Court Opinion

ID: 2961597
Source: CourtListenerOpinion
Date Created: 2015-09-21 20:45:10.864837+00
Date Added: 2024-06-11T11:42:12.073323
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USCA1 Opinion

	

          November 10, 1992                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                              _________________________          No. 92-1684                               HAROLD F. PEARSON, III,                                 Plaintiff, Appellee,                                          v.                       JOHN HANCOCK MUTUAL LIFE INSURANCE CO.,                                Defendant, Appellant.                              _________________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                   [Hon. Edward F. Harrington, U.S. District Judge]                                               ___________________                              _________________________                                        Before                                Selya, Circuit Judge,                                       _____________                            Coffin, Senior Circuit Judge,                                    ____________________                              and Boudin, Circuit Judge.                                          _____________                              _________________________               Robert  P. Joy, with whom Benjamin Smith and Morgan, Brown &               ______________            ______________     _______________          Joy were on brief, for appellant.          ___               G.  Rosalyn Johnson,  with  whom Harold  Owen  Beede and  G.               ___________________              ___________________      __          Rosalyn Johnson, P.C. were on brief, for appellee.          _____________________                              _________________________                              _________________________                    SELYA, Circuit Judge.  This hard-fought appeal presents                    SELYA, Circuit Judge.                           _____________          one  overarching   question  of  Massachusetts  law:     could  a          reasonable  jury, viewing the facts in  the light most hospitable          to  the plaintiff,  find  that the  defendant's personnel  manual          constituted a contract with its employees such that the defendant          was  bound to  rehire the  plaintiff, a former  at-will employee,          following  the  plaintiff's completion  of  a  leave of  absence?          Because  Massachusetts law  requires  a negative  answer to  this          inquiry, we  reverse the judgment  below.  Consequently,  we need          not reach the other issues briefed by the appellant.                                          I.                                          I.                                          __                                      Background                                      Background                                      __________                    From  1966 until  1987,  plaintiff-appellee  Harold  F.          Pearson, III, worked in  the Agricultural Investments  Department          at John Hancock Mutual Life Insurance Company (Hancock).  In late          1986, Pearson made arrangements to take an unpaid six-month leave          of absence  from the firm.   At  that time,  and before,  Hancock          maintained a personnel manual  for the guidance of administrators          and employees.   Pearson  testified  that Hancock  held out  this          manual  as  authoritative regarding  company  rules and  employee          benefits.  Pearson also said that, when he arranged for his leave          of absence, the  Hancock personnel assistant  with whom he  spoke          referred to  the  manual while  explaining the  mechanics of  the          leave.   Read most generously  to plaintiff, certain  language in          the manual suggests  that Hancock, subject  to the discretion  of          the  corporate  hierarchs,  would  try assiduously  to  place  an                                          2          employee  seeking to return  from a leave  of absence in  the job          most  nearly comparable to his  last previous job.   Pearson said          that, before taking his leave, he told several  Hancock officials          that he  expected to  be rehired  pursuant  to the  terms of  the          manual.   Pearson has not  argued that remarks  made during these          conversations    including  his  initial  conversation  with  the          Hancock personnel assistant   themselves constitute a contract.1                    "Optimism," Voltaire wrote, "is a mania for maintaining          that all is well when things are going badly."   F.M.A. Voltaire,          Candide (1759).   So it was here.  Approximately one month before          _______          Pearson's leave  was due  to expire,  he contacted  Hancock about          resuming  his employment.    After ordering  an investigation  to          ascertain if appropriate positions were available, and concluding          that none  were open,  one of Hancock's  vice-presidents directed          that a termination letter be sent to Pearson.  He never returned.                    In July of  1989, Pearson  brought suit  in the  United          States  District Court  for the  District  of Massachusetts.   He          claimed that Hancock  had violated his rights  under the Employee          Retirement Income  Security Act  of  1984 (ERISA),  29 U.S.C.                                            ____________________               1In the same  vein, we note  that, before Pearson  departed,          the parties signed a memorandum concerning his leave  of absence.          The memorandum states unequivocally  that Pearson was "advised of          the difficulties involved in offering an individual with a highly          specialized job at [Pearson's] grade level a comparable position"          following  completion of a leave of absence.  The memorandum also          memorialized  Pearson's  understanding  that  he  would  "not  be          reinstated  to [his]  current position"  and that  his employment          might possibly "be terminated  at the expiration of the  leave of          absence."  Not surprisingly, Pearson has  not suggested that this          memorandum  constitutes a source of rights  arising in his favor,          and  we do not consider either that possibility or theories alien          to Pearson's basic breach of contract claim.  See infra note 5.                                                        ___ _____                                          3          1001-1461 (1988),  and sought to recover  severance pay allegedly          due  him.  The  ERISA count  was tried to  the bench.   The judge          found that  the plaintiff was  not eligible to  receive severance          benefits and  exonerated Hancock  of any  ERISA violation.   That          ruling has not been appealed.                    In   addition  to  the  alleged  ERISA  violation,  the          complaint  included   several  pendent  state-law  claims.    The          district court  jettisoned the  majority of the  pendent claims.2          However, Pearson's breach of contract  claim survived and went to          the jury  over the  defendant's objection.   Apparently believing          that Hancock's search for a suitable opening was perfunctory, the          jury awarded him damages of $345,000.  The jury explicitly found,          on  special questions,  that the  personnel manual  constituted a          contract  between  the  parties  and that  Hancock  breached  its          contract by failing to  rehire Pearson.  When the  district court          denied  Hancock's renewed motion for judgment as a matter of law,          this appeal ensued.                                           II.                                         II.                                         ___                                  Standard of Review                                  Standard of Review                                  __________________                    In reviewing a district court's  denial of a motion for          judgment as a matter of law, we must examine the evidence and the          inferences  reasonably  to be  drawn from  it  in the  light most          flattering  to the verdict-winner.   See Veranda  Beach Club Ltd.                                               ___ ________________________          Partnership v.  Western Surety Co.,  936 F.2d 1364,  1383-84 (1st          ___________     __________________                                        ____________________               2Pearson  has  not  appealed  from the  dismissal  of  these          claims.                                          4          Cir.  1991);  Wagenmann v.  Adams, 829  F.2d  196, 200  (1st Cir.                        _________     _____          1987).   This means that  "[w]e take  the facts as  shown by  the          [winner's]  evidence and by at  least [as much]  of the [loser's]          uncontradicted  and  unimpeached  evidence  as,  under   all  the          circumstances, the jury virtually  must have believed."  Karelitz                                                                   ________          v. Damson  Oil Corp.,  820 F.2d  529, 530 (1st  Cir. 1987).   If,             _________________          without  gauging  witness   credibility,  resolving   testimonial          conflicts, or weighing the evidence, we ascertain that the proof,          even  when viewed  through these  rose-colored glasses,  will not          rationally support  a finding of liability, then  we must reverse          the district court's  refusal to  enter judgment as  a matter  of          law.   See Hendricks  & Assocs., Inc.  v. Daewoo Corp.,  923 F.2d                 ___ __________________________     ____________          209, 214 (1st Cir. 1991); Wagenmann, 829 F.2d at 200.                                     _________                                         III.                                         III.                                         ____                                       Analysis                                       Analysis                                       ________                    The parties  agree that  Massachusetts law  governs the          breach-of-contract   claim.     Pearson  argues   that,  applying          Massachusetts law,  the personnel manual  formed the basis  of an          enforceable  agreement  between  himself  and  Hancock  and that,          pursuant  to the  terms  thereof, Hancock  had  an obligation  to          rehire  him following  his leave  of absence.   In  contrast, the          centerpiece  of  Hancock's appeal  is  the  proposition that  the          personnel manual did not  constitute a binding contract.   On the          facts  of   this  case,  we  find  Hancock's  proposition  to  be          compelling.                                          A                                          A                                          5                    The cornerstone of our analysis is the decision of  the          the  employer's  personnel  manual.     In  determining  that  no          for  Boston Community Development, Inc., 403  Mass. 8, 525 N.E.2d          _______________________________________          Massachusetts Supreme  Judicial Court (SJC) in  Jackson v. Action                                                          _______    ______          411 (1988).   Jackson involved a  former employee who  challenged                        _______          his discharge as violative of the grievance  procedures limned in                                          6          modifiable, (2) merely hortatory,  (3) negotiated in a particular          instance,  (4)   specially  emphasized  by   the  employer,   (5)          at-will  employee, the SJC emphasized six factors; viz.:  (1) the          an  express or implied  contract altering Jackson's  status as an          had negotiated  concerning the language contained  in the manual;          employer's course of conduct, as the manual's stated  purpose was          any  time;  (2)  there  was no  firm  commitment  concerning  the          employer retained the right unilaterally to modify the manual  at          "policies"; (3) there was no evidence that  employer and employee          merely   to  provide   "guidance"   concerning   the   employer's          reasonable juror could find  that the manual formed the  basis of          attention"  to the manual; (5)  there was no  evidence that, when          hired  or, indeed,  thereafter, the  employee had  manifested his          consider whether  or not the manual's terms were (1) unilaterally          To  paraphrase, the  SJC  indicated that,  in order  to determine          stipulated nor identified a  term of employment.  Id.  at 415-16.                                                            ___          assent  to  the  manual's  terms;  and  (6)  the  manual  neither          document constitutes a binding  contract, an inquiring court must          whether the terms  of an employer's  personnel manual or  kindred          (4) there was no  evidence that the employer had  called "special          seasonably accepted  by the employee, and  (6) characterizable as          specifying  some period  of employment  (or, alternatively,  some          definitive  limit  on  the  otherwise  fluid  nature  of  at-will          employment).3                      We  recently discussed  the correspondence  between the          Jackson factors and basic  principles of contract law in  Biggins          _______                                                   _______          v. Hazen  Paper Co., 953 F.2d  1405 (1st Cir.),  cert. granted on             ________________                              _____ _______ __          other  grounds, 112 S. Ct. 2990, cross petition for cert. denied,          _____  _______                   _____ ________ ___ _____ ______          112 S.  Ct. 3035 (1992).   There, we held that,  when an employee          seeks to  show that  a personnel  manual forms  the  basis of  an          employment   contract,  Massachusetts  law   requires  him     to          "establish  all  of the  elements  ordinarily  necessary for  the          formation of  a contract."   Id.  at 1422.   Because Biggins  had                                       ___          failed to demonstrate either the occurrence of negotiations anent          the manual's terms or the employer's calling of special attention          to the manual  prior to the  time it fired  him, we reversed  the          district court's  denial of  the defendant's motion  for judgment          n.o.v.  Id. at 1423-24.                  ___                    We  think  that  these  decisions  carry  the  day  for          Hancock.   For one thing,  although the Jackson  court took great                                                  _______          pains to stress that  its decision was circumstance-specific, 525                                        ____________________               3We  do not  read Jackson  as suggesting  that this  list of                                 _______          factors  is  necessarily exclusive.    Rather, Jackson  envisions                                                         _______          focusing the lens of  inquiry on "the conduct of the parties, and          their relation,"  under the  totality of  the circumstances  in a          given case.  Jackson, 525 N.E.2d at 416.   Here, however, neither                       _______          the plaintiff nor the district court suggested that  the equation          should  be   reshaped  to  include  any   integers  beyond  those          considered by the Jackson court.                            _______                                          7          N.E.2d  at  414-16,  the  circumstances  here  seem  sufficiently          similar  to warrant  an identical  outcome.   For another  thing,          Biggins augurs poorly for  Pearson's plight.  In Biggins,  two of          _______                                          _______          the six Jackson factors  were missing.  We termed  the absence of                  _______          these  two factors "fatal  to [the employee's]  claim."  Biggins,                                                                   _______          953 F.2d  at 1424.  Here,  the plaintiff finds himself  in a much          deeper  hole:   the uncontroverted  evidence establishes  that no          fewer than  four of the Jackson  factors are lacking.   We review                                  _______          the tally.                    First, the personnel  manual upon which Pearson  relies          explicitly  states that  Hancock  "retains the  right to  revise,          suspend, or  cancel  in whole  or  in part  any  of the  policies          appearing  in this manual without advance notice."  What is more,          the  uncontradicted,  unimpeached  evidence   establishes  beyond          peradventure  that  Hancock  unilaterally  exercised  this  right          several times during Pearson's tenure.  Second, the manual is not          couched   in   language   traditionally   associated   with  firm          commitments.  Rather, it says that it "provides a description" of          "personnel policies and procedures."  Third, there is no evidence          in  the record  suggesting  that Pearson  and Hancock  negotiated          concerning  the contents  of the  manual    or, indeed,  that any          employee was consulted in  that regard.  Fourth, the  manual sets          forth no term of employment.                                          B                                          B                    Realizing that the  facts of  this case  are a  carrion          call  to the vulturous flock of factors enunciated in Jackson and                                                                _______                                          8          echoed in  Biggins, the plaintiff gamely asserts  that Jackson is                     _______                                     _______          an  avocet of a different plume.   He theorizes that, in Jackson,                                                                   _______          the  employee was attempting to establish  that the manual formed          the  basis of an employment  contract for some  term greater than          "at  will."   Thus, Pearson's  thesis runs,  the employee  had to          overcome  many  obstacles, including  the  "general rule  [that],          where an employment contract . . . contains no definite period of          employment,  it establishes  employment at  will."   Jackson, 525                                                               _______          N.E.2d at  412.   Pearson  argues that  in this  case, unlike  in          Jackson, he does not claim that  the manual alters his status  as          _______          an  at-will employee.  Rather, he concedes his status, but wields          the  manual as a means  of proving Hancock's  contractual duty to          provide a benefit described therein, namely, the benefit of being          rehired after taking a leave of absence.4                    Pearson's  argument  is  far   from  epigonic;  to  our          knowledge,  it  remains unaddressed  in  the  relevant case  law.          Nevertheless, the  district court endorsed  it.  We  do not.   No          less an  authority on  state law  than the  Massachusetts Appeals          Court has  recently rejected  this argument sub  silentio, citing                                                      ___  ________          Jackson  as  the  mainstay  of  its  conclusion  that  the  equal          _______          opportunity  policy announced  in an  employee handbook  "did not                                        ____________________               4Pearson  also tries  to distinguish  Jackson as  a case  in                                                     _______          which the plaintiff relied only upon the employer's dissemination          of the manual and not,  as here, upon additional factors  such as          the conduct of the  employer in conformity with the manual.  This          effort  will not withstand the mildest scrutiny.  In Jackson, the                                                               _______          SJC expressly  noted "the defendant's adherence  to the grievance          procedures," but  found evidence of such  a practice insufficient          to overcome the  inadequacies in the plaintiff's case.   Jackson,                                                                   _______          525 N.E.2d at 415.                                          9          establish contractual  rights which  would support an  action for          breach of contract."  Cherella  v. Phoenix Technologies, Ltd., 32                                ________     __________________________          Mass. App. Ct.  919, 586 N.E.2d 29, 31 (1992).   See also Coleman                                                           ___ ____ _______          v.  Boston Edison  Co., ___  Mass. App. Ct.  ___, ___  N.E.2d ___              __________________          (1992)  [No.  91-P-133] (applying  Jackson  to  defeat claim  for                                             _______          increased salary based on management salary program).                    There is, moreover, a  fundamental flaw in  plaintiff's          approach.  The definitional hallmark of employment at will is its          terminability  by "either  the employee  or the  employer without          notice, for almost any reason or for no reason at all."  Jackson,                                                                   _______          525 N.E.2d at  412 (collecting  cases).   To be  sure, there  are          exceptions, inasmuch as the law traditionally frowns upon certain          specific reasons for  terminating employment relationships.   The          fact  that one's employment  is at  will does  not mean  that his          employer  can   terminate  him  for   invidiously  discriminatory          reasons, see, e.g., Mass. Gen. Laws Ann. ch. 151B,   4 (West 1982                   ___  ____          & Supp. 1992), or reasons which countervail some well established          public policy,  see, e.g., DeRose  v. Putnam Management  Co., 398                          ___  ____  ______     ______________________          Mass. 205, 496 N.E.2d  428, 430-31 (1986), or reasons  which stem          from the employer's  nefarious desire to deprive  the employee of          benefits  otherwise due him, see, e.g.,  Fortune v. National Cash                                       ___  ____   _______    _____________          Register  Co., 373  Mass. 96,  364 N.E.2d  1251,  1255-56 (1977).          _____________          But, absent  proof  of a  prohibited  reason, the  ordinary  rule          pertaining  to termination  of employment  at will applies.   See                                                                        ___          Wright v. Shriners Hospital for Crippled Children, 412 Mass. 469,          ______    _______________________________________          589 N.E.2d  1241, 1244 (1992)  (categorizing "prohibited  reason"                                          10          situations as "exceptions to th[e] general rule").                    Such proof  is utterly lacking  here.  Pearson  has not          suggested, let  alone proved, that Hancock  possessed an improper          reason for not rehiring him.  The undisputed fact is that Hancock          did  no  more  than   terminate  (or,  in  a  sense,   refuse  to          reinstitute) an at-will employment  relationship.  So viewed, the          instant case reduces to  a prototypical employment case  in which          one party has  exercised its  legal right to  end a  relationship          with no  stated term.  There  is simply no evidence  upon which a          reasonable  jury  could  find  that  Hancock's  actions  were  in          derogation of a contractual obligation owed to Pearson.                                          C                                           C                    It  is  important to  emphasize  that  this  is  not  a          situation  in  which the  plaintiff  produced  evidence that  the          defendant terminated an at-will  employment relationship in order          to deprive an employee of some other right independently due him.          See, e.g., Fortune, 364 N.E.2d 1251; McCone v. New England Tel. &          ___  ____  _______                   ______    __________________          Tel.  Co., 393  Mass. 231, 471  N.E.2d 47, 49-50  (1984); Gram v.          _________                                                 ____          Liberty Mut. Ins.  Co., 384 Mass. 659, 429 N.E.2d  21, 29 (1981).          ______________________          Rather, it is a  situation in which the plaintiff  contends that,          notwithstanding   the   at-will    nature   of   the   employment          relationship, the act of discharge (or its functional equivalent,          the  refusal  to  reinstate),  in and  of  itself,  constituted a          deprivation of  a contractually assured  right.  In  other words,          Pearson,  while  admitting that  he was  an at-will  employee, is          claiming that  the company's personnel  manual somehow  conferred                                          11          upon him a contractual right to remain in Hancock's employ.   Not          only  is such a "right" inconsistent with the gravamen of at-will          employment (a  concept which enables  either party  to scrap  the          relationship  at   any  time,  without  notice   or  cause),  but          plaintiff's  articulation  of  the  right,  brought  full circle,          places  it  squarely  within  the  purview  of  Jackson  and  its                                                          _______          progeny.5                    The situation  which would  have obtained  if Pearson's          rationale were  adopted illustrates  the legal  impracticality of          the  distinction  that  he  advocates.    To  skirt  the term-of-          employment  obstacle, Pearson  would  have us  hold that  Hancock          promised only that it would rehire him   not that it would retain          him.   But,  if his  employment remained  at will,  Hancock would          remain   free  to   fire  him   simultaneous  with,   or  perhaps          milliseconds  after, the act of  reinstating him.   We think this          scenario   forcefully  indicates  that  the  employer's  putative          "promise"  to  rehire was  at best  illusory  and, in  any event,          lacked the  mutuality required to constitute  a binding contract.          See,  e.g., Jackson,  525 N.E.2d at  415 (suggesting  that merely          ___   ____  _______                                        ____________________               5It  is important  to note  that this  appeal is  limited to          Pearson's suit for breach of contract.   In suits based on  other          theories,  the  effect  of  Jackson's  holding   regarding  terms                                      _______          contained  in employee  manuals may  be somewhat  diluted.   See,                                                                       ___          e.g., Sinkevich  v. School Committee  of Raynham, 403  Mass. 420,          ____  _________     ____________________________          530 N.E.2d 173, 175 (1988) (in action for wrongful discharge, the          employer's personnel manual could potentially confer an otherwise          absent right  to resign  with minimal  notice);  Corion Corp.  v.                                                           ____________          Chen, ___ F. Supp. ___,  ___ (D. Mass. 1991) [1991 WL  280-288 at          ____          *7-8]  (holding the terms of a personnel manual to be enforceable          on a  theory of promissory  estoppel); cf.  Maddaloni v.  Western                                                 ___  _________     _______          Mass.  Bus Lines, Inc., 386 Mass. 877, 438 N.E.2d 351, 355 (1982)          ______________________          (noting possibility of recovery in quantum meruit).                                          12          hortatory or unilaterally modifiable "promises" are unenforceable          as  illusory); Gill  v.  Richmond Co-Operative  Ass'n, Inc.,  309                         ____      __________________________________          Mass. 73, 34 N.E.2d 509, 513-14 (1941) (where one party committed          itself to purchase only  so much as it wanted,  neither party was          bound  by the agreement due  to want of  mutuality); Bernstein v.                                                               _________          W.B.  Mfg. Co., 238 Mass. 589,  131 N.E. 200, 201 (1921) (because          ______________          one  party remained  free  to exit  at  any time,  the  agreement          violated "the  accepted legal maxim that . . . both of the mutual          promises must be binding or neither will be").                                         IV.                                         IV.                                         ___                                      Conclusion                                      Conclusion                                      __________                    In the last analysis, the plaintiff invites us to build          a legal  wall separating suits alleging  that grievance procedure          provisions in a personnel manual constitute a contract from suits          alleging that rehire provisions constitute a contract.  Accepting          this invitation would require  us to erect an  eclectic structure          without  the benefit of  either state-law blueprints  or even the          slightest intimation by the SJC that  Massachusetts jurisprudence          might  be receptive  to  so  unprecedented  a  design.    We  are          unwilling, however,  to tinker with seemingly  settled state law.          Nor is our renitency unfair to the plaintiff:  after all, Pearson          deliberately chose to bring this action in federal court when the          state  courts were  equally available  to him.6   A  litigant who                                        ____________________               6Plaintiff's   counsel  suggested  at   oral  argument  that          Pearson's suit was brought  in federal court because  it included          an ERISA  count along with  the salmagundi  of state-law  claims.          But, the state courts  have concurrent original jurisdiction over          ERISA  claims  which  are  brought  by  participants  to  recover                                          13          seeks out a  federal forum  when a state-court  forum is  equally          available to him cannot justifiably complain if the federal court          manifests great  caution in blazing  new state-law  trails.   See                                                                        ___          Ryan v. Royal Ins. Co., 916 F.2d 731, 744 (1st Cir. 1990); Porter          ____    ______________                                     ______          v. Nutter, 913 F.2d 37, 41 (1st Cir. 1990).             ______                    We need  go no further.   On the record  before us, the          plaintiff has failed sufficiently  to differentiate his case from          those  of the  unsuccessful  plaintiffs in  Jackson and  Biggins.                                                      _______      _______          Thus, these precedents apply  to determine whether the employment          manual at issue here  elevated Pearson's status above that  of an          at-will employee.   If that  potential did  not exist,  Pearson's          case  evaporates.   Because, as  we have  already  explained, the          record is devoid of  evidence that would enable Pearson  to vault          this hurdle, the district judge erred in denying Hancock's motion          for judgment as a matter of law.          Reversed.          Reversed.          ________                                        ____________________          benefits due under employee welfare benefit plans.  See 29 U.S.C.                                                              ___            1132(e)(1). Pearson's suit is of this genre.                                          14