NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-3105-99T1
CYNTHIA L. MITA,
Plaintiff-Appellant,
v.
CHUBB COMPUTER SERVICES, INC.,
CHUBB PROFESSIONAL RESOURCES,
INC. and RICHARD M. SARGENT,
individually and in his official
capacity,
Defendant-Respondent.
_________________________________
Argued February 7, 2001 - Decided March 2, 2001
Before Judges Baime, Wallace, Jr. and Lintner.
On appeal from Superior Court of New
Jersey, Law Division, Somerset County,
L-1618-97.
W. Cary Edwards and Jamie P. Clare
argued the cause for appellant
(Edwards & Caldwell, attorneys for
appellant; Mr. Edwards, of counsel;
Thomas G. Griggs, on the brief).
Brian D. Sullivan argued the cause for
respondent (Roberts & Finger, attorneys;
Joel L. Finger, of counsel; Mr. Sullivan,
on the brief).
The opinion of the court was delivered by
BAIME, P.J.A.D.
Plaintiff appeals from a summary judgment dismissing her
complaint for wrongful termination of employment. She asserts
that defendants Chubb Professional Resources, its division Chubb
Computer Services, Inc., and the division's chief executive
officer Richard Sargent violated their agreement not to fire her
for refusing to sign a non-compete clause. We disagree and
affirm the summary judgment.
I.
Plaintiff commenced her employment with Chubb Computer
Services in 1990 as a technical manager. She was subsequently
promoted to operations director. Chubb trained and placed
computer professionals with various businesses. Plaintiff's job
was to recruit and assign such professionals in return for
commissions.
At the time plaintiff was hired she signed an "Employee
Acknowledgment" which evidenced her status as an at-will
employee. The acknowledgment read:
The employment of any Chubb Programmer
Resources employee can be terminated by Chubb
Programmer Resources or the employee, with or
without cause and with or without notice, at
any time.
Plaintiff also received an employee handbook which re-
emphasized her at-will status, stating in pertinent part:
The employment relationship which exists
between The Chubb Institute and each of its
employees is employment-at-will. Under this
relationship, any employee is free to end his
or her employment with The Chubb Institute at
any time for any reason with or without prior
notice. Likewise, The Chubb Institute may,
at any time, decide to end an individual's
employment with or without cause or prior
notice, at its sole discretion.
This handbook sets forth certain procedures
and guidelines which The Chubb Institute may
or may not choose to follow. The statements
and contents of this handbook are not
promises of any kind by the Chubb Institute,
and The Chubb Institute reserves the right to
terminate an individual's employment with or
without cause, or to charge wages and/or any
other term or condition of employment of any
employee without any prior consultation or
agreement with any employee.
The handbook, amended in 1995, also outlined the procedure
whereby an employee's status could be changed. The handbook
stated that an employee's at-will status could be changed only by
written documentation which: (1) was signed by Chubb Computer
Services' President and the individual employee, (2) specifically
named the individual employee, (3) expressly stated that the
named employee was not employed at-will, and (4) set forth the
specific duration and terms of the individual's employment by
Chubb Computer Services.
In April of 1995, Chubb decided to expand the use of its
non-compete clause throughout the organization to include those
thought to be "major salespeople." In May of 1995, at a meeting
conducted by her immediate supervisor, Henry Crouse, plaintiff
and other sales representatives were requested to sign a non-
compete agreement. The agreement stated in relevant part:
During the term of this agreement and for one
(1) year following termination of Employee's
employment with [Chubb] for any reason,
Employee will not directly or indirectly
solicit or accept any business that is
competitive with [Chubb] with respect to any
of (15) customers of [Chubb] which will be
identified by [Chubb] at the time of such
termination.
Crouse informed those in attendance that they should review the
non-compete agreement and formulate any questions, which would be
addressed at a subsequent meeting.
A second meeting regarding the non-compete agreement was
held in May 1995, with plaintiff in attendance. At this meeting,
plaintiff and her fellow employees voiced their concerns
regarding the agreement, and submitted a list of questions to
Crouse about the ramifications for failing to sign the agreement.
Crouse then consulted with Richard Sargent.
During a third meeting, Crouse presented plaintiff and the
other employees with answers to many of their questions.
Particularly, plaintiff was told that those employees who chose
not to sign the non-compete agreement would have their
commissions reduced by 15%. Crouse also stated that Chubb would
not provide any sort of "package" for those employees who signed
the agreement and were subsequently terminated. Plaintiff asked
Crouse whether or not the 15% reduction was a "tradeoff," in that
she would not be later fired for her refusal to sign. Crouse
answered that he did not know, and would have to refer the
question to Sargent.
Within a day or two of the third meeting, Sargent conducted
a lunch meeting with plaintiff. Plaintiff attempted to convince
Sargent that it was unnecessary for her to sign the agreement
because she only placed computer professionals with a Chubb
subsidiarySee footnote 11. Plaintiff and Sargent also discussed the
consequences of plaintiff's refusal to sign the agreement.
Plaintiff stated that Sargent told her she would not be fired if
she did not sign the agreement. Plaintiff admitted, however,
that Sargent never directly stated that she would not be fired in
the future for not signing the non-compete clause. Plaintiff
nevertheless "felt as though it was implied." Plaintiff stated
that Sargent "gave [her] the impression...that this problem was
never going to come up again, that [she] was not going to be
asked to sign this again, and that [she] would not be fired for _
it was an exchange."
After conferring with Sargent, Crouse memorialized the 15%
reduction in commission in a memorandum to plaintiff dated May
17, 1995. The memorandum stated in relevant part:
If you choose not to sign the agreement your
commission eligible account revenue will be
reduced by 15% effective June 1, 1995. This
reduction will affect all account revenue,
not just new placement for future
commissions.
The reduction of commissions for non-
signature is a one-time levy, and will not be
re-adjusted in the future.
This agreement is not to be viewed as a
negative reflection on your performance, or
lack of trust, but it is necessary to further
protect the expanding interest of [Chubb].
Plaintiff, thereafter refused to sign the non-compete agreement,
and her commissions were reduced by 15% starting in June 1995.
In July 1995 plaintiff was informed that Sargent had
directed that she could not open new accounts with clients other
than Chubb subsidiaries because of her failure to sign the
agreement. Moreover, plaintiff was told that she would not be
promoted or receive additional account responsibilities, and any
salary increases would be reduced.
In April of 1997, Eleanor May, director of human resources
for Chubb, approached plaintiff and again requested that she sign
the non-compete agreement. Plaintiff told May that she could not
believe that this subject was coming up again because she had
been penalized for the past two years for refusing to sign the
agreement. Plaintiff asked May whether or not she could be fired
for refusing to sign again, to which May responded "no, no, no,
don't worry about that, you can't be fired."
On June 3, 1997, after completing a report regarding her
contacts outside of Chubb, plaintiff was instructed to execute
the non-compete agreement or she would be fired immediately.
Plaintiff's requests to consult an attorney or take the form home
were denied. Plaintiff refused to sign the form and was
immediately fired.
Sargent stated that plaintiff was ordered to sign the non-
compete agreement because he learned she and Crouse were
attempting to form a company that would compete with Chubb.
Sargent testified that the non-compete agreement was necessary to
ensure Chubb's interests were protected. Plaintiff and Crouse
formed a new company shortly after plaintiff's termination.See footnote 22
Plaintiff brought this action, contending that defendants
breached their agreement not to terminate her employment for her
refusal to sign the non-compete clause. She also asserted that:
(1) defendants committed fraud by repeatedly representing that
she would not be fired, (2) defendants breached an implied
covenant of good faith and fair dealing, (3) defendants were
estopped from terminating her employment because of their
promises not to do so, and (4) Chubb improperly withheld
commissions to which she was entitled following her discharge.
The Law Division granted defendants' motion for summary
judgment. The judge framed the issues in terms of whether: (1)
plaintiff's evidence was sufficient to permit a rational
factfinder to conclude that defendants promised plaintiff's
employment would never be terminated for her refusal to sign a
non-compete agreement and (2) if such a promise was made, was it
enforceable. As to the first question, the judge found no
credible evidence supporting plaintiff's claim that she had been
promised she would never be terminated on the basis of her
refusal to sign a non-compete agreement. With respect to the
second issue, the judge concluded that even if such a promise had
been made, it was not supported by adequate consideration. The
judge further concluded that plaintiff's claims of breach of an
implied covenant of good faith and fair dealing, fraud, and
promissory estoppel were not supported by the evidence presented.
Finally, the judge determined that plaintiff's right to
commissions terminated upon her discharge.
II.
We first address plaintiff's argument that she was
unlawfully discharged for refusing to sign the non-compete
agreement. This contention hinges upon the factual claim that
defendants promised plaintiff she would never be terminated for
refusing to sign the non-compete provision. We agree with the
Law Division judge that the evidence presented was not sufficient
to permit a rational factfinder to resolve this factual issue in
plaintiff's favor.
Brill v. Guardian Life Ins. Co. of Am.,
142 N.J. 520, 540 (1995). The evidence was so "one-sided that
[defendants] must prevail as a matter of law."
Ibid.;
see also
R. 4:46-2.
We begin with the settled principle that "an employer may
fire an employee for good reason, bad reason, or no reason at all
under the employment-at-will doctrine."
Witkowski v. Thomas J.
Lipton, Inc.,
136 N.J. 385, 397 (1994);
Velantzas v. Colgate-
Palmolive Co.,
109 N.J. 189, 191 (1988);
English v. College of
Medicine & Dentistry,
73 N.J. 20, 23 (1977);
Savares v. Pyrene
Manufacturing Co.,
9 N.J. 595, 600 (1952). An employment
relationship "remains terminable at the will of either an
employer or employee, unless an agreement exists that provides
otherwise."
Witkowski v. Thomas J. Lipton, Inc., 136
N.J. at 397
(citing
Bernard v. IMI Sys., Inc.,
131 N.J. 91, 105-06 (1993);
Erickson v. Marsh & McLennan Co.,
117 N.J. 539, 561 (1990)).
There are exceptions to the employment-at-will doctrine.
For example, if a plaintiff can prove that an employment manual
containing job security and termination procedures could
reasonably be understood by an employee to create binding duties
and obligations between the employer and its employees, the
manual will constitute, in effect, a unilateral offer to contract
that an employee may accept through continued employment.
Woolley v. Hoffmann-LaRoche,
99 N.J. 284, 309 (1986). An
employee manual can create an implied contract with some guaranty
of job protection even where the employment relationship is
otherwise at will.
Jackson v. Georgia-Pacific Corp.,
296 N.J.
Super. 1, 11 (App. Div. 1996),
certif. denied,
149 N.J. 141
(1997). Even where an employee manual does not create an implied
contract, modification of the employment-at-will status may occur
through oral promises of the employer.
Reynolds v. Palnut
Company,
330 N.J. Super. 162, 171 (App. Div. 2000). Testimonial
evidence presented by an employee may suffice to establish that
some degree of job security or protection was intended.
Ibid.
An employer is free to change the terms of employment.
Ackerman v. The Money Store,
321 N.J. Super. 308, 321 (Law Div.
1998). This power includes the right to impose new requirements
on the employee.
See Alexander v. Kay Finlay Jewelers,
208 N.J.
Super. 503, 507 (App. Div.),
certif. denied,
104 N.J. 466 (1986);
Anthony v. Jersey Central Power & Light Co.,
51 N.J. Super. 139
145 (App. Div. 1958). Moreover, an employment-at-will
relationship may be changed by the parties following the
commencement of the employment agreement. While it is true that
an employer can discharge an at-will employee at any time and for
any reason, "this principle is a consequence of the fact that the
length of an 'at will' employee's engagement is not controlled by
contract."
Nolan v. Control Data Corp.,
243 N.J. Super. 420, 429
(App. Div. 1990). This does not mean that the parties cannot
limit the employer's power to discharge or similarly confine its
authority with respect to other aspects of the employment
relationship.
Ibid.
We thus look initially to the original employment agreement
to determine the parties' relationship. The acknowledgment and
employee manual are crystal clear in that respect. Both
documents stated unequivocally that plaintiff is an at-will
employee and may be discharged at any time and for any reason.
Moreover, the employee manual defined with precision the method
by which the employment-at-will relationship could be altered,
i.e., by a written document signed by Chubb's president and by
the specifically named individual employee expressly stating the
duration and specific terms of the worker's employment and
stating that the employment is not at will.
While we have found no reported New Jersey decisions dealing
with the precise issue, it is arguable that an employee manual
can narrow and define the procedure or method by which an
employment-at-will contract can be changed by the parties. Where
an employee manual clearly and unequivocally provides the
exclusive means by which an employment-at-will relationship can
be altered, we perceive no sound jurisprudential or public policy
reason prohibiting enforcement. This principle derives from, and
is corollary to, the rule first stated in
Woolley v. Hoffman-
LaRoche, 99
N.J. at 300, that an employee manual may create an
implied contract defining the employment relationship. Thus
analyzed, "the manual is an offer that seeks the formation of a
unilateral contract _ the employees' bargained-for action needed
to make the offer binding being their continued work when they
have no obligation to continue." 99
N.J. at 302. In this
context, however, the employee manual sets forth the conditions
for employment. The employee, by continuing to work, accepts the
employer's offer and the requisite conditions of employment.
We note the limited contours of our holding. The unilateral
contract analysis is perfectly adequate for that employee who was
aware of the manual and who continued to work intending that
continuation to be the action in exchange for the employer's
promise. Therefore, the conditions of employment _ preservation
of the employee's at-will status and limitation of the mechanism
to alter that relationship _ must be placed in a prominent
position in the manual.
Cf. Nicosia v. Wakefern Food Corp.,
136 N.J. 401, 415 (1994) (a disclaimer that an employee manual is
intended to convey a unilateral offer must be prominently
displayed);
accord:
Woolley v. Hoffman-LaRoche, 99
N.J. at 309;
Falco v. Community Med. Center,
296 N.J. Super. 298, 319 (App.
Div. 1997),
certif. denied,
149 N.J. 141 (1997);
Catalane v.
Gilian Instrument Corp.,
271 N.J. Super. 476, 494 (App. Div.),
certif. denied,
136 N.J. 298 (1994);
Preston v. Claridge Hotel &
Casino,
231 N.J. Super. 81, 86 (App. Div. 1989);
Ware v.
Prudential Insurance Co.,
220 N.J. Super. 135, 143 (App. Div.
1987),
certif. denied,
113 N.J. 335 (1988). The typeface print
size, heading, and the degree to which it is separated from other
material or set off must be sufficient to attract the reader's
attention.
See Jackson v. Georgia-Pacific Corp., 296
N.J. Super.
at 15.
Further, there might be situations in which enforcement of
such a provision would be unconscionable. We recognize that the
employer and employee often have unequal bargaining positions.
In other contexts, the doctrine of unconcionability has been
developed and applied to protect the disadvantaged party in a
one-sided, adhesion contract.
Woolley v. Hoffman-LaRoche, 99
N.J. at 303 n.9 (citing S. Marrinan,
Employment At-Will:
Pandora's Box May Have an Attractive Cover,
7
Hamline L. Rev.
155, 193 (1984)). So too, an employer's conduct in conveying a
promise of job security in order to forestall an employee's
resignation may be so egregious as to require application of the
doctrine of promissory estoppel notwithstanding the disclaimer in
an employee manual.
Ibid.;
see also Restatement (Second) of
Contracts §590 (doctrine renders binding a promise when the
promissor should reasonably expect the promisee or a third party
to act or forbear to act in reliance on the promise, if the
promisee or third party does so and justice requires).
Applying these principles, it is clear that the May 1995
memorandum was insufficient to effect an alteration of
plaintiff's status as an employee-at-will. While the memorandum
was signed by Chubb's chief executive officer, it did not
expressly state that plaintiff was no longer to be regarded as an
at-will employee. Nor did it set forth the specific duration and
terms of plaintiff's employment. The memorandum did not comport
with the employee manual's requirements pertaining to a change in
an employee's at-will status.
We add for the sake of completeness that the memorandum does
not support plaintiff's claim of a promise on Chubb's part never
to fire her for refusing to sign a non-compete agreement. The
agreement does not say that plaintiff will not be terminated in
the future for refusal to sign an agreement not to compete.
Chubb never promised that it would not pursue the matter in the
future. Nor does the parties' conduct suggest such an agreement.
It will be recalled that plaintiff was approached shortly after
the memorandum was issued and was again requested to sign the
agreement. Plaintiff's continued refusal to sign a non-compete
agreement evidenced her desire to maintain her at-will status.
As we noted earlier, plaintiff ultimately formed a new company to
compete with Chubb. If this case were permitted to proceed to
trial, plaintiff's evidence could not withstand defendants'
motion for judgment.
Brill v. Guardian Life Ins. Co. of Am., 142
N.J. at 540 (citing
R. 4:37-2(b)).
III.
Plaintiff's remaining arguments do not require extended
discussion.
R. 2:11-3(e)(1)(E). We have concluded that the
evidence presented did not support plaintiff's claim she was
promised she would never be fired for refusing to sign a non-
compete agreement. While we harbor serious reservations
concerning the Law Division judge's alternative holding that if
Chubb made such a promise it was not supported by adequate
consideration, we need not address that issue. Plaintiff's
causes of action for fraud, breach of an implied covenant of good
faith and fair dealing, and promissory estoppel are derivative of
her contract claim for which we have found no basis. These
claims clearly lack merit.
Finally, we reject plaintiff's argument that she was
entitled to commissions following her termination. The Law
Division judge properly dismissed this claim.
Affirmed.
Footnote: 1 1It should be noted that defendants dispute plaintiff's claim
that she was only marketing to this Chubb subsidiary. Defendants
claim that plaintiff, in fact, had contact with at least nine
independent clients.
Footnote: 2 2Unlike plaintiff, Crouse signed an anti-compete agreement. In
unrelated litigation, the Chancery Division found that the noncompete
clause was reasonable in its scope. The court enforced the anti-
compete provision.