Opinion
1:98cv173-C.
March 17, 1999
MEMORANDUM AND RECOMMENDATION
THIS MATTER is before the court upon defendants' Motion for Summary Judgment. While not in the form of a motion, plaintiff requests in his response that partial summary judgment be entered in his favor on the issue of defendants' obligation to pay his mortgage on the home he left in Pamlico County. Having carefully considered defendants' Motion for Summary Judgment, conducted a hearing, and reviewed the pleadings, the court enters the following findings, conclusions, and recommendation.
FINDINGS AND CONCLUSIONS
I. Background
In this action, plaintiff contends he had a two-year contract of employment as a prison warden with defendant U.S. Corrections Corporation that was violated by its premature termination. As evidenced by a letter plaintiff contends that the terms of that agreement included the following:
(a) a starting date of July 28, 1997;
(b) a two-year term of employment;
(c) an annual salary of $70,000 with a performance bonus of 10 percent;
(d) a stock-option plan; and
(e) reimbursement of moving expenses.
It is undisputed that plaintiff began his career at defendants' Pamlico prison facility, and amicably transferred to defendants' Avery/ Mitchell unit. It also appears to be undisputed that within weeks of the transfer, plaintiff's employment was terminated for reasons unrelated to his job performance. The parties appear to agree that Corrections Corporation of America ("CCA") purchased the stock of U.S. Corrections Corporation ("USCC"). Under Rule 9 alternative pleading, plaintiff first contends that CCA acquired the assets and liabilities when it purchased the stock of USCC, and that its failure to honor his contract is a breach of that contract. Alternatively plaintiff contends that if USCC was, as it claims, a stranger to the alleged contract, CCA tortiously interfered with the contract he had with USCC.
Defendants contend that under prevailing North Carolina law, no contract of employment existed, plaintiff was an employee at will, and his services were terminable without reason. They characterize the letter upon which plaintiff relies as an offer of employment, not a contract, and argue that neither the provision of two year-end bonuses nor the agreement to pay moving expenses created a contract. Defendants seek summary judgment on all of plaintiff's claims, which include claims for breach of contract, violation of the state Wage and Hour Act, violation of the Fair Labor Standards Act, and tortious interference with contract. For the reasons discussed below, the undersigned will recommend that summary judgment be granted to defendants as to plaintiff's claims under the Wage and Hour Act and the Fair Labor Standards Act, but denied as to plaintiff's claims as to contract and alternative torts. The undersigned will also recommend that plaintiff's "motion" contained in his response for summary judgment as to his moving expenses and home mortgage be denied, inasmuch as those matters appear to be part of the alleged contractual obligation at issue in the claims as to contract and alternative torts.
II. Summary Judgment Standard Generally
On a motion for summary judgment, the moving party has the burden of production to show that there are no genuine issues for trial. Upon the moving party's meeting that burden, the nonmoving party has the burden of persuasion to establish that there is a genuine issue for trial.
When the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts. In the language of the Rule, the nonmoving party must come forward with "specific facts showing that there is a genuine issue for trial." Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving [sic] party, there is no "genuine issue for trial."Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (citations omitted; emphasis in the original) (quoting Fed.R.Civ.P. 56). There must be more than just a factual dispute; the fact in question must be material and readily identifiable by the substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986).
By reviewing substantive law, the court may determine what matters constitute material facts. Id. "Only disputes over facts that might affect the outcome of the suit under governing law will properly preclude the entry of summary judgment." Id. at 248. A dispute about a material fact is "genuine" only if the evidence is such that "a reasonable jury could return a verdict for the nonmoving party." Id.
[T]he court is obliged to credit the factual asseverations contained in the material before it which favor the party resisting summary judgment and to draw inferences favorable to that party if the inferences are reasonable (however improbable they may seem).Cole v. Cole, 633 F.2d 1083, 1092 (4th Cir. 1980). Affidavits filed in support of defendants' Motion for Summary Judgment are to be used to determine whether issues of fact exist, not to decide the issues themselves. United States ex rel. Jones v. Rundle, 453 F.2d 147 (3d Cir. 1971). When resolution of issues of fact depends upon a determination of credibility, summary judgment is improper. Davis v. Zahradnick, 600 F.2d 458 (4th Cir. 1979).
III. Contract Claims
Defendants' arguments in support of their motion can be reduced to one plain statement — as a matter of law, plaintiff was an at-will employee. While plaintiff does not have in his possession a document captioned "employment contract," he has produced letters and drafts that could lead a reasonable fact finder to conclude that his relationship with defendants was contractual rather than at-will. In North Carolina, ambiguities in written instruments are to be strictly construed against the drafting party. Station Associates, Inc. v. Dare County, 501 S.E.2d 705 (N.C.App. 1998).
In Kurtzman v. Applied Analytical Industries, Inc., 347 N.C. 329 (1997), the court held, as follows:
North Carolina is an employment-at-will state. This Court has repeatedly held that in the absence of a contractual agreement between an employer and an employee establishing a definite term of employment, the relationship is presumed to be terminable at the will of either party without regard to the quality of performance of either party.Id., at 331. While dissenting from the conclusion drawn by the majority, Justice Frye explained the at-will presumption:
The general rule of employment at will is more accurately construed as a rebuttable presumption which can be overcome by the words and conduct of the parties, allowing a jury to find that the parties in fact reached certain agreements within a contract of employment.Id., at 335. Clearly, Kurtzman stands for the proposition that an employer's assurances of continued employment do not remove the at-will presumption, and even the additional consideration of an employee relocating his residence to accept the employment will not alter this status.
In this case, plaintiff has presented a writing drafted by USCC that specifies a starting date, annual compensation, provision for a bonus "annually upon successful completion of first and second years of employment," stock options, moving expenses, and the use of a company vehicle. Defendants also promised, plaintiff alleges, that when plaintiff moved to the Avery/Mitchell facility, they would pay a second set of moving expenses and his mortgage until the house in Pamlico County sold.
Unlike the plaintiff in Kurtzman, plaintiff is not contending that his relocation (from Pamlico County) rebuts the at-will presumption. Rather, he claims that the letter of July 28, 1997, along with the promise to pay his relocation expenses, including his Pamlico County mortgage, are evidence that he was not an at-will employee and should be submitted to a jury. The undersigned is in agreement with this proposition, inasmuch as the July 23, 1997, letter, while not a model of clarity, could be construed to provide for a two-year period of employment, especially where, in accordance with North Carolina law, the ambiguities are construed against the drafter. Due to the fact that CCA has also availed itself of alternative pleading, the undersigned will recommend that both plaintiff's claim for breach of contract and his alternative claim for tortious interference with contract move forward to trial.
IV. Statutory Claims
Plaintiff also asserted causes of action under the Fair Labor Standards Act ("FLSA") and the Wage and Hour Act. Although plaintiff has stated that his FLSA claim has been abandoned, the record does not indicate that the parties have filed a Rule 41 stipulation of dismissal as to that claim. The undersigned, therefore, will recommend that the FLSA claim be dismissed with prejudice as a matter of housekeeping.
As to the claim under the Wage and Hour Act, plaintiff contends that unpaid sums on an employment contract that has been breached or tortiously interfered with are "compensation" or "wages" which are due and payable to him as an employee within a short period of time after his services are terminated. No party has cited the court to any North Carolina case that discusses whether a breach of a contract of employment is subject to the remedial provisions of the Act, which include penalties and the collection of attorneys fees. The court has also reviewed North Carolina law and can find no cases precisely on point. Plaintiff stated in his deposition that "every week that I worked, I got paid for." Stewart Depo., at 103. While plaintiff's citation of the language of Chapter 95-25.2(16) of the North Carolina General Statutes gives one pause, the provision simply defines "wages" as "compensation for labor or services rendered." Id. Plaintiff's claim is not for "labor or services rendered" because he admits he has been fully compensated for each day of employment; rather, plaintiff seeks recompense for defendants' alleged breach or tortious interference with an interest in property — a contract. To hold defendants liable under the remedial provisions of the Wage and Hour Act would be to expose employers to multiple liability and imposition of attorneys' fees where they simply contest the existence of a contract. Such a reading of the Wage and Hour Act would chill an employer's ability to lawfully challenge the existence of a contract. It is one thing to allegedly breach a contract of employment, but quite a different matter to fail to pay a worker for "labor and services rendered. . . ." While North Carolina does not keep a legislative record that would assist courts in determining legislative intent, review of the entire text of the Wage and Hour Act and annotated cases indicates that the law was intended and applied in such a manner as to discourage employers from withholding wages and other benefits earned by workers as a product of their labor or services Plaintiff's remedies are found in contract and in the alternative claim for tort. The undersigned, therefore, must recommend that summary judgment be granted on plaintiff's wage-and-hour claim.
V. Cross Motion for Summary Judgment
In count one of his complaint, plaintiff seeks damages both for breach of the alleged contract of employment and for the alleged failure of defendants, upon plaintiff's moving to Avery/Mitchell, to pay his mortgage on his house in Pamlico County until it sold. Plaintiff did not put his request in the form of a motion, but on page five of his "Memorandum in Opposition to Defendant's Motion for Summary Judgment." Even if the court were to consider plaintiff's request as a motion, though not filed in the form of a motion as required by Local Rule 7.1, it would be untimely, for the deadline for filing dispositive motions ran on January 6, 1999, and plaintiff filed his request on January 28, 1999. The undersigned, therefore, will recommend that plaintiff's "motion" for partial summary judgment contained in his response to defendants' motion be denied as not in compliance with Rule 7, Federal Rules of Civil Procedure, Local Rule 7.1, and the time limitations contained in the Pretrial Order.
RECOMMENDATION
IT IS, THEREFORE, RESPECTFULLY RECOMMENDED that
(1) defendants' Motion for Summary Judgment be ALLOWED as to plaintiffs' claims under the Fair Labor Standards Act and the Wage and Hour Act; and
(2) defendants' Motion for Summary Judgment be DENIED as to plaintiffs' claim for breach of contract and alternative claim for tortious interference with a contract; and
(3) plaintiff's "motion" for partial summary judgment, contained in his response, be DENIED for the reasons discussed above.
The parties are hereby advised that, pursuant to 28, United States Code, Section 636(b)(1)(C), written objections to the findings of fact, conclusions of law, and recommendation contained herein must be filed within ten (10) days of service of same. Failure to file objections to this Memorandum and Recommendation with the district court will preclude the parties from raising such objections on appeal. Thomas v. Arn, 474 U.S. 140 (1985), reh'g denied, 474 U.S. 1111 (1986); United States v. Schronce, 727 F.2d 91 (4th Cir.), cert. denied, 46 U.S. 1208 (1984).
This Memorandum and Recommendation is entered in response to defendants' Motion for Summary Judgment (#18) and plaintiff's "motion" for summary judgment contained in his response (#29).