Hanchard v. Facilities Development Corp.

651 N.E.2d 872, 85 N.Y.2d 638, 628 N.Y.S.2d 4, 10 I.E.R. Cas. (BNA) 1004, 1995 N.Y. LEXIS 1035
CourtNew York Court of Appeals
DecidedMay 4, 1995
StatusPublished
Cited by21 cases

This text of 651 N.E.2d 872 (Hanchard v. Facilities Development Corp.) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hanchard v. Facilities Development Corp., 651 N.E.2d 872, 85 N.Y.2d 638, 628 N.Y.S.2d 4, 10 I.E.R. Cas. (BNA) 1004, 1995 N.Y. LEXIS 1035 (N.Y. 1995).

Opinions

[640]*640OPINION OF THE COURT

Titone, J.

In this CPLR article 78 proceeding, petitioner claims that his termination from employment was arbitrary and capricious because respondent failed to follow its own pretermination procedures established in its Employee Handbook. Because respondent has substantially complied with its stated policies, and any departure therefrom is attributable to petitioner’s own failure to cooperate, we affirm the Appellate Division’s order dismissing the petition.

Petitioner George Hanchard, a licensed architect, began his employment with respondent Facilities Development Corporation on September 8, 1982 as an architect holding the title of Development Administrator II. Petitioner was terminated from that position on June 28, 1991. At the time of his termination, petitioner was 57 years old. Petitioner was notified of the termination orally on June 14, 1991, and by letter dated June 13, 1991, which stated: "[tjhis is to notify you that you are being charged with being materially deficient in your work as a result of recurring performance problems.” The letter proceeded to list the areas of deficiency charged against petitioner.

Petitioner instituted this article 78 proceeding to set aside his termination as arbitrary and capricious and for reinstatement and back pay, alleging that respondent failed to follow internal pretermination procedures as outlined in its Employee Handbook and supplements thereto. Specifically, petitioner claimed that respondent failed to give him an opportunity to respond to the charges against him and to provide him with a hearing, which, under company policy, is to be afforded prior to the discipline of "covered employees” such as petitioner who have held full-time employment with respondent for five years or more. Respondent sought dismissal of the petition on the ground, among others, that petitioner failed to exhaust administrative remedies before seeking judicial review and thereby waived his claims. Respondent also claimed that because petitioner was an at-will employee, he could be terminated at any time.

Supreme Court rejected the "exhaustion of administrative [641]*641remedies” and "waiver” arguments advanced by respondent as misplaced. The court concluded that respondent terminated petitioner without affording him the disciplinary process listed in the Employee Handbook. The court rejected the contention that petitioner was required to pursue further administrative remedies, finding that respondent’s conduct would have rendered such attempts futile. Thus, the court held that respondent’s action in terminating petitioner was arbitrary and capricious, and granted the petition by setting aside the termination and reinstating petitioner with back pay and other incidental benefits.

A divided Appellate Division reversed and dismissed the petition, holding that respondent substantially followed the method of employee performance review outlined in its various policy statements. Specifically, the Court found that respondent’s supervisors attempted to notify petitioner of his deficiencies and to discuss petitioner’s performance with him, but petitioner refused to participate in any constructive performance evaluations. The Court also concluded that petitioner failed to pursue available administrative remedies before seeking judicial relief, and that such efforts would not have been futile.

Two Justices in dissent noted that they did not believe that petitioner was entitled to a hearing pursuant to the 1989 supplemental discipline policies under the circumstances. However, the dissent concluded that, in light of respondent’s claim that petitioner was not entitled to a hearing under the 1987 policies which governed and were followed, respondent could not now benefit by taking the inconsistent position that petitioner failed to exhaust administrative remedies available under the Part II procedures. Citing respondent’s insistence that the 1987 procedures applied, the dissent concluded that petitioner’s attempts to exhaust administrative remedies would have been futile. Petitioner’s appeal to this Court as of right is predicated on the two-Justice dissent at the Appellate Division (see, CPLR 5601 [a]).

Absent an express agreement limiting its duration, an employment relationship is generally presumed to be a hiring at-will, terminable at any time by either party (Sabetay v Sterling Drug, 69 NY2d 329, 333). However, an employer may be bound by express statements in its policy manual limiting its otherwise unfettered right to discharge its employees (see, Weiner v McGraw-Hill, Inc., 57 NY2d 458). A disciplined or [642]*642terminated employee may seek article 78 review to determine whether the employer contravened any of its own rules or regulations in taking that disciplinary action (see, Matter of Mitchell v Dowdell, 172 AD2d 1032).

The parties here, in effect, agree that respondent did not reserve the right to discharge "covered” employees at any time without cause. The parties also do not dispute that respondent expressly limited its right to discharge members of that group by establishing a mandatory pretermination process in its Employee Handbook and supplements. The primary question facing this Court is whether respondent substantially abided by its own policies in terminating petitioner’s employment.

Our analysis in this case necessarily begins with a review of respondent’s internal disciplinary policies and procedures. In 1987, respondent issued an Employee Handbook containing disciplinary procedures to be followed in the event of an employee’s problematic performance evaluation. Respondent’s stated policy is to assist troubled employees to improve work performance rather than terminate them, where possible. To meet that goal, the handbook sets forth a progressive disciplinary plan, consisting largely of counseling techniques. First, supervisors faced with a problem employee are instructed to hold an informal discussion with the employee and indicate areas needing improvement. The supervisor is advised to keep his or her own supervisor apprised of the employee’s progress. If performance does not improve during the informal stage, more formal steps may be implemented. These may include, where appropriate, counseling with respondent’s Executive Director, legal counsel, or the Affirmative Action Officer. The employee’s supervisor is directed to prepare a memorandum for the Human Resources Manager explaining the problem areas, and a work plan to measure and guide improvement. The employee may also be placed on probation for a 30-day period, and appropriate action, including termination, may be taken, depending on the degree — or lack — of improvement shown. The handbook provisions permit the employee to submit documentation during any of the aforementioned stages, but do not provide for a pretermination hearing or other recourse for an employee who fails to cooperate with the progressive counseling program.

In December of 1988, respondent issued the "Part II Progressive Disciplinary Procedures” which supplement the 1987 [643]*643Employee Handbook. These policies were again supplemented in 1989.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Matter of Lanni v. City of New York
2025 NY Slip Op 31714(U) (New York Supreme Court, New York County, 2025)
Matter of Morgan-North v. Correct Care Solutions, LLC
2021 NY Slip Op 05702 (Appellate Division of the Supreme Court of New York, 2021)
Suffolk Anesthesiology Assoc., P.C. v. Verdone
134 A.D.3d 1016 (Appellate Division of the Supreme Court of New York, 2015)
McClave v. Port Authority of New York & New Jersey
134 A.D.3d 435 (Appellate Division of the Supreme Court of New York, 2015)
Matter of Oliner v. Sovereign Bank
123 A.D.3d 1041 (Appellate Division of the Supreme Court of New York, 2014)
Pena v. Port Authority
107 A.D.3d 433 (Appellate Division of the Supreme Court of New York, 2013)
Muhammad Shahid Nazir v. Charge & Ride, Inc.
95 A.D.3d 1215 (Appellate Division of the Supreme Court of New York, 2012)
O'Neill v. New York University
97 A.D.3d 199 (Appellate Division of the Supreme Court of New York, 2012)
Alltow, Inc. v. Village of Wappingers Falls
94 A.D.3d 879 (Appellate Division of the Supreme Court of New York, 2012)
Prestige Towing & Recovery, Inc. v. State
74 A.D.3d 1606 (Appellate Division of the Supreme Court of New York, 2010)
Daub v. Future Tech Enterprise, Inc.
65 A.D.3d 1004 (Appellate Division of the Supreme Court of New York, 2009)
Rooney v. Tyson
697 N.E.2d 571 (New York Court of Appeals, 1998)
Waite v. Coombe
247 A.D.2d 663 (Appellate Division of the Supreme Court of New York, 1998)
Laduke v. Hepburn Medical Center
239 A.D.2d 750 (Appellate Division of the Supreme Court of New York, 1997)
Enowitz v. Sanwa Business Credit Corp.
902 F. Supp. 59 (S.D. New York, 1995)
De Petris v. Union Settlement Ass'n
657 N.E.2d 269 (New York Court of Appeals, 1995)
Hanchard v. Facilities Development Corp.
651 N.E.2d 872 (New York Court of Appeals, 1995)

Cite This Page — Counsel Stack

Bluebook (online)
651 N.E.2d 872, 85 N.Y.2d 638, 628 N.Y.S.2d 4, 10 I.E.R. Cas. (BNA) 1004, 1995 N.Y. LEXIS 1035, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hanchard-v-facilities-development-corp-ny-1995.