Opinion
No. C00-2037
July 9, 2001
ORDER
This matter comes before the court pursuant to defendants' May 24, 2001 motion for judgment on the pleadings, or, in the alterative, motion for summary judgment (docket number 17). The parties consented to the exercise of jurisdiction by a United States Magistrate Judge. For the reasons set forth below, the motion for summary judgment is granted.
I. Background
Plaintiff Bill Moses ("Moses") filed a one count breach of contract claim against Defendants EMP Serv, LLC; EMP Services, LLC; and Pipestone System (collectively "EMP") alleging that EMP breached an employment contract with him when it terminated his employment on July 22, 1999. Moses interviewed for and accepted employment from EMP to work as a unit manager in a hog production facility known as Eagle Ridge in Independence, Iowa. Moses had previously been employed as a hog manager in Colorado prior to accepting the position with EMP. Plaintiff states that he asked for a contract for permanent employment. He states that he was told in response, "I will get a contract for you." On March 30, 1999, G.F. Kennedy, the managing partner, sent Moses a letter outlining the terms of the compensation package. Moses contends that this letter is a contract for permanent employment. Moses was terminated on July 22, 1999. EMP filed a motion for judgment on the pleadings, or, in the alternative, a motion for summary judgment. Because Moses claims there are genuine issues of material fact, the court will treat the motion as a motion for summary judgment.
II. Summary Judgment Standard
A motion for summary judgment may be granted only if, after examining all of the evidence in the light most favorable to the nonmoving party, the court finds that no genuine issues of material fact exist and that the moving party is entitled to judgment as a matter of law. Kegel v. Runnels, 793 F.2d 924, 926 (8th Cir. 1986). Once the movant has properly supported its motion, the nonmovant "may not rest upon the mere allegations or denials of [its] pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial."Fed.R.Civ.P. 56(e). "To preclude the entry of summary judgment, the nonmovant must show that, on an element essential to [its] case and on which [it] will bear the burden of proof at trial, there are genuine issues of material fact." Noll v. Petrovsky, 828 F.2d 461, 462 (8th Cir. 1987) (citing Celotex Corp. v. Catrett, 477 U.S. 317 (1986)). Although "direct proof is not required to create a jury question, . . . to avoid summary judgment, `the facts and circumstances relied upon must attain the dignity of substantial evidence and must not be such as merely to create a suspicion.'" Metge v. Baehler, 762 F.2d 621, 625 (8th Cir. 1985) (quoting Impro Prod., Inc. v. Herrick, 715 F.2d 1267, 1272 (8th Cir. 1983)). In applying these standards, the court must give the nonmoving party the benefit of all reasonable inferences to be drawn from the evidence. Krause v. Perryman, 827 F.2d 346, 350 (8th Cir. 1987).
III. Permanent Employment Contracts
Moses argues that the terms of the March 30, 1999 letter constitute a contract for permanent employment. He argues that when he negotiated the terms of his employment with the defendant's representative, Barb Becker, he stated that he wanted a written, permanent contract. He argues that he signed the March 30 letter with the belief that he was entering into a permanent employment agreement.
"The general rule is that, in the absence of consideration in addition to the employee's mere promise to perform an employment contract, the contract is construed to be for an indefinite term and is terminable at the will of either party." Kabe's Restaurant, Ltd. v. Kitner, 538 N.W.2d 281, 283 (Iowa 1995). "As is true of contract formation in general, the parties to an employment contract must manifest their assent to be bound and do so in a manner that is sufficiently definite to be enforceable." Hunter v. Board of Trustees of Broadlawns Medical Center, 481 N.W.2d 510, 514 (Iowa 1992). To make out an enforceable contract for permanent employment, the plaintiff must show that: (1) he had a contract with the defendant; (2) the terms were for permanent employment; (3) he provided additional consideration for permanent employment; (4) he was terminated without cause; and (5) the amount of his damages. Kabe's Restaurant, 538 N.W.2d at 283-84.
Plaintiff asked for permanent employment, an offer to sell his employment services. The response, "I will get a contract for you" is not an acceptance of that offer. The March 30, 1999 letter states: "The following is an overview of the compensation package that is offered to you through EMP SERV, LLC" and then lists information regarding salary, vacation and benefits. It states the start date of employment is April 17, 1999. The document does not state that it is permanent and does not list terms and conditions other than basic compensation and insurance benefits. Moses also relies on the statements made to him during the negotiation of his employment for his position that he was offered permanent employment. This reliance is misplaced.
"The construction of a contract, the legal effect of the contract is always a matter for the court. Interpretation, the meaning of contractual words, is also an issue for the court unless it is dependent upon extrinsic evidence or upon a choice among reasonable inferences from the extrinsic evidence." Iowa-Illinois Gas Electric Co. v. Black Veatch, 497 N.W.2d 821, 825 (Iowa 1993) (citations omitted). The court may consider extrinsic evidence when interpreting a contract if "it throws light on the parties' situation, antecedent negotiations, the attendant circumstances, and the objectives the parties were trying to attain."Id. In Thompson v. City of Des Moines, 564 N.W.2d 839 (Iowa 1997), the plaintiff claimed oral representations made to him during his job interview assured him of continuous employment. The court held that this type of preemployment negotiations are not sufficient to alter an employee's at-will status and create a binding contract for lifetime employment. Id. at 844. Instead, statements made during negotiations are made for the purpose to "sell" the company and do not alter an employee's at will status. Id. Therefore, the statements made during negotiations are insufficient to create a contract for permanent employment.
In addition, the terms stated in the March 30, 1999 letter are insufficient to create a contract of permanent employment. Moses argues that the mere fact that the position for which he was hired was not stated in the letter should not mean the letter should fail. However, in addition to not stating the position, the letter does not state that Moses was hired for a definite term. When a contract for employment is for an indefinite duration, the contract is terminable at the will of either party. Wolfe v. Graether, 389 N.W.2d 643, 652 (Iowa 1986). Because the terms of the letter do not state any definite time period or duration of employment, Moses' employment was terminable at will and the defendants are entitled to summary judgment on his breach of contract claim.
Upon the foregoing,
IT IS ORDERED
The defendants' May 24, 2001 motion for judgment on the pleadings, or, in the alterative, motion for summary judgment (docket number 17) is granted. This case is dismissed with prejudice. The Clerk of Court shall enter judgment for the defendants.