Opinion
Case No. 02-73065
July 8, 2003
OPINION AND ORDER
I. INTRODUCTION
This matter is before the Court on Defendant Electronic Data System's Motion for Summary Judgment. Plaintiff responded and Defendant replied to the response. In addition, both parties have filed supplemental briefs in response to the Court's Order to Show Cause of May 30, 2003. The Court finds that the facts and legal arguments are adequately presented in the parties' papers and the decision process would not be significantly aided by oral argument. Therefore, pursuant to E.D. MICH. LR 7.1(e)(2), it is hereby ORDERED that the motion be resolved on the briefs submitted. For the reasons set forth below, Defendant's Motion for Summary Judgment is GRANTED.
II. BACKGROUND
A. Plaintiff's Employment Relationship With EDS
On July 3, 1986, Plaintiff Steven Fletcher applied for employment with Defendant Electronic Data Systems (hereinafter "EDS"). By signing the Employment Application, Plaintiff made the following declaration:
I . . . UNDERSTAND THAT EMPLOYMENT WITH THE COMPANY IS AT WILL AND THE EMPLOYMENT RELATIONSHIP MAY BE ENDED BY EITHER PARTY AT ANY TIME, WITH OUR WITHOUT NOTICE.See July 3, 1986, Employment Application, p. 7; Defendant's Evid. Appx., Ex. U. On August 12, 1986, the parties executed an Employment Agreement, effective October 13, 1986, which also indicated that Plaintiff's employment was at will. This Employment Agreement provides:
7. It is the desire and expectation of each party that the employment relationship shall be a pleasant and rewarding experience for the parties hereto. However, it is understood that the employment relationship may be terminated at will, with or without cause, by either party at anytime. . . . It is further agreed that this Agreement may be modified or amended only by a written instrument executed by EDS and Employee, and approved in writing by an Officer of EDS.See 1986 Employment Agreement, ¶ 7; Defendant's Evid. Appx., Ex. R.
After being hired, Plaintiff worked in various positions with EDS in the Detroit area and in early 1998 Plaintiff assumed the position of Account Executive/Portfolio Manager for General Motors Vehicle Sales, Service, and Marketing. There is no indication that the assumption of this position changed or modified the status of Plaintiff's employment relationship with EDS. In fact, on March 12, 1999, Plaintiff and Defendant entered in a Non-Qualified Stock Option Agreement which clarified Plaintiff's status as an at-will employee by including the following provision:
(1) Employment-at-will. Grantee's employment with the Company is "at-will", and such employment is subject to termination by either the Company or Grantee at any time for any reason, with or without notice, unless specifically modified by an employment agreement or by applicable law.See March 12, 1999, Non-Qualified Stock Option Agreement, ¶ 1; Defendant's Evid. Appx. Ex. E. Furthermore, on April 12, 1999, Plaintiff and Defendant entered into an Executive Non-Competition and Confidentiality Agreement which provided the following:
8. Employment Relationship
Nothing contained in this Agreement shall impact the at-will employment relationship between Executive and EDS. Either Executive or EDS is free to terminate the employment relationship at any time with or without cause, reason or notice.See April 12, 1999, Executive Non-Competition and Confidentiality Agreement; Defendant's Evid. Appx. Ex. E.
Beginning January 2000, Plaintiff began reporting to Sudhir Vaidya. Later that year, through the efforts of Mr. Vaidya, Plaintiff was promoted to Client Delivery Executive, which, according to the Defendant, is a senior leadership position with EDS. There is no indication, however, that Plaintiff's promotion to Client Delivery Executive changed or modified the status of Plaintiff's employment relationship with EDS. In fact, on February 6, 2001, subsequent to Plaintiff's promotion, Plaintiff and Defendant entered into another Non-Qualified Stock Option Agreement which, like the March 12, 1999, Agreement, indicated that Plaintiff was an at-will employee. See February 6, 2001, Non-Qualified Stock Option Agreement, ¶ 1; Defendant's Evid. Appx. Ex. E. See also April 10, 2001, Equity Related Agreement, ¶ 7; Defendant's Evid. Appx. Ex. E ("[E]mployment with EDS is for an indefinite time and may be ended, with or without cause, at any time by either Employee or EDS, with or without previous notice.").
On December 20, 2001, EDS terminated its employment relationship with Plaintiff following an investigation into allegations of sexual harassment made against Plaintiff by a co-worker, as set forth below.
B. 1998 Sexual Harassment Claim and Investigation
In September 1998 Plaintiff commenced a consensual sexual relationship with an EDS coworker, Colleen Tatro-Harris. Plaintiff and Mrs. Harris would communicate with each other by using their EDS — supplied cellular telephones and pagers. Eventually, Mrs. Harris' spouse became suspicious of the affair and, in an attempt to confirm or deny his suspicions, started causing problems for Mrs. Harris at work by asking questions of her co-workers. After a few weeks, and in an effort to calm her husband, Mrs. Harris filed a complaint with EDS alleging that Plaintiff had been sexually harassing her. Mrs. Harris' claims were very serious. For example, on October 2, 1998, she and Plaintiff, along with other EDS co-workers, had attended happy hour at a local bar, and Plaintiff had driven both he and Mrs. Harris. Mrs. Harris claimed that afterwards she was too drunk to drive herself home and that Plaintiff had volunteered to wait with her until she was capable of driving. Mrs. Harris claimed that while waiting, she passed out. When she awoke, she claimed, Plaintiff was groping her and trying to kiss her.
Defendant conducted, by all accounts, a thorough investigation of Mrs. Harris' claims. Defendant's investigation exonerated Plaintiff of any sexual harassment, and concluded that Plaintiff's and Mrs. Harris' relationship had been consensual. Since Defendant found that Mrs. Harris had filed a false claim, Defendant terminated Mrs. Harris' employment. Defendant also found, however, that Plaintiff had misused EDS resources and inappropriately used EDS work time to conduct the affair. Defendant indicated that Plaintiff would incur no repercussions from the investigation. See Kirkpatrick Script; Plaintiff's Response Brief, Ex. B.
C. 2001 Sexual Harassment Claim and Investigation
On November 15, 2001, Plaintiff and several co-workers went to Mr. B's Sports Bar in Royal Oak, Michigan, to celebrate Plaintiff's and another co-worker's birthdays. Plaintiff was at the bar from roughly 5:00 p.m. to 10:00 p.m. and drank at least four beers and at least two shots of alcohol. Towards the end of the evening, around 9:30 p.m., Plaintiff and several co-workers were seated around a large rectangular table. Mrs. Katherine Jones, a co-worker of Plaintiff's, was sitting to Plaintiff's right. According to Plaintiff, he and Mrs. Jones sat next to one another for roughly one half-hour.
On November 30, 2001, Mrs. Jones told her manager, Chuck Batcheller, that while she had been seated next to Plaintiff at Mr. B's, Plaintiff had brushed the underside of her knee in a manner that had made her uncomfortable. Mr. Batcheller and his manager, Ms. Jeanine Charlton, told Mrs. Jones to write down her complaint and to contact Employee Relations. Mrs. Jones contacted Employee Relations and filed a complaint on December 4, 2001. Employee Relations Specialist Erica Garrett investigated Mrs. Jones' complaint.
Through the course of her investigation, Ms. Garrett reviewed Mrs. Jones initial complaint, and spoke with Mrs. Jones and Cathleen Zukowski. Mrs. Zukowski, a co-worker of both Plaintiff's and Mrs. Jones, claimed that at a Christmas party in December 2000 Plaintiff had also touched her leg in a manner that she considered inappropriate and that Plaintiff had told her on two prior occasions that she was "so beautiful" in a manner made her uncomfortable. In addition, on December 17, 2001, Ms. Garrett spoke with Plaintiff about the November 15, 2001, incident and Ms. Zukowski's allegations. Plaintiff denied Mrs. Zukowski's allegations but did not expressly deny Mrs. Jones' allegations.
Also on December 17, 2001, after Ms. Garrett spoke with Plaintiff, Mr. Vaidya presented Plaintiff with a Confidentiality Agreement, which indicated that Employee Relations' investigation was a confidential investigation and requested that Plaintiff not discuss the investigation without prior approval. Plaintiff refused to sign the Confidentiality Agreement and was placed on administrative leave.
On December 18, 2001, Plaintiff contacted Ms. Garrett to discuss the investigation. Ms. Garrett's notes of this conversation indicate that Plaintiff told her that he did not remember touching Mrs. Jones' leg, but that he had a lot to drink that evening. That day, Ms. Garrett issued her investigative report which summarized her investigation. After reviewing Ms. Garrett's investigative report, Dennis Stolkey, Mr. Vaidya's supervisor, decided to terminate Plaintiff's employment. On December 20, 2001, Mr. Vaidya met with Plaintiff and informed him that he was being terminated. Mr. Vaidya stated that Plaintiff was terminated for the following reasons:
In light of your inability to positively deny that you inappropriately touched a female co-worker on November 15, coupled with the allegation that you inappropriately touched another female employee in or around December 2000, as well as the fact that you exhibited extremely poor judgment in having a consensual affair with another EDS employee that resulted in a 1998 allegation of sex harassment (that was ultimately proven to be false), I must regretfully advise you that the decision has been made to immediately terminate your employment with EDS. Although I appreciate no allegation of inappropriate touching and/or sexual harassment has been irrebuttably established, you have repeatedly exercised extremely poor judgment that has unnecessarily exposed EDS to increased liability.See Vaidya Script; Defendant's Evid. Appx. T.
D. EDS' Bonus Incentive Plan
In 2001, Plaintiff had become eligible for participation in Defendant's 2001 Enterprise Client Executive and Client Executive (ECE/CE) Incentive Plan (hereinafter "Bonus Incentive Plan"). See Bonus Incentive Plan; Defendant's Evid. Appx. Ex. Y. Essentially, if Plaintiff met certain individual performance goals, established by both he and EDS management, Plaintiff would be entitled to a predetermined bonus. These individual performance goals were set forth in a CE/CDE Incentive Plan Scorecard, (hereinafter "Scorecard"), which was reviewed and signed by both Plaintiff and his immediate supervisor, Mr. Vaidya. See Scorecard; Defendant's Evid. Appx. Ex. X. If Plaintiff had met all of his 2001 goals, Plaintiff would have been eligible for a bonus equal to sixty-percent of his salary. According to Plaintiff, at the time he was terminated, Plaintiff's actual 2001 performance would have allowed him to receive a bonus of $32,835.05, just over half of the potential amount. See Plaintiff's Response Brief, p. 12. The Bonus Incentive Plan, however, contains the following language:
Separation from EDS Employment In order to be eligible to receive an incentive target payment, the participant must be an active employee of EDS on the date the payment is made (approximately February 2002).See Bonus Incentive Plan, p. 5; Defendant's Evid. Appx. Ex. Y. Furthermore, the Bonus Incentive Plan also contains the following disclaimer:
The EDS Enterprise Client Executive and Client Executive Incentive Plan ("Plan") is used by EDS leaders to communicate the terms and conditions of the Plan. This publication is only intended as a guideline. None of the information contained herein is intended to give special rights or privileges to specific individuals or to entitle any person to remain employed by EDS. Unless contrary to applicable law or the terms of a written contract executed by an officer of EDS, employment at EDS is not guaranteed for any definite period and may be terminated at any time by the company or by an employee with or without cause or previous notice. Although some of the guidelines set forth herein may suggest, even strongly, that certain procedures or steps be followed, these procedures should not be interpreted as altering an individual's employment relationship and do not constitute an employment contract.See Bonus Incentive Plan, p. 10; Defendant's Evid. Appx. Ex. Y.
As stated above, Defendant terminated Plaintiff's employment on December 20, 2001. Defendant terminated Plaintiff's employment prior to Defendant's payment of bonuses. Therefore, pursuant to the terms of the Bonus Incentive Plan, Defendant did not pay Plaintiff any portion of the $32,835.05 bonus.
E. Procedural History
On June 24, 2002, Plaintiff filed the instant Complaint in Wayne County Circuit Court, and Defendant removed the action to this Court, invoking this Court's diversity jurisdiction. Plaintiff's Complaint contains the following eight counts:
Count I Breach of Implied Employment Contract;
Count II Intentional Infliction of Emotional Distress;
Count III Defamation;
Count IV Tortious Interference with a Contract or Advantageous Business Relationship or Expectancy;
Count V Promissory Estoppel;
Count VI Discharge Against Public Policy;
Count VII Fraud and Misrepresentation; and
Count VIII Breach of Contract.
See Plaintiff's Complaint.
According to Plaintiff's response to Defendant's Motion for Summary Judgment, the underlying theory behind Plaintiff's Complaint is that in terminating Plaintiff's employment, EDS did not perform a reasonable investigation into Mrs. Jones' allegations, and should have taken corrective action only if a reasonable investigation had confirmed unlawful harassment or inappropriate behavior; in these respects, Plaintiff argues, Defendant failed to follow its own Sexual Harassment Policy. In addition, EDS promised Plaintiff that he would be entitled to certain bonuses and benefits if he achieved certain financial goals on behalf of the Defendant. It is the Plaintiff's belief that he was fired as a result of EDS' desire to reduce its workforce of highly compensated employees, (such as Plaintiff), without having to pay Plaintiff a severance package or bonuses that were otherwise due. Defendant now moves for Summary Judgment as to all of Plaintiff's claims.
III. LEGAL STANDARD
Summary judgment is appropriate only if the answers to the interrogatories, depositions, admissions, and pleadings combined with the affidavits in support show that no genuine issue as to any material fact remains and the moving party is entitled to judgment as a matter of law. See FED. R. Civ. P. 56(c). A genuine issue of material fact exists when there is "sufficient evidence favoring the non-moving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986) (citations omitted). In application of this summary judgment standard, the Court must view all materials supplied, including all pleadings, in the light most favorable to the non-moving party. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). "If the evidence is merely colorable or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50 (citations omitted).
The moving party bears the initial responsibility of informing the Court of the basis for its motion and identifying those portions of the record that establish the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has met its burden, the nonmoving party must go beyond the pleadings and come forward with specific facts to demonstrate that there is a genuine issue for trial. See FED. R. Civ. P. 56(e); Celotex, 477 U.S. at 324. The non-moving party must do more than show that there is some metaphysical doubt as to the material facts. It must present significant probative evidence in support of its opposition to the motion for summary judgment in order to defeat the motion for summary judgment. See Moore v. Philip Morris Co., 8 F.3d 335, 339-40 (6th Cir. 1993).
IV. ANALYSIS
A. Parties' Responses to Court's Order to Show Cause
As a preliminary matter, the Court must address the choice of law and choice of venue provisions contained in several agreements entered into between the parties. These agreements suggested that Texas and Delaware law could apply to one or more of Plaintiff's claims, and brought into question whether the Eastern District of Michigan was the appropriate venue for the instant action. Since the parties did not address these issues in their original papers, the Court ordered these issues briefed.
1. Venue
Neither party questions the propriety of this Court as the proper venue for Plaintiff's action. In fact, Defendant expressly waives its right to enforce any forum selection clauses contained in the agreements. See Defendant's Response to Order to Show Cause, p. 2 n. 2. Accordingly, and since a substantial part of the alleged events or omissions giving rise to Plaintiff's claims occurred in the Detroit area, the Court finds venue to be proper in the Eastern District of Michigan. See 28 U.S.C. § 1391. See also Kerobo v. Southwestern Clean Fuels, Corp., 285 F.3d 531 538 (6th Cir. 2002).
2. Choice of Law
In a diversity case, the choice of law rules to be applied by this Court are the choice of law rules of the state of Michigan. See Klaxon Co. v. Stentor Elec. Mfg. Co., Inc., 313 U.S. 487, 496 (1941). Michigan law distinguishes between contract claims and tort claims in determining which state's law applies.
(a) Plaintiff's tort claims
For tort claims in Michigan, there is a presumption that Michigan law applies to a claim unless there is a rational reason to otherwise. See Sutherland v. Kennington Truck Serv., Ltd., 562 N.W.2d 466, 471 (Mich. 1997).
In determining whether a rational reason to displace Michigan law exists, [this Court is to] undertake a two-step analysis. First, [this Court] must determine if any foreign state has an interest in having its law applied. If no state has such an interest, the presumption that Michigan law will apply cannot be overcome. If a foreign state does have an interest in having its law applied, [this Court] must then determine if Michigan's interests mandate that Michigan law be applied, despite the foreign interestsSutherland, 562 N.W.2d at 471.
Defendant is a Texas company. Texas, therefore, has an interest in having its law applied to the instant dispute. Since Plaintiff is domiciled in Michigan, however, and since all of the relevant events occurred in Michigan, Michigan's interest in having its law applied to the dispute mandates that Michigan law be applied. This Court will apply Michigan law to Plaintiff's tort claims. Accordingly, the Court will apply Michigan law to Plaintiff's following claims:
Count II Intentional Infliction of Emotional Distress;
Count III Defamation;
Count IV Tortious Interference with a Contract or Advantageous Business Relationship or Expectancy;
Count VI Discharge Against Public Policy; and
Count VII Fraud and Misrepresentation.
(b) Plaintiff's contract claims
For contract claims, Michigan follows the Restatement approach in determining which state's law is to apply. See Chrysler Corp. v. Skyline Indus. Servs., Inc., 528 N.W.2d 698, 702 (Mich. 1995). See also RESTATEMENT (SECOND) CONFLICT OF LAWS §§ 187 188. Pursuant to the limited autonomy rule of § 187(1) of the Restatement approach —
(1) The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by an explicit provision in their agreement directed to that issue.See RESTATEMENT (SECOND) CONFLICT OF LAWS § 187(1).
The 1986 Employment Agreement indicates that the Agreement is to be "governed and construed by the laws of the State of Texas." See 1986 Employment Agreement, ¶ 8; Defendant's Evid. Appx. Ex. R. Plaintiff argues that his contract claims do not arise out of his Employment Agreement with Defendant, but instead arise out of state and federal laws regarding sexual harassment. See Plaintiff's Response to Order to Show Cause, p. 8. Plaintiff, therefore, seeks to apply Michigan law to his contract claims and promissory estoppel claim. Plaintiff's argument is unpersuasive. Plaintiff's allegations relate directly to his employment relationship with EDS and his claim that EDS has violated agreements and broken promises regarding that relationship. As argued by the Defendant, therefore, Plaintiff's contract claims and promissory estoppel claim arise out of Plaintiff's employment with EDS and Plaintiff's 1986 Employment Agreement. See 1986 Employment Agreement, ¶ 8; Defendant's Evid. Appx. Ex. R. Since Plaintiff's claims arise out of his employment and, therefore, the Employment Agreement, Plaintiff's claims are claims which the parties could resolve by explicit provision in the Employment Agreement. Accordingly, Plaintiff's contract claims and promissory estoppel claim fall under § 187(1) of the Restatement and the Court shall give the 1986 Employment Agreement's choice of law provision full effect. The Court shall apply Texas law to the following counts of Plaintiff's Complaint:
Plaintiff's contract claims are Breach of Implied Employment Contract, (Count I); and Breach of Contract, (Count VIII).
Count I Breach of Implied Employment Contract;
Count V Promissory Estoppel; and
Count VIII Breach of Contract.
B. Breach of Implied Employment Contract (Count I)
With Count I of Plaintiff's Complaint, Plaintiff claims that Defendant made representations to its employees that it was Defendant's policy not to discharge an employee when sexual harassment charges were made against that employee without first performing a reasonable investigation into the allegations and confirming that unlawful harassment had occurred. These representations, along with Defendant's Sexual Harassment Policy and Plaintiffs continued employment, created a contractual agreement.
As a preliminary matter, the Court recognizes that Plaintiff has brought the following contract claims: (1) breach of an implied contract; (2) breach of an express contract; and (3) a promissory estoppel claim. The Court also notes Defendant's observation that "[w]here there exists a valid express contract covering the subject matter, there can be no implied contract." Woodward v. Southwest States, Inc., 384 S.W.2d 674, 675 (Tex. 1964). In the present case, however, Plaintiff's implied contract and express contract claims are not inconsistent with each other. Plaintiff's implied contract claim, (Count I), relates to Defendant's obligations under its Sexual Harassment Policy, and Plaintiff's express contract claim, (Count VIII), relates to Defendant's obligations to pay Plaintiff's bonus, pursuant to an alleged unilateral contract. These issues are not the same, and Plaintiff's express and implied contract claims, therefore, are not inconsistent. In addition, Plaintiff's promissory estoppel claim, (Count V), is alternatively requested relief, although it encompasses the same subject matter as both the express and implied contract claims. Accordingly, the presence of one claim does not automatically preclude Plaintiff's pursuit of the other.
Under Texas law, the assent and terms of an agreement may be inferred from the circumstances of the transaction — this is the concept of implied contract. See University Nat'l Bank v. Ernst Whinney, 773 S.W.2d 707 (Tex.App. 1989). "[A]n implied contract arises from the conduct of the parties, where such conduct demonstrates that the minds of the parties met on the terms of the contract." 14 TEX. JUR. CONTRACTS § 9 (citing Willford Energy Co. v. Submergible Cable Servs., 895 S.W.2d 379, 385 (Tex.App. 1994)).
Plaintiff argues that some of the terms of Plaintiff's employment relationship have been established by Defendant's Code of Conduct. See Defendant's Evid. Appx. Ex. F; Plaintiff's Response Brief, p. 6. Under Texas law, however,
In an employment-at-will situation, an employee policy handbook or manual does not, of itself, constitute a binding contract for the benefits and policies stated unless the manual uses language clearly indicating an intent to do so.Gamble v. Gregg County, 932 S.W.2d 253, 255 (Tex.App. 1996). Plaintiff's 1986 Employment Agreement clearly indicates that Plaintiff was hired as an at-will employee. See 1986 Employment Agreement, ¶ 7; Defendant's Evid. Appx. Ex. R. Assuming arguendo that Defendant violated the terms of its Sexual Harassment Policy as provided in its Code of Conduct, Defendant can only be liable if the Code of Conduct clearly indicates that the Defendant intended to impose a binding obligation upon itself by creating the Sexual Harassment Policy.
Plaintiff cites no language, however, that could be construed to demonstrate such an intent. In fact, the Code of Conduct itself disclaims any intent to be bound by the Code of Conduct.
The Code contains the following language:
The EDS Code of Business Conduct is not intended to confer any special rights or privileges upon specific individuals, provide greater or lesser rights under applicable law or entitled any person to remain employed by EDS. Unless contrary to applicable law or the terms of a written employment contract executed by an officer of EDS, employment at EDS is for no definite term and may be terminated at any time by the company or by an employee with or without cause and with or without any previous notice (unless specifically provided otherwise in a written contract executed by an officer of EDS). Although some of the guidelines set forth herein may suggest, even strongly, that certain procedures or steps be followed, these procedures should not be interpreted as altering the at-will employment relationship and do not constitute an employment contract.See Defendant's Code of Business Conduct, p. 16; Defendant's Evid. Appx. Ex. F.
Since Defendant's Code of Business Conduct expressly disclaims any intent to be bound by the Code of Conduct, any breach of a representation made in the Code of Conduct is not actionable, and the Defendant is not obligated to abide by its terms. See Gamble, 935 S.W.2d at 255; Bailey v. City of Austin, 972 S.W.2d 180, 191 (Tex.App. 1998). Accordingly, even assuming arguendo that Defendant did not abide by the terms of its Code of Business Conduct, there is no genuine issue of material fact regarding Plaintiff's claim Breach of Implied Contract, (Count I), and, therefore, Defendant's Motion must be GRANTED with respect to this issue.
C. Intentional Infliction of Emotional Distress (Count II)
To prevail under a theory of Intentional Infliction of Emotional Distress, Plaintiff must prove the following elements:
1. "extreme and outrageous" conduct on the part of the Defendant;
2. intent or recklessness;
3. causation; and
4. "severe emotional distress."
Roberts v. Auto-Owners Ins. Co., 374 N.W.2d 905, 908 (Mich. 1985).
Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. Generally, the case is one in which the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him to exclaim, "Outrageous!"Roberts, 374 N.W.2d at 908-909 (quoting RESTATEMENT (SECOND) TORTS § 46 cmt. d). In a contractual setting, there must be some breach of duty distinct from contract, and mere nonfeasance of a contractual obligation is insufficient. See id. In addition, Defendant can not be liable if all Defendant has done is insist upon its rights in a permissible way. See id.
With Count II of Plaintiff's Complaint, Plaintiff claims that Defendant's failure to perform a reasonable investigation into Mrs. Jones' complaint or to confirm unlawful sexual harassment constitutes extreme and outrageous conduct in that the Defendant's actions were allegedly taken with an ulterior motive, namely to terminate high paid employees without providing severance packages. In addition, and in response to Defendant's Motion for Summary Judgment, Plaintiff argues that the Defendant used Mrs. Jones' allegation of sexual harassment as an excuse to terminate the Plaintiff in order to avoid paying him the bonuses and benefits he had earned, and to avoid providing the Plaintiff with a severance package. It is Plaintiff's position that this alleged conduct is "extreme and outrageous."
Plaintiff's claim, however, fails because there is no evidence to support Plaintiff's contentions. To begin with, the mere fact that Defendant terminated Plaintiff's employment prior to his entitlement to a bonus, and did not provide Plaintiff a severance package, proves nothing regarding Defendant's intent in terminating the Plaintiff. Plaintiff was an at-will employee and was only eligible for the bonus in question if he was working for Defendant when bonuses were distributed. See Bonus Incentive Plan p. 5; Defendant's Evid. Appx. Ex. Y. After an investigation into a claim of sexual harassment, Plaintiff was terminated. There is no evidence to suggest that Plaintiff was terminated for any reason other than having repeatedly exercised poor judgment. In addition, as opposed to being "extreme and outrageous" conduct, the evidence presented indicates that Defendant's investigation of Mrs. Jones' allegation of sexual harassment, and Defendant's decision to terminate Plaintiff's employment following its investigation, was reasonable under the circumstances, especially in light of the Court's finding that Defendant was not even obligated to Plaintiff to conduct such an investigation. See supra Part IV.B.
Once Employee Relations received Mrs. Jones' written complaint, Ms. Garrett promptly commenced an investigation. Ms. Garrett spoke with Mrs. Jones, Mrs. Zukouwski, Mr. Batcheller, and twice spoke with the Plaintiff about the allegations. Following her investigation, Ms. Garrett prepared a detailed and objective report describing the allegations and Plaintiff's prior history with EDS, and submitted that report to Plaintiff's supervisors — Mr. Stolkey and Mr. Vaidya. Only after receiving and reviewing that report did Mr. Stolkey make the decision to terminate Plaintiff's employment. There is no evidence to suggest that upon hearing a description of the Defendant's investigation, an average member of the community would exclaim "outrageous!"
With respect to Plaintiff's claim that his termination in the absence of a confirmation of the sexual harassment complaint was "extreme and outrageous," the evidence is uncontroverted that on November 15, 2001, Plaintiff, a senior leadership executive with EDS, became intoxicated to the point that he could not later deny Mrs. Jones' allegation that he had inappropriately touched her, and instead indicated that his recollection of the event was impaired because of alcohol. In addition, Defendant terminated Plaintiff's employment only after conducting an investigation into Mrs. Jones' allegation and speaking with the Plaintiff about the incident on two occasions. Such conduct is not "extreme and outrageous."
Accordingly, with respect to Plaintiff's claim of Intentional Infliction of Emotional Distress, Defendant's Motion for Summary should be GRANTED.
D. Defamation (Count III)
The elements of a claim of Defamation are:
1. a false and defamatory statement concerning the Plaintiff;
2. an unprivileged publication to a third party;
3. fault amounting to at least negligence on the part of the publisher; and
4. either actionability of the statements irrespective of special harm, (defamation per se), or the existence of special harm caused by the publication, (defamation per quod).See Gonyea v. Motor Parts Federal Credit Union, 480 N.W.2d 297, 299 (Mich.Ct.App. 1991). "These elements must be specifically pleaded, including the allegations with respect to the defamatory words, the connection between the plaintiff and the defamatory words, and the publication of the alleged defamatory words." Gonyea, 480 N.W.2d at 299.
Plaintiff claims that Mrs. Jones' accusations of sexual harassment are false, and that Defendant has published these accusations to third-parties with knowledge of their falsity or in reckless disregard of their truth. Specifically, Plaintiff claims that Mr. Vaidya made defamatory statements to his wife by telling her that "Plaintiff was involved in a sexual harassment case and that he was fired because of it." See Plaintiff's Response Brief, p. 17. Furthermore, Plaintiff claims that Defendant has forced Plaintiff to engage in "self-defamation" by having to inform prospective employers that he was involved in a sexual harassment claim and was fired because of it.
In order to be actionable, a defamatory statement must be false. In the present case, it is beyond serious contention that the Plaintiff was involved in a sexual harassment case and that he was fired, in part, because of his involvement. Therefore, Mr. Vaidya's statement to his wife was not false. And contrary to Plaintiff's position, Ms. Garrett's written report does not find that Plaintiff sexually harassed Mrs. Jones, see December 18, 2001, Memorandum; Defendant's Evid. Appx. Ex. A, and Mr. Vaidya's "script of termination" expressly indicates that sexual harassment was not confirmed. See Script of Termination; Defendant's Evid. Appx. Ex. T ("Although I appreciate no allegation of inappropriate touching and/or sexual harassment has been irrebuttably established, you have repeatedly exercised extremely poor judgment that has unnecessarily exposed EDS to increased liability.").
Plaintiff has set forth no evidence to indicate that Mr. Vaidya, or any other representative of the Defendant, has made a false and defamatory statement, nor has Plaintiff set forth any evidence indicating that the Defendant's actions require the Plaintiff to engage in self-defamation. Accordingly, with respect to this issue, Defendant's Motion for Summary Judgment must be GRANTED.
E. Tortious Interference with a Contract or Advantageous Business Relationship or Expectancy (Count IV)
With Count IV of Plaintiff's Complaint, Plaintiff claims that he had a contractual and advantageous business relationship with the Defendant with a reasonable likelihood of future economic success, and that by engaging in the conduct described in Plaintiff's Complaint, Defendant intentionally and improperly interfered with that relationship.
Michigan recognizes both (1) a claim of Tortious Interference with a Contract; and (2) a claim of Tortious Interference with Advantageous Business Relations. To prevail on a theory of tortious interference with an existing contract, Plaintiff must show the following elements:
1. that a contract existed between Plaintiff and a third party;
2. knowledge of the contract on the part of the defendant;
3. that the contract was breached;
4. that the Defendant intentionally instigated the breach without justification; and
5. that this breach resulted in damages.
See Northern Plumbing v. Henderson Bros., 268 N.W.2d 296, 298-99 (Mich.Ct.App. 1978). To prevail on a theory of tortious interference with advantageous business relations, Plaintiff must show the following elements:
1. the existence of a valid business relation between the Plaintiff and a third party;
2. knowledge of the relationship on the part of the Defendant;
3. intentional interference causing a termination of that relationship; and
4. damage to the Plaintiff as a result of the termination.
See Northern Plumbing, 268 N.W.2d at 299. The Sixth Circuit has recently indicated that while Michigan law is not entirely clear on the subject, the Michigan Supreme Court would probably recognize the tort of tortious interference with contract and advantageous business relationship in the at-will employee context. See Stanek v. Greco, 323 F.3d 476, 479-480 (6th Cir. 2003). Tortious interference with contract or advantageous business relations in an at-will employee setting recognizes that "an at-will employee has a significant interest in his continued employment that will be protected against illegal interference by third persons." Stanek, 323 F.3d at 479 (quoting Tash v. Houston, 254 N.W.2d 579, 581 (Mich.Ct.App. 1977)).
In those situations where these two torts are recognized, however, a cause of action has only been recognized where the plaintiff seeks redress from a third-party that has interfered with the plaintiff's relationship with his employer. See Stanek, 323 F.3d at 479 (alleging that company president interfered with plaintiff's relationship with employer); Tash v. Houston, 254 N.W.2d 579 (Mich.Ct.App. 1977) (alleging plaintiff's supervisor interfered with plaintiff's relationship with employer); Stack v. Marcum, 382 N.W.2d 743, 744 (Mich.Ct.App. 1985) (holding that cause of action may lie against plaintiff's supervisor if supervisor used his authority to further his own ends at the plaintiff's expense); Feaheny v. Caldwell, 437 N.W.2d 358 (Mich.Ct.App. 1989) (alleging that corporate board of directors interfered with plaintiffs employment relationship with corporation); Patillo v. Equitable Life Assurance Pol'y, 502 N.W.2d 696, 700 (Mich.Ct.App. 1992) ("An employee has a manifest interest in the freedom of the employer to exercise its judgment without illegal interference or compulsion, and it is the unjustified interference by third persons that is actionable.") (emphasis added). This is consistent with the general rule that one may not tortiously interfere with one's own contract. See Wilkinson v. Powe, 1 N.W.2d 539 (Mich. 1942).
In the present case, Plaintiff brings his cause of action for tortious interference with contract and advantageous business relations against his employer — a party to the alleged contract. Plaintiffs claims, therefore, can not survive the requirement that a third-party tortiously interfered with Plaintiff's and Defendant's relationship. Accordingly, this claim must be dismissed, and Defendant's Motion for Summary Judgment must be GRANTED with respect to this issue.
F. Promissory Estoppel (Count V)
With Count V of Plaintiff's Complaint, Plaintiff claims (1) that Defendant made representations to its employees that it was Defendant's policy not to discharge an employee when sexual harassment charges were made against that employee without first performing a reasonable investigation into the allegations and confirmation that unlawful harassment had occurred; and (2) that Defendant made promises to Plaintiff that if Plaintiff achieved certain financial goals on behalf of the Defendant, Plaintiff would receive certain bonuses and benefits. Plaintiff claims that he relied on these promises and representations to his detriment, and that Defendant's failure to perform as promised has caused injury to Plaintiff.
Promissory estoppel is a cause of action available to a promisee who has acted to his detriment in reasonable reliance on an otherwise unenforceable promise. See David McDavid Nissan, Inc. v. Subaru of America, Inc., 10 S.W.3d 56, 73 (Tex.App. 2000). The elements of promissory estoppel are
1. a promise;
2. foreseeability of reliance thereon by the promisor; and
3. detrimental reliance by the promisee.
See English v. Fisher, 660 S.W.2d 521, 524 (Tex. 1983). "The damages recoverable based on promissory estoppel are not the profits that the promisee expected, but only the amount necessary to restore the injured party to the position he would have been in had he not acted in reliance on the promise." See Subaru of America, Inc., 10 S.W.3d at 73 (citing Fretz Constr. Co. v. Southern Nat'l Bank of Houston, 6265 W.2d 478, 483 (Tex. 1981)). See also RESTATEMENT (SECOND) CONTRACTS § 90.
With respect to Plaintiff's first promissory estoppel claim, the Court notes that a predicate of a promissory estoppel claim is that the Plaintiff's reliance upon the Defendant's assurance be reasonable. See Reyna v. First Nat'l Bank, 55 S.W.3d 58, 71 (Tex.App. 2001). Under Texas law, however, at-will employment does not provide the employee with any assurance of continued employment; therefore, there is no basis for reasonable reliance. See Murphy v. Gulf States Toyota, Inc., No. 01-00-00740-CV; 2001 Tex. App. LEXIS 3774 (Tex.App. June 7, 2001). Accordingly, Plaintiff's first promissory estoppel claim, related to Plaintiff's expectations regarding Defendant's sexual harassment policy, must fail.
With respect to Plaintiff's claim to entitlement to the $32,835.05 bonus, Plaintiff essentially argues that the Defendant promised him that he would get a bonus as long as he met the Scorecard requirements, regardless of whether he was employed by Defendant at the time bonuses were issued. Assuming that Defendant made such a promise, and assuming that Plaintiff detrimentally relied upon that alleged promise, such reliance was unreasonable. Plaintiff was an at-will employee and one of the express conditions of the bonus was that Plaintiff be employed at the time bonuses were issued. See Bonus Incentive Plan, p. 5; Defendant's Evid. Appx. Ex. Y ("In order to be eligible to receive an incentive target payment, the participant must be an active employee of EDS on the date the payment is made (approximately February 2002.")). Plaintiff has acknowledged that his entitlement to the bonus was governed by the terms of the Bonus Incentive Plan. See Fletcher Aff. pp. 94-95; Defendant's Evid. Appx. To the extent, therefore, that Plaintiff relied on his potential entitlement to a bonus to incur significant debt or to refrain from looking for other employment, such reliance prior to his entitlement to the bonus was unreasonable. Plaintiffs second promissory estoppel claim, therefore, must also fail.
With respect to Plaintiff's claim of Promissory Estoppel, (Count V), Defendant's Motion for Summary Judgment must be GRANTED.
G. Discharge Against Public Policy (Count VI)
The general rule is that contracts for employment of indefinite duration are terminable at-will by either party. An exception, however, to the general rule is if the employee's termination violates the public policy of the state of Michigan. See, e.g., Trombetta v. Detroit, Toledo Ironton Ry. Co., 265 N.W.2d 385 (Mich.Ct.App. 1978). As pointed out by the Defendant, public policy may be derived from "explicit legislative statements prohibiting the discharge, discipline, or other adverse treatment of employees who act in accordance with a statutory right or duty," Suchodolski v. Michigan Consol. Gas Co., 316 N.W.2d 710, 711-712 (Mich. 1982); or legislative statements of public policy implying a cause of action, (i.e., refusing to violate a law or refusing to participate in illegal scheme), see Suchodolski, 316 N.W.2d. at 712 n. 3. Furthermore, a cause of action may be maintained where an employee is terminated in retaliation for the exercise of a right conferred by a well-established legislative enactment, (i.e., filing worker's compensation claims). See id. The public policy relied upon by Plaintiff must be clearly mandated. See id.
Defendant argues that Plaintiff's claim must be dismissed since there is no public policy against terminating at-will employees for exercising poor judgment. Plaintiff argues that the Defendant has an obligation to enforce its sexual harassment policy in good faith and equally amongst its employees, and that Defendant's termination of Plaintiff without regard to its sexual harassment policy is in violation of public policy and contrary to the Michigan Supreme Court's holding in Chambers v. Trettco, Inc., 614 N.W.2d 910 (Mich. 2000).
Plaintiff's argument, however, lacks merit. Plaintiff fails to demonstrate the clearly mandated public policy that the Defendant has allegedly violated. While Plaintiff reads Chambers to create a public policy requiring employers to abide by the terms of their sexual harassment policies, and to perform an investigation pursuant to that policy in a reasonable manner, Chambers does not contain such a requirement.
The Court has already found that Defendant was not contractually bound to abide by the terms of its Code of Business Conduct. See supra Part IV.B. The present discussion addresses whether Michigan public policy mandates that the creation of a policy regarding sexual harassment requires Defendant to abide by its terms and to perform an investigation conducted pursuant to that policy in a reasonable manner.
In addition, there is no evidence to suggest that Defendant did not comply with the terms of its Code of Conduct. With this particular claim, and throughout his cause of action, Plaintiff relies significantly upon the language of Defendant's Code of Conduct which states that, following a complaint of sexual harassment, "[i]f an investigation confirms that improper conduct occurred, EDS will take appropriate action." See Sexual Harassment and Unlawful Behavior, Defendant's Evid. Appx. Ex. W. See also EDS Code of Conduct; Defendant's Evid. Appx. Ex. F. Based upon his prior experience with Employee Relations, and since there were no witnesses to the November 15, 2001, alleged event, Plaintiff expected no repercussions from Mrs. Jones' complaint since confirmation of the alleged harassment would have been virtually impossible. The language contained in the Code of Conduct, however, is not exclusive, and does not require confirmation of the sexual harassment claim before "appropriate action" is taken. This language clarifies to the alleged harasser, and assures the potential victim, that if an investigation confirms sexual harassment, Defendant will take action.
As stated in supra Part IV.C., on November 15, 2001, Plaintiff became intoxicated to the point that, when later presented with an allegation that he had inappropriately touched a female coworker at Mr. B's, Plaintiff could not deny the allegation and instead indicated that his recollection of the event was impaired because of alcohol. Furthermore, the evidence is uncontroverted that Defendant conducted an investigation into the matter and provided Plaintiff with the opportunity to respond to the allegation. While the evidence did not confirm that inappropriate touching had occurred, the Defendant considered the Plaintiff to have repeatedly exercised poor judgment, and, therefore, terminated the Plaintiff's employment. Based on the evidence as presented, there is no indication that Defendant has violated a public policy of the state of Michigan.
Construing the evidence in a light most favorable to the Plaintiff, the Court finds that Plaintiff has failed to demonstrate that a genuine issue of material fact exists on this issue. Accordingly, with respect to Plaintiff's claim of Discharge Against Public Policy, (Count VI), Defendant's Motion should be GRANTED.
H. Fraud and Misrepresentation (Count VII)
With Count VII of Plaintiff's Complaint, Plaintiff claims (1) that representatives of Defendant made false promises to Plaintiff and other employees regarding Defendant's sexual harassment policy; and (2) that representatives of Defendant made false promises to Plaintiff that Plaintiff would receive certain bonuses and benefits if Plaintiff achieved certain financial goals on behalf of the Defendant. Furthermore, Plaintiff claims that when the above promises were made, the representatives making the promises knew that they were false, or made them with reckless disregard of their truth, and that these promises were made to induce Plaintiff's reliance upon them.
In Michigan, Fraud and Misrepresentation requires proof of the following elements:
1. Defendant made a material representation;
2. It was false;
3. When Defendant made the statement, Defendant knew that it was false or made the statement recklessly without knowledge of truth or falsity;
4. Defendant made the statement with the intent that Plaintiff would act upon it;
5. Plaintiff acted in reliance upon it; and
6. Plaintiff suffered damage.
See Mitchell v. Dalhberg, 547 N.W.2d 74, 77 (Mich.Ct.App. 1996). The burden of proof rests with Plaintiff. "Fraud will not be presumed but must be proven by clear, satisfactory and convincing evidence." Higgins v. Lawrence, 309 N.W.2d 194, 197 (Mich.Ct.App. 1981). Furthermore, "[f]uture promises are contractual and do not constitute fraud." See Higgins, 309 N.W.2d at 197 (citing Hi-Way Motor Co. v. International Harvester Co., 247 N.W.2d 813 (Mich. 1976)).
In the present case, Plaintiff's claims of fraud relate to Defendant's alleged promises to do some act in the future — how Defendant would investigate a claim of sexual harassment, how Defendant would conclude that investigation, and whether Defendant would pay Plaintiff certain bonuses or benefits. These alleged future promises are contractual and, in the absence of bad faith, are not actionable as fraud. See id. But assuming promises were made, and assuming Defendant did not perform as promised, mere nonperformance does not give rise to an action for fraud. See Leib v. Bostwick, 239 N.W. 405 (Mich. 1931). There is no evidence that Defendant's alleged promises, if made, were made with fraudulent intent, and, therefore, no evidence that Defendant's alleged statements were made in bad faith. See Higgins, 309 N.W.2d at 197. Plaintiff's claim, therefore, fails. Defendant's Motion must be GRANTED with respect to this issue.
I. Breach of Contract (Count VIII)
With Count VIII of Plaintiff's Complaint, Plaintiff claims that in 2001 he and the Defendant entered into a contract whereby he was entitled to achieve certain bonuses and benefits if he achieved certain financial goals. Plaintiff claims that he reached those financial goals but that the Defendant has failed to perform under the contract. In demonstrating the existence of a contract or agreement, "a binding contract must have an offer and an acceptance and the offer must be accepted in strict compliance with its terms." Williford Energy Co. v. Submergible Cable Servs., 895 S.W.2d 379, 384 (Tex.App. 1994).
Plaintiff claims that Defendant made a unilateral offer to Plaintiff by indicating to him that if he performed at a certain level, he would be entitled to a bonus. Plaintiff makes the following statement:
4. That Sudhir Vaidya, my EDS manager, told me that if I achieved my target objectives in 2001 that I could receive a bonus of up to 60% of my salary depending on the target goals I met.See Fletcher Aff. ¶ 4; Plaintiff's Response Brief, Ex. L. Plaintiff argues that he accepted that purported unilateral offer by performance.
Mr. Vaidya made the above-statement at the time that Plaintiff and Mr. Vaidya reviewed and signed the Scorecard pursuant to the Bonus Incentive Plan. See Fletcher Transcript, p. 97; Defendant's Evid. Appx. See also Defendant's Evid. Appx. Ex. X Y. Plaintiff understood that his bonus eligibility was subject to the terms of the Scorecard and Bonus Incentive Plan. See Fletcher Aff. pp. 94-95; Defendant's Evid. Appx.
Mr. Vaidya's statement, therefore, can not be construed as a valid offer because the Scorecard expressly disclaims the possible formation of a contract. See Scorecard; Defendant's Evid. Appx. Ex. X ("Although some of the guidelines set forth herein may suggest, even strongly, that certain procedures or steps be followed, these procedures should not be interpreted as altering an individual's employment relationship and do not constitute an employment contract."). In addition, the Bonus Incentive Plan expressly disclaims the possible formation of a contract. See Bonus Incentive Plan; Defendant's Evid. Appx. Ex. Y.
From an objective viewpoint, therefore, Plaintiff should have recognized, and did subjectively recognize, that any statement Mr. Vaidya made regarding Plaintiff's entitlement to a bonus was subject to the terms of the Scorecard and Bonus Incentive Plan. Accordingly, since these documents expressly disclaim the possibility of contract creation, at the time Mr. Vaidya made his alleged statements regarding Plaintiff's entitlement to a bonus, no expression of assent, neither through words nor conduct, could have created a completed and definite agreement as to all essential elements. Edmunds v. Houston Lighting Power Co., 472 S.W.2d 797, 798-99 (Tex.Civ.App. 1971) ("[A]n offer . . . must sufficiently cover the essentials of the proposed transaction so that, with an expression of assent, there will be a completed and definite agreement on all essential details."). Since no contract could be formed, Defendant was under no contractual obligation to pay Plaintiff his bonus, even if earned, and Defendant is entitled to summary judgment on this issue.
Therefore, with respect to Plaintiff's claim of Breach of Contract, Defendant's Motion for Summary Judgment should be GRANTED.
V. CONCLUSION
Accordingly, and as set forth above, Defendant Electronic Data Systems' Motion for Summary Judgment is GRANTED. Plaintiff Steven Fletcher's cause of action is DISMISSED WITH PREJUDICE.
IT IS SO ORDERED.