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Karnes v. Doctors Hospital

Supreme Court of Ohio
May 30, 1990
51 Ohio St. 3d 139 (Ohio 1990)

Summary

holding that an employee manual was not a contract, in part because the "manual specifically disclaim[ed] any intent to create a contractual relationship. . . ."

Summary of this case from Stanich v. Hissong Group, Inc.

Opinion

No. 88-2174

Submitted January 16, 1990 —

Decided May 30, 1990.

Contracts — Employer and employee — No oral or written representations regarding continued employment — Relationship governed by employee handbook, when — Employment is at will, when — Employee warned that failure to report back to work on a prescribed date would result in termination — Promissory estoppel not applicable, when.

APPEAL from the Court of Appeals for Franklin County, No. 87AP-1028.

On May 26, 1964, plaintiff-appellant, Linda L. Karnes, commenced part-time employment as a dietary aide with defendant-appellee, Doctors Hospital. Beginning July 1, 1965, appellant assumed the aforementioned responsibilities on a full-time basis. On August 4, 1969, appellant transferred to the radiology department and began work as the film room librarian. She was subsequently promoted to assistant coordinator of the department on July 27, 1976.

During the course of her employment, appellant's relationship with appellee was subject to neither a formal written contract nor an oral agreement. However, throughout her association with appellee, the relationship was governed by an employee handbook which set forth the terms and conditions of her employment. On January 18, 1986, appellee distributed to her a new employee handbook. A receipt acknowledging this fact was signed by her at that time. It provided as follows:

"Handbook Receipt

"I have received a copy of the Employee Handbook of Doctors Hospital. I have read and familiarized myself with the information in this book. I have also received a copy of or had explained to me, the job description for my position.

"I understand this Handbook is presented for informational purposes only, and can be changed at any time by Doctors Hospital with or without notice. I also understand this Handbook is not a contract expressed or implied between myself and Doctors Hospital. I understand I am an employee at will and either myself or Doctors Hospital can terminate the employment relationship at any time for any reason. No representative of the hospital has the authority to enter into an agreement with me that is contrary to the foregoing."

Moreover, on the second page of the handbook the following statement appeared:

"This Employee Handbook is presented for informational purposes only, and can be changed at any time by Doctors Hospital with or without notice. This Handbook is not an employment contract, expressed or implied. Hospital employees are employees at will and either the employee or Doctors Hospital can terminate the employment relationship at any time (for any reason). No representative of Doctors Hospital has the authority to enter into an agreement with an employee that is contrary to the foregoing."

On January 2, 1986, appellant submitted to Mel Yutzey, Film Room Coordinator, a request for vacation leave from February 21, 1986 to March 10, 1986. However, on February 2, 1986, Peter Ellers, an orderly in the radiology department, was informed that he would be required to take military leave in order to attend basic training beginning the week of March 3, 1986. Accordingly, on February 8, 1986, Yutzey informed appellant that the second vacation week requested by her was being denied because it would coincide with the dates Ellers would be on military leave. At that time, appellant questioned Yutzey concerning the probable consequences she faced should she decide to remain on vacation during the period Ellers was on military leave. The response of Yutzey was noncommittal.

On February 12 or 19, 1986, appellant met again with Yutzey. During the meeting, appellant was shown a letter which Yutzey had prepared and which was to be sent to Douglas Bugbee, Director of the X-Ray Department at Doctors Hospital. The letter described the schedule conflict created by the military obligation of Ellers and the vacation request submitted by appellant. The letter further mentioned the possibility that appellant would be terminated should she fail to report to work on March 4, 1986. On February 21, 1986, appellant met with Bugbee concerning her impending vacation. She was informed by Bugbee at that time that if she failed to return to work on March 4, 1986, she would be terminated.

On February 21, 1986, appellant departed on her vacation to Florida. Appellant remained in Florida until March 2, 1986 when she prepared for her flight back to Ohio. During her trip to the airport, she concluded that she was too ill to fly. On March 3, 1986, appellant and her companion, Jack Utzinger, proceeded to drive home in her truck. When they reached Georgia it was determined that appellant was too ill to continue the trip. They decided instead to spend the night of March 3 in Georgia. On the morning of March 4, 1986, Utzinger called Doctors Hospital from Georgia and informed Jim McMurray, Coordinator of the Radiology Department, that appellant was ill and would be unable to report to work that day. Appellant and Utzinger thereafter resumed their trip to Ohio and arrived in Columbus in the late afternoon or early evening of March 4, 1986.

On the morning of March 5, 1986, appellant reported for work. When she attempted to clock in, her time card was missing. She then questioned Yutzey as to her next course of action. Yutzey was noncommittal. Appellant thereafter departed for home and telephoned Doctors Hospital upon arrival. Later that day she met with Mr. Luckhupt, Bugbee's superior. On March 6, 1986, Luckhupt informed her that he would investigate her case and communicate his decision to a Richard Vincent. On March 7, 1986, Vincent called appellant, told her that he was in the process of reviewing her case and instructed her to remain away from work until the matter was resolved. Finally, on March 31, 1986, appellant was informed by Vincent that she had been terminated.

On June 9, 1986, appellant instituted the present action in the Court of Common Pleas of Franklin County, alleging that she was "maliciously, wrongfully and discriminatorily discharged" and that her termination deprived her of her salary and associated benefits and divested her of her interest in appellee's pension and retirement program. She further alleged that she relied to her detriment upon the false representations of appellee.

On July 20, 1987, appellee filed a motion to dismiss and a motion for summary judgment, pursuant to Civ. R. 12(B)(6) and 56(B), respectively. On October 28, 1987, the trial court granted both motions. On October 27, 1988, the court of appeals affirmed.

The cause is now before this court pursuant to the allowance of a motion to certify the record.

Lucas, Prendergast, Albright, Gibson Newman and Rankin M. Gibson, for appellant.

Baker Hostetler, Ronald G. Linville, Charles J. Chastang and Bettina C. Altizer, for appellee.

Spater, Gittes Terzian, Frederick M. Gittes, John S. Marshall, Law Offices of Andrew J. Ruzicho and Louis A. Jacobs, urging reversal for amicus curiae, Employment Lawyers Association.


I

It is the contention of appellant that the trial court erred in granting appellee's motion to dismiss and motion for summary judgment. In this regard, appellant maintains that there exist genuine issues of material fact regarding the nature of her employment relationship with appellee. The first two counts of appellant's complaint contain allegations which propound a contractual theory of recovery. In essence, these allegations advance the view that the employee handbook at issue constituted an employment contract which was subsequently breached by appellee.

This construction of the legal effect of the manual is belied by its clear language to the contrary. The manual specifically disclaims any intent to create a contractual relationship between employer and employee and the language of the receipt signed by appellant further underscores that no such construction was intended. Moreover, appellant in her deposition unequivocally denied that the handbook was the product of negotiations between her and her employer. Appellant further conceded that the handbook was never viewed by her as a binding contract. Accordingly, the status of appellant cannot be characterized as that of a contract employee.

II

Appellant maintains, however, that the disposition of the case by the courts below is inconsistent with our decision in Mers v. Dispatch Printing Co. (1985), 19 Ohio St.3d 100, 19 OBR 261, 483 N.E.2d 150. In Mers, supra, we held at paragraphs two and three of the syllabus:

"The facts and circumstances surrounding an oral employment-at-will agreement, including the character of the employment, custom, the course of dealing between the parties, company policy, or any other fact which may illuminate the question, can be considered by the trier of fact in order to determine the agreement's explicit and implicit terms concerning discharge.

"The doctrine of promissory estoppel is applicable and binding to oral at-will employment agreements. The test in such cases is whether the employer should have reasonably expected its representation to be relied upon by its employee and, if so, whether the expected action or forbearance actually resulted and was detrimental to the employee."

In Mers, the plaintiff therein had been charged with various crimes. He was suspended from employment pending the favorable resolution of the charges against him. His criminal trial failed to produce a conviction and the charges against him were subsequently dismissed. He sought reinstatement to his former position and his employer declined to do so. In response, he instituted a civil action wherein he contended that the promise made to him by his employer altered his status as an employee at will. This court agreed, concluding that summary judgment was inappropriate where the facts and circumstances about his employment relationship were in dispute. We further observed that, if the facts as alleged by the plaintiff were found by a jury to be true, such facts would permit recovery for wrongful termination. Accordingly, we recognized that:

"An additional limit on an employer's right to discharge occurs where representations or promises have been made to the employee which fall within the doctrine of promissory estoppel. The Restatement of the Law 2d, Contracts, as quoted by this court in Talley v. Teamsters Local No. 377 (1976), 48 Ohio St.2d 142, 146 [2 O.O. 3d 297], provides the rule of law that: `"[a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. * * *"'" Mers, supra, at 104, 19 OBR at 264-265, 483 N.E.2d at 154.

We further explained that:

"The test in such cases is whether the employer should have reasonably expected its representation to be relied upon by its employee and, if so, whether the expected action or forbearance actually resulted and was detrimental to the employee." Mers, supra, at 105, 19 OBR at 265, 483 N.E.2d at 155.

Promissory estoppel, therefore, is not a contractual theory but a quasicontractual or equitable doctrine designed to prevent the harm resulting from the reasonable and detrimental reliance of an employee upon the false representations of his employer. See, also, Kelly v. Georgia-Pacific Corp. (1989), 46 Ohio St.3d 134, 139, 545 N.E.2d 1244, 1250.

It is this theory that is at the heart of count three of appellant's complaint. While we are in agreement with appellant that she has set forth a legally cognizable cause of action in count three, the undisputed facts of the case fail to support recovery on that basis.

An essential element of any action predicated upon promissory estoppel is the detrimental reliance of the promisee upon the false representations of the promissor. It is self-evident that in order for one to reasonably and detrimentally rely upon the representations of another, one must be aware that such representations were in fact made. A review of the evidence presented to the trial court in the case at bar discloses that appellant has failed to identify what provisions of the handbook were relied upon by her prior to her discharge. In fact, there is nothing in the record to indicate that appellant was even aware of the contents of the manual at the time of her termination. It is incongruous for appellant to suggest that she relied upon representations about which she was unaware. Moreover, appellant concedes that, unlike the plaintiffs in Mers and Kelly, supra, no oral representations were made to her regarding her continued employment. The evidence is quite to the contrary. Appellant was specifically warned that her failure to report back to work on the prescribed date would result in certain termination. The undisputed facts, therefore, do not permit recovery under the doctrine of promissory estoppel.

Accordingly, the judgment of the court of appeals is affirmed.

Judgment affirmed.

MOYER, C.J., SWEENEY, WRIGHT, H. BROWN and RESNICK, JJ., concur.

HOLMES, J., concurs in judgment only.

DOUGLAS, J., dissents.


Summaries of

Karnes v. Doctors Hospital

Supreme Court of Ohio
May 30, 1990
51 Ohio St. 3d 139 (Ohio 1990)

holding that an employee manual was not a contract, in part because the "manual specifically disclaim[ed] any intent to create a contractual relationship. . . ."

Summary of this case from Stanich v. Hissong Group, Inc.

finding no binding contract where employee manual disclaimed intent to create a contractual relationship and employee denied that the handbook was the product of negotiation between her and her employer

Summary of this case from Hines v. Humana Ins. Co.

finding it also relevant that the employee conceded that she never viewed the manual as a binding contract

Summary of this case from Terrell v. Uniscribe Professional Services, Inc.

stating that contractual disclaimers in an employment manual preclude its enforcement as a contract

Summary of this case from Gold Medal Prods. Co. v. Bell Flavors & Fragrances, Inc.

In Karnes v. Doctors Hospital (1990), 51 Ohio St.3d 139, 141, 555 N.E.2d 280, the Ohio Supreme Court held that an employee handbook that expressly disclaimed any employment contract could not be characterized as an employment contract.

Summary of this case from Johnson v. Aultman Hosp.

In Karnes, the Ohio Supreme Court determined that an employee handbook that expressly disclaimed any employment contract could not be characterized as an employment contract. Id.

Summary of this case from Ridgill v. Little Forest Medical Center
Case details for

Karnes v. Doctors Hospital

Case Details

Full title:KARNES, APPELLANT, v. DOCTORS HOSPITAL, APPELLEE

Court:Supreme Court of Ohio

Date published: May 30, 1990

Citations

51 Ohio St. 3d 139 (Ohio 1990)
555 N.E.2d 280

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