business reason," and that she was therefore fired without cause in contravention of the employee manual. To this end, Plaintiff states that she continued to make the enhancements that had allegedly been halted up until the time she was told that her job was being discontinued, and she claims that Defendant still uses the Hewlett Packard software. Plaintiff also claims that Defendant fraudulently concealed from her the fact that the decision to eliminate the Hewlett Packard system had already been made when Defendant hired Plaintiff, and that it concealed this fact during her employment in order to induce her to stay. Plaintiff's allegations are utterly devoid of merit, and border on the frivolous.
II. DISCUSSION A. Implied Breach of Employment Contract
Plaintiff first claims that her termination constituted a breach of an implied employment contract. In order to overcome the at-will employment doctrine, New York courts require an express limitation on an employer's ability to terminate the employee, such as a definite period of employment. See, e.g., Wright v. Cayan, 817 F.2d 999, 1002-04 (2d Cir. 1987); Murphy v. American Home Prods. Corp., 448 N.E.2d 86, 91-92 (N Y 1983). An employee can also attempt to demonstrate that the employer's actions amounted to an express limitation that the employee relied upon in accepting the job. See Murphy, 461 N.Y.S.2d at 237; Weiner v. McGraw-Hill, Inc., 443 N.E.2d 441, 445 (N Y 1982). Under the strict Wiener standard employed by New York courts, Plaintiff must show at a minimum that she relied upon an assurance that she could only be discharged for cause, and that this assurance was incorporated into the employment manual. See De Petris v. Union Settlement Assoc., 657 N.E.2d 269, 271 (1995).
Both the job application that Plaintiff completed and Defendant's Employee Manual indicated that Plaintiff's employment was at-will. Plaintiff suggests that the Employee Manual contains limitations on Defendant's ability to terminate her because it states that employees can be terminated for failure to meet performance expectations, misconduct, and due to job discontinuance for "business reasons." This language only describes some scenarios in which an employee might be asked to leave Defendant's employ; it does not set forth any express limitation that an employee can only be terminated for one of these reasons. This allegation is therefore insufficient to sustain Plaintiff's claim. See, e.g., Cucchi v. New York City Off-Track Betting Corp., 818 F. Supp. 647, 650 (S.D.N.Y. 1993); Gmora v. State Farm Mut. Auto. Ins., 709 F. Supp. 337, 341 (E.D.N.Y. 1989), aff'd, 888 F.2d 1376 (2d Cir. 1989).
Plaintiff also points to her offer letter and her Notice of Job Discontinuance, received on her last day of employment, as evidence of an implied contract of employment. Neither of these documents contains express limitations on Defendant's ability to terminate Plaintiff. Thus, Plaintiff has submitted absolutely no evidence of any limitation on Defendant's ability to terminate her employment, nor has she shown reliance upon any representation under the Weiner standard.
Although the offer letter states that Plaintiff's salary will be paid annually, a salary measured by a certain time period does not bind the employer to an employment term of the same period. See Chase v. United Hosp., 400 N.Y.S.2d 343, 344 (App.Div. 197 7).
B. Fraudulent Inducement
Plaintiff next alleges that Defendant fraudulently induced her into leaving her position at ADC and accepting a job with Defendant. Under New York law, at-will employees cannot evade the bar against suing for wrongful termination by suing in tort. See Murphy, 461 N.Y.S.2d at 235-36; Ullmann v. Norma Kamali, Inc., 616 N.Y.S.2d 583, 584 (App.Div. 199 4). In addition, plaintiffs cannot masquerade a breach of contract claim as a fraud claim. See Saleemi v. Pencom Sys., Inc., No. 99 Civ. 667, 2000 WL 640647, at *4-5 (S.D.N.Y. May 17, 2000). Under very limited circumstances, however, at-will employees can recover for fraudulent statements that induce them into accepting positions of employment by showing: (1) a material false representation; (2) scienter; (3) reasonable reliance; (4) damages; and, relevant here, (5) that the fraudulent misrepresentation was collateral or extraneous to the employment agreement. See Bridgestone/Firestone, Inc. v. Recovery Credit Servs., Inc., 98 F.3d 13, 19-20 (2d Cir. 1996); Stewart v. Jackson Nash, 976 F.2d 86, 88-90 (2d Cir. 1992). Since the Second Circuit's seminal decision in Stewart v. Jackson Nash, courts have upheld claims for fraudulent inducement where the injury alleged stems from leaving a former place of employment or agreeing to remain in a compromised position at a current place of employment, rather than from the termination itself or failure to perform terms of the employment agreement. See, e.g., Doehla v. Wathne Ltd., No. 98 Civ. 6087, 2000 WL 987280, at *5-6 (S.D.N.Y. July 17, 2000); Caron v. The Travelers Corp., No. 96 Civ. 6236, 1998 WL 395319, at *3-5 (S.D.N.Y. July 15, 1998); Kissner v. Inter- Continental Hotels Corp., No. 97 Civ 8400, 1998 WL 337067, at *3 (S.D.N.Y. June 25, 1998); Cole v. Kobs Draft Adver., Inc., 921 F. Supp. 220, 224-26 (S.D.N.Y. 1996); Garnier v. J.C. Penney Co., 863 F. Supp. 139, 140-41, 143 (S.D.N.Y. 1994); see also Navaretta v. Group Health, Inc., 595 N.Y.S.2d 839, 841 (App.Div. 1993). Plaintiff cannot avail herself of these precedents, however, because she alleges no damages that result from being induced away from her prior position. She alleges only the damages relating to the termination of her employment with Defendant.
Plaintiff claims that Defendant hired her for a job that did not exist because Defendant had already frozen the information warehouse before she began work and because she was not given the appropriate computer when she arrived. However, Plaintiff has alleged no specific misrepresentation that was made to her prior to beginning her employment with Defendant. One would have to theorize broadly that the job offer alone was fraudulent because no such position existed, or if it did, was soon to be eliminated. However, a job offer is by definition central, not collateral, to the employment agreement itself, and accordingly a hidden intention not to perform gives rise to a breach of contract claim, not a fraud claim. See Gruber v. Victor, 95 Civ. 2285, 1996 WL 492991, at *6-7 (S.D.N.Y. Aug. 28, 1996); Sudul v. Computer Outsourcing Servs., 868 F. Supp. 59, 61-62 (S.D.N Y 1994). Moreover, Plaintiff was not promised employment for any specific period of time; as an at-will employee, she could not reasonably rely on a mere promise of employment. See Garwood v. Sheen Shine, Inc., 572 N.Y.S.2d 237, 237 (App.Div. 199 1). Nor, as noted above, has Plaintiff specifically alleged any damages that are separate from the loss of a job, such as damage to career growth, loss of reputation, or loss of benefits and security.
In addition, Plaintiff performed her job for eight months, albeit with some difficulty until she obtained her new computer. Plaintiff has submitted no evidence to contradict Defendant's testimony that the decision to freeze further enhancements of the Hewlett Packard system was made in July or August 1998, several months after Plaintiff began work. Plaintiff has therefore failed to raise a question of fact on her fraudulent inducement claims.
Plaintiff also claims that the assurances of her supervisors in January 1998 that data enhancements would continue, despite a memo stating that enhancements were frozen until March 31, 1998, induced her to remain in her job. Plaintiff has not shown that these assertions are false, as she admitted in her deposition testimony that she continued to make enhancements from January through March. The only freeze was on external users' requests for information, which comprised only ten percent of Plaintiff's workload. Moreover, external users were reinstated in April.
Finally, Plaintiff charges that Defendant fraudulently concealed from her the fact that the information system was soon Plaintiff alleges numerous other actions by Defendant that amounted to "fraud." For example, she claims that she did not receive all of the benefits that she was promised, such as a staff. This is merely a restatement or her breach of contract claim and is not cognizable as fraud in New York. See Saleemi v. Pencom Sys., Inc., No. 99 Civ. 667, 2000 WL 640647, at *4-5 (S.D.N Y May 17, 2000). Plaintiff also claims that Defendant did not assist her in finding a new job as promised in the Notice of Job Discontinuance. This allegation has nothing to do with any fraudulent misrepresentation that induced her to accept a job to be frozen, thus inducing her to accept and then to remain in her job. In order to sustain a claim for fraudulent concealment, Plaintiff must show that Defendant concealed material facts and that it owed a duty to disclose the information allegedly concealed. See Nadal v. Otto Gerdau Co., No. 90 Civ. 4173, 1992 WL 8346, at *5 (S.D.N.Y. Jan. 14, 1992). Even were Plaintiff able to establish the existence of a duty to disclose, she has submitted no evidence that the decision to freeze the data warehouse was made prior to July or August 1998. Nor has she alleged any conversations or statements from which a "concealment" might be implied. Plaintiff has therefore failed to raise an issue of fact regarding the existence of a concealment or Defendant's scienter. Because Plaintiff was employed at-will, Defendant had no duty, once the decision was made, to provide advance warning that Plaintiff's job might be terminated. Therefore, Plaintiff's fraudulent concealment claim also fails.3 with Defendant or with any limitation on Defendant's ability to terminate Plaintiff, nor does it constitute fraud in its own right.
III. CONCLUSION
For the foregoing reasons, Defendant's motion for summary judgment is granted.
SO ORDERED.