Katsifos v Pulte Home Corp., 163 NC App 204 (03-429) 03/02/2004

Appeal by plaintiff from order entered 13 February 2003 by Narley L. Cashwell in Wake County Superior Court. Heard in the Court of Appeals 14 January 2004.

Strickland, Harris & Hilton, P.A., by Nelson G. Harris, for plaintiff-appellant.

Ford & Harrison, L.L.P., by Leanne C. Mehrman and Penry Riemann, P.L.L.C., by J. Anthony Penry, for defendant- appellant.

    CALABRIA, Judge.

    Renee Katsifos (“plaintiff”) appeals the trial court's order granting Pulte Home Corporation's (“defendant”) motion for summary judgment. Plaintiff asserts a genuine issue of material fact exists as to whether defendant breached its employment contract with plaintiff. We disagree and affirm the order of the trial court.
    Plaintiff filed a breach of contract action against defendant in April 2002 alleging her employment was terminated after she reported that a fellow employee was “improperly accessing her supervisor's emails and publishing the contents to otheremployees.” Plaintiff alleged she was required to report the email incident because defendant's “Business Practices Policy” provided that “[a]ny employees having information or knowledge of any violation or suspected violation of this policy shall promptly report such matter” and “[e]ach employee who violates this policy or permits others to do so shall be subject to dismissal or other disciplinary action as appropriate.” Plaintiff was annually required to sign the Business Practices Policy. Plaintiff alleged that following her report, she was harassed by the other employees and ultimately terminated.
    Plaintiff asserts the harassment and termination violated section 4.2 of the employee handbook. Plaintiff had been provided a copy of the handbook, which was promulgated by defendant to set forth the corporation's “broadly-stated, long-range indication of the Company's belief or intent.” Plaintiff was never required to acknowledge receipt of the handbook. The handbook stated that the Business Practices Policy set forth the company's procedures to ensure “the highest standard of business ethics” and provided regulations for electronic communications. The handbook further provided, in section 4.2, that “[e]mployees who, in good faith, report a possible violation of law, regulation, policy, procedure or Business Practices Policy will not be subjected to retaliation, retribution or harassment.” Accordingly, plaintiff filed a complaint against defendant alleging breach of contract. Following the trial court's granting of defendant's motion for summary judgment, plaintiff appealed.    Plaintiff asserts the trial court erred in granting defendant's motion for summary judgment because “a genuine issue of material fact exists as to whether defendant breached its contract with plaintiff.” Indeed, summary judgment is proper only “when the pleadings, depositions, answers to interrogatories, admissions and affidavits show no genuine issue of material fact exists, and the movant is entitled to judgment as a matter of law.” Bostic Packaging v. City of Monroe, 149 N.C. App. 825, 830, 562 S.E.2d 75, 79, disc. rev. denied, 355 N.C. 747, 565 S.E.2d 192 (2002). “The rule is designed to eliminate the necessity of a formal trial where only questions of law are involved and a fatal weakness in the claim of a party is exposed.” Dalton v. Camp, 353 N.C. 647, 650, 548 S.E.2d 704, 707 (2001). The evidence must be viewed in the “light most favorable to the nonmoving party” and the moving party “bears the burden of establishing the lack of any triable issue.” Id., 353 N.C. at 651, 548 S.E.2d at 707.
    On appeal, defendant explains the trial court properly granted summary judgment because no contract existed between plaintiff and defendant. Defendant argues no contract existed because the employee handbook contains the following disclaimer:
        1.2: Purpose of Handbook
        . . .Except for the Company's At-Will Employment policy, the policies and practices included in this handbook are subject to change without notice. With the same exception, nothing in this handbook is intended to create or constitute an employment agreement with any application of such policies and all determinations with respect to the application of such policies will be at the Company's discretion and will be final and binding upon the employee(s) affected.
(emphasis added). Therefore, defendant asserts, the employee handbook cannot be construed to be a contract.
    Indeed, “the law of North Carolina is clear that unilaterally promulgated employment manuals or policies do not become part of the employment contract unless expressly included in it.” Walker v. Westinghouse Electric Corp., 77 N.C. App. 253, 259, 335 S.E.2d 79, 83-84 (1985); accord Black v. Western Carolina Univ., 109 N.C. App. 209, 214, 426 S.E.2d 733, 736 (1993) (holding where the additional guidelines were not “expressly incorporated into the contract” they cannot be “part of the contract”). In the case at bar, taking the facts in the light most favorable to plaintiff, there is no support for the conclusion that plaintiff's employment contract expressly included the employee handbook. Rather, the express language of section 1.2 plainly rejects the conclusion that a contract was created. Accordingly, we cannot find the handbook provided by defendant created a contract with plaintiff.
    Nevertheless, plaintiff asserts even if the handbook was not incorporated into her employment contract, that plaintiff relied on the non-retaliation provision of section 4.2 and therefore defendant “was contractually obligated not to subject Plaintiff- Appellant to retaliation, retribution or harassment” in accordance with section 4.2. However, we cannot hold that reliance on a portion of a unilaterally promulgated employee handbook suffices to convert a non-retaliation provision into a contract. Moreover, we have previously held that where the handbook is not included in the employment contract, “'defendant was not obligated to follow itspersonnel policies in dismissing plaintiff.'” Smith v. Monsanto Co., 71 N.C. App. 632, 634, 322 S.E.2d 611, 613 (1984) (quoting Griffin v. Housing Authority, 62 N.C. App. 556, 557, 303 S.E.2d 200, 201 (1983)). Similarly, we hold, according to North Carolina law, defendant is not contractually bound to adhere to policies and provisions relied upon in an employee handbook that were not included in plaintiff's employment contract.
    “[W]e are sensitive to the 'strong equitable and social policy reasons militating against allowing employers to promulgate for their employees potentially misleading personnel manuals while reserving the right to deviate from them at their own caprice,'” however we are bound by the law of North Carolina, which is well settled in favor of defendant. Rosby v. General Baptist State Convention, 91 N.C. App. 77, 81, 370 S.E.2d 605, 608 (1988) (quoting Walker, 77 N.C. App. at 259, 335 S.E.2d at 83).
    Affirmed.
    Judges BRYANT and ELMORE concur.
    Report per Rule 30(e).

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