Joseph Clark v. Kellogg Co. ( 2000 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 99-1090
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Joseph F. Clark, *
*
Appellant, *
* Appeals from the United States
v. * District Court for the
* District of Nebraska
Kellogg Company; Kellogg USA, Inc., *
*
Appellees. *
___________
No. 99-1092
___________
Carolyn Lee, *
*
Appellant, *
*
v. *
*
Kellogg Company; Kellogg USA, Inc., *
*
Appellees. *
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No. 99-1093
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Jock A. Montes, *
*
Appellant, *
*
v. *
*
Kellogg Company; Kellogg USA, Inc., *
*
Appellees. *
___________
No. 99-1094
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Audrei Lemon McGee, *
*
Appellant, *
*
v. *
*
Kellogg Company; Kellogg USA, Inc., *
*
Appellees. *
___________
No. 99-1095
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Diann C. Moore, *
*
Appellant, *
*
v. *
*
Kellogg Company; Kellogg USA, Inc., *
*
Appellees. *
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___________
No. 99-1096
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Marian Granger, *
*
Appellant, *
*
v. *
*
Kellogg Company; Kellogg USA, Inc., *
*
Appellees. *
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No. 99-1097
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Regina Johnson, *
*
Appellant, *
*
v. *
*
Kellogg Company; Kellogg USA, Inc., *
*
Appellees. *
___________
No. 99-1098
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Nancy Trapani, *
*
Appellant, *
*
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v. *
*
Kellogg Company; Kellogg USA, Inc., *
*
Appellees. *
___________
No. 99-1102
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Kathryn Passauer, *
*
Appellant, *
*
v. *
*
Kellogg Company; Kellogg USA, Inc., *
*
Appellees. *
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No. 99-1103
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Stephanie Washington, *
*
Appellant, *
*
v. *
*
Kellogg Company; Kellogg USA, Inc., *
*
Appellees. *
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___________
No. 99-1105
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Raymond R. Sinkevich, *
*
Appellant, *
*
v. *
*
Kellogg Company; Kellogg USA, Inc., *
*
Appellees. *
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Submitted: December 17, 1999
Filed: March 8, 2000
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Before MURPHY and MAGILL, Circuit Judges, and SMITH,* District Judge.
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MAGILL, Circuit Judge.
Eleven seasonal employees brought suit against their employer, Kellogg Co. and
Kellogg USA, Inc. (collectively, Kellogg), after Kellogg failed to honor an alleged oral
promise to hire them for "permanent" employment if they "kept their noses clean" and
*
The Honorable Ortrie D. Smith, United States District Judge for the Western
District of Missouri, sitting by designation.
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continued to work for an indefinite number of summer seasons. The district court1
granted summary judgment in Kellogg's favor on all of Appellants' claims. Appellants
appeal the district court's dismissal of their claims for breach of contract, promissory
estoppel, fraudulent misrepresentation, and negligent misrepresentation. We affirm.
I. Background
Appellants worked for Kellogg under an oral contract during summer months as
replacements for regular employees who were on vacation. Appellants typically started
working in May and would work for up to twenty weeks. Appellants accepted such
seasonal employment every year from their date of hire through 1996. Of the eleven
Appellants, eight were hired in 1988, one in 1991, and two in 1992.
Appellants allege that Kellogg's management staff repeatedly told them that they
would be hired for permanent full-time positions at Kellogg's Omaha facility if the
following occurred: 1) openings for permanent positions became available, 2) they
"kept their noses clean," and 3) they continued to work for Kellogg every summer
season until permanent jobs became available. Appellants claim that they detrimentally
relied on these representations by refusing full-time employment with other employers.
More specifically, Appellants argue that Kellogg's representations caused them to lose
the "benefit of full-time salaries and raises, establishing themselves with other
employers and in obtaining benefits such as insurance or pension."
In 1996 and 1997, when Kellogg began hiring regular full-time employees, ten
of the eleven Appellants applied for full-time employment at Kellogg's Omaha facility.
Departing from past practice, Kellogg required all applicants to take a written
examination covering arithmetic, reading, problem-solving, safety, and instrumentation.
1
The Honorable Joseph F. Bataillon, United States District Judge for the District
of Nebraska.
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Several Appellants failed the examination, while others were precluded from taking it
because of poor attendance or other disciplinary problems. Because Kellogg did not
hire any of the Appellants for any of the regular full-time positions, Appellants initiated
the present diversity action in federal court.
II. Standard of Review
We review a grant of summary judgment de novo and apply the same standard
as that applied by the district court. See First Bank of Marietta v. Hogge, 161 F.3d
506, 510 (8th Cir. 1998). Summary judgment is appropriate when the evidence,
viewed in a light most favorable to the non-moving party, demonstrates that there is no
genuine issue of material fact, and that the moving party is entitled to judgment as a
matter of law. See id. We will apply the substantive law of the forum state, Nebraska.
See Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). We review de novo the
district court's application of state law, and, if the state law is ambiguous, we predict
how the highest court of that state would resolve the issue. See First Colony Life Ins.
Co. v. Berube, 130 F.3d 827, 829 (8th Cir.1997).
III. Appellants' State Law Claims
A. Breach of Contract
Appellants claim that they were promised "permanent, full-time" employment.
Under Nebraska law, a statement that an employee is being offered "permanent"
employment is considered an offer for an indefinite term of employment. See Johnston
v. Panhandle Coop. Ass'n, 408 N.W.2d 261 (Neb. 1987). Thus, we find that Kellogg's
alleged offer must be construed as an offer for at-will employment.2
2
In an attempt to paint Kellogg's offer as something other than at-will
employment, Appellants point to Section 103 of the collective bargaining agreement
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(CBA)between Kellogg and the American Federation of Grain Millers Union, Local
No. 50, AFL-CIO:
It is agreed that the first seven weeks of employment in which three or
more days have been worked, or the first ten weeks in which one or more
days have been worked, whichever occurs first, will be designated as the
"trial period." If, during this time, an employee does not work for one
week or more, these periods will be extended as required to complete the
trial period.
During this trial period such persons will not be considered as having any
seniority rights, except for order of layoff or recall; and the Company will
be free to discontinue employment of such a person without such action
being subject to jurisdiction or questioning by the Local Union. When
employed, the Union will be advised of those employees designated by
the Company as temporary replacement employees.
Because Section 103 provides new employees with seniority rights for order of
layoff and recall, Appellants contend that Kellogg's alleged offer must have been for
something other than at-will employment. We reject this argument. A layoff and a
termination from employment are not the same thing. A layoff, for purposes of the
CBA, is a discontinuance in employment with some expectation of recall, no break in
seniority, and no interruption in benefits. Termination, on the other hand, encompasses
a complete break in the employment relationship with no expectation of recall.
We reject Kellogg's argument that Appellants' state law claims, including their
breach of contract claim, are preempted by Section 301 of the Labor Management
Relations Act. While Section 301 preempts claims founded directly on rights created
by a CBA and claims substantially dependent on analysis of a CBA, see Caterpillar Inc.
v. Williams, 482 U.S. 386 (1987), not every dispute concerning employment or
tangentially involving a provision of a CBA is preempted by Section 301. See Allis-
Chalmers Corp. v. Lueck, 471 U.S. 202, 211 (1985). In this case, Appellants do not
claim that Kellogg breached the terms of the CBA. Indeed, the CBA does not speak
to how full-time employees are hired from the pool of seasonal workers. In short,
Appellants are not seeking to enforce any provision of the CBA. Rather, Appellants'
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Nebraska courts "have consistently held that when employment is not for a
definite term and there are no contractual, statutory, or constitutional restrictions upon
the right of discharge, an employer may lawfully discharge an employee whenever and
for whatever cause it chooses." Goff-Hamel v. Obstetricians & Gynecologists, P.C.,
588 N.W.2d 798, 801 (Neb. 1999). In Goff-Hamel, the Nebraska Supreme Court
extended this rule to find that an employer cannot incur liability for breach of contract
by terminating an offer for employment for an indefinite term. See id. Based on our
review of Nebraska case law, we find that the district court correctly dismissed the
Appellants' breach of contract claim.
B. Promissory Estoppel
Appellants next contend that Kellogg should be estopped from denying the
existence of a valid contract because of oral representations made about Appellants'
future employment opportunities upon which they reasonably relied. In Goff-Hamel,
the Nebraska Supreme Court held that promissory estoppel may be asserted as the
basis for a cause of action for detrimental reliance upon a promise of at-will
employment. See id. at 804. Notwithstanding this recent decision, we find that
Kellogg's alleged promise was far too indefinite to support a promissory estoppel
action.
As opposed to the instant case, Goff-Hamel involved an extremely specific offer
of employment. The defendant in Goff-Hamel: 1)represented to the plaintiff that she
claim requires only a de minimus interpretation of the CBA provision governing the
seven week trial period. Given the nature of Appellants' claims and the facts of this
case, it is clear that Appellants' state law claims neither originate in, nor refer in any
substantial way to, the rights and duties established in the CBA. Cf. Anderson v. Ford
Motor Co., 803 F.2d 953 (8th Cir. 1986).
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would start at a wage of $10 per hour; 2) outlined the plaintiff's proposed benefits
package in detail, informing the plaintiff that she would receive two weeks paid
vacation, three or four paid holidays, a retirement plan, uniforms and an educational
stipend; and 3) negotiated a specific starting date of October 4, 1993, based on the
plaintiff's desire to finish some projects with her then-current employer. See id. at 800.
Subsequently, the plaintiff was provided with uniforms and a schedule for her first
week of work. See id. The defendant in Goff-Hamel revoked its offer when one of the
owners' wives objected to hiring the plaintiff. See id. at 801. In contrast to Goff-
Hamel, this case involves parties who never agreed to any specific starting date, salary,
benefits package, work-schedule, or exactly how employees should go about keeping
their noses clean for an indefinite period of time while they waited for permanent
positions to materialize. Kellogg allegedly promised to hire Appellants sometime in the
unknown future if they managed to "keep their noses clean" and returned to work every
summer after successfully completing the seven-week trial period. As a matter of law,
we find Kellogg's alleged promise far too indefinite to support a promissory estoppel
action.
Appellants argue that Nebraska does not require definiteness in an action based
upon promissory estoppel. Although this appears to be the general rule in Nebraska,
see, e.g., Hawkins Constr. Co. v. Reiman Corp., 511 N.W.2d 113, 117 (Neb. 1994),
Goff-Hamel establishes a different rule for promissory estoppel actions based on
promises of at-will employment. See Goff-Hamel, 588 N.W.2d at 804 (requiring
plaintiff to prove a "definite promise of employment" on which she reasonably relied).
Had the Nebraska Supreme Court not intended to require plaintiffs to prove the
existence of a "definite promise of employment," it would not have used this language.
Moreover, rather than cite to any of the myriad Nebraska decisions rejecting the
requirement of definiteness in promissory estoppel actions, the Goff-Hamel court cited
an Indiana decision to support its new rule allowing promissory estoppel actions based
on definite promises of at-will employment. See id. at 805 (citing Eby v. York-
Division, Borg-Warner, 455 N.E.2d 623 (Ind. App. 1983)). In sum, under Nebraska
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law, plaintiffs must prove the existence of a definite promise of employment to sustain
a promissory estoppel action based on a promise of at-will employment. Appellants
have failed to meet this burden.
C. Fraudulent & Negligent Misrepresentation
Under Nebraska law, in order to maintain an action for either fraudulent or
negligent misrepresentation, a plaintiff must allege and prove reasonable reliance on the
alleged misrepresentation. See Gibb v. Citicorp Mortgage, Inc., 518 N.W.2d 910, 916,
922 (Neb. 1994). We agree with the district court that Appellants' reliance on
Kellogg's alleged misrepresentation was unreasonable as a matter of law. Forbearing
full-time employment with other employers in reliance upon a promise that Kellogg
would hire them for job openings that might materialize sometime in the unknown
future if they "kept their noses clean" for an indefinite number of summer seasons is not
the sort of promise upon which a plaintiff could reasonably rely.
IV. Conclusion
For these reasons and others discussed by the district court, we affirm the district
court's decision in its entirety.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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