Opinion ID: 1878384
Heading Depth: 1
Heading Rank: 3

Heading: Was there a breach?

Text: We next consider whether the company breached its employment contracts with plaintiffs. In so doing we need only assess whether the evidence as a whole reasonably supports the jury's verdict. Lesmeister v. Dilly, 330 N.W.2d 95, 100 (Minn. 1983). The jury concluded that the company's actions breached its contractual obligations. The company offers three arguments in support of its position that a breach did not occur. First, it argues that the handbook's section on dismissals does not apply in plaintiffs' cases. The company relies on the first sentence of the section: Dismissals usually come about because of an individual's indifference to work quality or attendance standards. It argues that this language limits application to attendance or performance problems, neither of which are issues here. There is, however, no explicit statement in the handbook that the section is limited to attendance or performance. The jury could reasonably conclude that the first sentence is an informative statement of fact rather than a limitation on the dismissal policy. This conclusion is supported by other language referring directly to the company's policy on serious misconduct, which indicates that the scope of the section includes more than just problems of attendance or productivity. Contractual terms are ambiguous if they are reasonably susceptible to more than one construction. Telex Corp. v. Data Products Corp., 271 Minn. 288, 291, 135 N.W.2d 681 685 (1965). Where ambiguity exists, and construction depends upon extrinsic evidence, the proper construction is a question of fact for the jury. Turner v. Alpha Phi Sorority House, 276 N.W.2d 63, 66 (Minn.1979). The issue whether the handbook provisions created a binding employment contract was fully litigated. The jury finding that the dismissal section applied to plaintiffs is supported by the evidence. The company argues, secondly, that even if the dismissal section did apply to plaintiffs, it did not prohibit the company from terminating plaintiffs without cause but only required that the company provide warnings to plaintiffs. The jury could have reasonably concluded that, read as a whole, the dismissal provisions limited the company's rights to terminate at-will employees. In addition to a warning, the section provides for a period in which to bring performance up to a satisfactory level. According to the provisions, no employee can be discharged without such a probationary period, except in cases of serious misconduct. Because the purpose of this period is to give the employee an opportunity to change his or her performance, the jury could have reasonably drawn the conclusion that the company's employees would be dismissed only for failing to adequately improve their performance or, in other words, for cause. Finally, the company argues that even if the dismissal provisions fully apply, it committed no breach because it complied with the requirements of the provisions. It contends that the meetings held by management with each plaintiff from November 1980 through January 1981 served as warnings. It further argues that the fact plaintiffs were placed on probation a week prior to their terminations and were warned that discharge would be considered indicates full compliance with the handbook. The record, however, reveals clearly that the purpose of the meetings between management and plaintiffs was not to warn them about their insubordination. The purpose of the meetings was to discuss the types of changes the company wanted made in the expense reports. The reason that there were numerous meetings over a 2- to 3-month period was because the company continually changed its position about what it wanted included in the expense reports. Also, prior to actually being placed on probation, plaintiffs were never told that they might be discharged. Finally, the record reveals that the probations given to plaintiffs prior to their dismissals were for the benefit of company management, to provide time to decide whether to terminate plaintiffs. On these facts, the jury could have found noncompliance with the dismissal provisions and breach of plaintiffs' employment agreements.