Cockels v. International Business Expositions, Inc

406 N.W.2d 465, 159 Mich. App. 30

• Court: Michigan Court of Appeals
• Decided: April 6, 1987
• Docket: Docket 92621
• Status: Published

Opinion

Per Curiam.

Plaintiff appeals as of right from an order of the Oakland Circuit Court granting summary disposition in favor of defendant.

For purposes of this motion, the material facts are not in dispute. Plaintiff, Irene A. Cockels, was employed by defendant, International Business Expositions, Inc., a corporation doing business as Business Expo, from approximately December 1, 1983, until October 3, 1984. Plaintiff was compensated by defendant on a commission basis of ten percent on sales of booths and advertising for defendant’s business expositions. Plaintiff allegedly performed in an exemplary manner and was, in fact, not disciplined or reprimanded in any fashion by defendant from the beginning of her employment to September 6, 1984. On September 6, 1984, plaintiff’s attorney wrote defendant, requesting payment of approximately $2,000 in commissions which defendant allegedly owed and wrongfully withheld from plaintiff. In the three weeks which followed, plaintiff received twelve memoranda from defendant reprimanding her for various aspects of her employment performance. Finally, on October 3, 1984, plaintiff was discharged by defendant.

On December 21, 1984, plaintiff filed a complaint with the Michigan Department of Labor. Plaintiff did not allege wrongful termination, but merely sought the return of wages and commissions allegedly due as of October 31, 1984. This claim was ultimately resolved by a consent agreement reached by the parties.

Plaintiff thereafter filed the instant complaint in the circuit court on February 4, 1986, alleging that her discharge, due to her assertion of her right to compensation, violated the "public policy of the State of Michigan as embodied in the wages and fringe benefits act,” MCL 408.471 et seq.; MSA 17.277(1) et seq. (Count i), and was in breach of defendant’s implied covenant of good faith and fair dealing in the contract of employment (Count ii).

On March 7, 1986, defendant filed a motion for summary disposition, claiming that plaintiffs Complaint failed to state a claim upon which relief could be granted. Defendant argued that the Department of Labor had exclusive jurisdiction over Count i of the complaint and that Count n was not cognizable in Michigan because plaintiff was an employee at will. Following a hearing on the motion, the circuit court granted the motion in an order entered April 24, 1986.

Defendant’s motion for summary disposition was brought and granted under MCR 2.116(C)(8). Motions under this subrule test the legal sufficiency of the pleadings. All well-pled allegations must be taken as true, and the motion should be denied unless the alleged claims are so clearly unenforceable as a matter of law that no factual development can possibly justify a right to recover. Hankins v Elro Corp, 149 Mich App 22, 26; 386 NW2d 163 (1986).

Plaintiff first argues that the trial judge erred in dismissing her claim that she was improperly discharged for demanding payment of her commissions. The trial court held. that this claim fell within the ambit of the act, which grants exclusive jurisdiction over the claim to the Department of Labor. We find no error.

The preamble to the act states:

An act to regulate the time and manner of payment of wages and fringe benefits to employees; to prescribe rights and responsibilities of employers.and employees, and the. powers and duties of the department of labor; to require keeping of records; to provide for settlement of disputes regarding wages and fringe benefits; to prohibit certain practices by employers; to prescribe penalties and remedies ....

MCL 408.472; MSA 17.277(2) gives employees the right to payment of earned wages at specific, regular intervals. MCL 408.471(l)(f); MSA 17.277(l)(f) defines "wages” as "all earnings,” including those determined on the basis of commission.

MCL 408.483; MSA 17.277(13) provides in pertinent part;

(1) An employer shall not discharge an employee or discriminate against an employee because the employee filed a complaint, instituted or caused to be instituted a proceeding under or regulated by this act, testified or is about to testify in a proceeding, or because of the exerdise by the employee on behalf of an employee or others of a right afforded by this act.

(2) An employee who believes that he or she is discharged or otherwise discriminated against by an employer in violation of this section may file a complaint with the [labor] department alleging the discrimination within 30 days after the violation occurs. Upon receipt of the complaint, the department shall cause an investigation to be made. If, upon the investigation, the department determines that this section was violated, the department shall order the rehiring or reinstatement of an employee to his or her former position with back pay. [Emphasis added.]

MCL 408.481; MSA 17.277(11) provides that "a complaint filed under section 13(2) must be filed within 30 days after the alleged violation occurs.” MCL 408.481; MSA 17.277(11) further provides the manner in which the department is to investigate and hear an alleged violation.

At issue is whether plaintiff’s written demand for prompt payment of earned commissions, for which she was allegedly terminated, constituted the "exercise by the employee ... of a right afforded by this act,” MCL 408.483(1); MSA 17.277(13)(1). Both parties agree that, if this inquiry is answered in the positive, the remedies provided by the act apply and are exclusive.

The allegations in plaintiffs complaint do not specifically claim that plaintiff was not paid in accordance with the exact schedules set forth in MCL 408.472; MSA 17.277(2); rather, plaintiff alleged that she demanded "payment of approximately $2,000 in commissions owed plaintiff and unpaid.” Plaintiff further alleged that she was discharged in retaliation for this demand, in violation of the public policy embodied in the act. We believe that these allegations were sufficient to bring plaintiffs claim within the ambit of the act. As stated in the preamble, one of the purposes of the act is to prescribe the rights and responsibilities of employers and employees with regard to the time and manner of payment of wages. Although plaintiff did not specify in her request that her commissions had been withheld in violation of the schedules set forth in the act, MCL 408.472; MSA 17.277(2), she was clearly asserting her rights to payment of those commissions and those rights were in fact derived from the act.

Accepting the truthfulness of the allegations, we therefore conclude that plaintiff was terminated for exercising a right afforded by the act. Moreover, plaintiff is not excused from failing to seek her remedy pursuant to the act merely because she pleaded that the act embodies an independent public policy that employees receive payment of wages in a timely manner. Although a termination in contravention of a strong public policy is wrongful and an exception to the general rule that' employment contracts may be terminable at will, Suchodolski v Michigan Consolidated Gas Co, 412 Mich 692, 695; 316 NW2d 710 (1982); Watassek v Dep’t of Mental Health, 143 Mich App 556, 563; 372 NW2d 617 (1985), lv den 424 Mich 878 (1986), administrative remedies provided by the Legislature in statutory schemes embodying those public policies must be pursued before a grievant may seek legal redress in the courts. Schwartz v Michigan Sugar Co, 106 Mich App 471, 479; 308 NW2d 459 (1981), lv den 414 Mich 870 (1982); Ohlsen v DST Industries, Inc, 111 Mich App 580, 585-586; 314 NW2d 699 (1981), lv den 417 Mich 1046 (1983); Covell v Spengler, 141 Mich App 76, 84; 366 NW2d 76 (1985), lv den 422 Mich 977 (1985). Since plaintiff failed to pursue the administrative remedies provided by the statute, we need not decide whether the public policy expressed in the statute is One which provides an exception to the general rule that employment contracts may be terminable at will. Summary disposition as to Count i was proper.

Plaintiff also argues that she has stated a cause of action for breach of the implied convenant of good faith and fair dealing, even though she concedes that she was an at-will employee.

This issue was before the Michigan Supreme Court in Prussing v General Motors Corp, 403 Mich 366; 269 NW2d 181 (1978), where the Court declined to rule on the issue. Subsequently, in Schwartz v Michigan Sugar Co, supra, this Court likewise declined to rule on the issue, stating that such a "radical departure from the common law and Michigan precedent. . . should come from the Supreme Court.” 106 Mich App 481.

Similarly, in Schipani v Ford Motor Co, 102 Mich App 606; 302 NW2d 307 (1981), this Court reversed the trial court’s denial of defendant’s motion for summary judgment with respect to plaintiffs claim that he was demoted by his employer maliciously and in bad faith. In so doing, this Court rejected the notion that an employer was charged with an implied covenant to act with good faith in an at-will employment contract:

Regarding plaintiffs Count m, a contract for indefinite employment has generally been held to be terminable at will. Lynas v Maxwell Farms, [279 Mich 684; 273 NW 315 (1937)]. This Court has stated that "[s]uch a contract is not violated even by an arbitrary or capricious discharge.” Hernden v Consumers Power Co [72 Mich App 349; 249 NW2d 419 (1976)] supra, 356. However, this Court has intervened where "the reason for the discharge is an intention on the part of the employer to contravene the public policy of this state.” Sventko v The Kroger Co, 69 Mich App 644, 647; 245 NW2d 151 (1976). [102 Mich App 619.]

Schipani thus illustrates the inconsistency between an implied covenant of good faith and fair dealing and an employer’s rights to discharge at-will employees. In Michigan, an employer may terminate an employee arbitrarily and capriciously absent a violation of public policy or an agreement to the contrary. As noted by our Supreme Court in Michigan State Employees Ass’n v Dep’t of Mental Health, 421 Mich 152, 158; 365 NW2d 93 (1984):

The legal protection of employee interests in job security is the exception, rather than the rule, in this state. In the absence of contractual agreements to the contrary, see, e.g., Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich 579; 292 NW2d 880 (1980), and of unlawful reasons for discharge such as race or sex discrimination, private sector employees are terminable at the will of their employers.

Summary disposition as to Count n was likewise proper.

Affirmed.