Terminating Employment

JULIUS J. OLSON, JUSTICE

Plaintiff is a consulting engineer, a specialist in the field of heating, ventilating, and air conditioning. As such he had developed a clientele bringing him a weekly income of approximately $200.

Defendant operates a paper manufacturing plant at Grand Rapids, this state. It had employed plaintiff in his professional capacity in 1926 and again in 1930. He was paid at the rate of $200 per week while so employed. Defendant was planning extensive enlargements of its plant, the estimated expense being about $1,000,000. Ordinarily a consulting engineer’s fees for doing the necessary planning and supervision of the contemplated improvements would involve from $35,000 to $50,000. During plaintiff’s employment in 1930 there was some discussion between the parties with respect of plaintiff’s employment to take this work in hand. At that time, too, he was negotiating with the executive officers of Purdue University relative to taking a position as associate professor in its department of engineering, particularly that branch thereof relating to heating, ventilating, and air conditioning.

The Purdue position carried a salary of $3,300 per year and required only nine months’ work in the way of instructions. This would leave plaintiff free to continue his practice as a consulting engineer during a period of three months of each calendar year. He was also privileged, if he entered that position, to continue his practice as a consulting engineer at all times insofar as his professional work at the university permitted him so to do. In addition thereto, he was privileged to contribute to engineering magazines and other publications. All income from such outside engagements was to be his in addition to the stated salary. Plaintiff considered this opportunity as one especially attractive to him. Defendant had full knowledge of all the foregoing facts.

On October 13, 1930, plaintiff, having received a telegram from Purdue University offering him the position and requiring immediate acceptance or rejection thereof, at once called an officer of defendant over the long-distance telephone informing him of the offer and the necessity on his part of making immediate response thereto. Defendant’s officer agreed that if plaintiff would reject the Purdue offer and also agree to purchase the home of defendant’s power superintendent it would give plaintiff permanent employment at a salary of $600 per month. Relying thereon, plaintiff rejected the Purdue offer and immediately thereafter moved to Grand Rapids and there entered upon the performance of his duties under this arrangement. He later entered into a contract for the purchase of the superintendent’s home. Appropriate to note is the fact that these negotiations were entirely oral and over the long-distance telephone, plaintiff being at Minneapolis and defendant’s officer at Grand Rapids. The only writing between the parties is a letter written on October 14, 1930, reading thus:

Blandin Paper Co. “Grand Rapids, Minn.”Attention: Mr. C.K. Andrews “Gentlemen:

In accordance with our conversation yesterday when our agreement was settled regarding my position with your company, I have wired Purdue rejecting their offer. Under the circumstances it was impossible for us to get together on a written agreement; I had to wire Purdue at once. However, I am making this move on the assumption that there will be no difficulty in working out our agreement when I get up to Grand Rapids.

Propositions like the one Purdue made are very rare and I am turning it down since I feel that the opportunities with you for applying my past experience are very attractive, the essential consideration being, however, that the job will be a permanent one.

According to the understanding we have, I am to take over Mr. Kull’s duties as Power Superintendent and serve also as Mechanical Engineer for your plant, supervising the mechanical construction and maintenance work and other mechanical technical matters. Mr. Kull is to remain for long enough period, about six months, to permit me to get my work organized and get acquainted with the details of his work. If the proposed new construction work is started within that time it may develop that Mr. Kull may remain until that is completed after which he will leave and I take over his duties. As an accommodation to him when he leaves town I am to purchase his house.

My salary is to be six hundred dollars ($600.00) per month and you are to pay my moving expenses to Grand Rapids.

Very truly yours, “RS/m R. Skagerberg.

Plaintiff rendered the services for which he was thus engaged “dutifully, faithfully and to the complete satisfaction of the defendant and was paid the agreed salary, except as to a voluntary reduction, up to September 1, 1932,” when, so the complaint alleges, he was “wrongfully, unlawfully and wilfully” discharged from further employment, although “ready, willing and able to perform.” By reason of the alleged breach of contract he claims to have suffered general damages in the amount of $25,000, and for this he prays judgment.

From what has been stated it is clear that the issue raised by the demurrer is simply this: Do the allegations set forth in the complaint show anything more than employment of plaintiff by defendant subject to termination at the will of either party?

The words “permanent employment” have a well established meaning in the law:

In case the parties to a contract of service expressly agree that the employment shall be ‘permanent’ the law implies, not that the engagement shall be continuous or for any definite period, but that the term being indefinite the hiring is merely at will.

The difficult question presented is whether the allegations set forth in the complaint bring this case within an exception to the rule stated. We find in 18 R.C.L. p. 510, the following statement:

Under some circumstances, however, ‘permanent’ employment will be held to contemplate a continuous engagement to endure as long as the employer shall be engaged in business and have work for the employe to do and the latter shall perform the service satisfactorily. This seems to be the established rule in case the employe purchases the employment with a valuable consideration outside the services which he renders from day to day.

And in 35 A.L.R. 1434, it is said:

It has been held that where an employe has given a good consideration in addition to his services, an agreement to hire him permanently should, in the absence of other terms or circumstances to the contrary, continue so long as the employe is able and willing to do his work satisfactorily.

Plaintiff cites and relies upon Carnig v. Carr, 167 Mass. 544; Roxana Petroleum Co. v. Rice, 109 Okla. 161; Pierce v. Tennessee C. I. R. Co. 173 U.S. 1, and other cases of similar import. A brief discussion of the cited cases upon which plaintiff relies may be helpful.

In Carnig v. Carr, plaintiff had been engaged in business for himself as an enameler. Defendant was a business competitor. Being such, and for his own advantage, defendant persuaded plaintiff to give up his business and sell his stock in trade to him. As consideration, in part at least, for entering into this arrangement, defendant agreed to employ plaintiff permanently at a stated salary, his work for defendant being the same as that in which plaintiff had been engaged. It is clear that what defendant sought and accomplished was to get rid of his competitor in business upon a promise on his part to give plaintiff permanent employment. The resulting situation amounted to the same thing in substance and effect as if plaintiff had purchased his job. Under such circumstances there can be no doubt that the exception to the general rule was properly invoked and applied and furnishes an illustration thereof.

In Pierce v. Tennessee C. I. R. Co., plaintiff had received an injury while employed by defendant. To settle the difficulty defendant promised employment to plaintiff at certain stated wages and was also to furnish certain supplies as long as his disability to do full work continued by reason of his injury. In consideration for these promises plaintiff released the company from all liability for damages on account of the injuries which caused his disability. Here, too, it is clear that plaintiff purchased from defendant his employment.

In Roxana Petroleum Co. v. Rice, plaintiffs Rice and Lyons were attorneys and rendered professional services for defendant over a period of time. They had other clients who paid them large annual retainers, one of these being the Pierce Oil Company, from which client they received an annual retainer of $17,500. The attorneys were prevailed upon by defendant to sever their connections with other clients and were promised and paid an annual retainer of $15,000, later increased to $20,000. Some time thereafter the petroleum company claimed that the expense bills were unsatisfactory. A controversy arose, and to settle same a compromise agreement was made. “In this compromise agreement a new employment contract was made. The general offices of the company had been moved to St. Louis. Plaintiffs were to continue their services in representing defendant in 40 or 50 lawsuits that were then pending in the courts of Oklahoma and Texas, and they were to continue in the services of the company in these two states as long as the defendant operated therein and as long as the services of the plaintiffs were satisfactory, and pay them reasonable fees for legal as well as other services. Later on new difficulties arose respecting the new contract. The court in distinguishing this form of contract from the ordinary contract of permanent employment came to the conclusion that because plaintiffs had compromised their claims against the company, changed their position in relation to their general practice, incurred expenses in maintaining an office for the special services of defendant, that thereby there was a permanent contract of employment. The court said:

We are of the opinion that from the facts and circumstances attending the making of the contract of employment in the instant case it was the intention of the parties that the employment was to continue as long as the defendant was in business in Oklahoma and Texas, and the plaintiffs were not subject to discharge without cause.

With regard to that part of the new agreement which provided that plaintiffs were to be paid as long as their services were “satisfactory” to defendant, the facts were such as to justify the court in holding that defendant’s claimed dissatisfaction was not genuine but rather and only pretended. The court quoted with approval the following statement from Electric Lighting Co. v. Elder Bros.:

But the dissatisfaction must be in good faith and with the performance of the contract. A plea of dissatisfaction with the work agreed to be satisfactorily completed must allege the facts from which the dissatisfaction arises. He must be in good faith dissatisfied. He cannot avoid liability by merely alleging that he is dissatisfied. The dissatisfaction must not be capricious nor mercenary nor result from a design to be dissatisfied. It must exist as a fact. It must be actual, not feigned; real, not merely a pretext to escape liability.

That the court did not intend to go beyond the general rule pertaining to such form of contract is clearly shown by the subsequent opinion rendered in Dunn v. Birmingham S. R. Co., where plaintiff was hired as defendant’s exclusive agent for the sale of its products in Tulsa, no time limit as to term of service having been provided for in the agreement. Five months later defendant, without notice to plaintiff, began selling its products to other retailers in Tulsa. Judgment for plaintiff in nominal damages only was sustained on appeal.

This court has had occasion to pass upon similar questions in various cases. Thus in Horn v. Western Land Assn., plaintiff had been appointed as attorney for defendant “at a salary of $1,000 per year, payable quarterly,” and was so informed in writing. Plaintiff wrote a letter “accepting the appointment upon the terms offered.” The court determined that this constituted a contract as to which neither party, without the other’s consent, could lawfully rescind without cause during the year.

In Bolles v. Sachs, two written agreements were involved, neither showing upon its face mutuality of obligation or other consideration. The court held that the two instruments could be considered together so as to show that one was given in consideration for the other. As thus construed the contract amounted to one of employment providing in substance that plaintiff was to render services for defendant as long as he might elect to serve. The employer breached the contract and sued for damages. The court held that the employe, never having fixed by his election the period of service, could not recover substantial damages, the obligation violated being too uncertain to furnish a basis for assessment of substantial damages.

In Smith v. St. Paul D. R. Co., plaintiff had been injured in the line of his employment. In settlement of the injury he was promised employment. In respect of the validity of such contract the court said:

The consideration for defendant’s agreement to employ was paid by the release of plaintiff’s claim for damages quite as much and as effectually as if plaintiff had actually paid cash. By releasing his claim for damages, the plaintiff paid in advance for the privilege or option of working for the defendant; and, having done this, he had the right to have it remain optional with him how long he would continue to work for the company, while it remained obligatory upon the latter to furnish the opportunity so long as he chose to work, and was able to properly perform the same. The plaintiff had parted with value for the optional contract, and there was owing to him a reciprocal duty and obligation on the part of the company.

In McMullan v. Dickinson Co., the first syllabus paragraph of the second opinion reads:

Plaintiff and defendant, a corporation, entered into an agreement by the terms of which the latter employed the former as assistant manager upon a stated yearly salary, payable in monthly instalments, said employment to continue so long as the business of the corporation should be continued, provided plaintiff properly and efficiently discharged his duties, and only so long as he should own and hold in his own name 50 shares of capital stock, fully paid up, in defendant corporation. Held, that the period of employment was for such time as plaintiff continued to own and hold the stock shares, not exceeding the period during which the corporate business was being transacted, and was fixed with sufficient definiteness; and, further, that there was no lack of mutuality of consideration.

In Newhall v. Journal Printing Co., action was brought upon a written contract. Plaintiff’s assignor, in consideration of $135 paid to defendant, was by the latter given the exclusive right to sell its publications within certain specified territory. Provision was made in the contract that either party thereto might terminate the same upon 30 days’ written notice to the other. Upon the expiration of the 30-day period from the date of service of such notice “all the rights of said second party plaintiff under said contract shall cease, except the right of reimbursement as hereinafter provided; provided, however, that said first party defendant shall not terminate this contract, except for the dishonesty, incompetence, negligence, inattention, or irresponsibility of said second party.” The court held upon plaintiff’s action to recover damages for its breach that the parties intended (and the contract clearly expressed such intention) that defendant could not terminate the contract “except for the dishonesty, incompetence, negligence, inattention, or irresponsibility” by the other party thereto.

From the cases discussed, and the discussion is limited to but a few of the many available, the rules of law applicable to the facts in the instant case do not seem to be in doubt, nor do we understand that counsel for either side criticize the rules of law laid down in these cases. Division or difference of opinion arises entirely by reason of the difficulty in application of these rules to the facts pleaded.

Plaintiff maintains that four different items of consideration entered into the contract relied upon, in addition to the promised service to be rendered, namely: (1) The rejection of the Purdue offer; (2) the agreement to purchase the superintendent’s house; (3) that plaintiff gave up an established business; and (4) that defendant saved the commission that it otherwise would have to pay engineers on new construction work.

Plaintiff obviously could not accept both the Purdue and the defendant’s offer. It was for him to take one or the other. He could not possibly serve both masters.

A man capable of earning $600 per month necessarily must be possessed of both learning and experience in his particular line of endeavor. The fact that he was able to command such salary at the time of entering into defendant’s service is convincing proof that there must be more than one person or enterprise seeking his talents and services. If plaintiff had elected to go to Purdue and, after having been there employed the same length of time as he was by defendant, was then discharged, does it follow that he could successfully sue Purdue University upon the same theory that he is here making a basis for liability against defendant? We have found no case fitting into plaintiff’s claim in this regard.

What has been said in respect of the Purdue opportunity applies with equal force to the third point raised by plaintiff. His capacity as a specialist in his line of endeavor had built up for him a lucrative practice. That practice he could not take with him when he entered defendant’s employment. Is not this exactly what every person having any line of employment must do when he seeks and obtains another? If plaintiff had been engaged in the practice of the law and as such had established a clientele bringing the same income and had later taken on a contract to act for a corporate enterprise at a fixed salary of $600 per month upon the same basis as here, do his counsel think, in virtue of the well established rules of applicable law, that he would have a lifetime job? Would not counsel have insisted upon a more definite agreement than that relied upon here?

Plaintiff’s claims in this regard are ably discussed and disposed of in Minter v. Tootle, Campbell Dry Goods Co. In that case plaintiff was employed by defendant for a term which plaintiff supposed to be permanent. About two years thereafter he was discharged and brought this action to recover his expenses and unpaid salary. There the employe in order to enter into defendant’s employment gave up his other employment. This was the basis for his theory of the case. The court said:

The reported cases which deal with contracts of employment in commercial business, where no other consideration than a promise to perform the service passes from the employe to the employer, are almost unanimous in applying the general rule that the words permanent, lasting, constant, or steady, applied to the term of employment do not constitute a contract of employment for life, or for any definite period, and such contracts fall under the rule ‘that an indefinite hiring at so much per day, or per month, or per year, is a hiring at will and may be terminated by either party at any time, and no action can be sustained in such case for a wrongful discharge.’ The general rule that the assurance of permanent employment will be construed as meaning an indefinite, as distinguished from a special, or merely temporary employment, is a common sense inference founded upon common knowledge of the customs and usages of business. The effort of plaintiff to show an additional consideration passing from him to defendant was abortive since it shows that he merely abandoned other activities and interests to enter into the service of defendant — a thing almost every desirable servant does upon entering a new service, but which, of course, cannot be regarded as constituting any additional consideration to the master.

With regard to purchase of the superintendent’s house, note should be made that in plaintiff’s letter written the day following the alleged making of the contract he said:

According to the understanding we have I am to take over Mr. Kull’s duties as Power Superintendent and serve also as Mechanical Engineer for your plant, supervising the mechanical construction and maintenance work and other mechanical technical matters. Mr. Kull is to remain for long enough period, about six months, to permit me to get my work organized and get acquainted with the details of his work. If the proposed new construction work is started within that time it may develop that Mr. Kull may remain until that is completed after which he will leave and I take over his duties.

As an accommodation to him when he leaves town I am to purchase his house.

It is difficult to find anything in this language indicating a consideration for, going to, or in any way benefiting defendant to induce it to enter into such contract. Plaintiff’s own statement is that “as an accommodation to Kull when he leaves town I am to purchase his house.” How this could be of any material interest to or concern of defendant in view of plaintiff’s own letter and stipulation is not apparent. Nowhere in the complaint is there any allegation that the purchase of the house from the superintendent in any way benefited defendant or damaged plaintiff. A man in plaintiff’s position would necessarily be interested in acquiring a place of abode upon leaving Minneapolis for Grand Rapids. In the very nature of his requirements he entered into the purchase for his own use and accommodation rather than for any benefit to or advantage of defendant. Nowhere is there any suggestion that defendant was to furnish him with a place of abode or do anything whatever in respect of finding or providing such.

GRODIN, J.

After 32 years of employment with See’s Candies, Inc., in which he worked his way up the corporate ladder from dishwasher to vice president in charge of production and member of the board of directors, Wayne Pugh was fired. Asserting that he had been fired in breach of contract and for reasons which offend public policy he sued his former employer seeking compensatory and punitive damages for wrongful termination, and joined as a defendant a labor organization which, he alleged, had conspired in or induced the wrongful conduct. The case went to trial before a jury, and upon conclusion of the plaintiff’s case-in-chief the trial court granted defendants’ motions for nonsuit, and this appeal followed.

SUMMARY OF THE EVIDENCE

The defendant employer is in the business of manufacturing fresh candy at its plants in Los Angeles and South San Francisco and marketing the candy through its own retail outlets. The South San Francisco plant is operated under the name See’s Candies, Inc., a wholly owned subsidiary corporation of See’s Candy Shops, Inc., which operates the Los Angeles plant as well. The stock of See’s Candy Shops, Inc., was held by members of the See family until 1972, when it was sold to Blue Chip Stamps Corporation. For convenience, the designation “See’s” will be used to refer to both companies.

Pugh began working for See’s at its Bay Area plant (then in San Francisco) in January 1941 washing pots and pans. From there he was promoted to candy maker, and held that position until the early part of 1942, when he entered the Air Corps. Upon his discharge in 1946 he returned to See’s and his former position. After a year he was promoted to the position of production manager in charge of personnel, ordering raw materials, and supervising the production of candy. When, in 1950, See’s moved into a larger plant in San Francisco, Pugh had responsibility for laying out the design of the plant, taking bids, and assisting in the construction. While working at this plant, Pugh sought to increase his value to the company by taking three years of night classes in plant layout, economics, and business law. When See’s moved its San Francisco plant to its present location in South San Francisco in 1957, Pugh was given responsibilities for the new location similar to those which he undertook in 1950. By this time See’s business and its number of production employees had increased substantially, and a new position of assistant production manager was created under Pugh’s supervision.

In 1971 Pugh was again promoted, this time as vice president in charge of production and was placed upon the board of directors of See’s northern California subsidiary, “in recognition of his accomplishments.” In 1972 he received a gold watch from See’s “in appreciation of 31 years of loyal service.”

In May 1973 Pugh travelled with Charles Huggins, then president of See’s, and their respective families to Europe on a business trip to visit candy manufacturers and to inspect new equipment. Mr. Huggins returned in early June to attend a board of director’s meeting while Pugh and his family remained in Europe on a planned vacation.

Upon Pugh’s return from Europe on Sunday, June 25, 1973, he received a message directing him to fly to Los Angeles the next day and meet with Mr. Huggins.

Pugh went to Los Angeles expecting to be told of another promotion. The preceding Christmas season had been the most successful in See’s history, the Valentine’s Day holiday of 1973 set a new sales record for See’s, and the March 1973 edition of See’s Newsletter, containing two pictures of Pugh, carried congratulations on the increased production.

Instead, upon Pugh’s arrival at Mr. Huggin’s office, the latter said, “Wayne, come in and sit down. We might as well get right to the point. I have decided your services are no longer required by See’s Candies. Read this and sign it.” Huggins handed him a letter confirming his termination and directing him to remove that day “only personal papers and possessions from your office,” but “absolutely no records, formulas or other material”; and to turn in and account for “all keys, credit cards, et cetera.” The letter advised that Pugh would receive unpaid salary, bonuses and accrued vacation through that date, and the full amount of his profit sharing account, but “No severance pay will be granted.” Finally, Pugh was directed “not to visit or contact Production Department employees while they are on the job.”

The letter contained no reason for Pugh’s termination. When Pugh asked Huggins for a reason, he was told only that he should “look deep within himself” to find the answer, that “Things were said by people in the trade that have come back to us.” Pugh’s termination was subsequently announced to the industry in a letter which, again, stated no reasons.

When Pugh first went to work for See’s, Ed Peck, then president and general manager, frequently told him: “if you are loyal to See’s and do a good job, your future is secure.” Laurance See, who became president of the company in 1951 and served in that capacity until his death in 1969, had a practice of not terminating administrative personnel except for good cause, and this practice was carried on by his brother, Charles B. See, who succeeded Laurance as president.

During the entire period of his employment, there had been no formal or written criticism of Pugh’s work. raised at the annual meetings which preceded each holiday season, and he was never denied a raise or bonus. He received no notice that there was a problem which needed correction, nor any warning that any disciplinary action was being contemplated.

Pugh’s theory as to why he was terminated relates to a contract which See’s at that time had with the defendant union. Prior to 1971, the union represented employees of See’s as well as employees of certain other candy manufacturers in a multiemployer bargaining unit, and there existed a collective bargaining agreement between the union and an employer association representing those manufacturers. In addition, there existed for many years prior to 1971 a supplemental agreement between the union and See’s which contained provisions applicable to See’s only.

In 1968 the supplemental agreement contained a new rate classification which permitted See’s to pay its seasonal employees at a lower rate. At a company meeting prior to the 1968 negotiations, Pugh had objected to the proposed new seasonal classification on the grounds that it might make it more difficult to recruit seasonal workers, and create unrest among See’s regular seasonal workers who had worked previously for other manufacturers at higher rates. Huggins overruled Pugh’s objection and (unknown to Pugh) recommended his termination for “lack of cooperation” as to which Pugh’s objection formed “part of the reason.” His recommendation was not accepted.

The 1968 association and supplemental agreements expired in 1971. Thereafter See’s negotiated with the union separately, and not as a part of any employer association.

The 1971 agreement expired in 1973. In April of that year, Huggins asked Pugh to be part of the negotiating team for the new union contract. Pugh responded that he would like to, but he was bothered by the possibility that See’s had a “sweetheart contract” with the union. In response, someone banged on the table and said, ” ‘You don’t know what the hell you are talking about.’” Pugh said, “Well, I think I know what I am talking about. I don’t know whether you have a sweetheart contract, but I am telling you if you do, I don’t want to be involved because they are immoral, illegal and not in the best interests of my employees.” At the trial, Pugh explained that to him a “sweetheart contract” was “a contract whereby one employer would get an unfair competitive advantage over a competitor by getting a lower wage rate, would be one version of it.” He also felt, he testified, that “if they in fact had a sweetheart contract that it wouldn’t be fair to my female employees to be getting less money than someone would get working in the same industry under the same manager.”

The union’s alleged participation in Pugh’s termination was in the form of a statement attributed to Mr. Button (the individual who succeeded Pugh as production manager) at a negotiating meeting between the company and the union in June 1973. According to one witness, Mr. Button stated at the commencement of the meeting, “Now we’ve taken care of Mr. Pugh. What are you going to do for us.”

DISCUSSION

A. Historical Background.

The law of the employment relationship has been, and perhaps still is, in the process of continuing evolution. The old law of master and servant, which held sway through the 18th century and to some extent beyond, viewed the relationship as primarily one of status rather than of contract. While agreement gave rise to the relationship and might establish certain of its terms, it was “custom and public policy, not the will of the parties, which defined the implicit framework of mutual rights and obligations.”

The essence of the relationship as so defined drew its contours from the model of the household — in which, typically, the servant worked, the master had general authority to discipline the servant, and it was the servant’s duty to obey. At the same time, the master had certain responsibilities for the servant’s general welfare. The relationship was thus in a sense paternalistic. And it was not terminable at will; rather, there existed a presumption (in the absence of contrary agreement) that employment was for a period of one year.

With the industrial revolution in the 19th century the law of master and servant underwent a gradual remodeling, primarily at the hands of the judiciary. Primary emphasis came to be placed, through contract doctrine, upon the freedom of the parties to define their own relationship. “The emphasis shifted from obligation to freedom of choice.” The terms of the contract were to be sought in voluntary agreement, express or implied, the employee being presumed to have assented to the rules and working conditions established by the employer.

In light of the generally superior bargaining power of the employer, “the employment contract became by the end of the nineteenth century a very special sort of contract — in large part a device for guaranteeing to management unilateral power to make rules and exercise discretion.” And management’s unilateral power extended, generally, to the term of the relationship as well. The new emphasis brought with it a gradual weakening of the traditional presumption that a general hiring (i.e., one without a specific term) was for a year, and its replacement by the converse presumption that “a general or indefinite hiring is prima facie a hiring at will.” (Wood, A Treatise on the Law of Master and Servant (1877) § 134, fn. 49.)(n.3 in opinion) See Blumrosen, Workers’ Rights Against Employers and Unions: Justice Francis — A Judge For Our Season (1970) 24 Rutgers L.Rev. 480, 481. It has been observed that what is sometimes called “Wood’s rule” finds dubious support in the authorities upon which the treatise relies. (Note, Implied Contract Rights to Job Security (1974) 26 Stan.L.Rev. 335, 341.)

In California, this presumption is reflected in Labor Code section 2922, which provides: “An employment, having no specified term, may be terminated at the will of either party on notice to the other. Employment for a specified term means an employment for a period greater than one month.”

The recognized inequality in bargaining power between employer and individual employee undergirded the rise of the labor unions and the institutionalization of collective bargaining.(n.4 in opinion) Congress, in adopting the National Labor Relations Act in 1935 found “inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract, and employers who are organized in the corporate or other forms of ownership association.” 29 U.S.C. § 151.

And through collective bargaining, unions have placed limitations on the employer’s unilateral right of termination. Under most union contracts, employees can only be dismissed for “just cause,” and disputes over what constitutes cause for dismissal are typically decided by arbitrators chosen by the parties. Collective bargaining agreements, however, cover only a small fraction of the nation’s work force, and employees who either do not or (as in the case of managerial employees such as Mr. Pugh) cannot form unions are left without that protection.

In recent years, there have been established by statute a variety of limitations upon the employer’s power of dismissal. Employers are precluded, for example, from terminating employees for a variety of reasons, including union membership or activities, race, sex, age or political affiliation. Legislatures in this country have so far refrained, however, from adopting statutes, such as those which exist in most other industrialized countries, which would provide more generalized protection to employees against unjust dismissal. And while public employees may enjoy job security through civil service rules the legal principles which give rise to these protections are not directly applicable to employees in private industry.

Even apart from statute or constitutional protection, however, the employer’s right to terminate employees is not absolute. “The mere fact that a contract is terminable at will does not give the employer the absolute right to terminate it in all cases.” Two relevant limiting principles have developed, one of them based upon public policy and the other upon traditional contract doctrine. The first limitation precludes dismissal “when an employer’s discharge of an employee violates fundamental principles of public policy”, the second when the discharge is contrary to the terms of the agreement, express or implied. Appellant relies upon both these principles in contesting his termination here.

C. Contract Limitations.

The presumption that an employment contract is intended to be terminable at will is subject, like any presumption, to contrary evidence. This may take the form of an agreement, express or implied, that the relationship will continue for some fixed period of time. Or, and of greater relevance here, it may take the form of an agreement that the employment relationship will continue indefinitely, pending the occurrence of some event such as the employer’s dissatisfaction with the employee’s services or the existence of some “cause” for termination. Sometimes this latter type of agreement is characterized as a contract for “permanent” employment, but that characterization may be misleading. In one of the earliest California cases on this subject, the Supreme Court interpreted a contract for permanent employment as meaning “that plaintiffs’ employment was to continue indefinitely, and until one or the other of the parties wish, for some good reason, to sever the relation.”

A contract which limits the power of the employer with respect to the reasons for termination is no less enforcible because it places no equivalent limits upon the power of the employee to quit his employment. “If the requirement of consideration is met, there is no additional requirement of equivalence in the values exchanged, or ‘mutuality of obligation.’”

Moreover, while it has sometimes been said that a promise for continued employment subject to limitation upon the employer’s power of termination must be supported by some “independent consideration,” i.e., consideration other than the services to be rendered, such a rule is contrary to the general contract principle that courts should not inquire into the adequacy of consideration. “A single and undivided consideration may be bargained for and given as the agreed equivalent of one promise or of two promises or of many promises.” Thus there is no analytical reason why an employee’s promise to render services, or his actual rendition of services over time, may not support an employer’s promise both to pay a particular wage (for example) and to refrain from arbitrary dismissal.

The most likely explanation for the “independent consideration” requirement is that it serves an evidentiary function: it is more probable that the parties intended a continuing relationship, with limitations upon the employer’s dismissal authority, when the employee has provided some benefit to the employer, or suffers some detriment, beyond the usual rendition of service. This functional view of “independent consideration” in the employment context has acquired judicial recognition in other states, and has been accepted in several recent cases by the California courts.

Accordingly, “it is settled that contracts of employment in California are terminable only for good cause if either of two conditions exist: (1) the contract was supported by consideration independent of the services to be performed by the employee for his prospective employer; or (2) the parties agreed, expressly or impliedly, that the employee could be terminated only for good cause.”

In determining whether there exists an implied-in-fact promise for some form of continued employment courts have considered a variety of factors in addition to the existence of independent consideration. These have included, for example, the personnel policies or practices of the employer, the employee’s longevity of service, actions or communications by the employer reflecting assurances of continued employment, and the practices of the industry in which the employee is engaged.

A related doctrinal development exists in the application to the employment relationship of the “implied-in-law covenant of good faith and fair dealing inherent in every contract.” The California Supreme Court in Tameny took note of authorities in other jurisdictions which have found an employer’s discharge of an at-will employee violative of that covenant, but considered it unnecessary to reach that issue in light of its holding that the pleading stated a cause of action on other grounds.

Recently one Court of Appeal has had occasion to confront the applicability of that doctrine more directly. In Cleary v. American Airlines, Inc., an employee who had been dismissed for alleged theft after 18 years of allegedly satisfactory service brought suit claiming, among other things, that his dismissal was in violation of published company policy requiring a “fair, impartial and objective hearing” in such matters, and in breach of the covenant of good faith and fair dealing. Holding that the complaint stated a cause of action on these grounds, the court reasoned:

Two factors are of paramount importance in reaching our result. One is the longevity of service by plaintiff — 18 years of apparently satisfactory performance. Termination of employment without legal cause after such a period of time offends the implied-in-law covenant of good faith and fair dealing contained in all contracts, including employment contracts.

The second factor of considerable significance is the expressed policy of the employer set forth in the regulation referred to in the pleadings. This policy involves the adoption of specific procedures for adjudicating employee disputes such as this one. While the contents of the regulation are not before us, its existence compels the conclusion that this employer had recognized its responsibility to engage in good faith and fair dealing rather than in arbitrary conduct with respect to all of its employees.

In the case at bench, we hold that the longevity of the employee’s service, together with the expressed policy of the employer, operate as a form of estoppel, precluding any discharge of such an employee by the employer without good cause.”

If “termination of employment without legal cause after 18 years of service offends the implied-in-law covenant of good faith and fair dealing contained in all contracts, including employment contracts,” as the court said in the above-quoted portion of Cleary, then a fortiori that covenant would provide protection to Pugh, whose employment is nearly twice that duration. Indeed, it seems difficult to defend termination of such a long-time employee arbitrarily, i.e., without some legitimate reason, as compatible with either good faith or fair dealing.

In Cleary the court did not base its holding upon the covenant of good faith and fair dealing alone. Its decision rested also upon the employer’s acceptance of responsibility for refraining from arbitrary conduct, as evidenced by its adoption of specific procedures for adjudicating employee grievances. While the court characterized the employer’s conduct as constituting “recognition of its responsibility to engage in good faith and fair dealing”, the result is equally explicable in traditional contract terms: the employer’s conduct gave rise to an implied promise that it would not act arbitrarily in dealing with its employees.

Here, similarly, there were facts in evidence from which the jury could determine the existence of such an implied promise: the duration of appellant’s employment, the commendations and promotions he received, the apparent lack of any direct criticism of his work, the assurances he was given, and the employer’s acknowledged policies. While oblique language will not, standing alone, be sufficient to establish agreement, it is appropriate to consider the totality of the parties’ relationship: Agreement may be “‘shown by the acts and conduct of the parties, interpreted in the light of the subject matter and of the surrounding circumstances.’”

Since this litigation may proceed toward yet uncharted waters, we consider it appropriate to provide some guidance as to the questions which the trial court may confront on remand. We have held that appellant has demonstrated a prima facie case of wrongful termination in violation of his contract of employment. The burden of coming forward with evidence as to the reason for appellant’s termination now shifts to the employer. Appellant may attack the employer’s offered explanation, either on the ground that it is pretextual (and that the real reason is one prohibited by contract or public policy, or on the ground that it is insufficient to meet the employer’s obligations under contract or applicable legal principles. Appellant bears, however, the ultimate burden of proving that he was terminated wrongfully.

By what standard that burden is to be measured will depend, in part, upon what conclusions the jury draws as to the nature of the contract between the parties. The terms “just cause” and “good cause,” “as used in a variety of contexts have been found to be difficult to define with precision and to be largely relative in their connotation, depending upon the particular circumstances of each case.” Essentially, they connote “a fair and honest cause or reason, regulated by good faith on the part of the party exercising the power.” Care must be taken, however, not to interfere with the legitimate exercise of managerial discretion.(n. 26 in opinion) Labor arbitrators have generated a large body of decisions interpreting and applying such terms as “just cause”, and some of their work may be useful. It must be remembered, however, that arbitrators are selected by the parties and on the basis, partly, of the confidence which the parties have in their knowledge and judgment concerning labor relations matters. For courts to apply the same standards may prove overly intrusive in some cases.

“Good cause” in this context is quite different from the standard applicable in determining the propriety of an employee’s termination under a contract for a specified term. And where, as here, the employee occupies a sensitive managerial or confidential position, the employer must of necessity be allowed substantial scope for the exercise of subjective judgment.

Arbitrator: Carroll R. Daugherty

Test Applicable for Learning Whether Employer Had Just and Proper Cause for Disciplining an Employee

Few if any union-management agreements contain a definition of “just cause.” Nevertheless, over the years the opinions of arbitrators in unnumerable discipline cases have developed a sort of “common law” definition thereof. This definition consists of a set of guide lines or criteria that are to be applied to the facts of any one case, and said criteria are set forth below in the form of questions.

A “no” answer to any one or more of the following questions normally signifies that just and proper cause did not exist. In other words, such “no” means that the employer’s disciplinary decision contained one or more elements of arbitrary, capricious, unreasonable, or discriminatory action to such an extent that said decision constituted an abuse of managerial discretion warranting the arbitrator to substitute his judgment for that of the employer.

The answers to the questions in any particular case are to be found in the evidence presented to the arbitrator at the hearing thereon. Frequently, of course, the facts are such that the guide lines cannot be applied with precision. Moreover, occasionally, in some particular case an arbitrator may find one or more “no” answers so weak and the other, “yes” answers so strong that he may properly, without any “political” or spineless intent to “split the difference” between the opposing positions of the parties, find that the correct decision is to “chastize” both the company and the disciplined employee by decreasing but not nullifying the degree of discipline imposed by the company—e.g., by reinstating a discharged employee without back pay.

It should be clearly understood also that the criteria set forth below are to be applied to the employer’s conduct in making his disciplinary decision before same has been processed through the grievance procedure to arbitration. Any question as to whether the employer has properly fulfilled the contractual requirements of said procedure is entirely separate from the question of whether he fulfilled the “common law” requirements of just cause before the discipline was “grieved.”

Sometimes although very rarely, a union-management agreement contains a provision limiting the scope of the arbitrator’s inquiry into the question of just cause. For example, one such provision seen by this arbitrator says that “the only question the arbitrator is to determine shall be whether the employee is or is not guilty of the act or acts resulting in his discharge.” Under the latter contractual statement an arbitrator might well have to confine his attention to Question No. 5 below-or at most to Questions Nos. 3, 4, and 5. But absent any such restriction in an agreement, a consideration of the evidence on all seven Questions (and their accompanying Notes) is not only proper but necessary.

The Questions

WILENTZ, C.J.

I.

The issue before us is whether certain terms in a company’s employment manual may contractually bind the company. We hold that absent a clear and prominent disclaimer, an implied promise contained in an employment manual that an employee will be fired only for cause may be enforceable against an employer even when the employment is for an indefinite term and would otherwise be terminable at will.

II.

Plaintiff, Richard Woolley, was hired by defendant, Hoffmann-La Roche, Inc., in October 1969, as an Engineering Section Head in defendant’s Central Engineering Department at Nutley. There was no written employment contract between plaintiff and defendant. Plaintiff began work in mid-November 1969. Some time in December, plaintiff received and read the personnel manual on which his claims are based.

In 1976, plaintiff was promoted, and in January 1977 he was promoted again, this latter time to Group Leader for the Civil Engineering, the Piping Design, the Plant Layout, and the Standards and Systems Sections. In March 1978, plaintiff was directed to write a report to his supervisors about piping problems in one of defendant’s buildings in Nutley. This report was written and submitted to plaintiff’s immediate supervisor on April 5, 1978. On May 3, 1978, stating that the General Manager of defendant’s Corporate Engineering Department had lost confidence in him, plaintiff’s supervisors requested his resignation. Following this, by letter dated May 22, 1978, plaintiff was formally asked for his resignation, to be effective July 15, 1978.

Plaintiff refused to resign. Two weeks later defendant again requested plaintiff’s resignation, and told him he would be fired if he did not resign. Plaintiff again declined, and he was fired in July.

Plaintiff filed a complaint alleging breach of contract, intentional infliction of emotional distress, and defamation, but subsequently consented to the dismissal of the latter two claims. The gist of plaintiff’s breach of contract claim is that the express and implied promises in defendant’s employment manual created a contract under which he could not be fired at will, but rather only for cause, and then only after the procedures outlined in the manual were followed. Plaintiff contends that he was not dismissed for good cause, and that his firing was a breach of contract.

Defendant’s motion for summary judgment was granted by the trial court, which held that the employment manual was not contractually binding on defendant, thus allowing defendant to terminate plaintiff’s employment at will.

III.

Hoffmann-La Roche contends that the formation of the type of contract claimed by plaintiff to exist - Hoffmann-La Roche calls it a permanent employment contract for life - is subject to special contractual requirements: the intent of the parties to create such an undertaking must be clear and definite; in addition to an explicit provision setting forth its duration, the agreement must specifically cover the essential terms of employment - the duties, responsibilities, and compensation of the employee, and the proof of these terms must be clear and convincing; the undertaking must be supported by consideration in addition to the employee’s continued work. Woolley claims that the requirements for the formation of such a contract have been met here and that they do not extend as far as Hoffmann-La Roche claims. Further, Woolley argues that this is not a “permanent contract for life,” but rather an employment contract of indefinite duration that may be terminated only for good cause and in accordance with the procedure set forth in the personnel policy manual. Both parties agree that the employment contract is one of indefinite duration; Hoffmann-La Roche contends that in New Jersey, when an employment contract is of indefinite duration, the inescapable legal conclusion is that it is an employment at will; Woolley claims that even such a contract - of indefinite duration - may contain provisions requiring that termination be only for cause.

The trial court held that in the absence of a “most convincing” demonstration that “it was the intent of the parties to enter into such long-range commitments clearly, specifically and definitely expressed”, supported by consideration over and above the employee’s rendition of services, the employment is at will. Finding that the personnel policy manual did not contain any such clear and definite expression and, further, that there was no such additional consideration, the court granted summary judgment in favor of defendant, sustaining its right to fire plaintiff with or without cause.

The Appellate Division, viewing plaintiff’s claim as one for a “permanent or lifetime employment,” found that the company’s policy manual did not specifically set forth the term, work, hours or duties of the employment and “appeared to be a unilateral expression of company policies and procedures not bargained for by the parties,” this last reference being similar to the notion, relied on by the trial court, that additional consideration was required. Based on that view, it held that the “promulgation and circulation of the personnel policy manual by defendant did not give plaintiff any enforceable contractual rights.” In so doing it noted the “objections to a lifetime employment contract that make it contrary to public policy, i.e., lack of definiteness, unequal burden of performance, etc.”. While it did not purport to establish any special contractual rule concerning company personnel policy manuals, its analysis suggests they would ordinarily not lead to contractual consequences except for such provisions as those “involving severance pay,” which “deal with a specific term of a contract. Its parameters are clearly set forth. The conditions and factors involved are definite and easily ascertained.”

We are thus faced with the question of whether this is the kind of employment contract - a “long-range commitment” - that must be construed as one of indefinite duration and therefore at will unless the stringent requirements of Savarese v. Pyrene Mfg. Co., 9 N.J. 595 (1952) are met, or whether ordinary contractual doctrine applies. In either case, the question is whether Hoffmann-La Roche retained the right to fire with or without cause or whether, as Woolley claims, his employment could be terminated only for cause. We believe another question, not explicitly treated below, is involved: should the legal effect of the dissemination of a personnel policy manual by a company with a substantial number of employees be determined solely and strictly by traditional contract doctrine? Is that analysis adequate for the realities of such a workplace?

IV.

As originally conceived in the late 1800’s, the law was that an employment contract for an indefinite term was presumed to be terminable at will; an employee with an at-will contract could be fired for any reason (or no reason) whatsoever, be it good cause, no cause, or even morally wrong cause. Pursuant to that rule, in New Jersey employers were free to terminate an at-will employment relationship with or without cause.

The at-will rule has come under severe criticism from commentators who argue that the economic justifications for the development of the rule have changed dramatically and no longer support its harshness. The Legislature here, as in most states, has limited the at-will rule to the extent that it conflicts with the policies of our various civil rights laws so that, for instance, a firing cannot be sustained in New Jersey if it is based on the employee’s race, color, religion, sex, national origin, or age.

This Court has clearly announced its unwillingness to continue to adhere to rules regularly leading to the conclusion that an employer can fire an employee-at-will, with or without cause, for any reason whatsoever. Our holding in Pierce v. Ortho Pharmaceutical Corp., while necessarily limited to the specific issue of that case (whether employer can fire employee-at-will when discharge is contrary to a clear mandate of public policy), implied a significant questioning of that rule in general.

Commentators have questioned the compatibility of the traditional at will doctrine with the realities of modern economics and employment practices. The common law rule has been modified by the enactment of labor relations legislation. The National Labor Relations Act and other labor legislation illustrate the governmental policy of preventing employers from using the right of discharge as a means of oppression. Consistent with this policy, many states have recognized the need to protect employees who are not parties to a collective bargaining agreement or other contract from abusive practices by the employer.

This Court has long recognized the capacity of the common law to develop and adapt to current needs. The interests of employees, employers, and the public lead to the conclusion that the common law of New Jersey should limit the right of an employer to fire an employee at will.

In recognizing a cause of action to provide a remedy for employees who are wrongfully discharged, we must balance the interests of the employee, the employer, and the public. Employees have an interest in knowing they will not be discharged for exercising their legal rights. Employers have an interest in knowing that they can run their businesses as they see fit as long as their conduct is consistent with public policy. The public has an interest in employment stability and in discouraging frivolous lawsuits by dissatisfied employees.

The spirit of this language foreshadows a different approach to these questions. No longer is there the unquestioned deference to the interests of the employer and the almost invariable dismissal of the contentions of the employee. Instead, as Justice Pollock so effectively demonstrated, this Court was no longer willing to decide these questions without examining the underlying interests involved, both the employer’s and the employees’, as well as the public interest, and the extent to which our deference to one or the other served or disserved the needs of society as presently understood.

In the last century, the common law developed in a laissez-faire climate that encouraged industrial growth and approved the right of an employer to control his own business, including the right to fire without cause an employee at will. The twentieth century has witnessed significant changes in socioeconomic values that have led to reassessment of the common law rule. Businesses have evolved from small and medium size firms to gigantic corporations in which ownership is separate from management. Formerly there was a clear delineation between employers, who frequently were owners of their own businesses, and employees. The employer in the old sense has been replaced by a superior in the corporate hierarchy who is himself an employee. We are a nation of employees. Growth in the number of employees has been accompanied by increasing recognition of the need for stability in labor relations.

The thrust of the thought is unmistakable. There is an interest to be served in addition to “freedom” of contract, an interest shared by practically all. And while “stability in labor relations” is the only specifically identified public policy objective, the reference to the “laissez-faire climate” and “the right to fire without cause an employee at will” as part of the “last century” suggests that any application of the employee-at-will rule (not just its application in conflict with “a clear mandate of public policy”) must be tested by its legitimacy today and not by its acceptance yesterday.

Given this approach, the issue is not whether the rules applicable to individual lifetime or indefinite long-term employment contracts should be changed, but rather whether a correct understanding of the “underlying interests involved,” in the relationship between the employer and its workforce calls for compliance by the employer with certain rudimentary agreements voluntarily extended to the employees.

V.

The rule of Savarese, which the trial court and the Appellate Division transported to this case, was derived in a very different context from that here. The case involved an unusual transaction not likely to recur (promise by company officer, made to induce employee to play baseball with company team, for lifetime employment even if employee became disabled as a result of playing baseball). Here, instead, we have the knowing distribution of an apparently carefully thought-out policy manual intended to cover all employees of a large employer. The courts below, however, despite this completely different situation, identified the claimed implied promise not to fire except for cause as purporting to establish an individual contract for lifetime or long-term employment for a particular employee. On that basis, they concluded that the stringent rule of Savarese was triggered.

As correctly read by the trial court and the Appellate Division, Savarese required that a long-term employment arrangement such as was involved in that case must be held to be an employment at will unless two distinct requirements are satisfied: there must be clear and convincing proof of a precise agreement, setting forth all of the terms of the employment, including, in addition to the duration thereof, the duties and responsibilities of both employee and employer; and the long-term undertaking by the employer must be supported by consideration from the employee in addition to his continued work. This reluctance to impose employment contracts other than at-will on employers is found in our cases both before and after. It should be noted, however, that each of these involved a particular contract between one employee and the employer, and its interpretation; none involved the question of the impact of a contract put forth by the employer as applicable to all employees, similar to the policy manual in this case.

What is before us in this case is not a special contract with a particular employee, but a general agreement covering all employees. There is no reason to treat such a document with hostility.

The trial court viewed the manual as an attempt by Hoffmann-La Roche to avoid a collective bargaining agreement. Implicit is the thought that while the employer viewed a collective bargaining agreement as an intrusion on management prerogatives, it recognized, in addition to the advantages of an employment manual to both sides, that unless this kind of company manual were given to the workforce, collective bargaining, and the agreements that result from collective bargaining, would more likely take place.

A policy manual that provides for job security grants an important, fundamental protection for workers. If such a commitment is indeed made, obviously an employer should be required to honor it. When such a document, purporting to give job security, is distributed by the employer to a workforce, substantial injustice may result if that promise is broken.

We do not believe that Hoffmann-La Roche was attempting to renege on its promise when it fired Woolley. On the contrary, the record strongly suggests that even though it believed its manual did not create any contractually binding agreements, Hoffmann-La Roche nevertheless almost invariably honored it. In effect, it gave employees more than it believed the law required. Its position taken before us is one of principle: while contending it treated Woolley fairly, it maintains it had no legal obligation to do so.

VI.

Given the facts before us and the common law of contracts interpreted in the light of sound policy applicable to this modern setting, we conclude that the termination clauses of this company’s Personnel Policy Manual, including the procedure required before termination occurs, could be found to be contractually enforceable. Furthermore, we conclude that when an employer of a substantial number of employees circulates a manual that, when fairly read, provides that certain benefits are an incident of the employment (including, especially, job security provisions), the judiciary, instead of “grudgingly” conceding the enforceability of those provisions, should construe them in accordance with the reasonable expectations of the employees.

The employer’s contention here is that the distribution of the manual was simply an expression of the company’s “philosophy” and therefore free of any possible contractual consequences. The former employee claims it could reasonably be read as an explicit statement of company policies intended to be followed by the company in the same manner as if they were expressed in an agreement signed by both employer and employees. From the analysis that follows we conclude that a jury, properly instructed, could find, in strict contract terms, that the manual constituted an offer; put differently, it could find that this portion of the manual (concerning job security) set forth terms and conditions of employment.

In determining the manual’s meaning and effect, we must consider the probable context in which it was disseminated and the environment surrounding its continued existence. The manual, though apparently not distributed to all employees (“in general, distribution will be provided to supervisory personnel”), covers all of them. Its terms are of such importance to all employees that in the absence of contradicting evidence, it would seem clear that it was intended by Hoffmann-La Roche that all employees be advised of the benefits it confers.

We take judicial notice of the fact that Hoffmann-La Roche is a substantial company with many employees in New Jersey. The record permits the conclusion that the policy manual represents the most reliable statement of the terms of their employment. At oral argument counsel conceded that it is rare for any employee, except one on the medical staff, to have a special contract. Without minimizing the importance of its specific provisions, the context of the manual’s preparation and distribution is, to us, the most persuasive proof that it would be almost inevitable for an employee to regard it as a binding commitment, legally enforceable, concerning the terms and conditions of his employment. Having been employed, like hundreds of his co-employees, without any individual employment contract, by an employer whose good reputation made it so attractive, the employee is given this one document that purports to set forth the terms and conditions of his employment, a document obviously carefully prepared by the company with all of the appearances of corporate legitimacy that one could imagine. If there were any doubt about it (and there would be none in the mind of most employees), the name of the manual dispels it, for it is nothing short of the official policy of the company, it is the Personnel Policy Manual. As every employee knows, when superiors tell you “it’s company policy,” they mean business.

The mere fact of the manual’s distribution suggests its importance. Its changeability - the uncontroverted ability of management to change its terms - is argued as supporting its non-binding quality, but one might as easily conclude that, given its importance, the employer wanted to keep it up to date, especially to make certain, given this employer’s good reputation in labor relations, that the benefits conferred were sufficiently competitive with those available from other employers, including benefits found in collective bargaining agreements. The record suggests that the changes actually made almost always favored the employees.

Given that background, then, unless the language contained in the manual were such that no one could reasonably have thought it was intended to create legally binding obligations, the termination provisions of the policy manual would have to be regarded as an obligation undertaken by the employer. It will not do now for the company to say it did not mean the things it said in its manual to be binding. Our courts will not allow an employer to offer attractive inducements and benefits to the workforce and then withdraw them when it chooses, no matter how sincere its belief that they are not enforceable.

Whatever else the manual may deal with (as noted above, we do not have the entire manual before us), one of its major provisions deals with the single most important objective of the workforce: job security. The reasons for giving such provisions binding force are particularly persuasive. Wages, promotions, conditions of work, hours of work, all of those take second place to job security, for without that all other benefits are vulnerable.

We are dependent upon others for our means of livelihood, and most of our people have become completely dependent upon wages. If they lose their jobs they lose every resource, except for the relief supplied by the various forms of social security. Such dependence of the mass of the people upon others for all of their income is something new in the world. For our generation, the substance of life is in another man’s hands.

Job security is the assurance that one’s livelihood, one’s family’s future, will not be destroyed arbitrarily; it can be cut off only “for good cause,” fairly determined. Hoffmann-La Roche’s commitment here was to what working men and women regard as their most basic advance. It was a commitment that gave workers protection against arbitrary termination.

Many of these workers undoubtedly know little about contracts, and many probably would be unable to analyze the language and terms of the manual. Whatever Hoffmann-La Roche may have intended, that which was read by its employees was a promise not to fire them except for cause.

Under all of these circumstances, therefore, it would be most unrealistic to construe this manual and determine its enforceability as if it were the same as a lifetime contract with but one employee designed to induce him to play on the company’s baseball team.

VIII.

Defendant expresses some concern that our interpretation will encourage lawsuits by disgruntled employees. As we view it, however, if the employer has in fact agreed to provide job security, plaintiffs in lawsuits to enforce that agreement should not be regarded as disgruntled employees, but rather as employees pursuing what is rightfully theirs. The solution is not deprivation of the employees’ claim, but enforcement of the employer’s agreement. The defendant further contends that its future plans and proposed projects are premised on continuance of the at-will employment status of its workforce. We find this argument unpersuasive. There are many companies whose employees have job security who are quite able to plan their future and implement those plans. If, however, the at-will employment status of the workforce was so important, the employer should not have circulated a document so likely to lead employees into believing they had job security.

XI.

Our opinion need not make employers reluctant to prepare and distribute company policy manuals. Such manuals can be very helpful tools in labor relations, helpful both to employer and employees, and we would regret it if the consequence of this decision were that the constructive aspects of these manuals were in any way diminished. We do not believe that they will, or at least we certainly do not believe that that constructive aspect should be diminished as a result of this opinion.

All that this opinion requires of an employer is that it be fair. It would be unfair to allow an employer to distribute a policy manual that makes the workforce believe that certain promises have been made and then to allow the employer to renege on those promises. What is sought here is basic honesty: if the employer, for whatever reason, does not want the manual to be capable of being construed by the court as a binding contract, there are simple ways to attain that goal. All that need be done is the inclusion in a very prominent position of an appropriate statement that there is no promise of any kind by the employer contained in the manual; that regardless of what the manual says or provides, the employer promises nothing and remains free to change wages and all other working conditions without having to consult anyone and without anyone’s agreement; and that the employer continues to have the absolute power to fire anyone with or without good cause.

COZORT, Judge.

Plaintiff employee brought an action for breach of employment contract and for wrongful discharge allegedly based on breach of implied covenant of good faith and fair dealing. The trial court granted summary judgment for defendant employer. We affirm.

The depositions and other materials in the record demonstrate that, in 1985, plaintiff was employed at Burroughs Wellcome Company in Greenville, North Carolina, as a chemist testing pharmaceutical products. She held 11½ years of seniority, earned $22,000 a year, and received many company benefits. An employee of the defendant, Applied Analytical, Inc. (“AAI”), approached plaintiff about taking a chemist’s position with AAI at a salary of $17,500-$18,500 per year. She declined the initial offers, but following negotiations, plaintiff accepted a position with defendant. One of the main topics discussed during the negotiations was plaintiff’s need for job security. She informed defendant that if the job with AAI turned out to be unsatisfactory for either party, she would be unable to return to her job at Burroughs Wellcome, or any other pharmaceutical company, because she did not hold a four-year degree in chemistry. In response, the general manager at AAI discussed career growth with plaintiff and talked of plaintiff’s future with the company in general terms. The letter from AAI’s general manager confirming defendant’s offer of employment stated:

This letter is to confirm in writing my verbal offer to you of a Chemist position at Applied Analytical Industries, with an initial annual salary of $17,500.00.

All of us at AAI are impressed with your qualifications and believe you can make significant contributions to our company. We hope you will accept our offer and believe you will find the position challenging and rewarding. As I indicated today during our telephone conversation, I believe the position which we are offering you will allow opportunities for your continued career growth in new areas involving method development for pharmaceutical dosage forms and bioanalytical assays for drugs in biological fluids.

We would appreciate a response to our offer by April 8, 1985.

Plaintiff accepted defendant’s offer and moved to Wilmington, North Carolina, where she began working for defendant in August 1985. In January, 1986, defendant granted plaintiff early tenure in the company, increased her salary by $2,000.00, and made her eligible for profit-sharing and a bonus. Plaintiff received positive evaluations from AAI supervisors after six months of employment, and again after one year with the company. On 14 November 1986, AAI’s president, Frederick Sancilio, called plaintiff into his office and presented her with a letter of termination. The letter stated plaintiff was being discharged for low productivity and for bothering other employees. Plaintiff adamantly protested the grounds for termination, reluctantly signed the letter, packed her personal belongings, and left the same day.

We consider first whether the trial court properly granted summary judgment on plaintiff’s breach of contract claim.

It is clear in North Carolina that, in the absence of an employment contract for a definite period, both employer and employee are generaly free to terminate their association at any time and without any reason. This Court has held, however, that in some circumstances employee manuals setting forth reasons and procedures for termination may become part of the employment contract even where an express contract is nonexistent.

Plaintiff argues initially that defendant’s personnel manual constituted part of her employment contract. She contends the contract was breached because defendant failed to follow the disciplinary procedure outlined in the manual. In her deposition, plaintiff testified she was given a copy of AAI’s personnel manual on or about her first day of work at the company. Each employee, including plaintiff, was required to sign a statement verifying the receipt of the manual. Employees were also required to sign periodic verifications acknowledging they had read revisions to the manual. According to the defendant’s manual, employees were classified as either “probationary” or “tenured.” An employee would be classified as probationary for the first six months of satisfactory performance. The employee then is classified as a tenured employee.

The manual made no specific reference to “employment at-will.” The section of the manual describing disciplinary procedures provided: “The Company reserves the right, with or without guideline notification to: Terminate an employee at any time. Suspend from work any employee or return to probationary status from tenured status any employee.” These rights were reserved for a “severe violation” of standards or rules by a “permanent” or “tenured” employee. The handbook’s illustrations of “severe violations” included, but were not limited to: “blatant safety rule violations which endanger the health and safety of the employee and/or his fellow workers, falsification of Company records or data, misappropriation or misuse of Corporate assets, soliciting or engaging in outside activities of any kind or for any purposes on Company property at any time.” For non-severe violations committed by a “tenured” employee, the manual provided for a verbal warning upon the first violation and written notices for the second and third violations. A tenured employee would be terminated after a fourth non-severe violation. Plaintiff contends she never received a verbal or written notice prior to termination, in violation of the prescribed disciplinary procedure.

It is clear that “unilaterally promulgated employment manuals or policies do not become part of the employment contract unless expressly included in it.” In Rosby v. General Baptist State Convention, this Court found no breach of contract by an employer when the employer’s personnel policies were not incorporated into the oral contract for employment. The plaintiff received the employment manual when he was hired, and was told it would be his “work bible.” The manual included a salary scale, conditions of employment, expected conduct of employer and the employee, and procedures to be followed for disciplinary actions. The Rosby court stated:

While we are sensitive to the “strong equitable and social policy reasons militating against allowing employers to promulgate for their employees potentially misleading personnel manuals while reserving the right to deviate from them at their own caprice”, we find that in the case sub judice, the material contained within the manual was neither inflexible nor all-inclusive on the issue of termination procedures. The manual, although presented as plaintiff’s “work bible” when he was hired, was not expressly included within his terminable-at-will contract.

In contrast, in Trought v. Richardson, this Court held that plaintiff stated a claim for breach of contract based on her allegation that the employer’s policy manual was part of her employment contract. There the plaintiff was required to sign a statement indicating she had read the defendant’s policy manual which provided she could be discharged “for cause” only and which stated that certain procedures must be followed in order for her to be discharged. The plaintiff alleged she was discharged without cause and without the benefit of the personnel manual procedures. The Court concluded that “on hearing on a Rule 12(b)(6) motion the plaintiff has sufficiently alleged that the policy manual was a part of her employment contract which was breached by her discharge to survive her motion.”

In Harris v. Duke Power Co., the North Carolina Supreme Court limited the rule in Trought to those specific facts. The plaintiff in Harris contended that his employment manual was part of his contract for employment with defendant and that he was entitled to recover for breach of contract when he was discharged in violation of the manual’s provisions. The Court distinguished Trought, finding that Harris had not been told that he could be discharged only “for cause.” The Court also noted that the employment manual in Harris provided rules of conduct which were directed specifically toward management and not targeted at employees.

It is clear from the evidence below that the handbook given plaintiff by defendant cannot be considered part of her original contract. As a result, plaintiff’s breach of contract claim based on this theory must fail.

Plaintiff next argues that the employment handbook was an independent unilateral contract made by defendant to her. She argues she is entitled to recover for defendant’s breach of that unilateral contract. We disagree. North Carolina has recognized a unilateral contract theory with respect to certain benefits relating to employment. However, in Rucker v. First Union Nat’l Bank, the Court declared, “We decline to apply a unilateral contract analysis to the issue of wrongful discharge. To apply a unilateral contract analysis to the situation before us would, in effect, require us to abandon the ‘at-will’ doctrine which is the law in this State. This we cannot do.” We find Rucker to be dispositive in this case.

Plaintiff next alleges she contributed additional consideration which would remove the contract from the scope of the employment at-will doctrine. In Sides v. Duke University, this Court carved out a significant exception from the employment at-will rule. There the plaintiff did not have an employment contract and thus was employed at-will. The plaintiff’s complaint alleged that she was assured by Duke she could be discharged only for “incompetence,” and these assurances induced her to move from Michigan to accept a job in Durham. The Court stated:

Generally, employment contracts that attempt to provide for permanent employment, or “employment for life,” are terminable at will by either party. Where the employee gives some special consideration in addition to his services, such as relinquishing a claim for personal injuries against the employer, removing his residence from one place to another in order to accept employment, or assisting in breaking a strike, such a contract may be enforced.

The Court then determined:

The additional consideration that the complaint alleges, her move from Michigan, was sufficient, we believe, to remove plaintiff’s employment contract from the terminable-at-will rule and allow her to state a claim for breach of contract since it is also alleged that her discharge was for a reason other than the unsatisfactory performance of her duties.

We find the facts below distinguishable from Sides. In Sides, the defendant assured the plaintiff “both at her job interview and again when the job was offered to her that nurse anesthetists at the hospital could only be discharged for incompetence.” In the case at bar, the plaintiff cannot point to any specific assurances given to her which compare to the assurances given to the plaintiff in Sides that she would not be discharged except for “incompetence.” The assurances upon which plaintiff here bases her breach of contract theory do not contain any specific terms or conditions, as in Sides. Plaintiff’s deposition reveals:

Q. When you had your discussions with the general manager, did you tell him that you would not take the job unless you understood that you had a permanent position there?

A. Not in those particular words, but—

Q. What did you tell him?

A. —I feel like we established the fact that if I were leaving my job at Burroughs Wellcome then I was going into a job—well, he told me he felt like I could have some career growth there, that there were things that they wanted me to do in the future as far as their microbiology lab and at the time it didn’t exist but they wanted me to help them with the microbiology lab.

And, we just talked about things that were far into the future that I couldn’t just go to work there and just do.

And, he felt like I had a chance for some real career growth there and, you know, that it was for a permanent job.

Furthermore, a reading of defendant’s letter confirming plaintiff’s employment indicates no assurances concerning the duration of plaintiff’s employment or relating to the discharge policies of the company. The letter’s reference to “continued career growth” does not suffice. Plaintiff can show no more than an offer of employment for an undetermined time. The trial court’s entry of summary judgment on plaintiff’s breach of contract claim was properly granted.

Plaintiff asserts a claim against defendant for breach of implied covenant of good faith and fair dealing implicit in her employment contract. Plaintiff contends that defendant breached its implied covenant of good faith and fair dealing by discharging plaintiff in violation of defendant’s personnel policy, by breaching defendant’s assurance of permanent employment and by communicating to third parties false reasons for discharging plaintiff. We conclude the trial court properly granted summary judgment on this claim.

In Coman v. Thomas Mfg. Co., Inc., the North Carolina Supreme Court created an exception to the employment at-will doctrine by authorizing a tort claim for wrongful discharge for an at-will employee whose discharge is in violation of a public policy. The Court specifically approved language from Sides v. Duke University. The Court, quoting Sides, stated:

While there may be a right to terminate a contract at will for no reason, or for an arbitrary or irrational reason, there can be no right to terminate such a contract for an unlawful reason or purpose that contravenes public policy. A different interpretation would encourage and sanction lawlessness, which law by its very nature is designed to discourage and prevent.

The Court defined public policy as being “the principle of law which holds that no citizen can lawfully do that which has a tendency to be injurious to the public or against the public good.” Coman therefore provides an exception to the employment at-will doctrine for employees who have been wrongfully discharged for an unlawful reason or for a reason which offends the public good.

In dicta, the Court, discussed the issue of firing an employee in bad faith:

This Court has never held that an employee at will could be discharged in bad faith. To the contrary, in Haskins v. Royster, this Court recognized the principle that a master could not discharge his servant in bad faith. Thereafter, this Court stated the issue to be whether an agreement to give the plaintiff a regular permanent job was anything more than an indefinite general hiring terminable in good faith at the will of either party.

The Court also said, “Bad faith conduct should not be tolerated in employment relations, just as it is not accepted in other commercial relationships.” The plaintiff here does not contend that she has a cause of action because her termination contravened any public policy. Instead, she argues that Coman created a cause of action based solely on “a breach of the implied covenant of good faith and fair dealing.” She contends the bad faith of the defendant is proven by defendant’s disregarding its promise of a permanent job and by giving false reasons—poor performance—for her discharge. We do not find this evidence sufficient to sustain a tort claim for wrongful discharge.

In McLaughlin v. Barclays American Corp., this Court discussed whether the plaintiff there had sufficiently alleged a claim based on bad faith discharge. The plaintiff alleged that he had been fired because he struck a subordinate on the face with his hand while defending himself from an attack by the subordinate. This Court said:

Along with the compelling public-policy concerns in those cases, moreover, the holdings in Sides and Coman are consistent with the principle that our courts do not give their imprimatur to employers who discharge employees in bad faith. We cannot say, however, that defendants’ actions amounted to bad faith. Sides, in language quoted with approval by our Supreme Court, noted the employer’s right to terminate an at-will contract for “no reason, or for an arbitrary or irrational reason.” The conduct of defendants in this case, in its worst light indifferent and illogical, does not demonstrate the kind of bad faith that prompted our courts to recognize causes of action in Sides and Coman.

The question presented here is whether Sides, Coman, and McLaughlin, read together, create a separate tort action based exclusively on discharge in bad faith, where no contravention of public policy is alleged or proven. We hold that there is no independent tort action for wrongful discharge of an at-will employee based solely on allegations of discharge in bad faith. As many have pointed out, the discussion of “bad faith” in Coman was pure dicta completely unnecessary to the Court’s decision. Both Coman and Sides involved violations of public policy. Our research has not discovered a single case from a North Carolina court which has allowed a claim of wrongful discharge based solely on the theory of bad faith.

The federal courts sitting in North Carolina and applying North Carolina law to this issue are split on whether to allow bad faith discharge claims independent of public policy violations. One federal court in the Eastern District has specifically rejected the idea of permitting such a claim. In English v. General Elec. Co., the court refused to allow a plaintiff to maintain a bad faith discharge claim in the absence of an egregious public policy violation. The court reasoned:

Despite plaintiff’s assertion that North Carolina recognizes a cause of action for bad faith discharge, the court finds that the present position of the North Carolina courts is more limited. Currently, the judicially-created exception to the general rule that employees are terminable at will extends only to cases where the discharge violates some well established public policy.

Clearly, the Coman and McLaughlin decisions contain language which could arguably lead to the adoption of a good faith requirement for discharge in future cases. However, Coman and McLaughlin are grounded solely on the premise that North Carolina has created a public policy exception to the employment at-will doctrine, and any suggestion in those cases that there is a broader prohibition against discharges in bad faith is purely dicta. Although plaintiff argues that North Carolina courts would now recognize an exception to the employment at-will doctrine for bad faith discharges, the North Carolina Supreme Court in commenting on the effect of Coman stated that the employment at-will doctrine has “been narrowly eroded by statutory and public policy limitations on its scope.”

Courts in the Middle District, however, have held that a bad faith exception to employment at will exists under certain circumstances. In Iturbe v. Wandel & Goltermann Technologies, Inc., the court upheld a plaintiff’s claim for wrongful discharge based on two theories. First, the court allowed plaintiff’s claim that she was wrongfully discharged in violation of the public policy against sex and ethnic discrimination. Second, the court ruled plaintiff had stated a claim of wrongful discharge based on bad faith where the defendant failed to follow personnel manual procedures when it discharged plaintiff.

To support its bad faith holding, the court in Iturbe discussed two cases cited in Coman which illustrated other jurisdictions’ willingness to accept a bad faith exception to the employment at-will doctrine. Both cases allowed for a bad faith exception to employment at will where employees were fired in violation of written policy manuals. The court in Iturbe found the plaintiff had stated an action where it was alleged that plaintiff’s employers “had a written procedure for layoffs in which job performance was the primary factor in determining which employees would be laid off and seniority was a determining factor in cases where job performance was considered to be equal.” The court denied the defendant’s motion to dismiss for failure to state a cause of action, concluding the plaintiff “has stated a claim that her termination was in violation of this written procedure. This is the type of bad faith discharge claim that the court believes the Coman and McLaughlin cases recognized.”

We believe the opinion in the English case from the Eastern District is a more accurate analysis of North Carolina law. Moreover, assuming arguendo that our Supreme Court intended, as the Middle District Court in Iturbe believes, to create a separate wrongful discharge claim grounded solely on bad faith with no claim based on public policy violations, the plaintiff in the case at bar still cannot survive defendant’s summary judgment motion. A footnote in Iturbe gives the rationale for the Court’s decision: “Since the court today only rules on the sufficiency of plaintiff’s complaint, the court accepts as true plaintiff’s allegations that the written procedure existed and that it somehow governed her employment relation with defendants, or her termination.” As we stated earlier, plaintiff’s employment relationship with defendant AAI was not “governed” by the policy manual given to her; the manual was not made an express part of her contract or made otherwise applicable to her. Therefore, even if we were to follow Iturbe’s analysis of Coman and McLaughlin, plaintiff still has no cause of action because her termination was not governed by the employment manual. Plaintiff’s allegations of bad faith, consisting of charges that defendant breached its assurance of permanent employment and that defendant communicated false reasons for firing plaintiff, simply have not been recognized as sufficient to sustain a cause of action for wrongful discharge.

To summarize, plaintiff has failed to prove a claim for breach of contract because (1) the employment manual upon which her contract claim was based was not a part of her employment contract; (2) unilaterally promulgated employment manuals do not affect the at-will nature of employment in North Carolina; and (3) plaintiff’s additional consideration, moving from Greenville to Wilmington, was not in exchange for assurances of discharge only for fault. As to the tort claim alleging wrongful discharge, North Carolina law does not allow claims of bad faith discharge in the absence of public policy violations. Assuming arguendo that such a claim is valid, plaintiff’s evidence failed to prove that she has a claim for bad faith discharge.

WHICHARD, Justice.

Defendant, Applied Analytical Industries, Inc., is based in Wilmington, North Carolina, and assists clients in securing FDA approval of pharmaceutical products. Plaintiff has worked in the pharmaceutical industry for over twenty years and was employed as national sales manager of E.M. Separations Technology in Rhode Island immediately prior to his employment with defendant. Defendant contacted plaintiff in October 1991 and began recruiting him for a position as director of sales in Wilmington. In January 1992 defendant offered plaintiff the position, and the parties negotiated the terms of employment until plaintiff accepted defendant’s offer on 6 March 1992.

Evidence at trial tended to show that during negotiations, plaintiff inquired into the security of his proposed position with defendant. Defendant’s agents attempted to assure plaintiff by statements that included the following: “If you do your job, you’ll have a job”; “This is a long-term growth opportunity for you”; “This is a secure position”; and “We’re offering you a career position.” Plaintiff began his employment with defendant on 30 March 1992. He immediately moved to Wilmington, and following the sale of his home in Massachusetts, his wife and daughter joined him there. Defendant terminated plaintiff’s employment on 2 November 1992.

Plaintiff argues that the combination of the additional consideration of moving his residence and defendant’s specific assurances of continued employment removed the employment relationship from the traditional at-will presumption and created an employment contract under which he could not be terminated absent cause. This asserted exception is gleaned principally from Sides v. Duke Univ.. Plaintiff argues that the exception is well established in North Carolina’s jurisprudence and that the judgment in his favor thus should be affirmed. We disagree.

North Carolina is an employment-at-will state. This Court has repeatedly held that in the absence of a contractual agreement between an employer and an employee establishing a definite term of employment, the relationship is presumed to be terminable at the will of either party without regard to the quality of performance of either party. There are limited exceptions. First, as stated above, parties can remove the at-will presumption by specifying a definite period of employment contractually. Second, federal and state statutes have created exceptions prohibiting employers from discharging employees based on impermissible considerations such as the employee’s age, race, sex, religion, national origin, or disability, or in retaliation for filing certain claims against the employer. Finally, this Court has recognized a public-policy exception to the employment-at-will rule.

Plaintiff does not rely upon any of these exceptions. He instead invokes an asserted exception earlier described by the Court of Appeals as follows:

Generally, employment contracts that attempt to provide for permanent employment, or “employment for life,” are terminable at will by either party. Where the employee gives some special consideration in addition to his services, such as relinquishing a claim for personal injuries against the employer, removing his residence from one place to another in order to accept employment, or assisting in breaking a strike, such a contract may be enforced.

The Court of Appeals relied upon this “moving residence” exception as additional support for its holding in Sides v. Duke University. There, the plaintiff, a nurse anesthetist who had moved from Michigan to North Carolina to accept employment at Duke University Medical Center, sued the Medical Center based on the termination of her employment. After concluding that the plaintiff had stated a claim that fell within a public-policy exception to the at-will doctrine, the court considered a “moving residence” exception, stating:

The additional consideration that the complaint alleges, her move from Michigan, was sufficient, we believe, to remove plaintiff’s employment contract from the terminable-at-will rule and allow her to state a claim for breach of contract since it is also alleged that her discharge was for a reason other than the unsatisfactory performance of her duties.

Here, plaintiff wishes to rely on this asserted “moving residence” exception to state a claim for relief. He does not contend that defendant’s assurances of continued employment were sufficient, standing alone, to create an employment contract for a definite term. Under well-settled law, they are not. This Court has held that a contract for “a regular permanent job” is not sufficiently definite to remove the employment relationship from the at-will presumption. Further, the assurance plaintiff here primarily relies upon, “If you do your job, you’ll have a job,” is not sufficient to make this indefinite hiring terminable only for cause.

Nor does plaintiff contend that a statutory or public-policy exception to the at-will doctrine applies. Rather, he argues that the combination of defendant’s assurances, such as, “If you do your job, you’ll have a job,” and plaintiff’s move from Massachusetts to North Carolina to accept the offer of employment, created a contract under which plaintiff could be discharged only for cause. The question thus is whether this Court should recognize a “moving residence” exception to the general rule of employment at will.

Plaintiff’s contention that this exception is well established in our jurisprudence is incorrect. This Court has not heretofore expressly passed upon it. While Malever, on which defendant relies, is somewhat pertinent, we do not consider it dispositive. The Court’s focus there was on whether the employer’s use of the term “permanent” in reference to the employment sufficed to remove the case from the employment-at-will doctrine, not on whether the employee’s relocation constituted additional consideration that accomplished such removal. Further, the Court noted that the employee’s relocation appeared motivated primarily by family rather than employment considerations. In Harris v. Duke Power Co., we cited application of the “moving residence” exception in Sides as part of a background discussion of exceptions to the general rule of employment at will. We neither specifically approved nor disapproved such an exception, however, and any language in Harris that may be viewed as suggesting the contrary is disapproved.

The employment-at-will doctrine has prevailed in this state for a century. The narrow exceptions to it have been grounded in considerations of public policy designed either to prohibit status-based discrimination or to insure the integrity of the judicial process or the enforcement of the law. The facts here do not present policy concerns of this nature. Rather, they are representative of negotiations and circumstances characteristically associated with traditional at-will employment situations.

Further, as we recognized in Coman, “adoption of the at-will rule by the courts greatly facilitated the development of the American economy at the end of the nineteenth century.” A century later, the rule remains an incentive to economic development, and any significant erosion of it could serve as a disincentive. Additional exceptions thus demand careful consideration and should be adopted only with substantial justification grounded in compelling considerations of public policy.

We perceive no such justification here. The society to which the employment-at-will doctrine currently applies is a highly mobile one in which relocation to accept new employment is common. To remove an employment relationship from the at-will presumption upon an employee’s change of residence, coupled with vague assurances of continued employment, would substantially erode the rule and bring considerable instability to an otherwise largely clear area of the law. We thus hold that plaintiff-employee’s change of residence in the wake of defendant-employer’s statements here does not constitute additional consideration making what is otherwise an at-will employment relationship one that can be terminated by the employer only for cause.

We do not, as the dissenting opinion suggests, hold that the establishment of “a definite term of service” is the sole means of contractually removing the at-will presumption. We simply follow settled law which holds that the employer’s assurances of continued employment do not remove an employment relationship from the at-will presumption, and now hold that the asserted additional consideration of the employee’s relocation of residence to accept the employment likewise does not alter this status. Because we do not recognize the exception plaintiff seeks, we need not consider, as does the dissent, whether the evidence sufficed to support a verdict for plaintiff under the asserted exception.

FRYE, Justice, dissenting.

Although our cases have in the past made reference to the existence of an “additional consideration” exception to the doctrine of employment at will, and our Court of Appeals has more fully described the exception based on moving residence, as the majority notes, this Court has never expressly passed upon the precise issue presented by the facts of this case. This Court granted defendant’s petition for discretionary review in this case to decide, first, whether North Carolina recognizes an exception to the rule of employment at will based on: (1) an employer’s making statements that can be construed as assurances that the employee will be discharged only for deficient performance, and (2) an employee’s providing “additional consideration” by moving his residence to accept employment in response to those assurances. I believe a more precise statement of this question is whether an enforceable contract exists between employer and employee, so as to remove the presumption that the employment is terminable at will, where the employer makes specific assurances and the prospective employee gives additional consideration in reliance on those assurances.

The majority correctly states that North Carolina follows the doctrine of employment at will. However, employment at will is not, nor should it be, an ironclad mandate which prevents employers and employees from negotiating the terms of the employment relationship to their mutual satisfaction. The general rule of employment at will is more accurately construed as a rebuttable presumption which can be overcome by the words and conduct of the parties, allowing a jury to find that the parties in fact reached certain agreements within a contract of employment. I read the majority’s decision as holding that representations made by an employer to a prospective employee and supported by additional consideration are insufficient as a matter of law to create an enforceable contract unless the employer specifies a definite term of service. Because this holding contradicts established principles of contract law, I must respectfully dissent.

The case often cited as the earliest adoption of North Carolina’s employment-at-will rule, Edwards v. Seaboard & R.R. Co., 121 N.C. 490 (1897), in fact recognized the contractual nature of the employment relationship. The facts in Edwards required the Court to discern the intent of the parties as to the term of employment. The Court held that the contract was not specific as to the term of service, and therefore, “it does not seem unreasonable that the parties intended that the service should be performed for a price that should aggregate the gross sum annually, leaving the parties to sever their relations at will, for their own convenience.”

In reviewing the origins of employment at will, this Court has noted that American courts moved toward the doctrine after “the industrial revolution and the development of freedom of contract.” Nothing else appearing, freedom of contract arguably presumes the freedom of either party to terminate the employment relationship at will. However, an inflexible adherence to this presumption cannot stand in the face of evidence of contrary intent on the part of the contracting parties. As stated by the majority, “parties can remove the at-will presumption by specifying a definite period of employment contractually.” Likewise, where an employer agrees to restrict his right to discharge an employee in exchange for additional consideration provided by the employee, the courts must recognize that a contract has been formed which removes the presumption of employment at will.

In applying this analysis, the essential inquiry is whether the necessary elements of an enforceable contract were present. “A contract is an agreement, upon a sufficient consideration, to do or not to do a particular thing.” Cases in which an employee relocates merely as an incident of accepting new employment will not rebut the presumption of employment at will. However, an agreement and consideration are both present where the employer has induced the employee to move his residence based on specific assurances that he will not be discharged except for deficient performance. This approach, which relies on contract principles, does not establish a “general exception” to employment at will in all cases involving a relocation.

The second issue presented by defendant-appellant in this case is whether, if North Carolina recognizes such an exception to the rule of employment at will, the record in this case supports the application of the exception and is sufficient to sustain the verdict returned in favor of plaintiff. Again, I believe a more precise question is whether plaintiff presented sufficient evidence to support a jury’s finding that an enforceable contract existed so as to rebut the presumption of employment at will. The majority states that the assurance primarily relied upon by plaintiff “is not sufficient to make this indefinite hiring terminable only for cause” and holds that the Court of Appeals erred in affirming the trial court, which denied defendant’s motion for judgment notwithstanding the verdict. I disagree.

The test for determining whether a motion for judgment notwithstanding the verdict should have been granted is the same as that which is applied when determining whether a motion for a directed verdict could have been properly granted. “A directed verdict is proper only if it appears that the nonmovant failed to show a right to recover upon any view of the facts which the evidence reasonably tends to establish.” Further, all of the evidence must be considered in the light most favorable to the nonmoving party, here the plaintiff, giving plaintiff the benefit of every reasonable inference to be drawn therefrom and resolving all conflicts, contradictions, and inconsistencies in plaintiff’s favor.

In this case the jury was presented, and answered, the following crucial questions:

Before plaintiff, Kurtzman, accepted a position of employment with defendant, AAI, did AAI make specific assurances to him that he would be discharged from employment with AAI only for deficient performance?

ANSWER: Yes

Did the defendant, AAI, breach the employment contract by terminating the plaintiff, Kurtzman, without just cause?

ANSWER: Yes

The proper question for this Court, therefore, is whether there was evidence, viewed in the light most favorable to plaintiff as the nonmoving party, from which the jury could find that defendant made specific assurances to plaintiff that he would be discharged only for deficient performance and that defendant breached the employment contract by terminating plaintiff without just cause.

There was testimony in this case that during the course of negotiation for employment, plaintiff made known his concern about job security and received certain assurances from defendant. Plaintiff, who at that time held a secure position, was concerned about the security of the position for which he was being recruited. Defendant assured plaintiff that it was a “career position.” When plaintiff specifically inquired about a written contract, defendant responded that he did not need a contract “if he was any good” and that as long as he did his job, he would have a job. From these statements a jury could reasonably conclude that defendant promised plaintiff he would not be discharged unless his performance was deficient. In reliance on these assurances, and in acceptance of defendant’s promise, plaintiff resigned from his job and moved his residence in order to accept employment with defendant. A jury could reasonably find that this action by plaintiff constituted sufficient additional consideration to support the employment contract.

All the evidence considered by the jury, viewed in the light most favorable to plaintiff, could reasonably support plaintiff’s contention that defendant made specific assurances that plaintiff would not be discharged unless his performance was deficient and that the contract was supported by additional consideration apart from plaintiff’s services. Therefore, I believe that the trial judge properly denied defendant’s motion for a directed verdict and for judgment notwithstanding the verdict and that the Court of Appeals correctly affirmed the trial court.

E. GRADY JOLLY, Circuit Judge:

I

In 1970, at age 48, Richard E. Wilson was hired by Monarch Paper Company. Monarch is an incorporated division of Unisource Corporation, and Unisource is an incorporated group of Alco Standard Corporation. Wilson served as manager of the Corpus Christi division until November 1, 1977, when he was moved to the corporate staff in Houston to serve as “Corporate Director of Physical Distribution.” During that time, he routinely received merit raises and performance bonuses. In 1980, Wilson received the additional title of “Vice President.” In 1981, Wilson was given the additional title of “Assistant to John Blankenship,” Monarch’s President at the time.

While he was Director of Physical Distribution, Wilson received most of his assignments from Blankenship. Blankenship always seemed pleased with Wilson’s performance and Wilson was never reprimanded or counseled about his performance. Blankenship provided Wilson with objective performance criteria at the beginning of each year, and Wilson’s bonuses at the end of the year were based on his good performance under that objective criteria. In 1981, Wilson was placed in charge of the completion of an office warehouse building in Dallas, the largest construction project Monarch had ever undertaken. Wilson successfully completed that project within budget.

In 1981, Wilson saw a portion of Monarch’s long-range plans that indicated that Monarch was presently advancing younger persons in all levels of Monarch management. Tom Davis, who was hired as Employee Relations Manager of Monarch in 1979, testified that from the time he started to work at Monarch, he heard repeated references by the division managers (including Larry Clark, who later became the Executive Vice President of Monarch) to the age of employees on the corporate staff, including Wilson.

In October 1981, Blankenship became Chairman of Monarch and Unisource brought in a new, 42-year-old president from outside the company, Hamilton Bisbee. An announcement was made that Larry Clark would be assuming expanded responsibilities in physical distribution. According to the defendants, one of Blankenship’s final acts as President was to direct Clark (who was in his mid-forties at the time) to assume expanded responsibility for both the operational and physical distribution aspects of Monarch.

When Bisbee arrived at Monarch in November 1981, Wilson was still deeply involved in the Dallas construction project. Richard Gozon, who was 43 years old and the President of Unisource, outlined Blankenship’s new responsibilities as Chairman of the company and requested that Blankenship, Bisbee, Wilson, and John Hartley of Unisource “continue to work very closely together on the completion of the Dallas project.” Bisbee, however, refused to speak to Wilson or to “interface” with him. This “silent treatment” was apparently tactical; Bisbee later told another Monarch employee, Bill Shehan, “if I ever stop talking to you, you’re dead.” Shehan also testified that at a meeting in Philadelphia at about the time Bisbee became President of Monarch, Gozon told Bisbee, “I’m not telling you that you have to fire Dick Wilson. I’m telling you that he cannot make any more money.”

As soon as the Dallas building project was completed, Bisbee and Gozon intensified an effort designed to get rid of Wilson. On March 8, 1982, Gozon asked for Bisbee’s recommendations on how to remove Wilson from the Monarch organization. On March 9, 1982, Bisbee responded with his recommendation that Wilson be terminated, and that any salary continuance to Wilson be discontinued should Wilson elect to pursue an adversarial role toward Monarch. Gozon then asked the Unisource Employee Relations Manager, John Snelgrove, to meet with Wilson with the goal of attempting to convince Wilson to quit.

During the same time frame, Bisbee was preparing a long-range plan for Monarch, in which he made numerous references to age and expressed his desire to bring in “new blood” and to develop a “young team.” This long-range plan was transmitted to Gozon, who expressed no dissatisfaction with the goals Bisbee had set out in the plan. In the meantime, Bisbee and Clark began dismantling Wilson’s job by removing his responsibilities and assigning them to other employees. Clark was also seen entering Wilson’s office after hours and removing files.

Blankenship was diagnosed with cancer in February 1982. In March 1982, Wilson was hospitalized for orthopedic surgery. Immediately after Blankenship’s death in June 1982, Bisbee and Snelgrove gave Wilson three options: (1) he could take a sales job in Corpus Christi at half his pay; (2) he could be terminated with three months’ severance pay; or (3) he could accept a job as warehouse supervisor in the Houston warehouse at the same salary but with a reduction in benefits. The benefits included participation in the management bonus plan, and the loss of the use of a company car, a company club membership, and a company expense account.

Wilson accepted the warehouse position. Wilson believed that he was being offered the position of Warehouse Manager, the only vacant position in the Houston warehouse at the time. When Wilson reported for duty at the warehouse on August 16, 1982, however, he was placed instead in the position of an entry level supervisor, a position that required no more than one year’s experience in the paper business. Wilson, with his thirty years of experience in the paper business and a college degree, was vastly overqualified and overpaid for that position.

Soon after he went to the warehouse, Wilson was subjected to harassment and verbal abuse by his supervisor, Operations Manager and Acting Warehouse Manager Paul Bradley (who had previously been subordinate to Wilson). Bradley referred to Wilson as “old man” and admitted posting a sign in the warehouse that said “Wilson is old.” In Bradley’s absence, Wilson was placed under the supervision of a man in his twenties. Finally, Wilson was further demeaned when he was placed in charge of housekeeping but was not given any employees to assist him in the housekeeping duties. Wilson, the former vice-president and assistant to the president, was thus reduced finally to sweeping the floors and cleaning up the employees’ cafeteria, duties which occupied 75 percent of his working time.

In the late fall of 1982, Wilson began suffering from respiratory problems caused by the dusty conditions in the warehouse and stress from the unrelenting harassment by his employer. On January 6, 1983, Wilson left work to see a doctor about his respiratory problems. He was advised to stay out of a dusty environment and was later advised that he had a clinically significant allergy to dust. Shortly after January 6, 1983, Wilson consulted a psychiatrist who diagnosed him as suffering from reactive depression, possibly suicidal, because of on-the-job stress. The psychiatrist also advised that Wilson should stay away from work indefinitely.

Wilson filed an age discrimination charge with the EEOC in January 1983. Although he continued being treated by a psychiatrist, his condition deteriorated to the point that in March 1983, he was involuntarily hospitalized with a psychotic manic episode. Prior to the difficulties with his employer, Wilson had no history of emotional illness.

Wilson’s emotional illness was severe and long-lasting. He was diagnosed with manic-depressive illness or bipolar disorder. After his first hospitalization for a manic episode, in which he was locked in a padded cell and heavily sedated, he fell into a deep depression. The depression was unremitting for over two years and necessitated an additional hospital stay in which he was given electroconvulsive therapy (shock treatments). It was not until 1987 that Wilson’s illness began remission, thus allowing him to carry on a semblance of a normal life.

II

Wilson filed suit against the defendants, alleging age discrimination and various state law tort and contract claims. The case was tried before a jury on Wilson’s claims that the defendants (1) reassigned him because of his age; (2) intentionally inflicted emotional distress; and (3) terminated his long-term disability benefits in retaliation for filing charges of age discrimination under the Age Discrimination in Employment Act (ADEA).

The district court denied the defendants’ motions for directed verdict. The jury returned a special verdict in favor of Wilson on his age discrimination claim, awarding him $156,000 in damages, plus an equal amount in liquidated damages. The jury also found in favor of Wilson on his claim for intentional infliction of emotional distress, awarding him past damages of $622,359.15, future damages of $225,000, and punitive damages of $2,250,000. The jury found in favor of the defendants on Wilson’s retaliation claim. The district court denied the defendants’ motions for judgment NOV, new trial, or, alternatively, a remittitur. The defendants appeal.

III

Monarch raises three issues, each attacking the district court’s exercise of discretion in sending the case to the jury and entering judgment on its verdict. First, Monarch argues that the district court erred in denying its motions for directed verdict, JNOV, and new trial on Wilson’s claim for intentional infliction of emotional distress. Second, Monarch argues that the district court erred in denying its similar motions on Wilson’s age discrimination claim. Finally, Monarch argues that the district court erred in denying its motions for directed verdict, JNOV, new trial, and remittitur with respect to the amount of back pay awarded on the age discrimination claim.⊕The court’s discussion of the age discrimination claim is omitted here.

With respect to the emotional distress claim, neither the quantum of actual damages or the award of punitive damages are appealed.

The standard of review for motions for directed verdict and for JNOV is that

the Court should consider all of the evidence — not just that evidence which supports the non-mover’s case — but in the light and with all reasonable inferences most favorable to the party opposed to the motion. If the facts and inferences point so strongly and overwhelmingly in favor of one party that the Court believes that reasonable men could not arrive at a contrary verdict, granting of the motions is proper. On the other hand, if there is substantial evidence opposed to the motions, that is, evidence of such quality and weight that reasonable and fair-minded men in the exercise of impartial judgment might reach different conclusions, the motions should be denied, and the case submitted to the jury.

FRYE, Justice.

The issue in this case is whether the termination of plaintiff’s employment based on a positive reading of a drug test constitutes a wrongful discharge because the drug test was not performed consistently with a state statute. We conclude that, on the facts of this case, it does not.

Plaintiff, Zannie Garner, was hired by defendant, Rentenbach Constructors Inc., as a carpenter on 30 June 1993. The parties do not dispute that plaintiff was an at-will employee. In June 1994, defendant implemented a substance-abuse policy requiring employees to submit to random drug testing. Plaintiff received a copy of defendant’s “Drug-Free Workplace Policy” and acknowledged its requirements in writing. On 26 July 1994, plaintiff was asked to give a urine sample for screening, and he agreed to do so. Third-party defendant, Allied Clinical Laboratories (Allied), performed the testing of plaintiff’s urine specimen at its Chattanooga, Tennessee, laboratory. The urine sample attributed to plaintiff tested positive for the presence of cannabinoids (marijuana), and the results were reported to defendant by Allied. On 8 August 1994, plaintiff’s employment was terminated. Plaintiff denies having used illegal drugs.

Plaintiff filed this action on 7 August 1995 alleging, inter alia, that his discharge from employment based on positive drug-screening results was wrongful because defendant violated N.C.G.S. § 95-232 by failing to have the testing performed by an “approved laboratory,” as defined by N.C.G.S. § 95-231(1). Defendant filed an answer denying any wrongdoing and asserting a third-party complaint against Allied. Defendant contends that it relied on Allied’s assurances that it was qualified and equipped to perform forensic urine drug testing and on Allied’s report concerning the presence of cannabinoids in plaintiff’s urine sample. Allied filed an answer denying liability.

In January 1997, defendant and Allied filed separate motions for summary judgment. Among the evidence considered by the trial court in ruling on the summary judgment motions were excerpts from a transcript of proceedings in plaintiff’s unemployment benefits claim held before the Employment Security Commission on 31 October 1994. Uncontroverted evidence indicated that at the time plaintiff’s urine sample was tested, Allied’s Chattanooga laboratory had a general laboratory accreditation from the College of American Pathologists, which included general screening toxicology, but it was not accredited for forensic urine drug testing. Nor was the laboratory certified by the United States Department of Health and Human Services, National Institute on Drug Abuse (NIDA), for forensic urine drug testing. The trial court also considered an affidavit of Wayne Amann, safety director for defendant, in which he stated that prior to using Allied to perform drug testing, he inquired and was assured by Allied that it was qualified and equipped to perform drug testing of Rentenbach employees and that its laboratories were “`NIDA’ certified.”

The trial court granted defendant’s motion for summary judgment, dismissing plaintiff’s claim of wrongful discharge. Allied’s motion for summary judgment was denied. Plaintiff appealed. The Court of Appeals reversed the trial court’s grant of summary judgment and remanded for trial. Discretionary review was allowed by this Court on 8 October 1998.

Recently, in Kurtzman v. Applied Analytical Indus., this Court reaffirmed the well-established principle that North Carolina is an employment-at-will state.

This Court has repeatedly held that in the absence of a contractual agreement between an employer and an employee establishing a definite term of employment, the relationship is presumed to be terminable at the will of either party without regard to the quality of performance of either party. There are limited exceptions. First, parties can remove the at-will presumption by specifying a definite period of employment contractually. Second, federal and state statutes have created exceptions prohibiting employers from discharging employees based on impermissible considerations such as the employee’s age, race, sex, religion, national origin, or disability, or in retaliation for filing certain claims against the employer. Finally, this Court has recognized a public-policy exception to the employment-at-will rule.

Our Court of Appeals first recognized a public-policy exception to the employment-at-will doctrine in Sides v. Duke Univ. The plaintiff in Sides was a nurse who alleged that she was discharged in retaliation for her refusal to commit perjury in a medical malpractice case against her employer. The Court of Appeals recognized the compelling public interest at stake and held that “notwithstanding that an employment is at will, no employer has the right to discharge an employee and deprive him of his livelihood without civil liability because he refuses to testify untruthfully or incompletely in a court case.”

This Court adopted a public-policy exception to employment at will in Coman v. Thomas Mfg. Co. In Coman, the plaintiff, a long-distance truck driver, alleged that his employer required him to drive in excess of the hours allowed by federal Department of Transportation regulations and ordered him to falsify his logs to show compliance with the regulations. The plaintiff refused to do so, and his pay was reduced by fifty percent, which amounted to a constructive discharge. The defendant’s conduct violated not only the federal regulations, but also the public policy of North Carolina because the federal regulations had been adopted in the state administrative code and because “actions committed against the safety of the traveling public” are contrary to the established public policy of the State. This Court held that the plaintiff stated a cause of action for wrongful discharge, expressly adopting the following language from Sides:

While there may be a right to terminate a contract at will for no reason, or for an arbitrary or irrational reason, there can be no right to terminate such a contract for an unlawful reason or purpose that contravenes public policy. A different interpretation would encourage and sanction lawlessness, which law by its very nature is designed to discourage and prevent.

Three years later, in Amos v. Oakdale Knitting Co., we were presented with a case in which three employees were told to work for reduced pay, below the statutory minimum wage, or they would be fired. Recognizing that payment of the minimum wage is the public policy of North Carolina, we held that the defendant-employer violated the public policy by firing the plaintiff-employees for refusing to work for less than the statutory minimum wage.

Plaintiff in this case contends that the statutory requirement that employee drug testing be performed by an approved laboratory is an express declaration of policy by the General Assembly and that any employee drug testing performed inconsistently with the Controlled Substance Examination Regulation violates public policy.

By enacting the Controlled Substance Examination Regulation, “the General Assembly finds that individuals should be protected from unreliable and inadequate examinations and screening for controlled substances. The purpose of this Article is to establish procedural and other requirements for the administration of controlled substance examinations.” N.C.G.S. § 95-230 (1993). Under North Carolina law, an employer or prospective employer “who requests or requires an examinee to submit to a controlled substance examination shall comply with the procedural requirements” of the Controlled Substance Examination Regulation. Among the procedural requirements in effect at the relevant time for this case was that an employer or prospective employer “shall use only approved laboratories for screening and confirmation of samples.” An “approved laboratory” is “a clinical chemistry laboratory which performs controlled substances testing and which has demonstrated satisfactory performance in the forensic urine drug testing programs of the United States Department of Health and Human Services or the College of American Pathologists for the type of tests and controlled substances being evaluated.”

We agree that N.C.G.S. § 95-230 is an expression of the public policy of North Carolina. However, we do not agree with plaintiff that because defendant violated N.C.G.S. § 95-232 by failing to use an approved laboratory, the public policy exception to the employment-at-will doctrine is automatically triggered, giving rise to a claim for wrongful discharge.

Under the rationale of Sides, Coman, and Amos, something more than a mere statutory violation is required to sustain a claim of wrongful discharge under the public-policy exception. An employer wrongfully discharges an at-will employee if the termination is done for “an unlawful reason or purpose that contravenes public policy.” As stated in Amos, the public-policy exception was “designed to vindicate the rights of employees fired for reasons offensive to the public policy of this State.” This language contemplates a degree of intent or wilfulness on the part of the employer. In order to support a claim for wrongful discharge of an at-will employee, the termination itself must be motivated by an unlawful reason or purpose that is against public policy.

The forecast of evidence in the instant case, when viewed in the light most favorable to plaintiff as the nonmoving party, shows that defendant violated the Controlled Substance Examination Regulation by failing to utilize an approved laboratory to conduct plaintiff’s drug testing. Such conduct may indeed subject an employer to liability under the civil penalty provisions of the Controlled Substance Examination Regulation. However, plaintiff in this case has failed to forecast any evidence that at the time of plaintiff’s testing defendant knew, or even suspected, that Allied’s laboratory in Chattanooga did not qualify as an approved laboratory under N.C.G.S. § 95-231(1). Plaintiff also has not forecast any evidence suggesting that his discharge was for an unlawful reason or for a purpose that contravenes public policy. In this case, defendant’s allegedly unlawful conduct was the failure to comply with a regulatory statute governing employee drug-testing procedures. In contrast, defendant’s reason for terminating plaintiff’s employment was permissible. Under the doctrine of employment at will, an employer who may fire an employee for any reason or no reason at all may certainly terminate an employee for suspected drug use as part of an effort to maintain a drug-free workplace.

We do not condone defendant’s failure to comply with the Controlled Substance Examination Regulation. Nor do we suggest that employers may take lightly the mandate and purpose of the law as set forth in N.C.G.S. § 95-230. However, on the evidence in the record in this case, plaintiff fails to sustain his claim for wrongful discharge upon defendant’s motion for summary judgment. Accordingly, we hold that the Court of Appeals erred by reversing the trial court’s grant of summary judgment in favor of defendant.

NEHRING, Justice:

Luke Hansen, Jason Melling, and Paul Carlson appeal the trial court’s summary determination that the “public policy” exception to Utah’s at-will employment doctrine did not apply to the circumstances surrounding the termination of their employment by America Online. We affirm.

BACKGROUND

Messrs. Hansen, Melling and Carlson, whom for convenience we will refer to as “the employees,” were employed by America Online (“AOL”) at its call center in Ogden, Utah. The Ogden call center is located in a strip mall. AOL leased, and reserved for its exclusive use, up to 350 parking stalls from the strip mall’s larger public parking lot.

AOL’s company policy prohibited employees at the Ogden Call Center from carrying or possessing a firearm of any type at the call center or in its exclusive parking lot. Printed notice of the policy was displayed in the entrance lobby to the Ogden Call Center. The employees admitted that they each had seen this policy displayed and knew the terms of AOL’s Workplace Violence Prevention Policy at the time they brought firearms onto the AOL parking lot.

On September 14, 2000, the three employees, all of whom were off-duty at the time, met in the lot where their cars were parked. Each had a firearm in his car, and they planned to go target shooting at a local gun range. An AOL security camera recorded Messrs. Melling and Carlson transferring their guns to Mr. Hansen’s car in the parking lot. Four days later, AOL discharged the employees. Although each employee was an at-will employee and could be terminated without cause, AOL acknowledged that the men were discharged because they violated AOL’s Workplace Violence Prevention Policy.

The employees then filed a lawsuit alleging wrongful termination. They alleged that, the AOL Workplace Violence Prevention Policy notwithstanding, AOL was liable for their wrongful discharge because their possession of firearms on the AOL parking lot was protected by a clear and substantial public policy. Both the employees and AOL filed motions for summary judgment. The trial court issued a memorandum decision denying the employees’ motion and granting AOL’s motion. The employees appeal. We affirm.

ANALYSIS

Utah’s employment law presumes that all employment relationships entered into for an indefinite period of time are at-will, where the employer or the employee may terminate the employment for any reason (or no reason) except where prohibited by law. The presumption of validity given to an employer’s decision to discharge an employee may be overcome by demonstrating that

(1) there is an implied or express agreement that the employment may be terminated only for cause or upon satisfaction of some agreed-upon condition; (2) a statute or regulation restricts the right of an employer to terminate an employee under certain conditions; or (3) the termination of employment constitutes a violation of a clear and substantial public policy.

An employee’s discharge for a reason that contravenes a clear and substantial public policy gives rise to a cause of action in tort.

The general rule that the employer-employee relationship is presumed to be at-will is fully integrated into our common law. By contrast, the public policy exception is a relatively recent offspring of the at-will doctrine. Remarking on the immature developmental state of our public policy exception jurisprudence, we have stated:

While the term “clear and substantial” adds little by way of specific guidance, a more precise definition of the term must await the time when this Court has had sufficient experience with a number of cases so that we can deduce from our experience more precise standards that give specific content to the term “public policy.”

Owing to the stability and predictability afforded employers and employees by the at-will rule, we have been justifiably wary of brushing broad public policy landscapes on the canvas of these cases, electing instead to limit the horizon of these cases by their facts. We have, however, outlined four categories of public policies eligible for consideration under the exception. These are:

(i) refusing to commit an illegal or wrongful act, such as refusing to violate the antitrust laws; (ii) performing a public obligation, such as accepting jury duty; (iii) exercising a legal right or privilege, such as filing a workers’ compensation claim; or (iv) reporting to a public authority criminal activity of the employer.

The third category of conduct, exercising a legal right or privilege, poses analytical challenges different from, and generally greater than, the others. An employer owes a duty to an employee, independent of any duty imposed by the contract of employment, not to exploit the employment relationship by demanding that an employee choose between continued employment and violating a law or failing to perform a public obligation of clear and substantial public import. The employer’s legal duty emanates from the recognition that the extortionate use of termination to coerce an employee to commit unlawful acts or avoid public obligations serves no legitimate economic objective and corrodes civil society.

By contrast, an employer’s insistence that an employee relinquish a legal right or privilege, even a right or privilege which carries strong public policy credentials, will not expose the employee to possible criminal penalties or other legal sanctions. In most cases, such demands by an employer will not thrust the employee between conflicting imperatives of wage earning and responsible citizenship. The analysis of whether the public policy exception applies to a particular legal right or privilege will frequently require a balancing of competing legitimate interests: the interests of the employer to regulate the workplace environment to promote productivity, security, and similar lawful business objectives, and the interests of the employees to maximize access to their statutory and constitutional rights within the workplace. When an employee, like the employees here, seeks protection within the exercise of a legal right or privilege category of the public policy exception, both the employer and the employee may appeal to public policy in aid of their cause.

“Public policy” is the label we attach to those shared expectations and standards of conduct which have acquired both widespread and deeply held allegiance among the citizenry generally. Public policy emanates from, and is shaped by, many forces, including, for example, religious doctrines, political ideologies, scientific discoveries, demographic shifts, and the ever-expanding pace and power of communication. We confer the elevated status of a public policy on a right that we have deemed essential to our way of life, the architecture of the institutions of government, or the distribution of governmental power. Our most fundamental and least ephemeral expressions of public policy are found in the Utah Constitution.

Accordingly, those who claim, like the employees in this case, that the right to keep and bear arms is a clear and substantial public policy can point to the right’s impressive constitutional and statutory pedigree. Article I, section 6 of the Utah Constitution states: “The individual right of the people to keep and bear arms for security and defense of self, family, others, property, or the state, as well as for other lawful purposes shall not be infringed; but nothing herein shall prevent the legislature from defining the lawful use of arms.”

The legislature has exercised its article I, section 6 power to enact numerous statutes defining the scope of the lawful use and possession of firearms. One statutory provision among the corps of firearms laws offers more than ample evidence that, despite its muscular claim to be one of our state’s clear and substantial public policies, the right of an employee to keep and bear arms cannot supplant the right of an employer to regulate the possession of firearms by employees within the workplace environment.

During its 2004 annual general session, the legislature enacted a chapter of the Utah Code known as the “Uniform Firearms Laws.” Utah Code Ann. §§ 63-98-101, -102 (2004). This statute states:

(1) The individual right to keep and bear arms being a constitutionally protected right under Article I, Section 6 of the Utah Constitution, the Legislature finds the need to provide uniform civil and criminal firearm laws throughout the state.

(2) Except as specifically provided by state law, a local authority or state entity may not:

(a) prohibit an individual from owning, possessing, purchasing, selling, transferring, transporting, or keeping a firearm at the individual’s place of residence, property, business, or in any vehicle lawfully in the individual’s possession or lawfully under the individual’s control; or

(b) require an individual to have a permit or license to purchase, own, possess, transport, or keep a firearm.

(3) In conjunction with Title 76, Chapter 10, Part 5, Weapons, this section is uniformly applicable throughout this state and in all its political subdivisions and municipalities.

(4) All authority to regulate firearms is reserved to the state except where the Legislature specifically delegates responsibility to local authorities or state entities.

(5) Unless specifically authorized by the Legislature by statute, a local authority or state entity may not enact, establish, or enforce any ordinance, regulation, rule, or policy pertaining to firearms that in any way inhibits or restricts the possession or use of firearms on either public or private property.

(6) As used in this section:

(a) “firearm” has the same meaning as defined in Subsection 76-10-501(9); and

(b) “local authority or state entity” includes public school districts, public schools, and state institutions of higher education.

(7) Nothing in this section restricts or expands private property rights.

The statute was sponsored by Senator Michael Waddoups. During the floor debate on the bill, Senator Waddoups stated that the bill’s sole purpose was to preempt efforts by the University of Utah to restrict the possession of firearms on its campus, in defiance of what Senator Waddoups understood to be a clear legislative mandate to the contrary.

Senator Gregory Bell expressed concern over the bill’s effect on private property rights. During the course of his remarks, Senator Bell criticized the bill as potentially prohibiting employers from restricting gun possession by employees and private citizens from regulating the presence of guns within their own homes. Other senators were wary of the possibility that the bill could be construed to limit owners of private businesses from restricting gun possession by business invitees. For example, Senator Dave Thomas expressed concern that the bill not prohibit Lagoon, a popular amusement park, from restricting the possession of firearms on its premises.

Senator Waddoups took the position that he did not intend that the bill would “in any way restrict private property rights.” He added that he did not intend to preempt restrictions on firearms possession put in place by the Delta Center, the Salt Lake City arena which is home to the Utah Jazz.

Debate of the bill in the House of Representatives echoed the Senate’s sensitivity to the bill’s private property implications. Representative Stephen Urquhart was a particularly vigorous advocate of the preeminence of private property rights, stating that it was the intention of the bill that private property rights govern. Representative Urquhart remarked that the bill does not affect private property rights and that the statutory language agreed upon by the committee reflected its best efforts to convey that intent. That language states: “Nothing in this section restricts or expands private property rights.”

This debate amply captures the tension between two familiar antagonists: the right to regulate one’s own private property and the right to keep and bear arms. Our task is to determine whether the right to keep and bear arms in Utah is a public policy which is so clear and substantial as to supersede an employer’s attempt to restrict weapons in the workplace by contract. We hold that it does not. We read the language of section 63-98-102(7) to indicate that the legislature has purposefully declined to give the right to keep and bear arms absolute preeminence over the right to regulate one’s own private property.

The employees attempt to add heft to their argument that their right to possess firearms is sufficiently substantial to overcome the at-will doctrine with citations to anecdotal evidence that private and public security is better safeguarded by an armed citizenry. According to the employees, Utah’s Constitution and statutes have so embraced this doctrine of peacekeeping that fundamental protections of private property must give way to it. The debates within our legislature suggest otherwise.

The legislative debates over section 63-98-102 suggest that to the extent Utah has a “clear and substantial” public policy relating to the possession of firearms, public policy does not implicate an employer’s right to restrict firearms in a parking lot leased by the employer and to terminate an at-will employee for violating that prohibition. Thus, in keeping with our view that the public policy exception may be invoked only sparingly in circumstances where the cause of an employee’s discharge implicates a public policy of such clarity and substance to impose on the employer a legal duty independent of contract rights inherent in the at-will doctrine, we affirm the judgment of the trial court.

We acknowledge that the legislature has enacted statutes which give practical effect to the mandate of article I, section 6. The employees argue that each of these statutes reflects the legislature’s intent that the right to keep and bear arms should be considered a clear and substantial public policy.

However, we confront here the unique situation in which the very claim to the public policy exception sought by the employees has been taken up and debated by the legislature. We are not asked to measure the clarity and substance of a public policy exception candidate and compare it for the first time with the rights of an employer. The legislature in its role as the primary institutional source of public policy has done this work for us. The ambivalence of the outcome of its labors directs us to our determination that the employees may not use the public policy exception to overcome the at-will doctrine.

CONCLUSION

There remains an evolving discussion about the role of firearms in our society. While certain areas of that debate are more developed than others, the mature at-will employment law in the state of Utah rejects the idea that, in the face of a freely entered-into agreement to the contrary, an employee has the right to carry a firearm on his employer’s premises.

MANSFIELD, Justice.

Can a male employer terminate a long-time female employee because the employer’s wife, due to no fault of the employee, is concerned about the nature of the relationship between the employer and the employee? This is the question we are required to answer today. For the reasons stated herein, we ultimately conclude the conduct does not amount to unlawful sex discrimination in violation of the Iowa Civil Rights Act.

We emphasize the limits of our decision. The employee did not bring a sexual harassment or hostile work environment claim; we are not deciding how such a claim would have been resolved in this or any other case. Also, when an employer takes an adverse employment action against a person or persons because of a gender-specific characteristic, that can violate the civil rights laws. The record in this case, however, does not support such an allegation.

I. Facts and Procedural Background.

Because this case was decided on summary judgment, we set forth the facts in the light most favorable to the plaintiff, Melissa Nelson.

In 1999, Dr. Knight hired Nelson to work as a dental assistant in his dental office. At that time, Nelson had just received her community college degree and was twenty years old.

Over the next ten-and-a-half years, Nelson worked as a dental assistant for Dr. Knight. Dr. Knight admits that Nelson was a good dental assistant. Nelson in turn acknowledges that Dr. Knight generally treated her with respect, and she believed him to be a person of high integrity.

On several occasions during the last year and a half when Nelson worked in the office, Dr. Knight complained to Nelson that her clothing was too tight and revealing and “distracting.” Dr. Knight at times asked Nelson to put on her lab coat. Dr. Knight later testified that he made these statements to Nelson because “I don’t think it’s good for me to see her wearing things that accentuate her body.” Nelson denies that her clothing was tight or in any way inappropriate.

During the last six months or so of Nelson’s employment, Dr. Knight and Nelson started texting each other on both work and personal matters outside the workplace. Both parties initiated texting. Neither objected to the other’s texting. Both Dr. Knight and Nelson have children, and some of the texts involved updates on the kids’ activities and other relatively innocuous matters. Nelson considered Dr. Knight to be a friend and father figure, and she denies that she ever flirted with him or sought an intimate or sexual relationship with him. At the same time, Nelson admits that a coworker was “jealous that we got along.” At one point, Nelson texted Dr. Knight that “the only reason I stay is because of you.”

Dr. Knight acknowledges he once told Nelson that if she saw his pants bulging, she would know her clothing was too revealing. On another occasion, Dr. Knight texted Nelson saying the shirt she had worn that day was too tight. After Nelson responded that she did not think he was being fair, Dr. Knight replied that it was a good thing Nelson did not wear tight pants too because then he would get it coming and going. Dr. Knight also recalls that after Nelson allegedly made a statement regarding infrequency in her sex life, he responded to her, “That’s like having a Lamborghini in the garage and never driving it.” Nelson recalls that Dr. Knight once texted her to ask how often she experienced an orgasm. Nelson did not answer the text. However, Nelson does not remember ever telling Dr. Knight not to text her or telling him that she was offended.

In late 2009, Dr. Knight took his children to Colorado for Christmas vacation. Dr. Knight’s wife Jeanne, who was also an employee in the dental practice, stayed home. Jeanne Knight found out that her husband and Nelson were texting each other during that time. When Dr. Knight returned home, Jeanne Knight confronted her husband and demanded that he terminate Nelson’s employment. Both of them consulted with the senior pastor of their church, who agreed with the decision.

Jeanne Knight insisted that her husband terminate Nelson because “she was a big threat to our marriage.” According to her affidavit and her deposition testimony, she had several complaints about Nelson. These included Nelson’s texting with Dr. Knight, Nelson’s clothing, Nelson’s alleged flirting with Dr. Knight, Nelson’s alleged coldness at work toward her (Jeanne Knight), and Nelson’s ongoing criticism of another dental assistant. She added that

Nelson liked to hang around after work when it would be just her and Dr. Knight there. I thought it was strange that after being at work all day and away from her kids and husband that she would not be anxious to get home like the other women in the office.

At the end of the workday on January 4, 2010, Dr. Knight called Nelson into his office. He had arranged for another pastor from the church to be present as an observer. Dr. Knight, reading from a prepared statement, told Nelson he was firing her. The statement said, in part, that their relationship had become a detriment to Dr. Knight’s family and that for the best interests of both Dr. Knight and his family and Nelson and her family, the two of them should not work together. Dr. Knight handed Nelson an envelope which contained one month’s severance pay. Nelson started crying and said she loved her job.

Nelson’s husband Steve phoned Dr. Knight after getting the news of his wife’s firing. Dr. Knight initially refused to talk to Steve Nelson, but later called back and invited him to meet at the office later that same evening. Once again, the pastor was present. In the meeting, Dr. Knight told Steve Nelson that Melissa Nelson had not done anything wrong or inappropriate and that she was the best dental assistant he ever had. However, Dr. Knight said he was worried he was getting too personally attached to her. Dr. Knight told Steve Nelson that nothing was going on but that he feared he would try to have an affair with her down the road if he did not fire her.

Dr. Knight replaced Nelson with another female. Historically, all of his dental assistants have been women.

After timely filing a civil rights complaint and getting a “right to sue” letter from the Iowa Civil Rights Commission, Nelson brought this action against Dr. Knight on August 12, 2010. Nelson’s one-count petition alleges that Dr. Knight discriminated against her on the basis of sex. Nelson does not contend that her employer committed sexual harassment. Her argument, rather, is that Dr. Knight terminated her because of her gender and would not have terminated her if she was male.

Dr. Knight moved for summary judgment. After briefing and oral argument, the district court sustained the motion. The court reasoned in part, “Ms. Nelson was fired not because of her gender but because she was a threat to the marriage of Dr. Knight.” Nelson appeals.

III. Analysis.

Section 216.6(1)(a) of the Iowa Code makes it generally unlawful to discharge or otherwise discriminate against an employee because of the employee’s sex. “When interpreting discrimination claims under Iowa Code chapter 216, we turn to federal law, including Title VII of the United States Civil Rights Act.” Generally, an employer engages in unlawful sex discrimination when the employer takes adverse employment action against an employee and sex is a motivating factor in the employer’s decision.

Nelson argues that her gender was a motivating factor in her termination because she would not have lost her job if she had been a man. Dr. Knight responds that Nelson was terminated not because of her sex — after all, he only employs women — but because of the nature of their relationship and the perceived threat to Dr. Knight’s marriage. Yet Nelson rejoins that neither the relationship nor the alleged threat would have existed if she had not been a woman.

Several cases, including a decision of the United States Court of Appeals for the Eighth Circuit, have found that an employer does not engage in unlawful gender discrimination by discharging a female employee who is involved in a consensual relationship that has triggered personal jealousy. This is true even though the relationship and the resulting jealousy presumably would not have existed if the employee had been male.

Tenge v. Phillips Modern Ag Co., like the present case, centered on a personal relationship between the owner of a small business and a valued employee of the business that was seen by the owner’s wife as a threat to their marriage. In that case, unlike here, the plaintiff had pinched the owner’s rear. She admitted that the owner’s wife “could have suspected the two had an intimate relationship.” Further, the plaintiff acknowledged she wrote “notes of a sexual or intimate nature” to the owner and put them in a location where others could see them. In the end, the owner fired the plaintiff, stating that his wife was “‘making me choose between my best employee or her and the kids.’”

Reviewing this series of events, the Eighth Circuit affirmed the summary judgment in favor of the defendants. The Eighth Circuit first noted the considerable body of authority that “‘sexual favoritism,’ where one employee was treated more favorably than members of the opposite sex because of a consensual relationship with the boss,” does not violate Title VII. The court distilled that law as follows:

The principle that emerges from the above cases is that absent claims of coercion or widespread sexual favoritism, where an employee engages in consensual sexual conduct with a supervisor and an employment decision is based on this conduct, Title VII is not implicated because any benefits of the relationship are due to the sexual conduct, rather than the gender, of the employee.

The Eighth Circuit believed these sexual favoritism precedents were relevant. The court’s unstated reasoning was that if a specific instance of sexual favoritism does not constitute gender discrimination, treating an employee unfavorably because of such a relationship does not violate the law either.

Yet the court acknowledged that cases where the employee was treated less favorably would be “more directly analogous.” The court then discussed a decision of the Eleventh Circuit where an employee had been terminated for being a perceived threat to the marriage of the owner’s son. It also cited three federal district court cases, each of which had “concluded that terminating an employee based on the employee’s consensual sexual conduct does not violate Title VII absent allegations that the conduct stemmed from unwelcome sexual advances or a hostile work environment.”

After reviewing these precedents, the Eighth Circuit found the owner had not violated Title VII in terminating the employee at his wife’s behest. As the court explained, “The ultimate basis for Tenge’s dismissal was not her sex, it was Scott’s desire to allay his wife’s concerns over Tenge’s admitted sexual behavior with him.”

In our case, the district court quoted at length from Tenge, stating it found that decision “persuasive.” However, Nelson argues there is a significant factual difference between the two cases. As the Eighth Circuit put it, “Tenge was terminated due to the consequences of her own admitted conduct with her employer, not because of her status as a woman.” The Eighth Circuit added a caveat:

The question is not before us of whether it would be sex discrimination if Tenge had been terminated because Lori the owner’s wife perceived her as a threat to her marriage but there was no evidence that she had engaged in any sexually suggestive conduct.

Nelson contrasts that situation with her own, where she claims she “did not do anything to get herself fired except exist as a female.”

So the question we must answer is the one left open in Tenge — whether an employee who has not engaged in flirtatious conduct may be lawfully terminated simply because the boss’s spouse views the relationship between the boss and the employee as a threat to her marriage. Notwithstanding the Eighth Circuit’s care to leave that question unanswered, it seems odd at first glance to have the question of whether the employer engaged in unlawful discrimination turn on the employee’s conduct, assuming that such conduct (whatever it is) would not typically be a firing offense. Usually our legal focus is on the employer’s motivation, not on whether the discharge in a broader sense is fair. Title VII and the Iowa Civil Rights Act are not general fairness laws, and an employer does not violate them by treating an employee unfairly so long as the employer does not engage in discrimination based upon the employee’s protected status.

In some respects, the present case resembles Platner. There a business owner chose to terminate a female employee who worked on the same crew as the business owner’s son, after the wife of the business owner’s son became “extremely jealous” of her. The district court found that the son was “largely to blame for fueling the wife’s jealousy,” and that the plaintiff’s conduct was “basically blameless and no different from that of the male employees.” Nonetheless, the Eleventh Circuit found no unlawful discrimination had occurred:

It is evident that Thomas, faced with a seemingly insoluble conflict within his family, felt he had to make a choice as to which employee to keep. He opted to place the burden of resolving the situation on Platner, to whom he was not related, and whose dismissal would not, as firing Steve obviously would, fracture his family and its relationships. It is thus clear that the ultimate basis for Platner’s dismissal was not gender but simply favoritism for a close relative.

Significantly, although Dr. Knight discusses Platner at some length in his briefing, Nelson does not refer to the decision in her briefing or attempt to distinguish it.

Nelson does, however, have three responses to Dr. Knight’s overall position. First, she does not necessarily agree with Tenge. She argues that any termination because of a supervisor’s interest in an employee amounts to sex discrimination: “Plaintiff’s sex is implicated by the very nature of the reason for termination.” Second, she suggests that without some kind of employee misconduct requirement, Dr. Knight’s position becomes simply a way of enforcing stereotypes and permitting pretexts: The employer can justify a series of adverse employment actions against persons of one gender by claiming, “My spouse was jealous.” Third, she argues that if Dr. Knight would have been liable to Nelson for sexually harassing her, he should not be able to avoid liability for terminating her out of fear that he was going to harass her.

Nelson’s arguments warrant serious consideration, but we ultimately think a distinction exists between (1) an isolated employment decision based on personal relations (assuming no coercion or quid pro quo), even if the relations would not have existed if the employee had been of the opposite gender, and (2) a decision based on gender itself. In the former case, the decision is driven entirely by individual feelings and emotions regarding a specific person. Such a decision is not gender-based, nor is it based on factors that might be a proxy for gender.

The civil rights laws seek to insure that employees are treated the same regardless of their sex or other protected status. Yet even taking Nelson’s view of the facts, Dr. Knight’s unfair decision to terminate Nelson (while paying her a rather ungenerous one month’s severance) does not jeopardize that goal. As the Platner court observed, “‘We do not believe that Title VII authorizes courts to declare unlawful every arbitrary and unfair employment decision.’”

Nelson’s viewpoint would allow any termination decision related to a consensual relationship to be challenged as a discriminatory action because the employee could argue the relationship would not have existed but for her or his gender. This logic would contradict federal caselaw to the effect that adverse employment action stemming from a consensual workplace relationship (absent sexual harassment) is not actionable under Title VII.

Nelson raises a legitimate concern about a slippery slope. What if Jeanne Knight demanded that her spouse terminate the employment of several women? Of course, a pretext does not prevail in a discrimination case. If an employer repeatedly took adverse employment actions against persons of a particular gender, that would make it easier to infer that gender and not a relationship was a motivating factor. Here, however, it is not disputed that Jeanne Knight objected to this particular relationship as it had developed after Nelson had already been working at the office for over ten years.

It is likewise true that a decision based on a gender stereotype can amount to unlawful sex discrimination. If Nelson could show that she had been terminated because she did not conform to a particular stereotype, this might be a different case. But the record here does not support that conclusion. It is undisputed, rather, that Nelson was fired because Jeanne Knight, unfairly or not, viewed her as a threat to her marriage.(n.5 in opinion) As we have noted above, Jeanne Knight said that she thought it was “strange that after being at work all day and away from her kids and husband that Nelson would not be anxious to get home like the other women in the office.” Viewed in isolation, this statement could be an example of a gender-based stereotype. However, as with Jeanne Knight’s other comments regarding Nelson, this statement was linked to a specific concern about Nelson’s relationship with her husband. This statement immediately followed Jeanne Knight’s claim that Nelson “liked to hang around after work when it would be just her and Dr. Knight there.” Viewing the summary judgment record, we come to the same conclusion as the district court: There is no genuine issue of material fact that the reason for Nelson’s firing was Jeanne Knight’s demand that she be fired, which was based in turn upon Jeanne Knight’s perception that the relationship between Dr. Knight and Nelson was a threat to the marriage.

The present case can be contrasted with another recent Eighth Circuit decision. In Lewis v. Heartland Inns of America, a female front desk employee at a hotel claimed she lost her job because she did not have the “Midwestern girl look.” As the court explained, “The theory of Lewis’s case is that the evidence shows Heartland enforced a de facto requirement that a female employee conform to gender stereotypes in order to work the A shift.” In fact, the evidence showed that motel management later procured video equipment so they could observe the appearance of front desk applicants prior to hiring. The Eighth Circuit reversed the district court’s grant of summary judgment to the employer and remanded for trial. However, the critical difference between Lewis and this case is that Nelson indisputably lost her job because Dr. Knight’s spouse objected to the parties’ relationship. In Lewis, by contrast, no relationship existed.

Nelson also raises a serious point about sexual harassment. Given that sexual harassment is a violation of antidiscrimination law, Nelson argues that a firing by a boss to avoid committing sexual harassment should be treated similarly.(n.6 in opinion) Allegedly, Dr. Knight told Nelson’s husband that he “feared that he would try to have an affair with her down the road if he did not fire her.”

But sexual harassment violates our civil rights laws because of the “hostile work environment” or “abusive atmosphere” that it has created for persons of the victim’s sex. On the other hand, an isolated decision to terminate an employee before such an environment arises, even if the reasons for termination are unjust, by definition does not bring about that atmosphere.(n.7 in opinion) The record indicates that Dr. Knight made a number of inappropriate comments toward Nelson that are of a type often seen in sexual harassment cases. But as already noted, Nelson does not allege in this case that she was a victim of sexual harassment.

As a Michigan appellate court observed regarding a male employee’s claim that he had been subjected to sex discrimination:

We do not read the Michigan Civil Rights Act or CRA to prohibit conduct based on romantic jealousy. Interpreting the CRA’s prohibition of discrimination based on sex to prohibit conduct based on romantic jealousy turns the CRA on its head. The CRA was enacted to prevent discrimination because of classifications specifically enumerated by the Legislature and to eliminate the effects of offensive or demeaning stereotypes, prejudices, and biases. It is beyond reason to conclude that plaintiff’s status as the romantic competition to the woman Vajda sought to date places plaintiff within the class of individuals the Legislature sought to protect when it prohibited discrimination based on sex under the CRA.

Plaintiff proceeded to trial on a theory of discrimination based on romantic jealousy. Plaintiff did not claim and the evidence did not establish that plaintiff was required to submit to sexually-based harassment as a condition of employment. Nor did the evidence presented at trial support a theory of gender-based discrimination. Plaintiff established, at most, that Vajda’s alleged adverse treatment of plaintiff was based on plaintiff’s relationship with Goshorn, not plaintiff’s gender. Vajda may have had a romantic purpose in initially pursuing Goshorn and may, as the trial court surmised, have intended to eliminate plaintiff so that he could pursue Goshorn’s affections. However, Vajda’s alleged harassment was not conduct that is proscribed by the CRA because it was not gender-based. Indeed, if Vajda’s motive was to win the affection of Goshorn, it would not matter if the person Vajda perceived to be standing in his way was male or female. As such, it is evident that plaintiff’s gender was not the impetus for Vajda’s alleged conduct, but rather was merely coincidental to that conduct.

IV. Conclusion.

As we have indicated above, the issue before us is not whether a jury could find that Dr. Knight treated Nelson badly. We are asked to decide only if a genuine fact issue exists as to whether Dr. Knight engaged in unlawful gender discrimination when he fired Nelson at the request of his wife. For the reasons previously discussed, we believe this conduct did not amount to unlawful discrimination, and therefore we affirm the judgment of the district court.

CADY, Chief Justice (concurring specially).

I concur in the majority opinion, but write separately to further explain the basis and rationale for the decision. Melissa Nelson set forth a claim for sex discrimination recognized by law, but the facts of the case did not establish the claim.

Our state and federal civil rights laws were enacted to eradicate various forms of discrimination from society. These laws prohibit employment discrimination based on numerous grounds, including discrimination “because of sex.” The primary purpose of this law has been to ensure that similarly situated employees are not treated differently because their sex differs.

While the goal behind prohibiting sex discrimination in the workplace is fundamental to a complete society, the task of determining a more precise meaning of sex discrimination has largely been left for the courts. Discrimination is abhorrent to the powerful echoes of the principle of equality that still resonate today from the voices of our forefathers centuries ago, but the struggle to understand and change remains. Yet, as revealed by our history, the process provided by the courts can often be the best environment for those echoes to be heard with greater clarity, aided by the benefit of a greater understanding achieved over the passage of time. A sharper meaning of sex discrimination, however, can be elusive, not only due to constraints on understanding, but also because of the inherent difficulty of fully capturing the intent of the legislature within an environment dominated by the venerable doctrine of employment at will, which still receives broad support.

These challenges to defining sex discrimination in the workplace have, at times, created controversy and divisiveness, especially when decisions by courts are not fully explained or when court decisions are not fairly read and interpreted or accepted. The task has also been compounded because the statutory language handed down by the legislature for the courts to interpret and apply in each case could not be more general. This law declares nothing more than workplace discrimination “because of sex” is illegal. Additionally, although we often presume Title VII and the Iowa Civil Rights Act to have similar scope and meaning, federal courts often declare that Congress provided little legislative history and explanation to guide courts in interpreting the prohibition against discrimination based on “sex.”

In the end, of course, the inherent difficulty of defining sex discrimination is understandable because its meaning is often more obvious in principle than when it is applied to a particular factual circumstance. Yet, the accumulation of court cases continues to shape its meaning, all seeking to express the intention of the legislature and to fulfill the purpose of these statutes. Perhaps this approach was the intent of the legislature.

Since the enactment of this nation’s civil rights law in 1964, courts have generally interpreted “sex” discrimination in the workplace to mean employment discrimination as a result of a person’s gender status. Of the legislative history that is available for courts to use to determine legislative intent, it was mostly clear that gender, not sexual activity, was the sole focus of the legislation. Thus, courts have generally recognized that discrimination exists in the workplace when similarly situated employees are treated differently “because they differ with respect to sex.” More to the point, the differential proscribed by the law “must be a distinction based on a person’s sex, not on his or her sexual affiliations.” In other words, differential treatment based on an employee’s status as a woman constitutes sex discrimination, while differential treatment on account of conduct resulting from the sexual affiliations of an employee does not form the basis for a sex-discrimination claim.

This distinction serves as the foundation of this case and other such cases in which employees suffer adverse employment consequences because they are involved in opposite-sex personal relationships with their employer. The complexity of such cases is not necessarily tied to the complexity of the law as much as the complexity of human relationships and interactions with others. Nevertheless, the law does not escape some blame for the difficult nature of the issue in light of the countervailing employment-at-will doctrine, which permits employers to terminate employees for reasons personal to them, so long as the will of the employer is not discriminatory or otherwise against public policy. This law is our Iowa law. Thus, while the loss of a job is often devastating to an employee, and at times unfair, these considerations do not play a role under our employment-at-will doctrine, and our exceptions to this law, such as sex discrimination, are only based on the underlying discriminatory motivation of the decision maker. Of course, the unfairness is enhanced for employees when the termination results from a personal relationship with the employer because only the employee suffers the loss of a job, while the other participant in the relationship does not. This result can make acceptance of the law even more difficult.

What has emerged from this complex area of the law is the general legal principle that an adverse employment consequence experienced by an employee because of a voluntary, romantic relationship does not form the basis of a sex-discrimination suit. Moreover, this general rule is not confined to relationships involving sexual intimacy. The same rule is applied to consensual affiliations involving sexually suggestive conduct. When employees are terminated due to consensual, romantic or sexually suggestive relationships with their supervisors, courts generally conclude the reason does not amount to sex discrimination because the adverse employment consequence is based on sexual activity rather than gender.

While courts have been slow to examine the core reasoning for excluding consensual sexual affiliations between employees and employers from the protection of sex-discrimination laws, such an examination offers helpful insight. Close personal relationships between men and woman can often produce personal emotions and conduct that are unfamiliar to the workplace relationship targeted by the general prohibition against gender discrimination in the workplace. To be sure, a consensual personal relationship alters the workplace relationship and produces responses and consequences that laws protecting an employee’s right to work in an employment environment free from gender discrimination were not intended to protect. This observation does not pass judgment on the conduct that defines a personal relationship between an employer and employee, but identifies the practical change in an employment relationship that occurs when a relationship extends beyond the workplace. It also recognizes that the law against workplace discrimination only seeks to protect a woman from discrimination based on her status as a woman in the workplace, not on her consensual sexual relationships or personal affiliations with her employer. The same protection, of course, applies to men. Under this common-sense rationale, a response by the employer to a consensual personal or romantic relationship that becomes a reason for termination is not based on the sex of the employee, but conduct arising from the relationship. No fault or blame for the relationship is considered, only the practical reality of its presence in the workplace as a potential ingredient of adverse employment consequences.

On the other hand, within the broad spectrum of cases that describe either conduct or gender status lies employer-employee relationships that, even though they are close, produce no suggestion of sexual activity or intimacy to support concluding the termination was grounded on conduct. As with so many legal issues, however, a gray area exists somewhere between these two groups of cases in which the law draws a line based on the individual facts and circumstances of each case.

In this case, Nelson has unmistakably stated a claim protected by our laws against sex discrimination She asserts that the sexual attraction her employer developed for her, which was the reason for her termination, was his creation and not the result of a personal relationship she maintained with him. Consequently, she maintained she did nothing for the law to now require her to assume responsibility for his attraction to her except exist in the workplace as a woman.

It is abundantly clear that a woman does not lose the protection of our laws prohibiting sex discrimination just because her employer becomes sexually attracted to her, and the employer’s attraction then becomes the reason for terminating the woman once it, in some way, becomes a problem for the employer. If a woman is terminated based on stereotypes related to the characteristics of her gender, including attributes of attractiveness, the termination would amount to sex discrimination because the reason for termination would be motivated by the particular gender attribute at issue.

Similarly, implicit in our laws against sex discrimination is that both men and woman are responsible for their own sexual desires and responses to attributes of the sex of the other, and neither sex is responsible to monitor or control the desires of the other sex. Thus, just as an employer cannot fire an employee for not conforming to a sex stereotype embraced by the employer or their customers, an employer cannot legally fire an employee simply because the employer finds the employee too attractive or not attractive enough. .

Accordingly, Nelson has stated a claim supported by our law. Yet, legal claims must also be supported by facts. When placed under the scrutiny of this legal proposition, Nelson’s claim fails because the facts failed to support her claim. The fact of the matter is Nelson was terminated because of the activities of her consensual personal relationship with her employer, not because of her gender. A review of the summary judgment record bears out this conclusion.

It is an undisputed fact in this case, viewing the evidence in a light most favorable to Nelson, that Nelson and Dr. Knight developed a consensual personal relationship. Similarly, it is undisputed that this relationship extended well beyond the workplace. Nelson and Dr. Knight communicated with each other outside the workplace on matters extraneous to the employment. Their relationship was personal and closer than the relationships Dr. Knight maintained with the other employees. Dr. Knight readily acknowledged he grew attracted to Nelson and was developing feelings of intimacy, and it is accepted for purposes of summary judgment that these feelings were more developed than those possessed by Nelson. Yet, during a frustrating moment involving a co-employee, Nelson confided in Dr. Knight that he was the reason she continued to work at the office. She also acknowledged she maintained a closer relationship with Dr. Knight than he maintained with the other employees in the office. Additionally, Nelson acknowledged that another employee in the office viewed her conduct towards Dr. Knight as flirting, although Nelson believed this employee felt she flirted with Dr. Knight because the employee was jealous of the close relationship she enjoyed with Dr. Knight.

The communication between Nelson and Dr. Knight included comments by Dr. Knight that were marked by sexual overtones. These communications have been explained by the majority. One evening after texting her about the tight shirt she wore to work that day, he followed up with another text message indicating it was good that her pants were also not too tight because he would “get it coming and going.” Another time, in response to a comment regarding the relative infrequency of her sexual activity, Dr. Knight told Nelson, “That’s like having a Lamborghini in the garage and not ever driving it.” Dr. Knight also once texted Nelson to ask how often she experienced orgasms. While these comments would commonly be viewed as inappropriate in most any setting and, for sure, beyond the reasonable parameters of workplace interaction, they nevertheless were an undeniable part of the consensual personal relationship enjoyed by Nelson and Dr. Knight. The banter, at least, revealed a relationship that was much different than would reasonably be expected to exist between employers and employees in the workplace.

The personal relationship also lasted six months and did not end until Dr. Knight’s wife discovered Nelson and Dr. Knight were texting each other while Dr. Knight was out of state on a vacation. Dr. Knight’s wife examined phone records to discover the texting only because she had grown suspicious of the relationship between Nelson and her husband.

Mixed motives, of course, can support a sex-discrimination claim. Yet, the record contained no evidence to suggest a factor other than the relationship between Nelson and Dr. Knight was a motivation for the termination or that the relationship was a pretext for a discriminatory intent.

The absence of sexual intimacy in the relationship between Nelson and Dr. Knight, and the absence of sexually suggestive behavior on the part of Nelson, does factually distinguish this case from the line of cases that do not recognize a sex-discrimination claim based on a consensual, romantic relationship. Yet, this distinction does not shift this case into the line of gender-discrimination cases that protect women from discrimination based on their physical appearance. Even if Nelson was fired because Dr. Knight was physically attracted to her, the attraction and resulting threat to the Knights’ marriage surfaced during and resulted from the personal relationship between Nelson and Dr. Knight, and there is no evidence in the summary judgment record tending to prove the relationship or Nelson’s termination were instead consequences of a gender-based discriminatory animus. Ultimately, the question comes down to whether a reasonable fact finder could find that Dr. Knight’s reasons for terminating Nelson were, even in light of the relationship, responses motivated by Nelson’s status as a woman. Courts evaluate this evidence “in light of common experience as it bears on the critical question of discrimination.”

True to our governing legal authorities, a sex-discrimination claim predicated on physical appearance accompanied by a consensual personal relationship between the employee and employer requires proof that the physical appearance of the plaintiff was a gender-based reason for the adverse employment action. An adverse employment action based on a personal relationship that existed here between Nelson and Dr. Knight — or its consequences — is not actionable discrimination based on sex under our statute.

In view of the undisputed fact of a personal relationship between Nelson and Dr. Knight, Nelson has failed to engender a fact question on her claim that Dr. Knight’s decision to terminate her was motivated by her status as a woman. The relationship, even in the context of summary judgment, included enough activity and conduct to support a determination as a matter of law that Nelson was terminated as a response to the consensual personal relationship she maintained with Dr. Knight. In the context of the personal relationship, there was insufficient evidence tending to show that Nelson’s status as a woman was also a motivating reason.

It is important to observe that a critical aspect of the entire analysis centers on the consensual and voluntary nature of the personal relationship. The law that navigates through the intersection between sex discrimination and personal workplace relationships to reach the destination of nondiscriminatory conduct requires willing participants to the relationship. Of course, a personal relationship between an employer and subordinate can give rise to subtle issues of power and control that may make the line between consensual and submissive relationships difficult to draw. This concern has been particularly observed in cases involving claims of sexual harassment, either hostile-environment claims or quid pro quo claims. Thus, the consensual aspect of a relationship is pivotal to the analysis of the claim of discrimination based on a personal relationship. In this case, it is undisputed the relationship was consensual. If it was not consensual, a turn in the analysis would occur. Yet, Nelson made no legal or factual claim that a relationship with Dr. Knight was submissive, objectionable, or harassing in any way, and there was no evidence in the record to hint the relationship was not jointly pursued. The role of consent is important to the responsibility of employees and employers of both sexes to monitor and control their conduct in the workplace.

While there is only a single standard for summary judgment, as a practical matter, it should be used sparingly in employment-discrimination cases. Ordinarily, employment discrimination cases generate genuine issues of material fact because they are “often fact intensive and dependent on nuance in the workplace.” Yet, the claim of discrimination in this case was actually framed by Nelson without relying on inferences or conflicting evidence. In other words, Nelson did not argue that Dr. Knight’s expressed reason for terminating her was actually a pretext for an underlying discriminatory intent to terminate her based on her status as a woman. Instead, Nelson used the same reasons to show the termination was discriminatory as Dr. Knight used to show the termination was not discriminatory. She never offered an explanation for how those reasons establish a discriminatory animus. Thus, the resolution of the case turns on context: Was Nelson’s termination a response by Dr. Knight to a personal relationship or was it his response to Nelson’s status as a woman? It is undisputed the relationship existed, and Nelson failed to generate a fact question on her claim that her termination was motivated by a stereotype involving her status as a woman.

While summary judgment must be granted with caution, courts are required to grant judgment for the movant when the legal standards have been met. In this case, there was insufficient evidence offered by Nelson in light of the undisputed evidence of a consensual personal relationship that would permit a reasonable fact finder to conclude by a preponderance of the evidence that Dr. Knight terminated Nelson based on her status as a woman. In the final analysis, this court has carefully considered the issue presented and has sought to understand its complexity with the seriousness and attention demanded of all cases. Research has failed to uncover any appellate court in the nation that has recognized sex discrimination under facts similar to those in this case, and it has failed to identify any state legislature that has defined sex discrimination to include adverse employment consequences from a consensual personal relationship. If, in fact, Congress or our legislature intended for adverse employment consequences from consensual personal relationships between employers and employees to be protected as sex discrimination, these legislative bodies can clarify or change the law to reflect such intent. In the meantime, our law and this court remains devoted to carrying out the important legislative goal of eradicating discrimination from society, but this case simply lacked the facts to establish discrimination. Without proof of sex discrimination, the employment-at-will doctrine followed in Iowa guides the outcome.

GEORGE, C.J.

Plaintiff Elysa J. Yanowitz was a regional sales manager employed by defendant L’Oreal USA, Inc. (L’Oreal), a prominent cosmetics and fragrance company. Yanowitz alleges that after she refused to carry out an order from a male supervisor to terminate the employment of a female sales associate who, in the supervisor’s view, was not sufficiently sexually attractive or “hot,” she was subjected to heightened scrutiny and increasingly hostile adverse treatment that undermined her relationship with the employees she supervised and caused severe emotional distress that led her to leave her position. In bringing this action against L’Oreal, Yanowitz contended, among other matters, that L’Oreal’s actions toward her constituted unlawful retaliation in violation of the provisions of Government Code section 12940, subdivision (h), which forbids employers from retaliating against employees who have acted to protect the rights afforded by the California Fair Employment and Housing Act (FEHA) (Gov.Code, § 12900 et. seq).

Section 12940(h) makes it an unlawful employment practice for an employer “to discharge, expel, or otherwise discriminate against any person because the person has opposed any practices forbidden under this part or because the person has filed a complaint, testified, or assisted in any proceeding under this part.” In this case, we are presented with an array of issues regarding the proper legal standards to apply in determining whether an allegedly retaliatory action by an employer is actionable under section 12940(h). First, we must decide whether an employee’s refusal to follow a supervisor’s order (to discharge a subordinate) that the employee reasonably believes to be discriminatory constitutes “protected activity” under the FEHA for which the employee may not properly be subjected to retaliation, when the employee objects to the supervisor’s order but does not explicitly tell the supervisor or the employer that she (the employee) believes the order violates the FEHA or is otherwise discriminatory. Second, we must decide how the term “adverse employment action” — a term of art that generally is used as a shorthand description of the kind of adverse treatment imposed upon an employee that will support a cause of action under an employment discrimination statute — should be defined for purposes of a retaliation claim under the FEHA, and whether, in evaluating whether or not an employee was subjected to an adverse employment action under the appropriate standard, each individual sanction or punitive measure to which the employee was subjected must be evaluated separately or instead collectively through consideration of the totality of the circumstances. On a related point, we must decide whether a plaintiff may invoke the continuing violations doctrine to rely upon allegedly retaliatory acts that occurred outside the limitations period when such acts are related to acts that occur within the limitations period prescribed by the FEHA. Finally, in light of our conclusions on the foregoing issues, we must determine whether, under the circumstances disclosed by the record in this case, the Court of Appeal properly concluded that the trial court erred in granting summary judgment in favor of the employer.

For the reasons set forth below, we conclude that an employee’s refusal to follow a supervisor’s order that she reasonably believes to be discriminatory constitutes protected activity under the FEHA and that an employer may not retaliate against an employee on the basis of such conduct when the employer, in light of all the circumstances, knows that the employee believes the order to be discriminatory, even when the employee does not explicitly state to her supervisor or employer that she believes the order to be discriminatory.

I.

II.

Past California cases hold that in order to establish a prima facie case of retaliation under the FEHA, a plaintiff must show (1) he or she engaged in a “protected activity,” (2) the employer subjected the employee to an adverse employment action, and (3) a causal link existed between the protected activity and the employer’s action. Once an employee establishes a prima facie case, the employer is required to offer a legitimate, nonretaliatory reason for the adverse employment action. If the employer produces a legitimate reason for the adverse employment action, the presumption of retaliation “drops out of the picture,” and the burden shifts back to the employee to prove intentional retaliation.

III.

Yanowitz contends that the following activity constitutes adverse employment actions for purposes of her prima facie claim: (1) unwarranted negative performance evaluations (specifically, Roderick’s July 16, 1998 memo criticizing Yanowitz); (2) L’Oreal’s refusal to allow Yanowitz to respond to the allegedly unwarranted criticism, by insisting on the July 22, 1998 meeting despite Yanowitz’s request to postpone the meeting to allow her to prepare a defense to the charges; (3) unwarranted criticism voiced by Roderick in the presence of Yanowitz’s associates and other employees on May 13, 1998, and the “humiliating” public reprobation by Wiswall on June 11, 1998; (4) refusing Yanowitz’s request to provide necessary resources and assistance to Christine DeGracia (sometime after May 13, 1998), thereby allegedly fueling the employee resentment for which Yanowitz was chastised in her performance reviews; and (5) Roderick’s solicitation of negative feedback from Yanowitz’s staff in April 1998.

As a threshold matter, we need not and do not decide whether each alleged retaliatory act constitutes an adverse employment action in and of itself. Yanowitz has alleged that L’Oreal’s actions formed a pattern of systematic retaliation for her opposition to Wiswall’s discriminatory directive. Contrary to L’Oreal’s assertion that it is improper to consider collectively the alleged retaliatory acts, there is no requirement that an employer’s retaliatory acts constitute one swift blow, rather than a series of subtle, yet damaging, injuries. Enforcing a requirement that each act separately constitute an adverse employment action would subvert the purpose and intent of the statute.

It is therefore appropriate that we consider plaintiff’s allegations collectively. L’Oreal additionally argues, however, that in any event we may not consider the full range of acts, because only acts that occurred within one year prior to the filing of Yanowitz’s claim with the DFEH — that is, within one year prior to June 25, 1999 — are actionable and the remaining acts are barred by the statute of limitations. L’Oreal urges us to apply the statute of limitations strictly and limit Yanowitz’s claims to only those acts that occurred one year or less before she filed her DFEH claim — namely, Roderick’s July 16, 1998 memorandum, the refusal to give Yanowitz additional time to respond to that memorandum, and the July 22, 1998 meeting. Conversely, Yanowitz urges us to apply the continuing violation doctrine we recently discussed in Richards v. CH2M Hill, Inc. Under that doctrine, an employer is liable for actions that take place outside the limitations period if these actions are sufficiently linked to unlawful conduct that occurred within the limitations period.

In Richards, we applied the continuing violation doctrine to a plaintiff’s disability accommodation and disability harassment claims under the FEHA, reasoning that the FEHA statute of limitations should not be interpreted to force upon a disabled employee engaged in the process of seeking reasonable accommodation or ending disability harassment the unappealing choice of resigning at the first sign of discrimination or, on the other hand, persisting in the reconciliation process and possibly forfeiting a valid claim should that process prove unsuccessful. Thus, we held that when an employer unlawfully refuses reasonable accommodation of a disabled employee or engages in disability harassment, the statute of limitations begins to run either “when the course of conduct is brought to an end, as by the employer’s cessation of such conduct or by the employee’s resignation, or when the employee is on notice that further efforts to end the unlawful conduct will be in vain.”

Subsequent to our decision in Richards, the United States Supreme Court decided National Railroad Passenger Corp. v. Morgan, where the court held that, with regard to the applicability of the continuing violations doctrine, a distinction should be drawn between discrimination and retaliation claims on the one hand, and hostile work environment claims on the other hand. The court in Morgan reasoned that because title VII’s definition of “unlawful employment practices” includes many discrete acts but does not indicate that the term “practice” converts related discrete acts into a single unlawful practice for timely filing purposes, discrete discriminatory acts are not actionable if time-barred, even when they are related to acts alleged in timely filed charges. The court further stated that hostile work environment claims, by contrast, by their very nature involve repeated conduct and thus cannot be said to occur on any particular day. Because a harassment claim is composed of a series of separate acts that collectively constitute one “unlawful employment practice,” the court in Morgan concluded that it does not matter that some of the component parts fall outside the statutory time period.

L’Oreal urges us to adopt Morgan’s reasoning and limit the continuing violation doctrine to only harassment claims, thus excluding discrimination and retaliation claims. A rule categorically barring application of the continuing violation doctrine in retaliation cases, however, would mark a significant departure from the reasoning and underlying policy rationale of our previous cases interpreting the FEHA statute of limitations. In Richards, we recognized that such a strict approach to the statute of limitations could encourage early litigation, and that in order to minimize the filing of unripe lawsuits and to promote the conciliatory resolution of claims, the FEHA statute of limitations should be interpreted liberally to allow employers and employees an opportunity to resolve disputes informally. In our earlier decision in Romano v. Rockwell Internat., Inc., these same policy concerns critically informed our decision that a FEHA action for discriminatory discharge does not commence until the actual discharge, not the time the employee was notified that he or she would be discharged.

Nothing in Richards or Romano limited application of these principles to only harassment claims, rather than discrimination or retaliation claims. Indeed, in Richards, we expressly applied the continuing violation doctrine to the plaintiff’s disability discrimination claim, as well as to her disability harassment claim. Thus, we already have recognized that when the requisite showing of a temporally related and continuous course of conduct has been established, it is appropriate to apply the continuing violations doctrine to disability accommodation claims, as well as to harassment claims.

Indeed, an examination of the facts of the instant case illustrates why a categorical bar on the application of the continuing violations doctrine in the retaliation context is incompatible with our previous pronouncements in this area. Here, the plaintiff alleges a retaliatory course of conduct rather than a discrete act of retaliation, and as we concluded above, a series of separate retaliatory acts collectively may constitute an “adverse employment action” even if some or all of the component acts might not be individually actionable. If, however, we were to foreclose application of the continuing violations doctrine as a matter of law in retaliation cases, the statute of limitations would start running upon the happening of the first act of retaliation, even if that act would not be actionable standing alone. A rule that would force employees to bring actions for “discrete acts” of retaliation that have not yet become ripe for adjudication, and that the employee may not yet recognize as part of a pattern of retaliation, is fundamentally incompatible with the twin policy goals of encouraging informal resolution of disputes and avoiding premature lawsuits that critically informed our analysis in Richards and Romano.

Accordingly, foreclosing the application of the continuing violation doctrine in a case such as this one, where the plaintiff alleges a retaliatory course of conduct rather than a discrete act of retaliation, would undermine the fundamental purpose of the FEHA by encouraging early litigation and the adjudication of unripe claims. We believe the better rule is to allow application of the continuing violations doctrine in retaliation cases if the requisite showing of a continuing course of conduct has been made. Thus, we reiterate that in a retaliation case, as in a disability accommodation or harassment case, the FEHA statute of limitations begins to run when an alleged adverse employment action acquires some degree of permanence or finality.

Turning to the applicability of the doctrine in the present case, we apply the factors outlined in Richards. Specifically, we consider whether “the employer’s actions were (1) sufficiently similar in kind — recognizing, as this case illustrates, that similar kinds of unlawful employer conduct, such as acts of harassment or failures to reasonably accommodate disability, may take a number of different forms Citation; (2) have occurred with reasonable frequency; (3) and have not acquired a degree of permanence.” Here, Yanowitz contends that in retaliation for her refusal to follow Wiswall’s discriminatory directives in the fall of 1997, L’Oreal began a campaign of retaliation that commenced with the solicitation of negative feedback from Yanowitz’s subordinates in April 1998, continued with a refusal to accommodate those employees’ administrative needs in May 1998, the presentation of unwarranted criticism and humiliation in the presence of these employees in June 1998, and an unwarranted negative written evaluation in a July 16, 1998 memorandum, and finally culminated with L’Oreal’s refusal, after the transmittal of the July 16 memorandum, to allow Yanowitz time to respond to the charges leveled against her.

In sum, Yanowitz alleges that in the course of these actions, L’Oreal solicited or fabricated negative information about Yanowitz and then used this information to intimidate, disempower, and punish Yanowitz. We conclude that a reasonable trier of fact could find that the solicitation of negative information from subordinates, the criticism of Yanowitz both verbally and in written memos based in part on the negative information obtained from her subordinates, and the subsequent refusal to allow Yanowitz to answer the charges leveled against her, were similar in kind and occurred with sufficient frequency to constitute a continuous and temporally related course of conduct. Moreover, a reasonable trier of fact could conclude Yanowitz was not on notice that further conciliatory efforts would be futile, until her final attempts to meet with company representatives to discuss the criticism directed at her were finally rebuffed. Accordingly, in light of the evidence submitted by the parties at the summary adjudication stage, we cannot determine that the continuing violation doctrine is inapplicable as a matter of law.

Furthermore, with regard to the question whether L’Oreal’s alleged acts of retaliation, considered collectively, constitute a sufficient adverse employment action under the relevant standard (materially affecting the terms, conditions, or privileges of employment), we conclude that Yanowitz has met her burden of establishing an adverse employment action for purposes of her prima facie case. The record establishes that prior to the period relevant here, Yanowitz had been a highly rated and honored employee of L’Oreal for 18 years. In April 1998, however, her supervisors Roderick and Wiswall began to actively solicit negative information about her and then employed this information to criticize Yanowitz both in the presence of her subordinates and in written memoranda. These supervisors refused to review her response to these charges and employed the negative information received to justify new, restrictive directives regarding her future performance and to impair her effectiveness with her staff.

These actions constituted more than mere inconveniences or insignificant changes in job responsibilities. Months of unwarranted and public criticism of a previously honored employee, an implied threat of termination, contacts with subordinates that only could have the effect of undermining a manager’s effectiveness, and new regulation of the manner in which the manager oversaw her territory did more than inconvenience Yanowitz. Such actions, which for purposes of this discussion we must assume were unjustified and were meant to punish Yanowitz for her failure to carry out her supervisor’s order, placed her career in jeopardy. Indeed, Roderick so much as told Yanowitz that unless there were immediate changes, her career at L’Oreal was over. Actions that threaten to derail an employee’s career are objectively adverse, and the evidence presented here creates a factual dispute that cannot be resolved at the summary judgment stage.

Contrary to L’Oreal’s assertion, this is not a case in which the plaintiff alleges merely commonplace indignities typical of the workplace. Yanowitz alleges a pattern of systematic retaliation, and numerous cases recognize that adverse employment action includes treatment similar to that here at issue.

We emphasize that we do not determine that the alleged adverse action occurred, or that it was not justified by bona fide concerns on the part of L’Oreal with regard to Yanowitz’s general performance at work that might yet be proved at trial. We hold only that, at the summary adjudication stage, Yanowitz’s evidence was sufficient to satisfy the adverse action element of her prima facie case. It remains for the trier of fact to decide whether Yanowitz’s allegations are true.

IV.

Finally, L’Oreal argues that the Court of Appeal erred in holding that Yanowitz met her burden of establishing that L’Oreal’s stated nonretaliatory grounds for taking the actions against her were pretextual. L’Oreal points to an August 5, 1997 memo from Roderick to Sears — written months before the incident with Wiswall — that severely criticized Yanowitz for deficiencies in her “listening” skills and her “attitude,” and to Yanowitz’s admission that the November 1997 merger created problems in her department and left her with additional job responsibilities that may have had an impact on her performance. L’Oreal additionally proffered evidence that it had received complaints about Yanowitz from customers before and after the incidents with Wiswall and that these complaints expressed negative feedback about Yanowitz, including an expressed desire by certain corporate customers not to work with Yanowitz again.

The evidence proffered by L’Oreal does indicate that there were problems with Yanowitz’s performance both before and after the incident with Wiswall, but such evidence is not sufficient in itself to support the trial court’s grant of summary judgment in L’Oreal’s favor. The record reflects that many of the problems identified in the negative performance reviews had been associated with Yanowitz in a number of performance reviews conducted between 1987 and 1996. Despite these criticisms, however, these same performance reviews consistently rated Yanowitz “above expectation,” and in 1997 — the year before the incidents here at issue — Yanowitz was awarded the sales manager of the year award. Moreover, there is no evidence that at the time of these earlier negative evaluations, L’Oreal actively solicited negative feedback about Yanowitz, berated her in the presence of her staff, or threatened to terminate her unless her performance improved. Roderick’s active solicitation of negative information concerning Yanowitz in the spring of 1998 strongly suggests the possibility that her employer was engaged in a search for a pretextual basis for discipline, which in turn suggests that the subsequent discipline imposed was for purposes of retaliation.

Thus, we conclude that the record reveals triable issues of fact as to whether L’Oreal’s heightened response to Yanowitz’s allegedly poor performance — after she refused to follow Wiswall’s directive — was retaliation for her protected activity under the FEHA. Taking into account all of the evidence submitted in support of and in opposition to the summary judgment motion, there exists a genuine issue of material fact as to whether L’Oreal’s articulated, nonretaliatory reasons for its actions were pretextual. Therefore, the Court of Appeal properly held that the trial court’s grant of summary judgment in favor of L’Oreal cannot be sustained on this ground.

CHAIRMAN MCFERRAN AND MEMBERS WILCOX AND PROUTY

On October 7, 2022, Administrative Law Judge Geoffrey Carter issued the attached decision. The Respondent filed exceptions and a supporting brief, the General Counsel filed an answering brief, and the Respondent filed a reply brief. The General Counsel filed cross-exceptions and a supporting brief, and the Respondent filed an answering brief.

The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.

The Board has considered the decision and record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings, and conclusions, to amend the remedy,(n.3 in opinion) The Respondent excepts to the judge’s ordering of a notice reading to remedy Whitbeck’s unlawful discharge. Contrary to the judge, in the circumstances of this case, we find that the Board’s standard remedies suffice to inform employees of the Respondent’s unlawful conduct. In so doing, we observe that the circumstances of this case are distinguishable from those presented in Gavilon Grain, LLC, 371 NLRB No. 79 (2022), and Absolute Healthcare d/b/a Curaleaf Arizona, 372 NLRB No. 16 (2022), in which high-level management officials openly participated in a widely disseminated course of unlawful conduct. We have thus amended the judge’s recommended remedy and Order to remove the notice reading. We shall substitute a new notice to conform to the Order as modified.

and to adopt the recommended Order as modified and set forth in full below.

The judge found, among other things, that the Respondent violated Section 8(a)(3) and 8(a)(4) by discharging employee Hannah Whitbeck. As explained below, we adopt the judge’s finding that the discharge violated the Act as alleged.

Background

The Respondent is engaged in the operation of public restaurants selling food and beverages throughout the United States, including, as relevant here, five stores in Ann Arbor, Michigan, one of which is located at 300 South Main Street (Main and Liberty).These stores are part of a District of approximately 10 stores in Ann Arbor and the surrounding area, overseen by Respondent’s District Manager, Paige Schmehl. Hannah Whitbeck was a shift supervisor at the Respondent’s Main and Liberty store. Whitbeck reported directly to the Store Manager, Erin Lind, who in turn reports to Schmehl.

In about January 2022, Whitbeck, in collaboration with a coworker, initiated a union organizing effort at her store by contacting Workers United (the Union). Whitbeck and her coworkers viewed her as the lead organizer at the Main and Liberty store. Whitbeck became visible as a union advocate to the Respondent when, on February 4, she began wearing a union button at work and sent a letter, signed by her and a handful of coworkers to the Respondent’s CEO, requesting that the Respondent voluntarily recognize the Union as their collective-bargaining representative.

On February 8, the Union filed a petition to represent the employees at Main and Liberty. Contemporaneously, the Union filed petitions to represent the employees at three other Ann Arbor stores, including its store on Zeeb Road. The Respondent actively opposed the Union’s coordinated organizing effort among the Ann Arbor stores in Schmehl’s District.

The Board held a representation hearing covering the petitions for the five Ann Arbor locations. Whitbeck attended the last day of the hearing and was noticed by Schmehl, who was also present for 10-15 minutes of the hearing. On March 20, employees at the Respondent’s Zeeb Road store held a “sip-in” event in support of the union organizing effort there, during which volunteers handed out Union buttons and “post it” notes to customers entering the store to encourage them to post supportive comments regarding the organizing campaign on the store’s community board. Whitbeck was on duty at Main and Liberty and did not participate, but Schmehl attended this 3-hour event, periodically removing “post it” notes from the board. Thereafter, on March 23, the Union filed a charge against the Respondent referencing Whitbeck, which the Respondent received on March 28.

During this same time period, the Respondent was investigating an incident involving Whitbeck’s violation of the Respondent’s “two-employee” rule. The rule requires that there be two employees in a store at all times. As discussed in detail in the judge’s decision, on February 27, Whitbeck departed work promptly at her scheduled leave time although the other shift supervisor on duty (with whom she had a dispute earlier in the shift) had not yet returned from his break, leaving the barista on duty alone in the store until the other shift supervisor returned. After learning from the barista on duty, via text message, that he had been alone in store for over a half hour, Whitbeck filed an incident report the following day.

District Manager Schmehl oversaw the investigation of the incident with guidance from the Respondent’s Partner Relations Support Center (PRSC), which handles human resources matters, and the Respondent’s legal department. The Respondent’s corrective action policy states generally that “the form of the corrective action taken will depend on the seriousness of the situation and the surrounding circumstances.” The Respondent also maintains a nonbinding job aid that recommends a final warning for “two employee”-rule violations. Consistent with the job aid, a former store manager at Main and Liberty, Laura Gibbons, testified that, in consultation with PRSC, she issued a final warning to a shift supervisor (A.H.) in 2021 for violating the “two employee” rule. Nevertheless, on March 21, Schmehl recommended that Whitbeck be discharged for violating the rule.

The Respondent’s legal department authorized Whitbeck’s discharge on April 3. Schmehl testified that the final discharge decision was a product of her collaboration with PRSC and the Respondent’s legal team. It is undisputed that the Respondent has not discharged any other employees at any of its Michigan locations for violating the “two employee” rule.

Discussion

Applying Wright Line, the judge found that the Respondent violated Section 8(a)(3) and 8(a)(4) of the Act by discharging Whitbeck on April 11. Under Wright Line, the General Counsel bears the initial burden of establishing that an employee’s union or other protected activity was a motivating factor in the employer’s adverse employment action. The General Counsel meets this burden by proving that (1) the employee engaged in union or other protected activity, (2) the employer knew of that activity, and (3) the employer bore animus against union or other protected activity. An employer’s motivation is a question of fact that may be inferred from both direct and circumstantial evidence on the record as a whole. Circumstantial evidence of discriminatory motive may include, among other factors, the timing of the action in relation to the union or other protected conduct; contemporaneous unfair labor practices; shifting, false, or exaggerated reasons offered for the action; failure to conduct a meaningful investigation; departures from past practices; and disparate treatment of the employee. Once the General Counsel sustains her initial burden under Wright Line, the burden shifts to the employer to show that it would have taken the same action even in the absence of the protected activity.

Regarding the General Counsel’s initial burden, as the judge made clear, there is no dispute that Whitbeck had engaged in protected activity, including supporting the Union and participating in Board proceedings, and that the Respondent was aware of such activities at the time it discharged her on April 11. In addition, in finding that the Respondent acted with animus in discharging Whitbeck, the judge relied upon (1) District Manager Schmehl’s activity during the March 20 “sip-in” event at Zeeb Road, which the judge found arguably created an impression of surveillance, (2) the Respondent’s disparate treatment of Whitbeck as compared with lesser discipline of another shift supervisor and the recommended corrective action set forth in Respondent’s job aid, (3) the Respondent’s deviation from its investigative practice in determining the level of discipline for Whitbeck, and (4) timing. As explained below, we agree with the judge that these factors provide ample evidence that the Respondent’s animus was a motivating factor in Whitbeck’s discharge.

In adopting the judge’s finding that District Manager Schmehl’s activity during the March 20 “sip-in” at the Respondent’s Zeeb Road store supports an inference of unlawful motivation by the Respondent, we note that Schmehl’s only discernable work activity during her unusual and unexplained 3-hour presence at the store was to remove “post it” notes from the community board, a task that the acting store manager clearly could have performed without assistance. Although there is no allegation in the complaint that Schmehl’s actions created an impression of surveillance, and we do not find such an independent Section 8(a)(1) violation here, Schmehl’s conduct nevertheless sheds light on the Respondent’s unlawful motive in discharging Whitbeck. Moreover, we reject the Respondent’s contention that the incident is irrelevant because Whitbeck did not participate in the sip-in. In this regard, we find the larger context here significant: on February 8, the Union had filed petitions to represent the Zeeb Road employees and the employees at Whitbeck’s “home” store, along with petitions at two other Ann Arbor stores in Schmehl’s District, and had filed a petition at a fifth Ann Arbor store only a few days earlier, on January 31. The Respondent actively opposed this coordinated organizing effort in which Whitbeck played a visible part.

We further agree with the judge that the Respondent subjected Whitbeck to disparate treatment in discharging her. Specifically, the Respondent departed from its job aid’s recommendation of a final warning for violations of the “two employee” rule and from its history of issuing a final warning for a previous violation of the “two employee” rule. Even assuming, as the Respondent contends, that Schmehl was unaware of the previous lesser discipline issued to another shift supervisor who violated the “two employee” rule, that fact does not undercut a finding of disparate treatment here given the participation of multiple overlapping decisionmakers. Indeed, Schmehl admitted that the Respondent’s Partner Relations Support Center (PRSC), which handles human resources issues and was involved in the previous discipline, collaborated with her in the final determination to discharge Whitbeck. Compare New Otani Hotel & Garden, 325 NLRB 928 (1998) (no disparate treatment warranting inference of unlawful motive where multiple decision makers’ testimony established that none was aware of previous instances of misconduct similar to that which prompted alleged unlawful discipline). On these facts, we find, in agreement with the judge, that the Respondent’s disparate treatment of Whitbeck supports an inference of unlawful motive.

Moreover, we agree with the judge’s finding that the Respondent’s failure to consider surrounding circumstances in evaluating the appropriate discipline for Whitbeck lends further support to the inference of unlawful motive here. We rely both on the language of the Respondent’s corrective action policy–i.e., “the form of the corrective action taken will depend on the seriousness of the situation and the surrounding circumstances”–and on Schmehl’s testimony that the Respondent’s practice was consistent with that policy. Indeed, Schmehl specifically asserted that Whitbeck’s reasons for her prompt departure at the end of her shift, which resulted in her leaving a partner alone in the store, would have been considered during the investigation. Yet, as the judge found, the Respondent entirely failed to follow up on Whitbeck’s indication in her incident report that she had “something serious” after work that necessitated her prompt departure.

Finally, we agree with the judge that the timing also supports the inference that Whitbeck’s discharge was unlawfully motivated. In so finding, we note that Schmehl recommended Whitbeck’s discharge the day after her unusual activity in observing the “sip-in” at Zeeb Road and only 2-1/2 weeks after she noted Whitbeck in attendance at the Board’s representation hearing on the petitions pending in Schmehl’s district, including those for Zeeb Road and Whitbeck’s home store. Unlike the judge, we further rely on the timing of the discharge in relation to the Union’s filing of an unfair labor practice charge naming Whitbeck. It is undisputed that the Respondent’s legal department–which, by Schmehl’s own admission, also participated in the discharge decision–did not authorize the discharge until April 3, nearly 2 weeks after Schmehl recommended it and only 5 days after the Respondent received the charge.

Based on the foregoing, we find, in agreement with the judge, that the General Counsel sustained her initial burden under Wright Line of proving that the Respondent’s discharge of Whitbeck was unlawfully motivated. Having done so, we turn to the Respondent’s Wright Line defense burden. In finding that the Respondent did not meet its defense burden here, the judge noted that the Respondent asserted that it discharged Whitbeck for “knowingly” violating the “two employee” rule, but found that the Respondent failed to present any evidence that discharge would be the appropriate level of discipline for a “knowing” violation. In addition, the judge relied on the lack of comparator evidence from the Respondent that it had discharged other employees for violating the “two employee” rule. Further, the judge relied on the fact that Respondent’s disciplinary job aid recommends a final written warning, not discharge, for violations of the “two employee” rule. For the reasons stated by the judge, we agree that the Respondent failed to establish that it would have discharged Whitbeck even absent her Section 7 and other protected activity. In particular, in the absence of evidence that any other employee in one of the Respondent’s Michigan stores ever had been discharged for violating the rule, we agree with the judge that the Respondent failed to establish that it would have discharged Whitbeck for violating the “two employee” rule even absent her protected activity. See Tschiggfrie Properties, 368 NLRB No. 120, supra, slip op. at 5 (employer failed to meet defense burden, in part, based on absence of evidence that any other employee had previously been discharged for misconduct on which the employer relied).

Having found, in agreement with the judge, that the General Counsel sustained her initial burden under Wright Line and that the Respondent failed to establish that it would have discharged Whitbeck even absent her protected activities, we adopt the judge’s findings that the Respondent violated Section 8(a)(3) and (4) by discharging Whitbeck on April 11.

ORDER

The National Labor Relations Board orders that the Respondent, Starbucks Corporation, Ann Arbor, Michigan, its officers, agents, successors, and assigns, shall

1. Cease and desist from

(a) Discharging or otherwise discriminating against employees for supporting Workers United or any other labor organization.

(b) Discharging or otherwise discriminating against employees for participating in National Labor Relations Board processes.

(c) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act.

2. Take the following affirmative action necessary to effectuate the policies of the Act.

(a) Within 14 days from the date of this Order, offer Hannah Whitbeck full reinstatement to her former job or, if that no longer exists, to a substantially equivalent position, without prejudice to her seniority or other rights or privileges previously enjoyed.

(b) Make Hannah Whitbeck whole for any loss of earnings and other benefits, and for any other direct or foreseeable pecuniary harms, suffered as a result of the discrimination against her in the manner set forth in the remedy section of the judge’s decision as amended in this decision.

(c) Within 14 days from the date of this Order, remove from its files any reference to the unlawful discharge and, within 3 days thereafter, notify the employee in writing that this has been done and that the discharge will not be used against her in any way.

(d) Compensate Hannah Whitbeck for the adverse tax consequences, if any, of receiving a lump-sum backpay award, and file with the Regional Director for Region 7, within 21 days of the date the amount of backpay is fixed, either by agreement or Board order, a report allocating the backpay award to the appropriate calendar years.

(e) File with the Regional Director for Region 7, within 21 days of the date the amount of backpay is fixed by agreement or Board order or such additional time as the Regional Director may allow for good cause shown, a copy of Hannah Whitbeck’s corresponding W-2 forms reflecting the backpay award.

(f) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place designated by the Board or its agents, all payroll records, social security payment records, timecards, personnel records and reports, and all other records, including an electronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order.

(g) Within 14 days after service by the Region, post at its Main and Liberty facility in Ann Arbor, Michigan, copies of the attached notice marked “Appendix.” Copies of the notice, on forms provided by the Regional Director for Region 7, after being signed by the Respondent’s authorized representative, shall be posted by the Respondent and maintained for 60 consecutive days in conspicuous places, including all places where notices to employees are customarily posted. In addition to physical posting of paper notices, notices shall be distributed electronically, such as by email, posting on an intranet or an internet site, and/or other electronic means, if the Respondent customarily communicates with its employees by such means. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. If the Respondent has gone out of business or closed the facility involved in these proceedings, the Respondent shall duplicate and mail, at its own expense, a copy of the notice to all current employees and former employees employed by the Respondent at the facility at any time since April 11, 2022.

(h) Within 21 days after service by the Region, file with the Regional Director for Region 7 a sworn certification of a responsible official on a form provided by the Region attesting to the steps that the Respondent has taken to comply.

IT IS FURTHER ORDERED that the complaint is dismissed insofar as it alleges violations of the Act not specifically found.

APPENDIX

DIAZ, Circuit Judge

I.

II.

DANA L. CHRISTENSEN, Chief District Judge.

Defendant/Counter-Plaintiff Howmedica Osteonics Corp. d/b/a Stryker Orthopedics (“Stryker”) filed a motion for judgment as a matter of law with regard to the wrongful discharge claim brought by Plaintiff/Counter-Defendant Jeremy R. Myers (“Myers”). For the reasons explained below, the Court grants Stryker’s motion.

BACKGROUND

Stryker, a medical device and equipment manufacturer, terminated Myers on December 10, 2013, following an investigation into Myers’s professional conduct. Myers had begun working for Stryker in 2005 as a sales representative, selling Stryker products to doctors throughout Montana and nearby states. In July, 2010, Stryker promoted Myers to the position of Sales Manager for Stryker’s Northwest Branch. Shortly after accepting the promotion, Myers signed a contract including, among other provisions, confidentiality and non-competition obligations. Myers agreed to be bound by those obligations for a year following termination of his employment.

Myers acknowledged that he received and read Stryker’s employee handbook and its code of conduct during his employment. Stryker’s personnel documents prohibit workplace harassment and promote ethical behavior. The company’s published policies also established that Stryker may terminate an employee for violating company policies.

Myers’s sales territory performed well under his leadership, and he was rated as outstanding in his 2013 performance review. Toward the end of that year, however, his manager, Scott Curtis (“Curtis”), and human resources manager, Jenny Lavey (“Lavey”), became concerned about Myers’s behavior. Following several customer and employee complaints, Curtis and Lavey conducted an investigation into Myers’s professional conduct. Immediately following the investigation, and without discussing the matter with Myers, Stryker terminated Myers’s employment.

In the summer of 2013, Myers advocated for the termination of Justin Auch (“Auch”), a salesperson within his region. Curtis followed Myers’s advice and discharged Auch. Curtis was surprised by the volume and negativity of feedback he received from other employees and customers regarding Auch’s termination. The complaints questioned Myers’s fitness to manage a sales team and suggested that Myers’s continued employment would threaten Stryker’s relationships with employees and customers. One doctor removed all of his business from Stryker.

Upon fielding complaints about Myers, Curtis traveled from his workplace, Denver, Colorado, to Montana to speak with the customers and employees who worked closely with Myers. Over the course of several weeks, Curtis heard from many of Myers’s subordinates that Myers managed them through intimidation, harassment, and demands for money and services. Stryker’s Operations Manager told Curtis that she had personally witnessed Myers behave aggressively and unprofessionally with her team of employees and with others. Curtis viewed the behavior described as serious, unusual, and unacceptable.

Conversations with customers similarly concerned Curtis. He learned that Myers had been banned from a hospital for 30 days for failing to sign in at the front desk and that Myers had not disclosed the disciplinary measure. Several customers stated that they would remove all of their business from Stryker to avoid working directly with Myers. Another described Myers bullying a hospital CFO.

Curtis notified Lavey of his conversations with employees and customers and asked her to conduct an investigation. Over several days, Lavey interviewed employees who worked with Myers and documented those interviews. The individuals interviewed corroborated the information compiled by Curtis. Lavey determined—and Curtis agreed—that Myers’s misconduct was so egregious and extensive that discharge was necessary. Curtis and Lavey recommended Myers’s termination to their respective managers. On December 10, 2013, Curtis and Lavey met with Myers and notified him that he was being terminated and gave a general explanation of the reasons. After Myers’s termination, Stryker rehired Auch.

In May, 2014—seven months before expiration of Myers’s contractual obligations—Myers took a job with Zimmer, Inc. (“Zimmer”), which manufactures and sells products competitive to Stryker’s within the same markets.

ANALYSIS

I. WRONGFUL DISCHARGE CLAIM

Myers brings a wrongful discharge claim under Montana’s Wrongful Discharge from Employment Act (“WDEA”). Mont. Code Ann. §§ 39-2-901 to 39-2-915 (2015). The parties agree that Myers was not a probationary employee. Under the WDEA, an employer’s discharge of a non-probationary employee is lawful if: (1) the employer did not retaliate against the employee for protected activities; (2) the employer had good cause to terminate the employee; and (3) the employer did not violate his own personnel policies. § 39-2-904. Myers does not claim that his discharge was retaliatory. Rather, he raises three alternative theories for wrongful discharge. First, he asserts that Stryker lacked good cause for his termination. Second, he argues that Stryker’s purported good cause reason is a pretext and that the true reason for his discharge is unlawful. And third, he claims that even if Stryker can show good cause, Stryker violated the provisions of its own personnel policies when it terminated him.