finding outrageous conduct where employer, despite knowledge that plaintiff was in dire financial straits and that company official had made numerous obscene telephone calls to plaintiff's wife and threatened to rape her, conditioned plaintiff's reemployment on plaintiff's agreement to apologize to official who had made calls, work directly under him, attend church and pray with him, and remain silent or risk losing his job
How later courts described this case
- finding outrageous conduct where employer, despite knowledge that plaintiff was in dire financial straits and that company official had made numerous obscene telephone calls to plaintiff's wife and threatened to rape her, conditioned plaintiff's reemployment on plaintiff's agreement to apologize to official who had made calls, work directly under him, attend church and pray with him, and remain silent or risk losing his job
- holding that explicit at-will language in the employee handbook served “to negate the legitimacy of any expectation [the employee] may have had based on [his manager’s] representations”
- finding witness testimony that an event “may have” occurred “insufficient to raise an issue of fact” as to whether the event actually occurred
- holding that a plaintiff “may not create a dispute of fact concerning an issue about which he has no recollection”
Written by the judges who cited it.
The opinion
MILBURN, Circuit Judge,
concurring and dissenting.
I concur with parts III, IY, and V of the majority opinion. However, I respectfully dissent from part II for the reasons that follow.
Although! agree with most of the majority’s reasoning on the' issue of wrongful discharge, I am of the view that the employee handbook issued by Brown Machine Company set forth conflicting employment policies, and, therefore, the conflict was properly resolved by the jury. In addition to the at will provision contained in the final “tear-out page,” which is set out in the majority opinion, the handbook also provided, at pages 41 and 42:
COMPANY RULES
In order to promote the common good and welfare of the Company and its employees, the Company has established rules of conduct generally accepted in industry. The commission of any of the acts listed below will result in disciplinary action ranging from verbal or written warnings to suspension or to immediate discharge depending upon the act and the circumstances.
ATTENDANCE
1. Excessive tardiness or absence.
2. Absence without notification for three (3) or more consecutive work days.
3. Leaving company premises during working hours without permission.
4. Failing to report absence within IV2 hours of- starting time.
5. Failing to return from leave of absence as scheduled. • •
6. Improper use of accident leave or extended disability leave benefits.
CONDUCT
7. Punching another employee’s time card, or allowing another to punch one’s time card.
8. Making unauthorized solicitations or distributions during working time.
9. Failure to follow established work procedure.
10. Insubordination.
11. Restricting own production or interfering with production of other employees.
12. Loafing, loitering or sleeping on the job.
13. Conducting personal business on Company time.
14. Fighting or committing an assault.
15. Incurring excessive wage garnishments.
16. Using abusive or threatening language.
17. Gambling on Company premises.
18. Using or being under the influence of intoxicants or narcotics on Company premises.
19. Disorderly, offensive or immoral conduct.
20. Falsifying any Company records or employment application.
21. Stealing or commission of any criminal offense on Company property.
SAFETY AND HEALTH
22. Violating safety regulations.
23. Horseplay or use of machinery, equipment, tools, in a hazardous manner.
24. Possessing firearms, weapons, explosives, etc., on the premises.
25. Failing to make immediate report of an occupational injury.
26. Creating or contributing to any unsanitary condition.
MISUSE OF PROPERTY
27. Damage to or improper use of Company property either willfully or through gross negligence.
28. Intentional making of scrap or waste.
*1244 29. Unauthorized possession of Company property.
30. Disclosure of confidential Company information to outsiders without proper authorization.
31. Failure to properly park or operate personal automobiles on Company property.
32. Unauthorized use of bulletin boards.
33. Posting notices in unauthorized places.
VIOLATION OF COMPANY RULES
All employees will note that when it becomes necessary to apply the Company rules, the groups, I, II, and III are established to develop a philosophy of progressive corrective discipline.
Group “I” Rules
A violation of a group “I” Rule will be handled in a four step procedure.
1st Step — Verbal warning confirmed in writing.
2nd Step — Another violation of any group “I” Rules within a 30 working day period will be subject to a written warning.
3rd Step — Violation of any group “l” Rule within 60 working days from written warning will be subject to disciplinary lay-off.
4th Step — Another violation of any group “l” Rule within a 60 working day period following a disciplinary lay-off will be subject to discharge.
Company rules number 1, 3, 4, 9, 17, 23, 26, 31, 32, 33, are considered group “l” type rules.
The violation of a Group “II” Rule will be handled in a three step procedure.
Group “H” Rules
1st Step — Constitutes a written warning.
2nd Step — Disciplinary lay-off.
3rd Step — Discharge.
Company rules numbers 2, 5, 6, 8, 10, 11, 13, 15, 22, 24, 25, 30, are considered group “II” type rules.
The violation of a Group “III” Rule will be subject to immediate discharge, such as; Company rules number 7, 12, 14, 16, 18, 19, 20, 21, 27, 28, and 29.
J.A. at 2358-59 (emphasis supplied). Thus, while the handbook does purport to inform Brown Machine employees that their employment could be terminated at will (the final “tear-out page”), the handbook also explicitly indicates that certain conduct will not result in termination, but in less severe discipline.
When an employer explicitly states in its employee handbook that employment is at will, it necessarily follows that employee concerns about job security will be aroused. However, if the employer, in an effort to hire and retain good employees and allay their fears concerning job security, additionally sets out rules regarding specific conduct and specific corresponding disciplinary procedures that will be applied, then the employer should be bound by them. In the present case, as Brown Machine concedes in its brief, the conduct of Pratt arguably fell within several of the listed types of conduct and would have been arguably subject to different disciplinary procedures. Therefore, Brown Machine should not be allowed to escape its specific and explicit representations concerning discipline by relying upon an at will employment provision contained in the same employee handbook. See Damrow v. Thumb Cooperative Terminal, Inc., 126 Mich.App. 354, 361-64 , 337 N.W.2d 338, 342 (1983) (Employers are not free to depart from existing policies stated in a policy manual simply on grounds that they were under no obligation to adopt them in the first place.).
In holding that the Company Rules section does not detract from the at will language in the subsequent tear-out page, the majority relies upon this court’s decision in Reid v. Sears, Roebuck & Co., 790 F.2d 453 (6th Cir.1986). However, Reid is distinguishable from the present case. In Reid , the employee handbook in question contained a provision that violation of enumerated company rules “may result in termination of your employment.” Id. at 457 (emphasis supplied). We held that delineating conduct that may result in termination did not preclude at will discharge nor conflict with the at will discharge provision of *1245 the employee handbook. On the other hand, the provision in question in this case does not delineate examples of conduct that may result in discharge, but provides enumerated types of conduct with specific corresponding levels of “progressive corrective discipline” which ranged “from verbal or written warnings to suspension or to immediate discharge depending upon the act and the circumstances that will be exercised.” Clearly, employees of Brown Machine were led to believe and/or had a reasonable expectation that their employment was not at will, as Brown Machine explicitly informed them that certain conduct would result in discipline less severe than discharge.
More importantly, in a holding subsequent to this court’s decision in Reid , the Michigan Court of Appeals has addressed this very question. In Dalton v. Herbruck Egg Sales Corp., 164 Mich.App. 543 , 417 N.W.2d 496 (1987), the Michigan Court of Appeals held that if an employee handbook contains both an at will provision and provisions which provide for progressive discipline leading up to termination, “the question whether an employment contract with a just cause termination policy has been formed is a question of fact to be resolved by the jury." Dalton, 417 N.W.2d at 498 . Therefore, any holdings of this court in Reid on this issue of substantive state law that are in conflict with Dalton are no longer valid. See Wieczorek v. Volkswagenwerk, AG, 731 F.2d 309 , 310 (6th Cir.1984) (“The law of Michigan is controlled by a decision of the Michigan Court of Appeals until the Michigan Supreme Court or another panel of the Michigan Court of Appeals rules otherwise.”); Simpson v. Jefferson Standard Life Ins. Co., 465 F.2d 1320, 1323 (6th Cir.1972) (“decisions of intermediate state courts must be followed by the federal court unless there is reason to believe they would not be followed by the state’s highest court.”).
Thus, the conflicting provisions of the employee handbook in question in this case justified the district court’s denial of a directed verdict. Moreover, “[a]s we have often stated, ‘[wjhen this court is reviewing a district judge’s interpretation of state law, we give “considerable weight” to the interpretation of the judge.’ ” Martin v. Joseph Harris Co., 767 F.2d 296 (6th Cir.1985) (quoting Bagwell v. Canal Ins. Co., 663 F.2d 710, 712 (6th Cir.1981)). See also Insurance Co. of N. America v. Federated Mut. Ins. Co., 518 F.2d 101 , 106 n. 3 (6th Cir.1975). In sum, the conflict raised a question of fact which was properly resolved by the jury. Accordingly, I would AFFIRM the district court on the issue of wrongful discharge (Toussaint) as well as the other issues raised in this appeal.