Opinion ID: 1490250
Heading Depth: 1
Heading Rank: 7

Heading: Incorporation of the Employee Protection Plan

Text: RPS argues that the evidence did not support the conclusion that the 1997 contract unambiguously incorporated the severance payments set forth in the Employment Protection Plan or that the severance payments were applicable under the circumstances of this case. RPS argues that the severance pay provision was never triggered because neither of the threshold events, i.e., a change in ownership or RPS going public, ever occurred. The 1997 contract provides that if an employee is discharged for reasons other than gross misconduct, fraud, embezzlement, theft or voluntary termination, he is entitled to receive severance pay under the terms of the `Employment Protection Plan-Change in Ownership Structure' provision. The Employment Protection Plan discusses two scenarios under which an employee can receive severance pay for voluntarily resigning  (a) a change in the CEO or sale of the company or (b) RPS going public. RPS contends it only owes severance pay if one of the triggering events set forth in the Employment Protection Plan occur. On the other hand, Mr. Teter argues that the 1997 contract, by its terms, only intended to incorporate the payment schedule found in the Employment Protection Plan, and not the triggering events contained therein. The interpretation of a contract is a matter of law and therefore is reviewed de novo. See Hamblen County v. City of Morristown, 656 S.W.2d 331, 335-36 (Tenn.1983). When resolving disputes concerning contract interpretation, our task is to ascertain the intention of the parties based upon the usual, natural, and ordinary meaning of the contractual language. Guiliano v. Cleo, Inc., 995 S.W.2d 88, 95 (Tenn.1999). If a contract's language is clear and unambiguous, then the literal meaning of the language controls the outcome of the contract dispute. See Planters Gin Co. v. Fed. Compress & Warehouse Co., 78 S.W.3d 885, 890 (Tenn. 2002). Additionally, all provisions in the contract should be construed in harmony with each other, if possible, to promote consistency and to avoid repugnancy between the various provisions of a single contract. Guiliano, 995 S.W.2d at 95. We agree with the trial court and Court of Appeals that the only reasonable interpretation of the 1997 contract is that the parties intended to incorporate only the payment schedule from the Employment Protection Plan into the 1997 contract. The Court of Appeals explained: It is clear that the parties intended that the plaintiff be provided severance pay, provided he was not discharged for gross misconduct, fraud, embezzlement or theft, or voluntarily terminated his employment. The position advanced by RPS  that the plaintiff was only entitled to severance pay in the event the company was sold or Mr. Berry was replaced  is simply untenable. The triggering event in the plaintiff's employment contract was clearly intended to be wrongful termination and wrongful termination only. While severance pay was also to be available in the event of a sale of the company or a change in the company's leadership, these triggering events were in addition to, rather than in place of, the event of wrongful termination. For these reasons, Mr. Teter would be entitled to receive severance pay under the terms of the 1997 contract, at the amount set forth in the Employer Protection Plan, so long as RPS cannot show that it would have fired him for gross misconduct, as discussed above.