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CUCCHI v. NEW YORK CITY OFF-TRACK BETTING CORP.

April 15, 1993

DIANE CUCCHI, Plaintiff,
v.
NEW YORK CITY OFF-TRACK BETTING CORPORATION, HAZEL DUKES AS PRESIDENT OF THE NEW YORK CITY OFF-TRACK BETTING CORPORATION, and EDWARD LEWIS AS CHAIRMAN OF THE BOARD OF DIRECTORS OF THE NEW YORK CITY OFF-TRACK BETTING CORPORATION, Defendants.



The opinion of the court was delivered by: KENNETH CONBOY

 KENNETH CONBOY, DISTRICT JUDGE:

 Plaintiff and defendants have both moved for partial summary judgment. For the reasons that follow, plaintiff's motion is denied, and defendant's motion is granted in part, and denied in part. *fn1"

 I. Breach of Contract

 Plaintiff claims that defendants violated express and implied contracts of employment between plaintiff and defendants when defendants terminated plaintiff. We disagree.

 "It is [well] settled law in New York that, absent an agreement establishing a fixed duration, an employment relationship is presumed to be a hiring at-will, terminable at any time by either party." Sabetay v. Sterling Drug, Inc., 69 N.Y.2d 329, 514 N.Y.S.2d 209, 211, 506 N.E.2d 919 (Ct. App. 1987). However, New York courts have recognized that in certain limited circumstances, when an employer has expressly agreed to limit its termination rights, the employer may no longer terminate the employee at-will. Id. 514 N.Y.S.2d at 212; see Weiner v. McGraw Hill, Inc., 57 N.Y.2d 458, 457 N.Y.S.2d 193, 443 N.E.2d 441 (Ct. App. 1982). When ascertaining whether an employer has expressly agreed to limit its termination rights, courts must look at the totality of the circumstances. See Gorrill v. Icelandair/Flugleidir, 761 F.2d 847, 852-53 (2d Cir. 1985).

 In the case before us, the plaintiff asserts a number of bases for her claim that defendant's expressly limited their right to fire plaintiff at-will. First, plaintiff points to the OTB Corporate Policy and Procedures Manual ("OTB Manual"). Second, plaintiff points to OTB's Uniform Rules of Discipline. Third, plaintiff claims that certain statutes, rules, and regulations which, inter alia, limit the right of employers to fire their employees, have been incorporated into plaintiff's alleged employment contract. Fourth, plaintiff points to her employment application which states that OTB is an equal opportunity employer. Finally, plaintiff asserts that defendants induced plaintiff to leave her previous employment by making certain oral assurances to her.

 Plaintiff's reliance on OTB's Uniform Rules of Discipline is also misplaced. Even assuming that the Uniform Rules of Discipline were applicable to plaintiff, the rules are, on their face, silent about any limitation on OTB's reasons for termination. However, citing the deposition testimony of former OTB President Howard Giordano, plaintiff asserts that a letter that Giordano inserted in the Uniform Rules of Discipline connotes that OTB employees can only be fired for cause. See Plaintiff's Memo Submitted with Exhibit 56 at 2. Even assuming that Giordano attempted to convey that message in the letter, we do not find that the letter stated with sufficient clarity and explicitness that OTB employees could only be terminated for cause. Therefore, we believe that that language, as a matter of law, cannot be construed as excluding other grounds for termination, see Novinger v. Eden Park Health Services, Inc., 167 A.D.2d 590, 563 N.Y.S.2d 219, 220-21 (N.Y. App. Div. 2d Dept. 1990); Martinez v. Marvin v. Kent Nursing Home, 153 A.D.2d 553, 544 N.Y.S.2d 210, 211-12 (N.Y. App. Div. 2d Dept. 1989); Gmora v. State Farm Mutual Automobile Insurance Co., 709 F. Supp. 337, 341 (E.D.N.Y. 1989), aff'd mem, 888 F.2d 1376 (2d Cir. 1989), and we conclude that the Uniform Rules of Discipline were not an express limitation on the rights of the defendants to fire plaintiff at-will.

 Third, plaintiff claims that because "a contract [is] deemed to include in its terms all rights conferred upon the parties by the laws of the state [where the contract was made]," N.C. Freed Co. v. Board of Governors of the Federal Reserve System, 473 F.2d 1210, 1215 (2d Cir.), cert. denied, 414 U.S. 827, 38 L. Ed. 2d 61, 94 S. Ct. 48 (1973); accord Dolman v. United States Trust Co., 2 N.Y.2d 110, 157 N.Y.S.2d 537, 542, 138 N.E.2d 784 (Ct. App. 1956), certain statutes, regulations, and rules, such as the New York Anti-Discrimination Laws, are incorporated into her purported employment contract. Apparently, plaintiff maintains that defendants' violation of those statutes is a basis for a breach of contract action against the defendants. We disagree. Plaintiff's reasoning is flawed because an at-will employment arrangement is not contractual and does not create an employment contract. See Ingle v. Glamore Motor Sales, Inc., 73 N.Y.2d 183, 538 N.Y.S.2d 771, 774, 535 N.E.2d 1311 (Ct. App. 1989) (stating that at-will employees discussed in two previous Court of Appeals Cases did not have a contractual arrangement with their employers); Dickstein v. Del Laboratories, Inc., 145 A.D.2d 408, 535 N.Y.S.2d 92, 94 (N.Y. App. Div. 2d Dept. 1988) (implicitly holding that in employment at-will cases there exists no contract); 3A Corbin On Contracts § 674 at 124-25 (Supp. 1992) ("A 'contract' terminable at-will by either party without further obligation or right flowing to either is repugnant to the term 'contract' itself, which carries with it implications of performance and duty, [and] expectations based on promises."). Since there existed no contract in which to incorporate the statutes, rules, and regulations cited by the plaintiff, her breach of contract claim based on these statutes, rules, and regulations must fail. *fn2" Moreover, even assuming that at-will employment is contractual, we have found no New York cases in which a terminated at-will employee sued its employer under a breach of contract theory based on violations of statutes, rules, and regulations by the employer. *fn3"

 Plaintiff's assertion that the OTB by-laws limit the right of the defendants to terminate plaintiff is also meritless. The only written document that plaintiff appears to claim that she saw before accepting her job was the OTB's Uniform Rules of Discipline. See Cucchi Aff. P 26-P 33. *fn4" Plaintiff never alleges that she relied on the OTB by-laws before she decided to accept the Inspector General job with OTB, and plaintiff's failure to establish pre-hiring reliance on the by-laws is fatal to her contract claim based on the by-laws. See Novinger v. Eden Park Health Services, Inc., 167 A.D.2d 590, 563 N.Y.S.2d 219, 221 (N.Y. App. Div. 2d Dept. 1990). Moreover, the only portion of the by-laws that arguably might apply to plaintiff, merely state that the executive staff are to be "appointed by the Board of Directors to serve at the will of the Board of Directors." Ex. A to Elaissen Aff., Art. (IV, § 2(D)). However, because the by-laws do not state explicitly that this is the exclusive way that executive staff can be fired, it cannot, as a matter of law, be read to preclude other methods of termination. See Marvin v. Kent Nursing Home, 153 A.D.2d 553, 544 N.Y.S.2d 210, 211 (N.Y. App. Div. 2d Dept. 1989).

 Plaintiff also contends that because the top of the first page of her OTB employment application stated that OTB is an equal opportunity employer, plaintiff had a contractual right not to be fired because of her sex. We disagree. We do not believe that this statement is a sufficiently express limitation on defendants right to fire plaintiff so as to allow plaintiff to sue defendants under a breach of contract theory. Therefore, even if OTB did fire plaintiff for discriminatory reasons, that firing does not constitute a breach of contract. *fn5"

 Plaintiff's final contract argument is that defendants orally assured her that only the OTB Board of Directors could fire plaintiff, that no retaliation would be taken against plaintiff for plaintiff's investigatory work, that no retaliation would be taken against her for reporting wrongdoing, that OTB was an equal opportunity employer with maternity leave benefits, that the OTB Uniform Rules of Discipline were mandatory and binding, and that plaintiff would not be considered management. Plaintiff asserts that she left her previous employment and came to work for OTB based on these oral assurances.

 First of all, it is important to note that none of the alleged oral promises state that plaintiff could only be fired for cause. Indeed, none of these promises create an expectation of continued employment. Therefore, these promises did not alter plaintiff's at-will status.

 Moreover, while an employer's oral assurances only to fire an employee for just cause are a significant factor a court must take into consideration in determining whether the employer intended alter the employee's at-will status, an employer's oral assurances that induce a person to work for the employer are not by themselves sufficient evidence of an express agreement to alter the employees at-will status. See Paolucci v. Adult Retardates Center, Inc., 182 A.D.2d 681, 582 N.Y.S.2d 452, 453 (N.Y. App. Div. 2d Dept. 1992) (oral assurances made to the plaintiff were not sufficient "to limit the defendant's right to discharge the plaintiff at any time for any reason."); Diskin v. Consolidated Edison Co. of New York, Inc., 135 A.D.2d 775, 522 N.Y.S.2d 888, 890 (N.Y. App. Div. 2d Dept. 1987) (oral assurances that the plaintiff could only be dismissed for cause were not sufficient to limit the defendant's right to terminate the plaintiff at will); Kotick v. Desai, 123 A.D.2d 744, 507 N.Y.S.2d 217, 219 (N.Y. App. Div. 2d Dept. 1986) ("allegation that the [employer] promised [the employee] a 'permanent position to last as long as the plaintiff was physically capable', is insufficient [to alter the employee's at-will status]"); Hill v. Westchester Aeronautical Corp., 112 A.D.2d 977, 492 N.Y.S.2d 789, 791 (N.Y. App. Div. 2d Dept. 1985) ("plaintiff's bald assertion that defendants [] promised to not fire him except upon just cause, and that he relied on that promise, are insufficient to [alter plaintiff's at-will status.]"); Gould v. Community Health Plan of Suffolk, Inc., 99 A.D.2d 479, 470 N.Y.S.2d 415, 417 (N.Y. App. Div. 2d Dept. 1984) ("Plaintiff's vague allegations about the nature of the optometry practice he surrendered in exchange for the position he accepted with CHPS, and his further allegations about being advised he could have the job as long as he wanted it, and that he would receive security from CHPS' personnel policies, are insufficient [evidence that defendants altered plaintiff's at-will status.]"); Gross v. Goldome, 1988 U.S. Dist. LEXIS 12480 at *9-10, 1988 WL 90913, *3-*4 (W.D.N.Y. 1988) (plaintiff who left previous employment on the basis of oral assurances by the defendant that plaintiff could be fired from his new job only for just cause did not establish that plaintiff was anything other than an at-will employee); See also Sabetay, 514 N.Y.S.2d at 212 (discussing Weiner and stating that "the express agreement between the parties limiting the [Weiner] employer's otherwise unfettered right to terminate its employees" consisted of "the language in the [employer's] handbook, coupled with the reference to the handbook in the employment application;" The oral assurance the employer made to the employee was not the express agreement relied on by the Court but was only one of four significant factors supporting the employee's breach of contract claim.).

 We do not believe that the Second Circuit's decision in Ohanian v. Avis Rent A Car System, Inc., 779 F.2d 101 (2d Cir. 1985) mandates a different result. In Avis, the plaintiff's only evidence that the defendant expressly promised to fire him only for just cause, was evidence of the defendant's oral assurances to the plaintiff that the plaintiff's employment with the company was secure "unless [the plaintiff] screwed up badly." Id. at 104, 109. These assurances induced the plaintiff to relocate to become the head of the defendant's Northeast region. The Second Circuit held that the evidence of the oral assurances was a sufficient basis for the jury's determination that the defendant had explicitly limited its right to terminate the plaintiff at will, and that the defendant could only fire the plaintiff for cause. Id; see also Sivel v. Readers Digest, Inc., 677 F. Supp. 183, 186-87 (S.D.N.Y. 1988) (citing Avis and holding that evidence that the plaintiff relied on the defendant's oral assurances that the defendant could terminate the plaintiff only if the plaintiff made a serious mistake, was sufficient to alter the plaintiff's at-will status).

 We believe that the Second Circuit's holding in Avis is distinguishable from the present case. First of all, the defendant in Avis essentially orally promised the plaintiff that the defendant would fire the plaintiff only for just cause. However, as noted above, none of defendants' oral promises to plaintiff in the case before ...


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