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Heller v. Champion International Corp.

decided: December 6, 1989.

IRWIN HELLER, PLAINTIFF-APPELLANT, CROSS-APPELLEE,
v.
CHAMPION INTERNATIONAL CORPORATION, DEFENDANT-APPELLEE, CROSS-APPELLANT



Appeal from judgment of United States District Court for the District of Connecticut, Ellen Bree Burns, Chief Judge, granting judgment n.o.v. in favor of employer in action alleging breach of implied employment contract.

Oakes, Chief Judge, and Van Graafeiland and Pratt, Circuit Judges.

Author: Pratt

PRATT, Circuit Judge:

Irwin Heller appeals from a judgment of the United States District Court for the District of Connecticut, Ellen Bree Burns, Chief Judge, granting judgment n.o.v. in favor of Champion International Corporation ("Champion"), Heller's former employer. Heller claimed that various personnel documents provided to him during the course of his employment, combined with oral assurances from company officials, created an implied contract of employment under Connecticut law, and that Champion breached that contract when it demoted and later fired him in the fall of 1982.

After the jury found for Heller, the district court set aside the verdict on Champion's motion for judgment n.o.v., reasoning that "even if the contracts which [Heller] alleges exist, [Champion] had sufficient cause under the terms of the contracts to terminate [Heller]'s employment." Because in reaching this conclusion the district court improperly re-decided questions of fact and credibility that had been properly submitted to the jury, we reverse and remand for further proceedings.

BACKGROUND

Viewing the evidence in the light most favorable to Heller, as we must in reviewing a judgment n.o.v., the following facts were established at trial. Heller was initially hired by U.S. Plywood Company in 1957 as an employment supervisor. After leaving that firm in 1964 to pursue a career as an independent consultant, Heller returned to the company in 1971, by which time U.S. Plywood had become a division of Champion. Two years later Heller was promoted to the position of Director of Compensation for the entire corporation. But in 1975, after a new chief executive officer reorganized the management of Champion, Heller was replaced as Director of Compensation by John Parker, who became Heller's new supervisor.

Each year from 1976 to 1980 Parker rated Heller's performance as "good" or "very good" in written performance evaluations. According to the evaluation forms, this meant that Heller "[consistently] [met] all major requirements and often [excelled] in the performance of responsibilities", and at least met "all major requirements". Although Champion discontinued its policy of providing written evaluations in 1980, Heller continued to receive regular "merit increases" in salary. Ironically, Heller's "merit increases" were roughly equal, in percentage terms, to the ones received by Parker during the same period.

In August 1982 Heller learned from an outgoing manager that Parker was considering some type of employment action against him. Fearing that Parker was about to demote him because of his age (he was 52 at the time) or for some other improper purpose, Heller decided to tape-record future meetings with Parker in order to obtain "an accurate accounting of what was going to happen". Before going through with his plan, Heller consulted an attorney who advised him that the taping was not illegal, a proposition that Champion has never disputed.

On September 2, 1982, Parker met with Heller and demoted him to a nonsupervisory position. Heller taped this meeting without Parker's knowledge. According to Parker's contemporaneous notes, he demoted Heller for the following reasons:

-- A managerial style that resulted in a totally demoralized department -- this determined by individual interviews with members of the department (his subordinates).

-- Lackadaisical and lazy attitude.

-- Unwilling to do anything by himself.

-- Lack of direction and follow through to subordinates and in work assignments.

-- Has not gotten off his butt and shown what he can do.

-- Spends too much time in social conversation.

After his demotion, Heller confided to two coworkers that he had recorded the meeting with Parker and had consulted "a big-time lawyer who could make a big-time case" against the company. One of these confidants, Mark Davenport, approached Parker on September 30, 1982, and revealed to him that Heller had been "taping conversations of you in an effort to develop information that might be damaging to the corporation". Parker discussed this situation with Donald Gardner, the Vice President of Employee Relations, and Bill Foster, a company attorney, and on October 1, 1982, it was decided that Heller would be fired immediately. According to a plan devised by Parker and Foster, the dismissal would be carried out by initially telling Heller he was being fired "for performance reasons". However, if Heller admitted to tape-recording earlier meetings, the reason for the dismissal would be changed to "for cause".

Parker and Foster fired Heller that afternoon in a meeting that was also taped by Heller. As prearranged, Parker first told Heller he was being discharged for performance reasons, including "the lackadaisical and lazy attitude that you had * * * the negative attitude that you had * * * the inability to produce a general quality of work which was acceptable overall." Heller then indicated that he would notify his attorney, and said that "every conversation we've had is on a tape recorder and there are an awful lot of lies." Having secured this admission, Parker and Foster fired Heller "for cause".

Heller commenced this lawsuit in December 1983, alleging that Champion's conduct violated the federal age discrimination statute and constituted a breach of contract under Connecticut law. With respect to his contract claim, Heller asserted that various handbooks, bulletins, and other personnel documents, as well as oral representations by company officials, created implied contractual obligations that prohibited Champion from demoting and later discharging him in the manner that it did. The jury found that Champion did not discriminate against Heller because of his age, but that it did breach the implied employment contract.

On Champion's motion for judgment n.o.v., the district court set aside the jury's finding on the contract claim, ruling that Champion "had sufficient cause under the terms of the [implied contract] to terminate the plaintiff's employment." Specifically, the court held that "Heller's deceptive, thoroughly unprofessional conduct" in taping meetings with his superiors and revealing that fact to co-workers "violated the standards of conduct which Champion imposed on its employees. Reasonable minds could only conclude that, under the terms of the very same policies [Heller] relies on to prove his contract theories, Champion had the right to discharge him for such conduct." Heller appeals that ruling.

Discussion

Judgment n.o.v. may be entered "only if, 'without weighing the credibility of the witnesses or otherwise considering the weight of the evidence, there can be but one conclusion as to the verdict that reasonable [persons] could have reached." Stubbs v. Dudley, 849 F.2d 83, 85 (2d Cir. 1988) (quoting Simblest v. Maynard, 427 F.2d 1, 4 (2d Cir. 1970)), cert. denied, 489 U.S. 1034, 109 S. Ct. 1095, 103 L. Ed. 2d 230 (1989). For judgment n.o.v. to be proper, "either there must be 'such a complete absence of evidence supporting the verdict that the jury's finding could only have been the result of sheer surmise and conjecture' or the evidence must be so overwhelming that reasonable and fair-minded persons could only have reached the opposite result." Baskin v. Hawley, 807 ...


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