USCA1 Opinion
[NOT FOR PUBLICATION]
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 94-1842
JOHN R. HOLLAND,
Plaintiff, Appellant,
v.
HARTFORD COMPUTER EXCHANGE, INC., AND RONALD TALBOT,
Defendants, Appellees.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Rya W. Zobel, U.S. District Judge]
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Before
Torruella, Chief Judge,
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Coffin, Senior Circuit Judge,
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and Stahl, Circuit Judge.
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Robert P. Sherman with whom Leonard G. Learner and David R.
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DeVeau were on brief for appellant.
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Scott A. Faust with whom Gregory C. Keating was on brief for
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appellees.
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COFFIN, Senior Circuit Judge. Plaintiff John Holland
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asserts that the district court erred in granting summary
judgment for defendants on his claim of constructive discharge
and on various other causes of action stemming from his departure
from his job as a computer salesman for Hartford Computer
Exchange (HCE). Our review of the record and caselaw persuades
us that, based on the evidence offered, no reasonable jury could
find that Holland was discharged. Because this determination is
fatal to most of his claims, and the remaining allegation of
breach of contract also fails as a matter of law, we affirm the
district court's judgment in its entirety.
A district court's grant of summary judgment is reviewed de
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novo. Bourque v. FDIC, No. 94-1568, slip op. at 7 (1st Cir. Dec.
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28, 1994). We examine the evidence in the light most favorable
to the nonmovant, and must affirm if the parties' proof reveals
"`that there is no genuine issue as to any material fact and that
the moving party is entitled to judgment as a matter of law.'"
Id. (citation omitted).
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An issue is only "genuine" if there is sufficient
evidence to permit a reasonable jury to resolve the
point in the nonmoving party's favor . . . while a fact
is only "material" if it has "`the potential to affect
the outcome of the suit under the applicable law.'"
Id. at 7-8 (citations omitted).
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The central question in this appeal is whether Holland is
entitled to jury consideration of his constructive discharge
claim. The district court's negative answer had two separate
prongs. First, it determined that, on the facts presented, no
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reasonable jury could conclude other than that Holland
voluntarily left the defendants' employ. Second, it held that
the facts underlying the allegation of constructive discharge are
insufficient as a matter of law to support such a claim. In our
view, it is unnecessary to dwell on Holland's intent because, as
the district court found and as we shall explain below, the
undisputed facts fall far short of establishing a termination.
Cf. Vega v. Kodak Caribbean, Ltd., 3 F.3d 476, 481 (1st Cir.
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1993) ("An employee's perceptions cannot govern a claim of
constructive discharge if, and to the extent that, the
perceptions were unreasonable.").1
A constructive discharge occurs when an employer
"deliberately makes an employee's working conditions so
intolerable that the employee is forced into an involuntary
resignation," Pena v. Brattleboro Retreat, 702 F.2d 322, 325-26
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(2d Cir. 1983) (citation omitted), cited in Radvilas v. Stop &
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Shop, Inc., 18 Mass. App. Ct. 431, 439 n.14, 466 N.E.2d 832, 838
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n.14 (1984). See also Vega, 3 F.3d at 480 (to establish
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constructive discharge plaintiff must show that his work was "so
arduous or unappealing, or working conditions so intolerable,
that a reasonable person would feel compelled to forsake his job
rather than to submit to looming indignities"); Alicea Rosado v.
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1 As a practical matter, of course, there is no difference
between the district court's two holdings. The conclusion that
the allegations failed as a matter of law to establish a
termination leads inexorably to a finding that Holland left HCE
voluntarily.
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Garcia Santiago, 562 F.2d 114, 119 (1st Cir. 1977).2 A change
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for the worse in the quality of working conditions is not itself
enough to satisfy the standard; a constructive discharge involves
a "drastic reduction" in the circumstances of one's employment.
Alicea Rosado, 562 F.2d at 120. Holland's claim of
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constructive discharge rests upon the fact that his commission
percentage was reduced from 40 percent to 30 percent in July
1993.3 Holland therefore needs to show that withdrawal of ten
percent of his commission made his employment at HCE
"intolerable," effectively compelling him to leave. Although
Holland insists that a 25 percent paycut is so substantial that
he must be entitled to a jury finding on its significance, we are
obliged to view that reduction within the full factual context in
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2 Holland asserts in his brief that Massachusetts would
apply a "more liberal" standard in evaluating his claim of
constructive discharge, but the cases he cites fail to support
such a contention because they involve employees with written
employment contracts. See Miller v. Winshall, 9 Mass. App. 312,
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318, 400 N.E.2d 1306, 1310 (1980); Steranko v. Inforex, Inc., 5
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Mass. App. 253, 263, 362 N.E.2d 222, 230 (1977) ("A material
change in an employee's duties or a significant reduction in rank
may constitute a breach of contract entitling the employee to
damages."). Holland concededly was an at-will employee, which
logically implicates different concerns. Cf. Henderson v. L.G.
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Balfour Co., 852 F.2d 818, 822 n.1 (5th Cir. 1988) (applying
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Massachusetts law).
3 He alleged, in addition, a "systematic pattern of
harassment" that consisted entirely of questioning on two
occasions in the summer of 1993 by HCE's president about expenses
for which Holland sought reimbursement. One involved a new one-
year subscription to the Wall Street Journal and the other
concerned the large number of personal long distance phone calls
on Holland's July 1993 telephone bill for HCE, including 15 to a
prospective new employer. At oral argument, Holland's counsel
acknowledged that these incidents add nothing to the constructive
discharge claim, and simply were meant to be corroborative.
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evaluating whether any reasonable jury could find a constructive
discharge. We therefore summarize the relevant background.
In early 1992, when three key HCE employees left the company
to form their own business, Holland asked for a better commission
structure as a inducement for him to stay. HCE's president,
Ronald Talbot, agreed to increase Holland's commissions to a flat
40 percent on gross profits. Under the tiered structure
previously in effect, Holland had earned a 30 percent commission
on profits up to $75,000, 35 percent on profits between $75,000
and $150,000, and 40 percent on gross profits over $150,000.
Two months after the change in compensation, Holland wrote
to Talbot expressing concern about the company's continuing
viability, advising him that "[u]nless you intend to rebuild HCE,
we need to plan a graceful transition." Holland stated that he
planned to begin seeking other opportunities, and "hope[d] that
within the next 2-4 months I can find another position." During
the following fourteen months, Holland and Talbot together
explored ways of keeping Holland at HCE, including his becoming a
part owner of the business. None of these approaches came to
fruition, and in May 1993 Holland actively began pursuing other
jobs, including one with a sales training firm in San Diego.
Holland took off a week in June to attend a course at the San
Diego company, Solution Selling, and another week in July to
attend an associates meeting there.
In mid-July, several events occurred. On July 15, Talbot
wrote a letter to Holland noting that Holland had said he was
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leaving HCE, and detailing procedures for "a workable
transition." Holland, who denies that he ever told Talbot he was
leaving, responded with a memo on July 19:
As you know, all discussions between us regarding a
migration from HCE to Solution Selling have been
contingent upon us reaching a mutually satisfactory
severance agreement. If we are unable to reach such an
agreement, I intend to remain with HCE.
On another note, this will confirm that you have
authorized me to attend the Solution Selling Associates
meeting to be held in San Diego the week of July 26.
Of course, I shall be available by phone that week and
will be checking my messages on a daily basis.
Finally, thank you for coming to Boston today to meet
with me. Per our discussion, I look forward to
receiving a revised severance package proposal from
you.
In a telephone conversation on July 22, and in a memo thereafter,
Talbot informed Holland that his commission rate would now be
calculated at 30 percent. The memo stated that "[t]his plan will
be reviewed again on/about September 1, 1993."
On September 3, Holland faxed a letter to Talbot announcing
his departure from HCE. Holland stated that he was "not
willingly or voluntarily terminating my employment with HCE," but
was being forced out by Talbot's "unilaterally changing the terms
of our agreement and thereby making it economically impossible
for me to remain with the company."
We believe that no reasonable juror could conclude that this
sequence of events adds up to a constructive discharge.
Holland's commission had been increased to 40 percent as an
incentive for him to stay with HCE, and it was not reduced until
after Holland aggressively had been pursuing other jobs and his
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departure seemed imminent. The fact that Holland claimed that he
would not leave unless he got an adequate severance package in no
way diminishes the inference unequivocally drawn from his actions
-- that he was on his way out the door. The rationale for his
commission increase therefore no longer existed.
In addition, while a flat 30 percent rate was a lower level
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of compensation than provided even in the earlier tiered
structure, it was a percentage from within that three-level
scheme. And, because he already had earned 40 percent on all
profits through the first six months of 1993, the flat 30 percent
rate beginning in July could not have meant much of a change in
his average, annual commission rate from the percentage he had
accepted as satisfactory before January 1992. Certainly, any
difference cannot be termed so intolerable as to trigger a forced
termination. This is particularly so because the 30 percent
level was given limited duration. Talbot's memo stated that
Holland's compensation plan would be reviewed again on about
September 1.4
In short, the undisputed facts inescapably show that Holland
was dissatisfied with his earning potential at HCE and was
looking aggressively for other opportunities. In those
circumstances, Talbot's decision to withdraw a premium
compensation rate explicitly offered as an incentive for
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4 In addition, by August 1993, HCE had an experienced broker
who could help Holland generate sales. This was not the case
when his commission was increased to 40 percent in early 1992
after, in his words, HCE "lost one of the top brokers in the
business." See App. at 161 (March 1992 letter to Talbot).
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continuity can hardly be characterized as a termination. The
district court therefore correctly held that the facts underlying
the allegation of constructive discharge are insufficient as a
matter of law. Cf. Nunez-Soto v. Alvarado, 918 F.2d 1029, 1031
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(1st Cir. 1990) (despite "significantly adverse" employment
action, including demotion from supervisory position, the facts
do not show circumstances "that would likely make her quit");
Zabielski v. Montgomery Ward & Co., 919 F.2d 1276, 1281 (7th Cir.
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1990) (constructive discharge claim viable where plaintiff's
salary cut from $26,000 to $9,600 and plaintiff demoted out of
management).
Holland's claim that Talbot committed a breach of contract
when he withdrew the 40 percent rate is equally insupportable.
Holland asserts that, when Talbot offered the higher compensation
"on a going forward basis," he was committing to such a rate for
however long Holland remained employed at HCE. This assertion,
however, is based solely on Holland's subjective expectation. As
noted, Holland was an at will employee. The combined effect of
that status, past experience -- Talbot previously had made a
unilateral reduction in the commission schedule -- and the
context of the raise -- to induce Holland to stay -- make
unreasonable any inference that a binding contract for an
indefinite term was formed. Holland's effort to generate a
genuine factual dispute concerning this issue therefore fails.
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As Holland concedes in his brief, the legal inadequacy of
his constructive discharge claim extinguishes his remaining
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causes of action. The district court's grant of summary judgment
to defendants is therefore AFFIRMED.
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