Frechette v. Wal-Mart Stores CV-94-430-JD 09/26/95 P UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Joyce A. Frechette

v. Civil No. 94-430-JD

Wal-Mart Stores, Inc.

O R D E R

The plaintiff, Joyce Frechette, has brought this diversity

action against the defendant, Wal-Mart Stores, Inc., alleging

state law claims of wrongful termination (count I), breach of

contract (count II), and intentional infliction of emotional

distress (count III). Before the court are the defendant's

motion for summary judgment (document no. 23) on the wrongful

termination and contract claims, and the plaintiff's motion for

reconsideration (document no. 35) of the court's order of August

29, 1995, dismissing count III of the complaint.

Background1

_____ In June 1991, Joyce Frechette was hired to manage the shoe

department of the defendant's department store in Hooksett, New

Hampshire. A provision on the back of Frechette's employment

1The court's recitation of the facts relevant to the instant motion are either not in dispute or have been alleged by the plaintiff. application expressly designated her position as "terminable-at-

will." Frechette placed her initials on a line immediately

following this provision, attesting that she understood it. Upon

being hired, Frechette also signed an acknowledgment form

indicating that her employment was on an at-will basis.

Frechette received favorable evaluations from Wal-Mart and

was eventually promoted to district manager. In September 1992,

the defendant issued the plaintiff a company car, a company phone

card, and a company credit card. However, the company did not

provide Frechette with a copy of its travel manual. The manual,

which Wal-Mart claims it routinely gives to employees, expressly

states that alcoholic beverages purchased with business meals are

to be borne as personal expenses and that employees are not

permitted to use the company credit card for personal expenses,

even if they reimburse the company.

On several occasions Frechette witnessed her superiors

purchasing alcoholic beverages with their company credit cards.

Frechette acknowledges that on several occasions, she too

purchased alcohol on her company credit card and reimbursed the

company. On October 22, 1993, however, Wal-Mart terminated

Frechette's employment because she had charged two alcoholic

beverages on her company credit card in violation of company

policy.

2 Discussion

I. Defendant's Motion for Summary Judgment

Wal-Mart asserts that it is entitled to summary judgment on

count I because it terminated Frechette for a legitimate reason,

i.e., the use of the credit card in violation of company policy.

Memorandum of Law in Support of Defendant's Motion for Summary

Judgment at 1. Wal-Mart argues that the legitimate basis for

Frechette's termination prevents her from satisfying either of

the elements necessary for a wrongful termination claim under New

Hampshire law. Id. at 9-15. Wal-Mart further asserts that the

legitimacy of its termination of Frechette compels the court to

enter summary judgment in its favor on the breach of contract

claim asserted in count II. Defendant's Reply to Objection to

Motion for Summary Judgment 5 2.

Frechette disputes Wal-Mart's contention that the

termination was legitimate. Specifically, she argues that Wal-

Mart acted in bad faith by terminating her for the violation of a

policy of which she was not aware. Plaintiff's Memorandum of Law

in Support of Objection to Motion for Summary Judgement at 5-7.

She further claims that she was terminated for performing acts

that public policy encourages: working diligently, following

promulgated rules and policies, and relying in good faith upon

her employer's representations regarding company policy. Id. at

3 9. Frechette also argues that the defendant's motion for summary

judgment addresses only her wrongful termination claim and, as

such, does not reach her breach of contract claim. Id. at 1-2.

The court may only grant a motion for summary judgment where

the "pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and that

the moving party is entitled to a judgment as a matter of law."

Fed. R. Civ. P. 56(c). The court must view the entire record in

the light most favorable to the nonmoving party, "'indulging all

reasonable inferences in that party's favor.'" Mesnick v.

General Elec. Co.,

(1st Cir. 1991) (guoting

Griqqs-Ryan v. Smith,

(1st Cir. 1990), cert.

denied, 112 S. C t . 2965 (1992)).

A. Wrongful Termination

New Hampshire has long recognized that public policy

militates against the termination of at-will employees in bad

faith. In Monqe v. Beebe Rubber Co., the New Hampshire Supreme

Court held that a bad-faith termination breached the contract

between the employer and the at-will employee.

,

(1974). The court later "construe[d]

Monqe to apply only to a situation where an employee is

4 discharged because he performed an act that public policy would

encourage, or refused to do that which public policy would

condemn." Howard v. Dorr Woolen Company,

,

(1980). The court has since made clear that an

action for wrongful termination must include proof of bad faith,

malice, or retaliation on the part of the employer, and proof

that the employee was terminated for doing something that public

policy would encourage or for refusing to do something that

public policy would discourage. Cloutier v. A. & P. Tea Co.,

,

(1981); see also Short

v. School Admin. Unit. No. 16,

;

(1992); Cillev v. New Hampshire Ball Bearings, Inc.,

,

(1986). Inguiry into the public

policy component must focus on the acts of the employee and on

their relationship to public policy, not on the mere articulation

of a public policy by the employee. See Dunninqton v. Essex

Group, Inc., No. 93-271-JD, slip op. at 5 (D.N.H. Dec. 8, 1993)

(higher productivity and keeping individuals off public

assistance are laudable goals but not acts that public policy

would encourage).

Satisfaction of the public policy component of a wrongful

termination claim is typically a guestion for the jury to decide.

Cloutier,

,

. However, at times

5 "the presence or absence of a public policy [may be] so clear

that a court may rule on its existence as a matter of law, and

take the question away from the jury." Short,

,

(citation omitted) (holding that an employee's

refusal to criticize his superior could not form the basis of a

public policy); see also MacDonald v. Tandy Corp.,

(D.N.H. 1992) (overruling jury's determination that

employee was terminated in violation of public policy encouraging

employees to cooperate with theft investigations where

investigation led employer to believe that employee had committed

theft), aff'd,

(1st Cir. 1993).

Wal-Mart argues that it terminated Frechette for charging

alcohol on her company credit card and that public policy does

not encourage such conduct. Wal-Mart's Motion for Summary

Judgment at 14. The court finds that as a matter of law the

purchase of alcohol with a company credit card is not an act that

public policy would encourage.

Frechette acknowledges this conclusion but takes a broader

view of the conduct for which she was terminated. However,

Frechette's suggestion that she was terminated for working

diligently and for following the rules and policies of her

employer proves too much. If public policy encouraged an at-will

employee to follow only those rules actually known by the

6 employee, employees could insulate themselves from other policies

simply by remaining oblivious to them.

In addition, Frechette's argument that she was terminated

for relying on her employer's representations regarding its

policies, an apparent reference to Wal-Mart's condonation of

prior alcohol purchases by Frechette and her supervisors on

company credit cards, is without merit. The public policy

component of a wrongful termination claim is not satisfied by a

bald assertion that an employer has waived the right to enforce

its own rules and regulations. Arguably, Wal-Mart's condonation

of the use of credit cards to charge alcoholic beverages is

relevant to the guestion of whether it acted in bad faith in

discharging Frechette. However, Wal-Mart's actions have no

bearing on the public policy inguiry; it is the conduct of the

employee, not the employer, that must be evaluated in assessing

the public policy component. Thus, the court finds that

Frechette has not articulated a public policy sufficient to

satisfy a wrongful termination claim under New Hampshire law, and

does not reach the issue of whether Wal-Mart terminated the

plaintiff in bad faith.

7 B. Breach of Contract

The court next considers Wal-Mart's argument that entry of

summary judgment on the wrongful termination claim compels entry

of summary judgment on the contract claim. The New Hampshire

Supreme Court has been inconsistent in its characterization of

the wrongful termination cause of action. Compare Monqe,

,

(holding that the bad-faith

termination of an at-will employee constitutes a breach of the

employment contract) with Cloutier,

,

(referring to the wrongful termination cause of action as a

tort) and

,

(dissenting opinion)

(same). However, this court has resolved the issue, ruling that

wrongful termination is a tort. Hutton v. Essex Group, Inc.,

, 332 & n.l (D.N.H. 1994) (relying on the language in

Cloutier and noting that this is the majority view); see also

Vandegrift v. American Brands Corp.,

(D.N.H. 1983) (referring to the "hybridization" between tort and

contract that Monqe and its progeny have produced).

However, the characterization of wrongful termination as a

tort does not mean that a plaintiff, having failed under a

wrongful termination theory, can litigate the same dispute under

a contract theory merely by alleging a breach of the implied

covenant of good faith implicit in all contracts under New Hampshire law, see Cloutier,

,

(citing Bursev v. Clement,

,

, 347-

48 (1978) and Seaward Construction Co. v. City of Rochester,

,

(1978)). Although wrongful

termination had its genesis in contract, see Monqe,

,

, the subseguent cases characterizing

wrongful termination as a tort have neither created an entirely

new tort nor necessitated the creation of a new cause of action

in contract. C f . Bergeron v. Traveler's Insurance Co.,

,

(1984) (noting that the explicit

introduction of a public policy component into wrongful

termination did not create a new rule of law). Rather, the

traditional cause of action for wrongful termination has evolved

from its contractual roots and is now treated as a tort. It

follows that any claim of a terminated at-will employee based on

a contract theory must still be brought under the rubric of

wrongful termination and, as such, must satisfy the public policy

component of that cause of action. Accordingly, the court holds

that a separate contractual remedy is not available to an at-will

employee who alleges that she was terminated in bad faith but who

cannot satisfy the public policy prong of the wrongful

termination cause of action. II. Plaintiff's Motion for Reconsideration

Frechette argues that the court improperly dismissed count

III of her complaint in its endorsed order of August 29, 1995

(citing Dunninqton v. Essex Group, Inc., No. 93-271-JD (D.N.H.

Dec. 8, 1993)). The court grants the motion to reconsider that

part of Frechette's argument not controlled by Dunninqton and

will address the guestion of whether the exclusive remedy

provision of the New Hampshire workers' compensation statute,

N.H. Rev. Stat. Ann. ("RSA") § 281-A:8, bars the plaintiff from

maintaining a claim for intentional infliction of emotional

distress arising solely out of her termination.

The exclusive remedy provision "prohibits an employee from

maintaining a common-law action against his employer for personal

injuries arising out of the employment relationship." Brewer v.

K.W. Thompson Tool Co.,

(D.N.H. 1986)

(construing RSA § 281:12, predecessor to RSA § 281-A:8). The

court recently has held that personal injuries "arising out of

the employment relationship" include those suffered from the

"intentional infliction of emotional distress occasioned solely

by reason of discharge." Kopf v. Chloride Power Electronics,

Inc.,

, 1191 (D.N.H. 1995) ("[D]ischarge . . .

forms one of the many experiences an employee may encounter along

the 'course of his employment.'"); see also Censullo v. Brenka

10 Video, Inc.;

(1st Cir. 1993) ("Emotional distress

is a personal injury, not subject to recovery in a common law

action under the workmen's compensation statute."); Bourque v.

Town of Bow,

(D.N.H. 1990) (exclusive

remedy provision bars claims for personal injuries arising from

wrongful termination, including permanent physical and

psychological damages and emotional distress).

Frechette bases her intentional infliction of emotional

distress claim on Wal-Mart's conduct involving her termination.

Amended Complaint 55 2-3. Frechette's claim is barred by the

exclusive remedy provision of the worker's compensation statute

because Wal-Mart's conduct arose in the course of Frechette's

employment. Accordingly, the plaintiff cannot maintain her

claim.

Conclusion

The defendant's motion for summary judgment (document no.

23) is granted as to counts I and II. The plaintiff's motion for

reconsideration (document no. 23) of the court's August 29, 1995,

11 order is granted but the relief requested is denied. The clerk

is ordered to close the case.

SO ORDERED.

Joseph A. DiClerico, Jr, Chief Judge September 26, 1995

cc: Roger B. Phillips, Esquire E. Tupper Kinder, Esquire

12