1. Employer and Employee--at-will employment contract--action
for wrongful termination--public policy--not extended
The trial court did not err by granting summary judgment
against Arnold (the original defendant who counterclaimed against
the original plaintiff and then brought a third-party complaint
against the original plaintiff's parent company, including many
of the same claims) on a claim for wrongful termination of an at-
will employment contract where Arnold alleged violation of public
patent policy, the fruits of his labor clause of the North
Carolina Constitution, the open door clause of the North Carolina
Constitution, and his right to free speech. The Court of Appeals
declined to expand public policy exceptions to essentially
private contract disputes.
2. Employer and Employee--breach of implied covenant of fair
dealing--summary judgment
The trial court did not err by granting summary judgment for
Arnold on a claim against his employer for breach of an implied
covenant of fair dealing in the context of an at-will employment
contract.
3. Employer and Employee--interference with prospective
economic relations--no action
The trial court did not err by granting summary judgment for
Arnold on a claim for interference with prospective economic
relations arising from a dispute over ownership of software.
There is no basis for believing that a cause of action exists in
North Carolina for interference with prospective contractual
relationships. Appeal by David J. Arnold, Jr., third-party plaintiff, from
judgment entered 11 March 1996 by Judge W. Steven Allen, Sr., in
Guilford County Superior Court. Heard in the Court of Appeals 16
February 1999.
This case arises out of a controversy between Teleflex
Information Systems, Inc. (Teleflex), and David J. Arnold, Jr.
(Arnold), over the ownership of certain methods and processes
Arnold developed, or invented, while an employee of Teleflex.
Teleflex is the wholly owned subsidiary of Vanguard Cellular
Systems, Inc. (Vanguard). Teleflex instituted this action
seeking an injunction from the trial court to prevent Arnold from
divulging any trade secrets of Teleflex; seeking a declaration
that Arnold was hired to invent the software in question, and a
declaration that Teleflex owns all rights, including intellectual
property rights, in the software; and seeking damages. Arnold
counterclaimed, seeking similar relief against Teleflex and
seeking damages for wrongful termination of his employment, among
other things. Arnold brought a third-party complaint against
Vanguard, which included many of the same claims he asserted
against Teleflex. The nine causes of action in his third-party
complaint against Vanguard included claims for wrongful
termination of employment [Count II], breach of the duty of fair
dealing [Count IV], and interference with prospective economic
relations [Count V]. On motion of Vanguard, the trial court
granted summary judgment on Counts II, IV, and V of Arnold's
third-party complaint, certified there was no just cause for
delay, and Arnold appealed to this Court from the grant ofsummary judgment.
Upchurch & Galifianakis, by Nick Galifianakis; and Lee L.
Corum, for third-party plaintiff-appellant.
Smith Helms Mulliss & Moore, L.L.P., by William Sam Byassee,
for third-party defendant-appellee.
HORTON, Judge.
[1]During the time Arnold was an at-will employee of
Teleflex or Vanguard, or both, Arnold developed a new batch
billing architecture. Arnold contends, and Vanguard denies,
that the new process resulted from work Arnold did on his own
time, without any assistance from Vanguard or its employees, and
that he is the sole owner of the process or invention. Arnold
agrees that he was an at-will employee of Vanguard, but argues
that he was fired by Vanguard on 28 January 1994 in violation of
the public policy of this State for refusing to sign a document
acknowledging that he claimed no ownership interest in the
process. Although there is a continuing factual dispute whether
Arnold was in fact an employee of Vanguard, counsel for Vanguard
stipulated in oral argument that Arnold could be considered an
employee of Vanguard for purposes of this appeal.
Although the discharge of an employee-at-will normally does
not support an action for wrongful termination of employment,
North Carolina courts have developed a public policy exception to
the general rule. There is no bright-line test for determining
when the termination of an at-will employee violates publicpolicy. Our Supreme Court held in Amos v. Oakdale Knitting Co.,
331 N.C. 348, 416 S.E.2d 166 (1992), that:
[a]lthough the definition of public policy
approved by this Court does not include a
laundry list of what is or is not injurious
to the public or against the public good, at
the very least public policy is violated when
an employee is fired in contravention of
express policy declarations contained in the
North Carolina General Statutes.
Id. at 353, 416 S.E.2d at 169 (footnote omitted). The plaintiff
employee in Amos was fired because she refused to work for less
than the statutory minimum wage. The Court held that defendants
violated the public policy of North Carolina by firing plaintiffs
for refusing to work for less than the statutory minimum wage.
Id. at 354, 416 S.E.2d at 170.
Plaintiff alleges four public policy violations arising from
termination of his at-will employment with Vanguard. Arnold
contends that his discharge violates public patent policy, as
set out in Article I, § 8, cl. 8 of the U.S. Constitution; that
his termination denies him the right to the fruits of his labors
as found in Article I, § 1 of the N.C. Constitution; that the
action of Vanguard in terminating his employment operates to bar
the courthouse door in violation of Article I, § 18 of the N.C.
Constitution; and that his discharge violates his rights to free
speech as guaranteed by both the U.S. and N.C. Constitutions. We
disagree but will examine each of appellant's arguments.
Public Patent Policy
Plaintiff contends that defendant terminated his employment
in violation of a public patent policy. He contends that
Article I, § 8, cl. 8 of the U.S. Constitution confers upon him aright to protect his inventions, and to terminate his employment
in light of his alleged right violates the Constitution. He also
claims that defendant's conduct harms the public at large because
to deny plaintiff the ability to file a patent is to delay or
deny the public's right to the future use of his inventions. In
its brief, defendant cites Article I, § 8, cl. 8, which provides
that congress shall have power . . . [t]o promote the progress
of science and useful arts, by securing for limited times to
authors and inventors the exclusive right to their respective
writings and discoveries[.] Defendant contends that the
language of Article I, § 8, cl. 8 confers no patent right upon
plaintiff, but rather grants Congress the power to enact laws
that create property rights in inventions. We agree with
defendant's contention, in light of the fact that after the
Constitution was ratified, Congress passed the Patent Act in
1790. We follow the holdings of other jurisdictions that the
Patent Clause of the U.S. Constitution authorizes Congress to
enact the patent laws, but does not confer any rights by itself
upon an individual. Brosso v. Devices for Vascular
Intervention, Inc., 879 F. Supp. 473, 478, aff'd, 74 F.3d 1225
(E.D. Pa. 1995). We decline to create a "public patent policy"
exception to the employment at-will doctrine.
Denial of the Fruits of His Labor
Plaintiff further contends that defendant's conduct violates
public policy as promoted under the North Carolina Constitution.
Article I, § 1 of the N.C. Constitution guarantees all citizens
of North Carolina certain inalienable rights; that among theseare life, liberty, the enjoyment of the fruits of their own
labor, and the pursuit of happiness. He claims that defendant
terminated him in an effort to deny him the enjoyment of the
fruits of his own labor. Defendant contends that Article I, § 1
creates no interest which limits the employment at-will doctrine,
and argues that the constitutional provision guarantees to an
individual only the right to pursue ordinary and simple
occupations free from government regulation. In Real Estate
Licensing Board v. Aikens, 31 N.C. App. 8, 228 S.E.2d 493 (1976),
this Court determined that an amendment to our statutes
regulating real estate brokers and requiring their licensure was
unconstitutional as being overly broad, because the definition
contained in the amendment purported to regulate business
activities such as those of defendant, which consist[ed] only
of selling for a modest fee the addresses of property for rent,
some information about the features of the properties, and the
phone numbers of the lessors. Id. at 11, 228 S.E.2d at 495.
This Court held, in part, that to regulate the defendant, and
others like him, as real estate brokers was a sharp and
dangerous detour from any established and accepted definition
of real estate broker. Id. at 12, 228 S.E.2d at 496. In Aikens,
the defendant argued that such regulation violated several
provisions of our State Constitution, including Article I, § 1.
We agreed, holding that the fundamental provisions of our State
Constitution, such as Article I, § 1, were inserted to guarantee
the right to pursue ordinary and simple occupations free from
governmental regulation. Id. at 13, 228 S.E.2d at 496 (emphasisadded). See also State v. Ballance, 229 N.C. 764, 768, 51 S.E.2d
731, 734 (1949), in which Justice Ervin eloquently observed that
the declaration of rights in our State Constitution was inserted
chiefly to protect the individual from the State. Id.
(emphasis added). Here, Arnold does not seek redress for any
governmental action, and the cited provision of the State
Constitution does not give him a remedy against a corporate
defendant in an essentially private dispute over the ownership of
property. We agree with defendant's position for the above
reasons, and find that Article I, § 1 of the North Carolina
Constitution does not apply to plaintiff's claim.
Barring the Courthouse Door
Plaintiff contends that defendant's conduct violates public
policy as promoted under Article I, § 18 of the North Carolina
Constitution. The section provides that:
All courts shall be open; every person
for an injury done him in his lands, goods,
person, or reputation shall have remedy by
due course of law; and right and justice
shall be administered without favor, denial,
or delay.
Plaintiff contends that, when defendant learned that plaintiff
consulted a patent attorney and asserted his legal rights as an
inventor, defendant made an effort to bar plaintiff from
asserting his rights in court by confronting plaintiff with two
options: either relinquish his ownership rights, or face
termination of employment. Defendant contends that the very fact
plaintiff has asserted his claims in a court of law contradicts
his own argument that defendant has somehow barred plaintiff a
judicial remedy. We agree with defendant's contention, and wefind no evidence that defendant illegally prohibited plaintiff
from asserting his rights in a court of law.
Right to Free Speech
Plaintiff contends that defendant violated public policy by
denying him his constitutionally protected right to free speech.
He contends that defendant abridged his right to claim ownership
of his inventions, and that defendant terminated his employment
because he refused to disavow those rights. Defendant contends
there is no free speech interest to be protected here; no free
speech rights are implicated in a dispute between an employee and
a private employer. If state action is responsible for
restricting speech, then there is a potential constitutional
violation. See Corum v. University of North Carolina, 330 N.C.
761, 782, 413 S.E.2d 276, 289, reh'g denied, 331 N.C. 558, 418
S.E.2d 664, cert. denied, 506 U.S. 985, 121 S.E.2d 431 (1992).
Defendant contends that, as a private entity, it is allowed to
abridge plaintiff's free speech rights without violating public
policy. We agree with defendant's contention for the above-
stated reasons, and we find no public policy violation here.
In determining whether to enlarge the scope of the public
policy exceptions to the employment-at-will doctrine, we must
focus on the public interests involved. In McLaughlin v.
Barclays American Corp., plaintiff asked this Court to
recognize, as a public-policy exception to the employee-at-will
doctrine, a cause of action for wrongful discharge when the
termination results from the employee's use of self-defense. 95
N.C. App. 301, 304, 382 S.E.2d 836, 839, cert. denied, 325 N.C.546, 385 S.E.2d 498 (1989). We noted in McLaughlin that
'[p]ublic policy' is a 'vague expression' but has been defined
as the principle of law holding that no citizen can lawfully do
that which has a tendency to be injurious to the public or
against the public good. Id. at 305, 382 S.E.2d at 839
(citations omitted). After analyzing the leading North Carolina
cases of Coman v. Thomas Manufacturing Co., 325 N.C. 172, 381
S.E.2d 445 (1989), and Sides v. Duke University, 74 N.C. App.
331, 328 S.E.2d 818, disc. reviews denied, 314 N.C. 331, 333
S.E.2d 490 and disc. review denied, 314 N.C. 331, 335 S.E.2d 13
(1985), we stated:
In each case, our courts focused on the
potential harm to the public at large if
those instructions [i.e., to give perjured
testimony in Sides and to violate the state
and federal highway safety regulations in
Coman] were obeyed. Similar public-policy
implications are not present in Mr.
McLaughlin's case. We do not perceive the
kind of deleterious consequences for the
general public, if we uphold Barclays'
action, as might have resulted from decisions
favorable to the employers in Sides and
Coman.
McLaughlin, 95 N.C. App. at 306, 382 S.E.2d at 840 (emphasis
added). Here, we do not find the potential harm to the public
at large as in Sides, Coman, and their successors. In those
cases, the defendant-employer encouraged the plaintiff-employee
to violate some law or risk being fired. In the case before us,
the evidence does not suggest that Vanguard encouraged Arnold to
violate any law. We know of no law requiring the plaintiff to
claim an ownership interest in his inventions or to file a patent
application. We decline to expand the public policy exceptionsto essentially private contract disputes such as this. The
assignment of error is overruled.
Plaintiff contends, however, that the interference is with
his prospective contractual relationships. In EEE-ZZZ Lay
Drain Co. v. N.C. Dept. of Human Resources, 108 N.C. App. 24, 422
S.E.2d 338 (1992), overruled on other grounds, 347 N.C. 97, 489
S.E.2d 880 (1997), this Court reversed the trial court's denial
of summary judgment, holding in part that [p]laintiff was unable
to point to any specific instance when these acts [i.e.,
interference with prospective contractual relations] occurred,
and this Court is unable to find any evidence of such in the
record. We find no basis for believing that such a cause of
action even exists in North Carolina. Id. at 31, 422 S.E.2d at
343 (emphasis added). Likewise, in the case before us, Arnold
cannot point to any particular prospective relationships with
which Vanguard tortiously interfered, and the trial court's grant
of summary judgment must be affirmed. Arnold is not without a
remedy, however. If he ultimately prevails at trial, he may seek
damages from Vanguard for wrongfully obtaining an injunction
against him. N.C. Gen. Stat. § 1A-1, Rule 65(e) (1990).
In summary, we affirm the grant of summary judgment by thetrial court as to all three counts which are the subject of this
appeal.
Affirmed.
Judges GREENE and LEWIS concur.
*** Converted from WordPerfect ***