Wayne D. Norton v. Caremark, Inc., Baxter Health Care Corporation

20 F.3d 330, 29 Fed. R. Serv. 3d 10, 9 I.E.R. Cas. (BNA) 617, 1994 U.S. App. LEXIS 5830, 1994 WL 100372
CourtCourt of Appeals for the Eighth Circuit
DecidedMarch 30, 1994
Docket92-2891MN
StatusPublished
Cited by49 cases

This text of 20 F.3d 330 (Wayne D. Norton v. Caremark, Inc., Baxter Health Care Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wayne D. Norton v. Caremark, Inc., Baxter Health Care Corporation, 20 F.3d 330, 29 Fed. R. Serv. 3d 10, 9 I.E.R. Cas. (BNA) 617, 1994 U.S. App. LEXIS 5830, 1994 WL 100372 (8th Cir. 1994).

Opinion

LEVIN H. CAMPBELL, Senior Circuit Judge.

Appellee Wayne Norton brought action in 1990 alleging that defendants Baxter Traven-ol Laboratories (“Baxter”) and its then-subsidiary Caremark, Inc. (“Caremark”), had violated Norton’s employment contract by discharging him without following certain procedures allegedly required in the contract. The case was tried before a jury in the United States District Court for the District of Minnesota. 1 The jury returned a verdict finding Baxter and Caremark liable for breach of contract and awarding Norton $305,000 in back pay. The district court denied defendants’ motions for judgment as a matter of law and for a new trial or a remitti-tur. The defendants appeal, and we affirm.

I.

Travenol Laboratories (“Travenol”), a subsidiary of Baxter, hired Norton in 1978 as a sales representative to sell medical care products to hospitals in the Des Moines, Iowa, region. In 1981, Travenol transferred Norton to Minneapolis. In 1986, Norton was promoted to general manager of the Minneapolis Branch Sales Office. In 1987, after Baxter acquired its competitor Caremark, Baxter combined the companies’ two Minneapolis sales offices and named Norton as general manager of the consolidated office.

When Norton began work for Travenol in 1978, he signed a document entitled “Employment Agreement,” which stated in part: “Either Travenol or I may terminate my employment at any time.” At some point in the early 80s, Travenol issued a ‘Work Ride Policy & Handbook” (“the Handbook”). The Handbook outlined the procedures to be followed when an employee’s performance or behavior was unacceptable. The Handbook stated that it was the policy of the company to use “corrective discipline” with employees. According to the Handbook, “discharge [would] be resorted to only where previous efforts by Management to bring about correction have failed, or where discharge [was] the only appropriate action ... because of the nature of the employee’s gross misconduct.”

The Handbook divided conduct violations into two categories: “major” offenses and “serious” offenses. Major offenses were those, like theft or the possession of a firearm,, for which discharge would be appropriate for the first violation. For serious offenses, like wasting time on the job or absence without good cause, the employee would be subject to “corrective discipline” consisting of a four-step procedure. The first serious offense in a twelve-month period would result in an verbal warning; the second would result in a written warning; the third, in a suspension or probation. The fourth serious offense in twelve months could result in discharge.

The Handbook dealt not only with misconduct and violations' of work rules but also with the procedures to be followed when the performance of a manager or other salaried employee was deficient. The Handbook stated that the “first remedial steps” in such a situation “should always be in the nature of personnel training and counseling.” In the event performance did not improve, the Handbook suggested that a supervisor conduct an interview with the employee during which a “Performance Program” would be outlined, detailing “the areas of deficiency and specifying] what ‘acceptable performance’ would include.” The performance program should cover a minimum of 30-60 days, to “give the individual affected ample time to show improvement.” If the employee was “either unwilling or unable to satisfy the standards set forth in the program,” the Handbook warned that “termination may result.” The Handbook pronounced, however, that “[n]o employee is to be discharged due *333 to unaccepted job performance unless there is on file a record of one or more deficiency interviews.”

After Baxter acquired Caremark, Care-mark promulgated in June, 1989, its own personnel policy relating to pre-termination procedures for employees. A memorandum from Sheldon Asher, an Executive Vice President of Caremark, and Richard Brown, Caremark’s Human Resources Director, was distributed to area vice presidents and to general managers enclosing so-called Disciplinary Action Guidelines (“the Guidelines”). These were to be followed, the memo said, when an employee “deviate[s] below an acceptable level of performance.” The memo stated that “at the first hint of unacceptable performance,” “[a] verbal warning should be issued, and a work improvement discussion conducted.” Such a procedure, according to the memo, was “an important management responsibility” that was “owe[d] to the employee.”

The Guidelines went on to define the procedures involved in administering what the memo called “progressive discipline.” The process was to involve four steps: (1) a verbal warning along with a “work improvement discussion”; (2) a written warning; (3) a performance program, along with a written acknowledgment by the employee that the program was the final corrective step; and (4) termination. The Guidelines emphasized that each step of the discipline procedure should be documented and warned that in connection with a termination, “procedure and policy must be adhered to strictly.” Adherence to the Guidelines, according to the memo, was “important in avoiding fines and re-instatement potentially dictated by the legal system.”

The Guidelines allowed for some flexibility. According to the Guidelines, “based on the severity of the situation,” it might be “necessary to combine one or two of the steps in the process and proceed on an accelerated timetable.” Also, the memorandum explained that there were “situations” where the Guidelines were “inappropriate and a different course of action [was] warranted.”. Examples of such situations included “a complete mismatch between job responsibilities and employee abilities, gross misconduct, and job elimination.”

Norton learned about the above policies in the course of his work for Travenol, Baxter, and Caremark. At trial he' testified that soon after he was promoted to general manager in 1986, he attended a branch manager’s meeting where a Human Resources representative distributed and explained the Handbook. He further testified to receiving training on two other occasions in the procedures contained in the Handbook. The Guidelines and memorandum from Asher and Brown were distributed to Norton in his capacity as general manager.

In the summer and fall of 1989, Care-mark’s midwest area vice president, Joe Herring, became dissatisfied with Norton’s performance as general manager. Norton was blamed for the Minneapolis office’s unsatisfactory financial results and poor morale. According to Norton, the financial results were not as bad as they appeared, and the morale problems resulted from the earlier merger of Caremark and Baxter.

Over the course of the fall months of 1989, Norton and Herring met several times to discuss the performance of the branch office. The accounts of these meetings differ. It appears, in any case, that the meetings and communications between Herring and Norton did not satisfy the “progressive discipline” procedures set out in the Handbook and the Guidelines. Richard Brown, the Human Resources Director for Caremark, admitted at trial that the documentation of the discussions “was not in strict compliance” with the Guidelines. Herring, too, admitted that he never provided Norton with a written warning that satisfied the requirements of the Guidelines.

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Bluebook (online)
20 F.3d 330, 29 Fed. R. Serv. 3d 10, 9 I.E.R. Cas. (BNA) 617, 1994 U.S. App. LEXIS 5830, 1994 WL 100372, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wayne-d-norton-v-caremark-inc-baxter-health-care-corporation-ca8-1994.