Havill v. Woodstock Soapstone Company, Inc

Facts

P began working for D in 1982. She worked part-time at first and then full-time, until she was terminated in April 1987 when the company was experiencing financial difficulties. P resumed employment with D in 1990 working initially as an independent contractor from her home and later that year as a part-time employee in D's office. P became a full-time employee in August 1994. In 1994, D issued and distributed personnel policies. The policies detailed a process whereby an employee was entitled to two written warnings in a twelve-month period prior to termination for 'willful or repeated violations, or exaggerated behavior not in the best interest of the company or its employees.' The policies established a 'just cause' requirement for the termination of D's employees with problems such as unauthorized absences, violation of safety procedures, theft, careless or faulty work, and incompatibility with other employees. P's duties included data entry, database maintenance, and mailings to prospective customers. P received 'very positive' performance reviews in 1995 and 1996 as well as a $1000 bonus in August 1997. P was steadily improving at sales and customer service on the telephone, though she remained reluctant to do this work. D's business was declining seriously for various market-related reasons. Many of D's competitors went out of business. D had to reorganize the company by adding a line of gas-burning stoves and outsourcing in-house functions, including many of the letter shop and order fulfillment functions that comprised much of P's workload. D hired Laura Scott to streamline the operation. Tension developed between P and Scott soon after Scott's arrival. P felt humiliated by the way Scott dealt with her. Scott and D began to perceive that P was resisting the reorganization. P manifested 'rude' and 'insubordinate' conduct towards Scott. P got a reprimand letter. The letter was written forty-one days before plaintiff was terminated. P entered into a written agreement with D and Scott in which they all pledged to cooperate as team members in the best interests of the company. Despite these efforts, D terminated P on November 10, 1997. P did not receive any written warnings prior to termination. P obtained her personnel file, which contained a memo dated November 10, 1997, indicating that her position had been eliminated due to lack of work. D gave P a recommendation letter. Two weeks later D placed an ad in the Valley News seeking an 'office whiz' who would be 'a well-organized person with fast and accurate typing and keyboard ability, basic computer literacy, and sound office skills.' Heather Dahlin responded to this advertisement and was hired. She worked for the company handling telephone inquiries, taking and processing orders, bookkeeping, and other miscellaneous tasks until she quit in November 1998. By January 1998, D had hired three new customer service representatives. P sued D for wrongful termination of her employment in violation of an implied contract. The trial court determined that D and P did have an implied contract that P's employment would not be terminated without just cause and adherence to D's stated procedures. The trial court rejected D's claim as pretext. The trial court found against defendant on the job elimination issue. Only two weeks after delivering plaintiff a letter of recommendation that praised her for 'organization' and 'sound office skills' such as data entry, database management, and work with customers in person and over the phone, defendant advertised for an 'office whiz' who would be a 'well organized person with fast and accurate typing and keyboard ability, basic computer literacy, and sound office skills.' The court found that D bound itself to the terms of an implied employment contract that entitled P to two written warnings before she would be terminated for just cause. Defendant breached that contract when it terminated her without warning, and thus is liable for damages. The trial court awarded Pa total of $74,644 in principal damages plus $15,040 in prejudgment interest. The trial court calculated P's damages for the period beginning in calendar year 1998 and ending in 2004 - a total period of seven years. This includes five years of back pay, i.e., lost wages up to the time of judgment, and two years of front pay - damages for lost future wages accruing after the date of judgment. Both parties appealed.

Issues

Rule of Law

Holding and Decision

Legal Analysis

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