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MIRABELLA v. TURNER BROADCASTING INC.

May 16, 2003

JOSEPH A. MIRABELLA, PLAINTIFF,
v.
TURNER BROADCASTING INC., DEFENDANT.



The opinion of the court was delivered by: Barbara S. Jones, United States District Judge

OPINION AND ORDER

I. Introduction

Plaintiff Joseph Mirabella commenced this action on October 23, 2000 by filing a complaint in the Superior Court of New Jersey, Law Division, Ocean County, alleging breach of an implied obligation of good faith and fair dealing, breach of an employment contract, and defamation. Defendant Turner Broadcasting Sales, Inc., incorrectly pled as Turner Broadcasting Systems, Inc., ("Turner" or the "defendant") removed the action to the United States District Court for the District of New Jersey on the basis of diversity pursuant to 28 U.S.C. § 1332. Defendant filed a motion to dismiss the complaint for lack of personal jurisdiction and alternatively for a change of venue to the Southern District of New York. Additionally, the defendant moved for summary judgment with respect to the breach of good faith and covenant of fair dealing and breach of contract claims, and for dismissal of the defamation claim.

On June 15, 2001, Judge Mary L. Cooper held that the defendant was not subject to personal jurisdiction in New Jersey and transferred the action to this Court pursuant to 28 U.S.C. § 1406(a). On August 20, 2001, this Court permitted the defendant to refile and serve its motion for summary judgment and dismissal. For the reasons set forth below, defendant's motion for summary judgment with respect to the breach of good faith and covenant of fair dealing and breach of contract claims is granted, and defendant's motion to dismiss the defamation claim is denied.

1. Breach of Implied Covenant of Good Faith and Fair Dealing

"It is well settled [under New York law] that absent an agreement establishing employment of a fixed duration, an employment relationship is presumed to be a hiring at will, terminable at any time by either party." Gill v. Pathmark Stores, Inc., 655 N.Y.S.2d 623, 624 (2d Dep't 1997).*fn1 Furthermore, New York law does not impose a duty of good faith and fair dealing with respect to termination of an at-will employment agreement. See Nunez v. A-T Fin'l Info., Inc., 957 F. Supp. 438, 443 (S.D.N.Y. 1997); Knudsen v. Quebecor Printing (U.S.A.) Inc., 792 F. Supp. 234, 238 (S.D.N.Y. 1992). However, New York courts and the Second Circuit have created an exception to an employer's right to terminate an employee at-will in some limited circumstances. In Wakefield v. N. Telecom, Inc., 769 F.2d 109 (2d Cir. 1985), the Second Circuit held that an at-will employee could recover under a breach of covenant of good faith and fair dealing theory if the employee could demonstrate that his employment was terminated so that the employer could avoid paying him earned commissions on completed sales.

In the instant case, plaintiff contends that the defendant breached an implied covenant of good faith and fair dealing because he was terminated so that the defendant could "avoid paying him commissions and bonuses he had earned." (Am. Compl. §§ 28-29). However, the Court finds that this case does not fall within the limited exception to employment at-will recognized by the Second Circuit in Wakefield because "where no fixed amount was due at the time of termination, courts have refused to place a restriction on employer's unfettered discretion to fire an at-will employee at any time." Plantier v. Cordiant PLC, 97 Civ. 8696, 1998 U.S. Dist. LEXIS 15037, at *7 (S.D.N.Y. Sep. 1998) (holding that no implied covenant of good faith and fair dealing existed because plaintiff's bonus was discretionary and "none was due when she was terminated.").

In this case, the 1999 performance incentives for which plaintiff was eligible were entirely discretionary.*fn2 The March 8, 1999 memo that describes the incentives clearly stated that "[a]ll performance incentives are allocated at the discretion of [defendant's] senior management." (McLane Decl. Ex. E) Consequently, no fixed amount could have been due to the plaintiff at the time of his termination, and thus the defendant remained free to terminate plaintiff at-will.

2. Breach of Contract

Plaintiff also contends that his termination violated what plaintiff refers to as defendant's "Compliance Program," which states that employees are responsible for "reporting violations of the Code of Ethics".*fn3 (Am. Compl. ¶ 38; McLane Supplemental Decl. Ex. A). Additionally, plaintiff claims that his termination violated defendant's "Open Door Policy," which provides a procedure for "employment-related issues to be reviewed through a specific chain of management personnel" and which states that an employee will not be retaliated against for use of the process. (Am. Compl. ¶ 34; McLane Supplemental Decl. Ex. A). Finally, plaintiff alleges that his termination violated the defendant's "Discipline and Discharge Policy" because plaintiff was terminated without a final written warning and without a chance for improvement. (Am. Compl. ¶¶ 37, 40; McLane Decl. Ex. C).

Although employment in New York is at-will unless otherwise agreed, an action for breach of contract may lie where a plaintiff can show that the employer made its employee aware of an express written policy limiting the right to discharge upon which the employee relied when accepting employment to his detriment. See Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458, 465 (N.Y. 1982). Plaintiff contends that the Code of Ethics, Open Door Policy, and Discipline and Discharge policies were express written policies that limited defendant's right to discharge him. The Court disagrees for a number of reasons.

The New York Court of Appeals has held that an express disclaimer of contractual rights in an employee manual bars an action for breach of contract based on the terms of the manual. Lobosco v. New York Tel. Co./NYNEX, 96 N.Y.2d 312, 317 (N.Y. 2001). In so holding the Lobosco court stated that Weiner, the case relied on by plaintiff here, stands only for the proposition that a personnel manual that states that employees can only be terminated for cause may support a breach of contract claim if the employee detrimentally relied upon that limitation when accepting employment. Lobosco, 96 N.Y.2d at 317 (stating that where a policy manual contains "conspicuous disclaiming language, . . . such disclaimer prevents the creation of a contract and negates any protection from termination plaintiff may have inferred from the manual's no reprisal provision.")

Here, the Policy Manual itself clearly stated

The policies and rules stated in this manual are intended as guidelines for Company employees and managers, and do not create a contractual obligation. [Defendant] is an "at will" employer and can terminate an employee's employment at any time without notice, for any reason, with or without cause, unless an employee has a written employment agreement or is covered by a collective bargaining agreement which expressly limits the Company's right to terminate the employee's employment at will.
McLane Supplemental Decl. Ex. A). Each provision relied upon by plaintiff, namely, the Compliance Program (or Code of Ethics), Open Door Policy, and Discharge and Discipline Policy appears under the "Table of Contents" of defendant's Policy and Procedure Manual. (McLane ...

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