Haselrig v. Public Storage, Inc.

ROBERT M. BELL, Judge. A single question is presented by Walter Haselrig, appellant, in this appeal from the judgment of the Circuit Court for Prince George’s County, namely: Whether the lower court erred in granting appellee’s [Public Storage, Inc.’s] motion to dismiss appellant’s complaint for failure to state a cause of action. 1 ¹¹⁹ We will hold, as to count one, that it did; consequently, we will reverse and remand for trial on that count. The court’s ruling as it pertains to count two was not error; hence, as to it, we will affirm. COUNT ONE In Count One, captioned “Wrongful Discharge”, of his two-count complaint, appellant alleged that upon his entering into an employment contract with appellee he received a copy of appellee’s “Employee Handbook,” which contained a statement of its purpose and a listing and summary of appellee’s policies and practices.

Appellant’s complaint alluded to several of those policies and practices as important elements of his claim. Among the policies and practices to which appellant referred were those relating to “Probationary Period”, 2 “Work Rule Violations and Corresponding Disciplinary Action” 3 and “Termination”, more particularly “Involuntary Dismissal”. The latter provision, pertinent to the case sub judice, provides: Involuntary Dismissal ¹²⁰ If, after attaining regular status, following the successful completion of your probationary period, you are not satisfying your job performance requirements, you will be counseled by your Supervisor and given a reasonable opportunity to improve. If reasonable means of improving performance have been attempted and you still do not meet job requirements, you may be terminated involuntarily.

You may be dismissed without notice or pay in lieu of notice for violating work rules, business ethics or committing any serious act. Alleging that he had completed his probationary period and had not violated any of the enumerated violations, and relying on the provision just cited, appellant asserts that his termination for “failure to meet dates for certificates of occupancy” was wrongful. According to the complaint “the provisions contained in the ‘Employee Handbook’ regarding Plaintiff and Defendant’s employment relation became contractual obligations in that with knowledge of these provisions the Plaintiff embarked upon and continued his work for the Defendant.” Rather than file an answer, appellee moved to dismiss the complaint, or, alternatively, for summary judgment, on the ground that the “Employee Handbook” contained disclaimers and, therefore, could not constitute an express or implied contract. In support of this argument, appellee directs our attention to the provision in the handbook, captioned “Employment Relationship”, which provides: The relationship between you and PSI is predicated on an at will basis.

That is to say that either the Employee or the Company may terminate their employment at their discretion. (Emphasis added) Like appellant, appellee also found the provision pertaining to the probationary period and, in particular, its last paragraph, significant. It provides: It should be understood that employment and compensation can be terminated, with or without cause and with or ¹²¹ without notice at any time, at the option of either the Company or the Employee. Relying on Castiglione v. Johns Hopkins Hospital, 69 Md.App. 325, 339-40 , 517 A.2d 786 (1986), appellee maintains that these provisions are “disclaimers”, which expressly negate, in clear and conspicuous language, any notion that a contractual relationship other than “at-will” was intended or contemplated by the Employee Handbook. 4 When reviewing the trial court’s grant or denial of a motion for summary judgment, because that decision involves issues of law, not fact, the appellate court determines whether the trial court was legally correct.

Heat and Power v. Air Products, 320 Md. 584, 591 , 578 A.2d 1202 (1990), citing Maryland Rule 2-501 and King v. Bankerd, 303 Md. 98, 111 , 492 A.2d 608 (1985). And, because the choice between permissible factual inferences is a matter of fact, not law, which, therefore, must be made by the finder of fact when the underlying facts are undisputed but susceptible of more than one permissible factual inference, a trial court is legally ■ incorrect if it grants summary judgment. Id. Under those circumstances, the appellate court must reverse.

Id. ¹²² The facts of this case, for purposes of the motion for summary judgment, are not in dispute. 5 It is not disputed that appellant was given, at the time of his hire, an Employee Handbook setting forth the provisions upon which the parties rely. What is at issue is the justifiability of appellant’s reliance upon those provisions of the handbook detailing the termination procedures in cases of involuntary dismissal. Related to this issue, and, indeed, critical to its resolution, is the question of the interpretation of those handbook provisions which appellee characterizes as “disclaimers.” 6 It is well-settled that an employer who hires an employee for an indefinite period may, at his or her pleasure, discharge that employee at any time. Adler v. American Standard Corp., 291 Md. 31, 35 , 432 A.2d 464 (1981).

That rule does not apply, however, where “an employer communicates personnel policy statements to its employees which ‘... limit the employer’s discretion to terminate an indefinite employment or that set forth a required procedure for termination of such employment ... ’, such statements, if justifiably relied on by its employee, may, ‘... become contractual undertakings by the employer that are enforceable by its employee.’ ” Fournier v. USF & G, 82 Md.App. 31, 37 , 569 A.2d 1299 , cert. denied, 319 Md. 581 , 573 A.2d 1337 (1990), quoting Staggs v. Blue Cross of Maryland, Inc., 61 Md.App. 381, 392 , 486 A.2d 798 , cert. ¹²³ denied, 303 Md. 295 , 493 A.2d 349 (1985). See also Dahl v. Brunswick Corp., 277 Md. 471, 475 , 356 A.2d 221 (1976) (“[Brunswick’s] policy directive with respect to severance pay constituted an offer of a unilateral contract of which the employees were aware and, by continuing to work for Brunswick, accepted.”). The policy directive to which we referred in Staggs provided, in pertinent part: IV. Employees terminated due to dismissal are subject to the following conditions: A. Except in extreme cases when dismissal will be immediate, employees will be given at least two formal counseling sessions by their supervisors and/or manager before final dismissal.

All formal counseling sessions must be first reviewed with the Employment and Employee Relations Department prior to any discussion with the employee. Formal counseling sessions with employees must be substantiated in writing by filing form 5.65 Problem Solving Report with the Employment and Employee Relations Department. During the second counseling session, the employee will be advised that continuance of the problem may result in dismissal. Failure to sign form 5.65, Problem Solving Report after it has been discussed, may provide grounds for immediate dismissal.

E. An employee may be dismissed at any time for cause without liability to Blue Cross and Blue Shield of Maryland. 61 Md.App. at 384-85 , 486 A.2d 798 . Neither Staggs nor any of the other appellants in that case were hired with a fixed contract or term of employment, “although all were covered by certain personnel policies adopted by Blue Cross, as set forth in a 1975 policy memorandum.” Id., 61 Md. App. at 384 , 486 A.2d 798 . Its obvious rationale, and that of Dahl , as well, is that legitimate expectations of employ ¹²⁴ ees engendered by employee manuals or policy directives issued by employers, ought to be protected. While in Staggs and Dahl the facts and circumstances were such as to permit an inference of justifiable reliance on policy directives, Castiglione v. Johns Hopkins Hospital, 69 Md.App. 325 , 517 A.2d 786 (1986), cert. denied, 309 Md. 325 , 523 A.2d 1013 (1987) and Fournier, supra, upon which appellee relies, are cases in which the opposite was true.

In Castiglione , a discharged employee alleged that, in discharging her, the hospital violated a provision in the employee handbook it had given her when she was hired. We affirmed the trial court’s grant of summary judgment, noting that the handbook contained an express disclaimer: Finally, this handbook does not constitute an express or implied contract. The employee may separate from his/her employment at any time; the Hospital reserves the right to do the same. 69 Md.App. at 329 , 517 A.2d 786 . The employee manual in Fournier did not contain an express disclaimer of the kind found sufficient in Castiglione ; rather, prominently appearing on the application for employment which the employee signed, was the following: I understand that, if I am employed, it will be for a trial period of three months; that, if in the judgment of the Company I am unsuitable during this period, the employment may be terminated by the Company without notice; and that, after this trial period, the employment may be terminated by either party at will upon two weeks notice to the other.

In any event, all obligation on the Company’s part as respects salary shall end with the last day I work. 82 Md.App. at 33 , 569 A.2d 1299 . We found this statement to be a sufficient disclaimer to foreclose any justifiable reliance, by the employee, on any provision in the handbook. Consequently, as in Castiglione , we affirmed the trial ¹²⁵ court’s grant of summary judgment in favor of the employer. 82 Md.App. at 42 , 569 A.2d 1299 . Appellee maintains that, like Castiglione , its employee handbook contains an express disclaimer and, indeed, that it is located in at least two places in the handbook.

It directs our attention to the sections captioned “Employment Relationship” and “Probationary Period.” It invites us to interpret these provisions, believing that, when we do, we will find that they contain “disclaimers” and, therefore, support the court’s summary judgment ruling. In other words, it is appellee’s position that the only critical inquiry in this case is the existence, vel non, of an express disclaimer. Appellant, not surprisingly, sees the issue differently. In his view, it is the intent of the parties that is at issue; did they intend that a contract be created by the employee handbook?

Since that determination is a factual matter, where the evidence is conflicting or admits of more than one reasonable inference, summary judgment is inappropriate. Appellant, therefore, believes that the issue cannot be resolved without considering and construing the entire handbook, or at the very least, all relevant provisions. Appellant's action is premised upon the existence of a contractual relationship transforming an at-will relationship into one in which termination can only occur after certain procedures have been followed. The theory of appellant's complaint is that, although he was hired as an at-will employee, that relationship was changed consistent with certain of the provisions in the handbook that appellee gave him when he was hired.

In particular, appellant alleged that the involuntary dismissal section of the “Termination” provision set forth a specific procedure which appellee agreed to follow before terminating a non-probationary employee. When appellee terminated him, a non-probationary employee, without following that procedure, appellant alleged that it, thereby, breached its employment contract with him. ¹²⁶ Appellee defended on the ground that, because it contains disclaimers, the employee handbook was not intended to be and, in fact, could not have been intended to be, an offer of a contract which appellant could accept by working for appellee. The disclaimers, it argued, foreclosed any justifiable reliance by appellant on any of the provisions in the handbook. Thus, critical to the position of both appellant and appellee is the resolution- of the question whether appellee’s dissemination of the employee handbook to appellant, coupled with his continued employment with appellee, resulted in the transformation of appellant’s at-will contract into one precluding termination except in accordance with the handbook provisions.

Stated differently, at issue is whether appellant could justifiably have relied upon the handbook and the employer/employee relationship it reflected, as modifying his employment relationship with appellee. “That, as a general rule, the construction or interpretation of all written instruments is a question of law for the court is a principle of law that does not admit of doubt____ However before the court can construe a contract, there must exist a contract; and, if it be claimed an instrument of writing, although in form a complete agreement, was not intended by the parties to be binding upon them, the question as to whether or not the instrument was so intended is one for the jury____” (Citations omitted). Gordy v. Ocean Park, Inc., 218 Md. 52, 60 , 145 A.2d 278 (1958). In this case, as we have seen, appellant maintains that there was a contract, while appellee maintains that there was not. In fact, as we have also seen, appellee insists that, in order to demonstrate the correctness of its position, we need do no more than interpret the provisions it maintains are disclaimers: if they are disclaimers, then, as appellee argues, appellant could not justifiably rely on any other provisions in the handbook.

See Castiglione, supra and Fournier, supra. In neither Castiglione nor Fournier was the issue the construction of the provisions found to be disclaimers. In Castiglione , it was conceded that the provision was an ¹²⁷ express disclaimer. 69 Md.App. at 334-35 , 517 A.2d 786 . In Fournier , the employee conceded that he knew or should have known, when he applied for employment, that the employer “disclaimed any intention of employing appellee for a fixed term or of limiting its discretion to terminate appellant’s employment at its pleasure.” 82 Md.App. at 37 , 569 A.2d 1299 .

Thus, in both of those cases, there was no dispute as to the meaning of the provisions at issue. Unlike Castiglione and Fournier , we must construe the subject provisions for sufficiency as disclaimers. In this case, appellant makes two arguments: 1) given the totality of the circumstances, the provisions in the handbook, upon which appellee relies, would not negate the justifiability of his reliance on other provisions in that handbook as contractual undertakings by appellee and 2) the provisions characterized by appellee as “disclaimers” are not, in fact, “disclaimers.” Appellee relies upon the statement of the Employment Relationship, ie., The relationship between you and PSI is predicated on an at will basis. That is to say that either the Employee or the Company may terminate their employment at their discretion, and the last paragraph of the Probationary Period provision, which provides: It should be understood that employment and compensation can be terminated, with or without cause and with or without notice at anytime, at the option of the Company or the Employee.

These provisions are not necessarily contractual provisions; hence, our only purpose in reviewing them is to determine whether, in the face of them, an employee could rely on the employee handbook as changing the nature of his or her employment. Put another way, we seek the intention of the employer in including the provisions in the handbook. The clarity with which a provision in the employee handbook disclaims contractual intent will determine the ¹²⁸ viability of an employee’s claim that he or she justifiably relied on provisions in that handbook. Therefore, we review the