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April 2, 1985

DORLESCA SALANGER, Plaintiff, against U.S. AIR, Defendant.

The opinion of the court was delivered by: MINER




 This action arises out of plaintiff Dorlesca Salanger's allegedly improper discharge from her employment with defendant U.S. Air. Jurisdiction is predicated upon 28 U.S.C. § 1332. A trial to the Court was held on August 7-9, 1984. *fn1" The final submissions of counsel were filed on November 16, 1984. There follow the findings of fact and conclusions of law mandated by Fed. R. Civ. P. 52(a).


 In 1967, plaintiff obtained employment with Mohawk Airlines ("Mohawk") as a salesperson and reservationist. During an initial nonsalaried training period, Ronald Bailey, a Mohawk training instructor, represented to plaintiff that, upon completion of her training, she would have job security and would be terminated only for just cause. *fn2" Allegedly relying on these statements, plaintiff completed the training program. She then was assigned to Mohawk's sales offices in Syracuse, New York. In 1972, Mohawk merged with Allegheny Airlines ("Allegheny") and plaintiff continued her employment under the new management. In 1978, at her request, plaintiff was reassigned to the Allegheny ticket counter at Hancock International Airport ("Hancock") in Syracuse as a "Customer Service Agent." In October of 1978, defendant acquired Allegheny and subsequently changed the name of the airline to U.S. Air. Plaintiff continued her employment at Hancock as an employee of defendant.

 At some point in 1980, defendant, through its Security Department and Customer Service Department, conducted an investigation of plaintiff's suspected involvement in the misappropriation of company funds. *fn3" On September 5, 1980, plaintiff was suspended from her position during the pendency of this investigation. Eventually, based upon the findings of the investigation, a criminal complaint was filed charging plaintiff with the crime of grand larceny in the third degree, N.Y. Penal Law § 155.30 (McKinney 1982), and a warrant for plaintiff's arrest was issued by a Town Justice of the Town of Dewitt. Pursuant to this warrant, plaintiff was arrested on September 10, 1980, and arraigned in the Town of DeWitt Justice Court. Thereafter, on September 24, 1980, plaintiff received a letter from defendant, dated September 19, 1980, notifying her that the investigation had been completed and that her employment was terminated. The letter also informed plaintiff that "[i]f you feel you have received unfair treatment you may pursue the matter through the Grievance Procedure." Plaintiff's Exhibit 8.

 In accordance with the Personnel Policy Guides and other corporate documents issued by defendant and its predecessors, which expressly provided for a grievance procedure to be available to employees terminated "for cause," Plaintiff's Exhibits 1, 2, 3, 4; Defendant's Exhibit AG, plaintiff exhausted the three grievance steps available to her. At the conclusion of the grievance proceedings, defendant adhered to its original determination to discharge plaintiff. Finally, on March 10, 1981, a grand jury in Onondaga County dismissed the charge of grand larceny in the third degree against plaintiff pursuant to N.Y. Crim. Proc. Law § 190.75 (McKinney 1982).Plaintiff then applied to defendant for reinstatement, but was refused an appointment to her former position or to any other position. *fn4"

 Plaintiff sets forth two claims arising from her termination and defendant's refusal to reinstate her upon the dismissal of the charges by the grand jury. *fn5" First, she alleges that, based upon the oral representations of Ronald Bailey and the language of the Personnel Policy Guides outlining a grievance procedure for those employees terminated for cause, a contract existed between her and defendant ensuring that she would be terminated solely for just cause. She contends that since the evidence before defendant was not sufficient to establish that she had misappropriated any funds, no just cause existed, and thus, the contract was breached. Second, plaintiff argues that defendant's refusal to reinstate her after the criminal charge aginst her was dismissed violated § 296(16) of the New York Executive Law which prohibits a corporation from "act[ing] upon adversely to the individual involved, any arrest or criminal accusation of such individual not then pending against that individual which was followed by a termination of that criminal action or proceeding in favor of such individual . . . in connection with the licensing, employment or providing of credit or insurance to such individual." N.Y. Exec. Law § 296(16) (McKinney 1982).


 A. Breach of Contract Claim

 Under New York law, absent a specific contractual or statutory provision to the contrary, an employer has an unqualified right to terminate an employee at will. Bergamini v. Manhattan and Bronx Surface Transit Operating Authority, 94 A.D.2d 441, 463 N.Y.S.2d 777, 782 (1st Dep't 1983) (Asch, J., dissenting), reversed, 62 N.Y.2d 897, 478 N.Y.S.2d 857, 467 N.E.2d 521 (1984); Albury v. New York Civil Service Commission, 32 A.D.2d 895, 895, 302 N.Y.S.2d 3, 4 (1st Dep't), aff'd, 27 N.Y.2d 694, 314 N.Y.S.2d 13, 262 N.E.2d 219 (1969). Plaintiff, however, alleges that a contractual qualification of defendant's authority to terminate existed in that Bailey's representations to her and the grievance procedures "recognize[d] the obligation of the defendant not to discharge an employee except for just cause." Plaintiff's Trial Brief at 3. Plaintiff relies exclusively on the New York Court of Appeals decision in Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458, 457 N.Y.S.2d 193, 443 N.E.2d 441 (1982). There, a publishing house employee resigned from his position to accept an employment offer from defendant, a competing publishing house. During negotiations over the position, defendant's representatives informed plaintiff that company policy permitted termination solely for just cause.A written job application, which plaintiff was required to sign, also stated that termination could occur solely for just cause. After working eight years for defendant and declining several other job offers in that period, plaintiff was terminated for no apparent reason. In holding that the issue whether a contract to terminate solely for just cause was formed presented a question of fact for trial even though no formal employment contract existed, the court noted:

 First, plaintiff was induced to leave Prentice-Hall with the assurance that McGraw-Hill would not discharge him without cause. Second, this assurance was incorporated into the employment application. Third, plaintiff rejected other offers of employment in reliance on the assurance. Fourth, appellant alleged that, on several occasions when he had recommended that certain of his subordinates be dismissed, he was instructed by his supervisors to proceed in strict compliance with the handbook and policy manuals because employees could be discharged only for just cause. He also claims that he was told that, if he did not proceed in accordance with the strict procedures set forth in the handbook, McGraw-Hill would be liable for legal action.

 57 N.Y.2d at 465-66, 457 N.Y.S.2d at 197. Here, because defendant's oral and written representations arguably induced plaintiff to obtain and continue employment with defendant and an express grievance procedure existed for those employees discharged for ...

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