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April 21, 1994

AGWAY, INC., Defendant.


The opinion of the court was delivered by: THOMAS J. MCAVOY

Presently before the court is a motion by the plaintiff pursuant to Federal Rules of Civil Procedure 59(a) and 59(e), to amend and alter the Summary Judgment Order issued by this court on September 16, 1993, which dismissed the plaintiff's cause of action based upon an alleged breach of employment contract.

 In the case at bar, the plaintiff challenges the Court's Order of September 16, 1993, on the basis that new evidence was adduced at trial which was not available at the time of the summary judgment motion. More specifically, the plaintiff avers that the testimony of Marketing Manager Dave McDougal stating that he was unaware of the Revised Displaced Employee Policy when he interviewed Mrs. Bartz, unequivocally demonstrates that an implied employment contract existed between Agway and the plaintiff and that this implied employment contract was breached by Agway when it terminated the plaintiff.

 It is 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 for any reason or no reason. Mycak v. Honeywell, Inc., 953 F.2d 798, 801 (2d Cir. 1992), citing Sabetay v. Sterling Drug, Inc., 69 N.Y.2d 329, 333, 514 N.Y.S.2d 209, 211, 506 N.E.2d 919, 920 (N.Y. 1987) (citation omitted). Under this rule, limitations on the right of an employer to discharge an at-will employee have been narrowly construed by the courts of New York. Specifically, the New York Court of Appeals has held that "absent a constitutionally impermissible purpose, a statutory proscription, or an express limitation in the individual contract of employment, an employer's right at any time to terminate an employment at will remains unimpaired." Murphy v. American Home Products Corp., 58 N.Y.2d 293, 305, 461 N.Y.S.2d 232, 237, 448 N.E.2d 86, 89 (N.Y. 1983). Plaintiff recognizes that because her employment was for an unspecified duration that she is presumed to have been an employee at will. However, plaintiff cites Gorrill v. Icelandair/Flugleidir, 761 F.2d 847, 852-53 (2d Cir. 1985), in support of her position that she had an employment contract stemming from Agway's Displaced Employee Policy that limited defendant's right to terminate her employment at will.

 In Gorrill, the Second Circuit held that a contractual commitment could be implied from a defendant's operations manual where the manual specifically stated that seniority would be the sole factor in terminations stemming from a reduction in force. The keystone of the Second Circuit's decision in Gorrill was the specificity with which the defendant's policy was articulated in its handbook. The operations manual of the defendant in Gorrill stated:

senority shall be the sole factor for determining demotions, transfers or terminations caused by job elimination or force reduction when a senior employee is qualified to perform the available work or can be adequately trained in a reasonable or practicable period of time.

 Gorrill at 850.

 From this language, and evidence that the defendant gave the plaintiff repeated oral and written assurances that the operations manual contained the terms and conditions of employment and was controlling, the Second Circuit discerned an "express limitation" on the defendant's right to terminate at will.

 Additionally, in the recent case Mycak v. Honeywell, Inc., 953 F.2d 798 (2d Cir. 1992), the Second Circuit held that a job security policy stated in an employer's handbook contractually bound the defendant and rejected the defendant's contention that the provisions amounted only to non-binding "general statements of policy and supervisory guidelines". Again, the linchpin of the Circuit's decision was that the defendant's policy set forth a very specific and detailed procedure for work force reduction in mandatory and unqualified terms. Id. at 802.

 Support for this conclusion lies in a close analysis of Agway's Displaced Employee Policy. The pertinent language of this policy states:

Agway will make an attempt to place employees who have been effected by work force reductions in available positions whenever possible.

 This Displaced Employee Policy was revised in April 1990, via an inter office memorandum from Richard ...

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