This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2000).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C1-01-1141

 

 

Richard A. Hecht,

Appellant,

 

vs.

 

Interstate Power Company,

Respondent.

 

Filed April 2, 2002

Affirmed
Klaphake, Judge

Randall, Judge, dissenting

 

Martin County District Court

File No. C700581

 

 

James T. Hansing, 840 TriTech Center, 331 Second Avenue South, Minneapolis, MN  55401 (for appellant)

 

Phillip A. Kohl, III, Christian & Peterson, P.A., 314 South Broadway, Albert Lea, MN  56007 (for respondent)

 

            Considered and decided by Randall, Presiding Judge, Klaphake, Judge, and Poritsky, Judge.*


U N P U B L I S H E D   O P I N I O N

KLAPHAKE, Judge

            Appellant Richard Hecht sued his former employer, Interstate Power Company, for breach of contract and promissory estoppel, alleging that he had been wrongfully terminated despite a promise of permanent employment.  The district court granted summary judgment in favor of Interstate Power.  Because the statements and representations on which appellant relies are too indefinite and lack the consideration required to transform at-will employment into a permanent position, we affirm.

D E C I S I O N

            “On appeal from a grant of summary judgment, we must determine whether any genuine issues of material fact exist and whether the district court erred in its application of the law.”  Patterson v. Wu Family Corp., 608 N.W.2d 863, 866 (Minn. 2000) (citation omitted).  The reviewing court must view the evidence in a light most favorable to the non-moving party.  Offerdahl v. Univ. of Minn. Hosps. & Clinics, 426 N.W.2d 425, 427 (Minn. 1988).  Because there is no serious dispute concerning the facts, the issue before this court is whether the district court erred in its application of the law.

            1.         Permanent Employment

            Under Minnesota law, employment is considered to be at will, terminable by either party at any time.  Martens v. Minn. Min. & Mfg. Co., 616 N.W.2d 732, 741 (Minn. 2000).  Even where an employer makes assurances seeming to indicate job permanence, the statements are generally considered mere statements of policy indicating only at-will employment.  Aberman v. Malden Mills Indus., Inc., 414 N.W.2d 769, 771 (Minn. App. 1987).  Thus, “the following terms indicate only an at-will contract: ‘permanent employment,’ ‘life employment,’ and ‘as long as the employee chooses.’” Id. (quoting Skagerberg v. Blandin Paper Co., 197 Minn. 291, 294-95, 266 N.W. 872, 874 (1936)).  Likewise, “[g]ood employees are taken care of,”  “career situation,” and “[we will] retire together” have been found insufficient to support a contract for permanent employment.  Ruud v. Great Plains Supply, Inc., 526 N.W.2d 369, 370 (Minn. 1995); Degen v. Investors Diversified Servs., Inc., 260 Minn. 424, 428, 110 N.W.2d 863, 866 (1961); Dumas v. Kessler & Maguire Funeral Home, Inc., 380 N.W.2d 544, 547 (Minn. App. 1986). 

            This general presumption of at-will employment can be overcome by presenting “objective evidence that the employer clearly intended to create a lifetime-employment contract.”  Gunderson v. Alliance of Computer Prof’ls., Inc., 628 N.W.2d 173, 181-82 (Minn. App. 2001) (citation omitted), review granted (Minn. July 24, 2001) and appeal dismissed (Minn. Aug. 17, 2001).  An employee who gives valuable consideration beyond “his customary daily services or otherwise giv[es] up more than one normally gives up when he agrees to take on a new employment” may successfully prove a claim of permanent employment.  Bussard v. College of St. Thomas, Inc., 294 Minn. 215, 223, 200 N.W.2d 155, 161 (1972).  Likewise, where the oral and written negotiations of the employer and employee clearly indicate an intent to offer and to accept permanent employment, the general presumption can be overcome.  Eklund v. Vincent Brass & Aluminum Co., 351 N.W.2d 371, 376 (Minn. App. 1984), review denied (Minn. Nov. 1, 1984). 

            Hecht relies on verbal and documentary evidence to support his claim of a contract of permanent employment.  He points to the statements of his supervisor, Duane Crawley, who told Hecht he “would be set for the rest of his career with the company * * * if he got the job” and that it would “enhance his pension when he got around to retiring.”  Similarly, Fred Lindeman, director of power generation for Interstate Power, interviewed Hecht for the position and assured him that the job was secure and that after the pending merger, “at least you will have a job.”  Second, Hecht relies on the actual job posting, which stated, “This position will not be impacted by the merger [and it] will exist [in the new company] and remain at the Fox Lake Plant.”  Hecht claims that he interpreted these statements and the job posting to mean that he had a job for as long as he wanted, until he retired.

            The statements of Crawley and Lindeman fall into the category of mere statements of policy, no different from the following statement, which was found to be insufficient to support a contract of permanent employment:  “we are offering you security and you will always have the security that you’re going to have Malden Mills to represent.” Aberman, 414 N.W.2d at 770.  These statements are not an objective manifestation of intent to form an enforceable contract, but are mere expressions of good will and create no more than at-will employment. 

            Nor are the statements of Crawley and Lindeman like those in Eklund, where the court concluded that statements of intent to offer security were sufficient to present a fact issue to a jury.  In Eklund, the employer negotiated his contract with the president of the company, who had hiring authority, and the president specifically acknowledged that the employee was adamant that he would not accept the job unless he received assurances of permanent employment.  Eklund, 351 N.W.2d at 374-75.  Here, neither Crawley nor Lindeman had hiring authority.  And although Lindeman was on the interview committee, Hecht’s hiring had to be approved by a superior in the company.  Further, while Hecht was interested in job security, his inquiries were not unequivocal.

            Similarly, the language of the job posting is too vague to support a contract of permanent employment.  The posting describes the job as merger-proof and as remaining in the company, which was true.  Hecht was one of a minority of non-union employees, fewer than 15 out of 300, who did not have to interview in order to retain his job after the merger.  He held the job for more than two years and received raises totaling $16,000.  As circumstances changed after the merger and the character of the Fox Lake plant changed, the decision was made to eliminate a number of jobs.  One of the policies behind the concept of at-will employment is that the employer must have the ability to make discretionary and independent judgments in employment situations.  Spanier v. TCF Bank Sav., 495 N.W.2d 18, 20 (Minn. App. 1993), review denied (Minn. Mar. 22, 1993). 

            Hecht argues that by giving up his union job, with its security and seniority privileges, he provided the sort of valuable consideration that could support a claim of permanent employment.  See Gunderson, 628 N.W.2d at 182-83.  However, the consideration must be “both uncharacteristic of the employment relation and regarded by the parties as consideration for a promise of job security.”  Id. (citation omitted).  Thus, salary reductions, forgoing other job opportunities, award of pension rights, or reduction in commissions are not sufficient consideration for permanent employment unless clearly regarded by the parties as such.  Id.  There is no indication in the record that Hecht expressly waived his union rights in exchange for his new position.

            While both Hecht and Interstate Power undoubtedly hoped that the job would remain secure and unchanging, the negotiations of the parties lack the specificity of terms or valuable consideration necessary to transform this at-will contract into one for permanent employment.  We therefore conclude that the district court’s decision is an accurate application of the law and that summary judgment was properly granted on Hecht’s breach of contract claim.

            2.         Promissory Estoppel

            An implied contract may be enforced where there is a

promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance * * * [where] injustice can be avoided only by enforcement of the promise.

 

Faimon v. Winona State Univ., 540 N.W.2d 879, 882 (Minn. App. 1995) (citations omitted), review denied (Minn. Feb. 9, 1996). 

            Promissory estoppel generally has no application where a contract exists, but an exception is sometimes recognized for at-will employment contracts.  Gorham v. Benson Optical, 539 N.W.2d 798, 801 (Minn. App. 1995).  Key factors include the existence of a definite promise and reasonable reliance by the employee, as well as action or forbearance in reasonable reliance on the promise.  Id. at 801-02. 

            Where, however, the employee produces no evidence that the employer made a clear and definite promise, the employee cannot proceed with a promissory-estoppel claim.  Spanier, 495 N.W.2d at 20-21.  In Spanier, the court found that the employee’s mere understanding or firm impression that his job offered long-term security, based on the employer’s commitment to his area of loan expertise, was not definite enough to support a claim of promissory estoppel, despite the fact that the employee had resigned his former employment in reliance.  Id.  Similar to the facts here, the employee in Spanier worked for a significant period of time at the new job before his termination, and at least one of the reasons for the employee’s termination was a change in the business plan of his employer.  Id. at 19-20.  As did the court in Spanier, we conclude that Hecht attempts to base his claim on his mere impression of a promise of security, rather than any clear and definite promise. 

            The district court also concluded that Hecht failed to present evidence of the third prong of promissory estoppel, that injustice could only be prevented by enforcing a promise of permanent employment. 

Numerous considerations enter into a judicial determination of injustice, including the reasonableness of a promisee’s reliance and a weighing of public policies in favor of both enforcing bargains and preventing unjust enrichment.

 

Faimon, 540 N.W.2d at 883 (footnote omitted).  Where the promise of employment is indefinite in its terms, an employee’s reliance becomes less reasonable and injustice less likely.  Id.  Because Hecht bases his reliance on an indefinite promise and because Interstate Power merely exercised its discretion two years later to make a business decision to eliminate a position, there is little injustice to Hecht and no unjust enrichment to Interstate to allow Hecht’s promissory estoppel claim to succeed.

            Essentially, Hecht’s promissory estoppel claim may be paraphrased as follows:  “I will keep this job as long as I want, for as many years as I feel like working, until I decide to retire.”  Stated in this way, it is clear that the promise is not definite enough to be enforced to the detriment of an employer’s discretion to make employment decisions.  See Spanier, 495 N.W.2d at 19-20.

            We therefore conclude that the district court did not err in granting summary judgment to Interstate Power and in dismissing Hecht’s breach of contract and promissory estoppel claims.

            Affirmed.  


 

 

 

RANDALL, Judge (dissenting)

 

            I respectfully dissent with the majority's decision, that even for purposes of surviving a motion for summary judgment, the record does not reflect enough disputed materials to find for appellant.  To me, the record shows a promise, Hecht relied on the promise, and injustice can be avoided only by giving Hecht a chance to enforce the promise. 

Richard Hecht began working for Interstate Power as a union employee in 1964.  By 1995, Hecht was head maintenance man at Interstate Power's Fox Lake Plant.  By a union contract, he enjoyed considerable job security and, by 1995, he was first in seniority at the plant.

            Through a series of mergers between 1995 and 1998, Interstate Power became a wholly owned subsidiary of Alliant Energy Corporation.  In 1996, prior to the merger, Interstate's superintendent of the Fox Lake plant, Duane Crawley, who was Hecht's direct supervisor and friend, urged Hecht to obtain a chief engineer's license and apply for the position of maintenance manager at Fox Lake.  Crawley, the only licensed engineer at Fox Lake, was at the point of retiring.  Minnesota safety regulations required a licensed engineer to be in the plant during operation, so the position of maintenance manager was created to prevent shutdown of the plant.  Thus it was in the company's interest that Hecht qualify and apply for the job.  That is why management personnel contacted Hecht. This position was a management-level position and not covered by the union contract.  Hecht obtained the license and, when the job was formally posted in March 1997, applied for the position. 

            The job posting stated that the position would not be affected by the pending merger among Interstate Power, Iowa Electric Service, and Wisconsin Power & Light, but would continue at Fox Lake after the merger.  Hecht discussed the job security prospects with Crawley and chief engineer Fred Lindeman.  Lindeman described the job as "permanent and secure" and one that "would not ever go away."  Crawley described the job to Hecht as "merger-proof" and one that would set him up until retirement.  Both men assumed that the job would continue until Hecht was ready to retire.  In July 1997, Hecht was hired for the position and gave up his union job-security benefits.  As part of the hiring, Hecht was ineligible for "transition package benefits" awarded to employees during the merger process and could not apply for any other job postings.

            In October 1998, Alliant Energy decided to eliminate Hecht's position of maintenance manager for claimed reasons of economy.  Fox Lake had been a cycling plant, open 24 hours a day most of the time; after the merger, it became a peaking plant, operating primarily during the day with fewer employees, all of whom eventually obtained chief-engineer licenses.  Hecht remained employed until October 1999 because of the necessity of having a licensed engineer at the plant.  He was terminated on October 31, 1999.

Hecht sued Interstate Power, alleging that it had breached its contract of permanent employment with him.  Alternatively, he asserted a claim in promissory estoppel.  The district court granted summary judgment to Interstate Power on both issues.  Hecht appeals from this judgment.

I.          Breach of Contract

 

Hecht alleges that respondent, through its representatives and the language of its job posting, made an offer of permanent and secure employment that would last until his retirement and that respondent breached this contract by terminating his employment.

            Under Minnesota law, employment generally is considered to be "at will," terminable by either party at any time.  Martens v. Minnesota Min. & Mfg. Co., 616 N.W.2d 732, 741 (Minn. 2000).  This general presumption can be overcome by presenting "objective evidence that the employer clearly intended to create a lifetime-employment contract."  Gunderson v. Alliance of Computer Prof'ls, Inc., 628 N.W.2d 173, 181-82 (Minn. App. 2001) (citation omitted), review granted (Minn. July 24, 2001) and appeal dismissed (Minn. August 17, 2001).  Thus, clear and unequivocal language in a contract could represent sufficient evidence.  Id at 182.  An employee who gives valuable consideration beyond "his customary daily services or otherwise giv[es] up more than one normally gives up when he agrees to take *** new employment" can support a claim of permanent employment.  Bussard v. College of St. Thomas, Inc., 294 Minn. 215, 223, 200 N.W.2d 155, 161 (1972).  Likewise, where the oral and written negotiations of the employer and employee clearly indicate an intent to offer and accept permanent employment, the general presumption can be overcome.  Eklund v. Vincent Brass & Aluminum Co., 351 N.W.2d 371, 376 (Minn. App. 1984), review denied (Minn. Nov. 1, 1984). 

Hecht argues that the job posting directly implied permanence to the position by stating that it was merger-proof.  Hecht also points out that the discussions, where management people solicited him to make the job switch, were for the company's benefit as well as his.  Hecht’s new job was listed as merger-proof. Of all the workers at the plant, he did not have to reapply for a job after the merger. 

I conclude that Hecht showed sufficient disputed facts to defeat a motion for summary judgment, particularly when all reasonable inferences have to be resolved in his favor.

II.        Promissory Estoppel

In addition to the issue of a contract, Hecht alleges that the statements made to him by respondent's representatives are sufficient to support a claim of promissory estoppel.  An implied contract can be found to be enforceable where there is a

promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance * * * [where] injustice can be avoided only by enforcement of the promise.

 

Faimon v. Winona State Univ., 540 N.W.2d 879, 882 (Minn. App. 1995) (quotation and citations omitted), review denied (Minn. Feb. 9, 1996).  Although promissory estoppel generally has no application where a contract exists, an exception is made in the case of at-will employment contracts to permit promissory estoppel recovery in appropriate circumstances.  Gorham v. Benson Optical, 539 N.W.2d 798, 801 (Minn. App. 1995). 

The majority concludes, "Hecht attempts to base his claim on his mere impression of a promise of security, rather than any clear and definite promise."  I disagree.  The facts show that clear and definite promises were made that the position was permanent.  In March 1997, a position for a maintenance manager was advertised.  The posting read,

This position will not be impacted by the merger with IES and WP&L.  This position will exist in IEC and remain at the Fox Lake Plant.

 

Interstate's superintendent of the Fox Lake plant and Hecht's direct supervisor, Duane Crawley stated that he "told Hecht that he would be set for the rest of his career with the company."  Crawley also said that he was on the committee that interviewed all the applicants and that it was his understanding that the job was "merger-proof."  During Hecht's interview for the job posting he mentioned job security concerns, and the head of the committee, Lindeman, "reassured Hecht that we needed him and that the job would be secure – meaning that it would be there as long as he wanted it."  Lindeman testified in his affidavit that the committee made it clear that Hecht

"would not have to worry about [the job] being eliminated in the future.*** It was our intent to hire him into a job he could keep until he retired."

 

The facts show that Crawley stated that if he had known that if Hecht took the job it was an "at-will" position he would never have told him to go after the job.  These statements are not just "mere impression[s] of a promise of security."  They are clear statements that the position was permanent and that Hecht would occupy that position until he retired.  These statements could reasonably be taken by a fact-finder as proof of Hecht's claims.

Hecht was induced and did rely on Interstate Power's promise that the position was permanent.  The facts show that Hecht argues he was persuaded to obtain his chief engineer's license and accept the job as maintenance manager at Fox Lake.  Hecht had to give up a secure job, study for the new position, and take and pass an exam for the job.  The record shows that Hecht expressed concern to Crawley about job security, and the job posting's language that the merger would not impact the position allayed his concerns.  It should be noted that Crawley approached Hecht to apply for the job.  Hecht was induced by the discussions that taking the new job would enhance his position when he eventually retired.

The majority states,

"[b]ecause Hecht bases his reliance on an indefinite promise and because Interstate Power is merely exercising its discretion two years later, to make a business decision to eliminate a position, there is little injustice to Hecht and no unjust enrichment to Interstate."

 

I disagree.  Hecht was induced to apply for a management position at a time when he was covered by a labor agreement and was senior on the list.  The company knew that his position on the list meant that he would be the last person laid off if employee cutbacks or layoffs were made.  As a result of taking the position, Hecht lost the security of the labor agreement and was no longer protected by that agreement in case of reductions.  Hecht knew that and sought specific promises and assurances that his job would continue until his retirement.  The job posting stated:

(1)  This position will not be impacted by the merger with IES and WP&L.

(2)  The position will exist in IEC and remain at the Fox Lake plant.

(3)  The responsibilities and salary will not change significantly.

By accepting this position, Hecht gave up transition-package benefits and was ineligible to apply for other job postings. 

It is unjust that an employee who worked for the same company for 33 years, had security under a labor agreement, gave that up on the company's promises, and accepted a job only to be terminated two years later, now cannot, at least, argue his case on the merits. 

This is an appeal from a motion for summary judgment.  It is not our duty to try the case on the merits.  I conclude that Hecht easily showed enough of a case to defeat a motion for summary judgment.  I respectfully dissent and conclude that the district court erred, on both issues, in granting summary judgment to Interstate Power.

 



* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.