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Thompson v. Associated Potatoe Growers5/11/2000
Appeal from the District Court of Grand Forks County, Northeast Central Judicial District, the Honorable Joel D. Medd, Judge.
REVERSED AND REMANDED.
Opinion of the Court by Sandstrom, Justice.
[ ] Associated Potato Growers, Inc., appealed from a judgment awarding Dennis Thompson damages for wrongful termination of his employment. We hold an employer's decision to terminate an employee for cause must be assessed by the trier of fact under an objective standard of reasonableness. Because the trial court did not apply that standard in deciding Associated did not have cause to terminate Thompson, we reverse and remand for further proceedings.
I.
[ ] Associated is a cooperative corporation in the business of storing, washing, and selling potatoes belonging to its members. Associated hired Thompson as general manager under a written contract that ran from August 1, 1991, through July 31, 1992, and allowed Thompson "to extend and renew agreement for up to two one year consecutive terms" by giving Associated "notice of his intention to renew and extend not later than 60 days prior to the end of the then current term." Thompson extended the written contract from August 1, 1992, through July 31, 1993.
[ ] On May 28, 1993, Associated's board of directors met to discuss allegations that Thompson had altered grades of potatoes and changed growers' records. The minutes of the meeting state Thompson admitted changing growers' records but claimed he had the right to make the changes. The minutes also indicate the Board and other Associated office employees did not believe Thompson had the right to change growers' records. At that meeting, the Board decided to give Thompson a two-week leave of absence and asked Associated's accountants to perform a "mini-audit" of growers' records. On May 29, Thompson informed Associated he had elected to extend the parties' written employment contract for another year.
[ ] Thompson was not present at a June 10, 1993, meeting, where the Board reviewed the accountants' "mini-audit" and decided to terminate Thompson, without cause, subject to legal review of his employment contract. Thompson was present at a June 14 meeting, where the Board asked him to resign, but he refused. The minutes of the June 14 meeting reflect Thompson agreed to meet with the accountants and a committee of Board members to explain his actions. On June 16, Thompson met with the Board subcommittee and accountants. On June 17, the Board subcommittee reported to the full Board, which thereafter decided to terminate Thompson for cause. Associated notified Thompson his employment was terminated effective June 18, 1993, under paragraph 14 of the employment contract, which was entitled "Termination for Cause" and provided " he EMPLOYER may terminate this Agreement immediately for material violation of the EMPLOYER'S policies or material breach of the provisions of this Agreement, including specifically the failure to perform his duties as required hereunder."
[ ] Thompson sued Associated for wrongful termination. After a bench trial, the trial court decided Thompson did not commit a material violation of the employer's policies or a material breach of the provisions of the employment agreement, and Thompson's actions were not dishonest but were intended to insure fair compensation for potato growers. The court decided Associated did not have cause to terminate Thompson and awarded him $129,400 in damages.
[ ] The trial court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. § 27-05-06. Associated's appeal is timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. art. VI, §§
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