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BRAUN v. KELSEY-HAYES CO.

March 14, 1986

DOUGLAS M. BRAUN
v.
KELSEY-HAYES CO.



The opinion of the court was delivered by: KELLY

 KELLY, J.

 The plaintiff Douglas M. Braun filed the underlying action against the defendant Kelsey-Hayes Co. following his termination from employment as a safety engineer at the defendant's fabricating plant in Philadelphia. Jurisdiction is based upon diversity. The plaintiff's complaint alleges three causes of action: Count I, breach of oral representations in an employment contract; Count II, breach of a severance pay and benefits contract; and Count III, wrongful discharge. Presently before the court is the defendant's motion for summary judgment on all counts of the complaint. For the following reasons, the defendant's motion will be granted as to Counts I and III and denied as to Count II.

 The party moving for summary judgment pursuant to Fed. R. Civ. P. 56(c) has the burden of demonstrating that there is "no genuine issue as to any material fact" and that he is entitled to judgment as a matter of law. 10A Wright, Miller & Kane, Federal Practice & Procedure: Civil 2d § 2727 at 133 (1983). Facts asserted by the party opposing the motion are regarded as true if supported by affidavits or other evidentiary material. Id. at 127-28. In deciding the motion, all doubts must be resolved in favor of the party opposing summary judgment. Wright v. Federal Machine Co., Inc., 535 F. Supp. 645, 647 (E.D. Pa. 1982).

 COUNT I

 Count I of the complaint alleges that at the time of the plaintiff's hiring, as part of his employment contract, the defendant verbally assured the plaintiff that he would retain his job as long as he performed it satisfactorily. The plaintiff claims that the terms of this contract are properly ascertained by examining all surrounding circumstances of the parties' relationship. The plaintiff has testified at deposition that he was also promised that any reductions in force would be made on the basis of job performance rather than employee seniority. The plaintiff also claims that the facts and allegations set forth in the complaint and in deposition testimony illustrate that he was fired for being a "whistle blower" in carrying out his duties and responsibilities as a safety engineer; the plaintiff alleges this violated a covenant of good faith and fair dealing as implied by his employment contract.

 The defendant argues he is entitled to summary judgment of Count I. First, the defendant correctly states that the plaintiff has the burden of overcoming the presumption under Pennsylvania law that employers may terminate employees at will for any reason, at any time, absent a contract or statute which provides otherwise. Fleming v. Mack Trucks, 508 F. Supp. 917, 920 (E.D. Pa. 1981). Under Pennsylvania law, a representation that employment is guaranteed "so long as" the job is performed satisfactorily is too ambiguous to modify the strong presumption that contracts of employment of indefinite tenure are "at-will", and accordingly, subject to termination without cause. Geib v. Alan Wood Steel Company, 419 F. Supp. 1205, 1207-09 (E.D. Pa. 1976); see also Fleming, 508 F. Supp. at 920. It is not necessary to follow the plaintiff's suggestion to look beyond the terms of the alleged oral contract and determine an intended duration of employment through evidence of the surrounding circumstances of the parties' relationship. The plaintiff's reliance on Hansrote v. American Industrial Technologies, Inc., 586 F. Supp. 113 (W.D. Pa. 1984), aff'd 770 F.2d 1070 (3d Cir. 1985) for this proposition is misplaced. There is no indication that the plaintiff was guaranteed employment for a specific duration. Rather, the plaintiff was employed at the defendant's will. Thus, the alleged oral representation by the defendant's agent that the plaintiff was guaranteed employment "as long as he performed satisfactorily" is insufficient as a matter of law to create a cause of action for breach of the plaintiff's contractual claims in Count I.

 Next, the defendant argues that no evidence exists to prove that the plaintiff was laid off or fired on the basis of seniority, because it is impossible for seniority to have been a basis for the termination of employment where it is undisputed that the plaintiff was the only employee in his job classification. Accordingly, the defendant asserts that it is a matter of law that no "breach" of this alleged oral contract could have occurred. The plaintiff has offered no evidence to rebut the defendant's conclusion. At deposition, the defendant stated he was the only safety engineer employed by defendant Kelsey-Hayes. However, he claimed that his supervisor, the Safety Manager, should have been laid off rather than he because his performance and training exceeded hers. Even if true, this assertion has no bearing on the question of whether the plaintiff was laid off on a seniority basis. Rather, it amounts to a contention that the defendant management erred in its choice of which employee to terminate. The defendant's retention of the supervisor and firing of the plaintiff simply does not evidence or indicate a seniority based decision; and it is not the province of the court or jury to second guess managerial decisions. Accordingly, it is a matter of law that no breach of the alleged oral contract regarding seniority occurred.

 Lastly, the defendant asserts that the plaintiff has presented insufficient evidence as a matter of law to interpret and maintain Count I as a cause of action for breach of an implied covenant of good faith. Section 205 of the Restatement Second of Contracts (1965) states that every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement. The plaintiff's complaint does not explicitly state that the defendant breached its contract with the plaintiff by violating an implied covenant of good faith and fair dealing. However, facts are alleged in Count I which communicate a theory that the defendant was terminated from employment because his conscientious performance as a safety engineer proved embarrassing to the defendant. The plaintiff later characterized these events (in its response to the defendant's motion for summary judgment) as a breach of the covenant of good faith.

 Sitting in diversity jurisdiction the court is constrained by the requirement that "a federal court must be sensitive to the doctrinal trends of the state whose law it applies, and the policies which inform the prior adjudications by the state courts." Becker v. Interstate Properties, 569 F.2d 1203, 1206 (3d Cir. 1977), cert. denied 436 U.S. 906, 56 L. Ed. 2d 404, 98 S. Ct. 2237 (1978). Certain states have enhanced the position of an employee-at-will. For example, the Massachusetts Supreme Court implied into the employment at-will relationship a requirement of good faith in Fortune v. National Cash Register Co., 373 Mass. 96, 364 N.E. 2d 1251 (1977), which affirmed judgment for the employee based on the jury's finding that his termination after 25 years of employment as a salesman was motivated by the employer's bad faith desire to avoid payment of certain bonuses. However, Pennsylvania has not implied a requirement of good faith into the at-will employment contract.

 The Third Circuit has held that a claim for breach of an implied covenant of good faith in an at will employment contract fails "unless some modification of Pennsylvania's adherence to the discharge at will doctrine could be predicted, since it would be to no avail to plaintiff to claim breach of an express contract of employment which would have been terminable immediately thereafter at the option of the employer." Bruffett v. Warner Communications, Inc., 692 F.2d 910, 913 (3d Cir. 1982). The plaintiff cites Shipkowski v. U.S. Steel Corp., 585 F. Supp. 66 (E.D. Pa. 1983) as authority for ascertaining a cause of action in an at-will contract pursuant to an implied covenant of good faith. However, in the circumstances of the instant case, the reliance is misplaced. The good faith action in Shipkowski (which was explicitly alleged in the complaint) was maintained precisely because the length of the plaintiff's employment and other facts indicated a possibility that the at-will doctrine had been modified. Here, there is no indication that the plaintiff can satisfy the burden of overcoming the presumption of at-will employment, as discussed above. Accordingly, the interpretation of Count I as an action for violating a covenant of good faith is inappropriate as a matter of law.

 In conclusion, the plaintiff has failed to state a cause of action in Count I upon which relief may be granted, and there is no genuine issue as to any material fact. Judgment will be entered for the defendant as to this count.

 COUNT II

 According to the plaintiff, Count II of his complaint alleges that at the time of his termination he agreed not to contest it with higher levels of management on the condition that his medical benefits and 75% of his salary would be continued through November, 1983. The plaintiff states that in order to obtain these benefits, on April 27, 1983 he threatened to tell defendant President Koavar of illegal safety and health practices at the plant. The plaintiff asserts that in response, defendant's agent, K. W. Spahr, promised the severance benefits would be continued to November, 1983, and claims the defendant was bound by these alleged oral representations. According to the plaintiff, the defendant subsequently breached this agreement by terminating the plaintiff's severance pay on June 1, 1983 and ending his Blue Cross/Blue Shield coverage on August ...


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