Pierre Arboireau and Sandrine Arboireau v. Adidas-Salomon Ag, a Foreign Corporation and Adidas America, Inc., a Delaware Corporation
Docket: 02-35398
Court: Court of Appeals for the Ninth Circuit; October 30, 2003; Federal Appellate Court
The case involves Pierre and Sandrine Arboireau, who appealed after the district court granted summary judgment to defendants Adidas-Salomon AG and Adidas America, Inc. The appeal concerns claims of breach of contract and intentional misrepresentation following Pierre's recruitment for a position with Adidas America, which he was led to believe would be stable for at least 24 months.
Pierre was contacted by Yannick Morat, who encouraged him to apply for the Head of Worldwide Footwear Costing position. During the interview process, Pierre was assured of the position's stability, emphasizing his family's need for certainty due to their planned relocation. Brian Mignano, the supervisor, repeatedly sought a long-term commitment, stating a preference for a tenure of at least two to three years, without disclosing any potential plans to move the position to Germany.
On September 3, 1999, Mignano offered Pierre the position over the phone, discussing salary and reiterating the desire for a long-term commitment, but did not provide a guarantee of a minimum duration. The same day, Mignano indicated that a formal proposal would follow. Pierre formally accepted the offer on September 7, 1999, summarizing the terms and including a belief that the minimum duration would be 24 months, although he noted that this was not exhaustive and awaited further confirmation from Human Resources.
The court affirmed some aspects of the district court's ruling while reversing others and remanding the case for further proceedings.
On September 8, 1999, Mignano emailed Arboireau a preliminary proposal for employment, which required verification with HR and legal, and included a detailed definition of at-will employment. Valentino followed up on September 17 with an offer letter that reiterated this at-will status. Arboireau inquired about various employment benefits on September 20, and after receiving answers, he requested further details on health benefits and the employee handbook on October 12. Valentino confirmed the package containing the offer letter, a non-competition agreement, and other documents would be sent, which Arboireau received on October 14. He signed the agreement on October 22 and commenced work on January 5, 2000.
After starting his position, Arboireau experienced pressure to relocate to Germany due to corporate restructuring. His new supervisor, Bob Shorrock, was appointed on June 1, 2000, and later informed Arboireau of his termination, effective June 22, 2000, though his employment continued until July 28, 2000. The termination was not for cause but due to the transfer of his position to Germany, despite prior complaints about his performance.
The Arboireaus filed a complaint against adidas-Salomon AG and adidas America, alleging breach of contract and intentional misrepresentation among eight claims. The magistrate judge granted summary judgment for the defendants on all claims and dismissed the complaint with prejudice. The appeal, focusing on the summary judgment related to breach of contract and intentional misrepresentation, was reviewed de novo. The court concluded that while summary judgment was appropriate for most claims, one claim needed to be remanded for trial. The standard of review involved assessing whether there were genuine issues of material fact in favor of the nonmoving party, without weighing the evidence.
The district court's summary judgment in favor of Appellees on the breach of contract claim is upheld based on the nature of Arboireau's employment. The offer letter signed by Arboireau explicitly stated that employment was at-will, aligning with Oregon's presumption that employment contracts are at-will. Appellants' assertion that Arboireau accepted a fixed-term employment offer on September 7, 1999, is negated by his own testimony, which confirmed no promises of fixed-term employment were made during the relevant discussions. Under Oregon's objective theory of contract interpretation, acceptance must exactly match the offer, and Arboireau's acceptance was ineffective as the offer was not for a fixed term. Additionally, the parol evidence rule prohibits introducing evidence of prior oral agreements that contradict the written offer letter, which contains an integration clause stating it is not to be construed as a contract beyond its outlined terms. Appellants' arguments to circumvent the parol evidence rule, including claims of misrepresentation regarding the offer letter's purpose for visa processing, lack supporting evidence. Even if fraudulent inducement were proven, it would not alter the written contract's terms since Arboireau affirmed the contract by accepting severance and other compensations post-termination, leaving him bound by its terms.
Appellants argue that the offer letter for at-will employment is ambiguous, citing Arboireau's cultural ignorance of at-will employment and difficulties with the English language. However, the court finds this argument unpersuasive, stating that under Oregon law, a sophisticated party contracting in English cannot use language difficulties to evade contract terms. Arboireau, an executive-level hire in an international corporation, is bound by the contract as written. The court notes that at-will employment was explicitly defined in the offer letter and other related documents, countering the claim of ambiguity. The presence of a penalty for early termination does not create ambiguity, as the definitions are clear and separate. Consequently, the district court's summary judgment in favor of the Appellees on the breach of contract claim is affirmed.
Regarding the two intentional misrepresentation claims, plaintiffs must prove five elements: a false representation of material fact, knowledge of its falsity, intent for plaintiffs to rely on it, justifiable reliance, and resultant damages. Additionally, nondisclosure can be misrepresentation if previous statements would mislead without full disclosure. The court will evaluate two theories from the Appellants to determine if these elements are satisfied.
Appellants assert that Appellees did not inform them that the employment position was terminable at any time by either party. They argue that Arboireau was misled into believing that the offer letter was solely related to the visa process, leading him to think he could not be terminated. Appellants claim the offer letter inadequately explained the implications of at-will employment, particularly considering Arboireau's cultural and linguistic challenges. However, the arguments are unconvincing as no evidence was provided showing that Defendants intentionally misled Arboireau regarding at-will employment or that they were aware of his confusion. Arboireau's comment about a "Minimum duration: 24 months" could indicate his commitment rather than an understanding of guaranteed employment.
Appellants also argue that statements made in Arboireau's visa application suggest a commitment to three years of employment. The district court clarified that stating a three-year term is standard practice for visa applications to minimize paperwork, and the application does not imply at-will or term employment. Even if there were an expectation for a three-year duration, it does not equate to a binding contract for a three-year term.
The court concluded that Appellees adequately disclosed the nature of the employment relationship in the written materials, which an executive would typically read and comprehend. The district court's summary judgment on Appellants' misrepresentation claim regarding the length of employment was upheld.
A second claim of intentional misrepresentation was deemed more plausible. Appellants allege that during the interview process, Appellees failed to disclose the "constant pressure" to relocate the Position to Germany, despite knowing that Arboireau sought job stability. This claim is supported by Oregon law, which allows for a misrepresentation claim based on the omission of material contingencies that could mislead a candidate. The precedent case indicated that nondisclosure of significant facts can constitute misrepresentation when prior representations would be misleading without full disclosure.
The plaintiffs successfully demonstrated that the defendants had either made or were close to making a decision to close the Eugene plant, leading to the reversal of the district court's summary judgment. The case references the precedent set in Meade, which established that failing to disclose a potential closure of a facility is a failure to disclose a material contingency under Oregon law. No subsequent Oregon appellate decisions have criticized Meade, and it remains accepted as a correct statement of the law.
In applying Meade's principles, the district court determined that Mignano did not have reason to believe the Position would move to Germany within two to three years, and that no decision had been made regarding the relocation at the time Arboireau was recruited. The court distinguished the case from Meade by stating that Mignano did not provide assurances of job security and lacked knowledge of an impending move.
However, the appellate court found that a rational jury could conclude that Mignano's repeated request for a minimum two-year commitment implied locational stability, which could mislead Arboireau regarding the Position's future in Portland. While Arboireau, as an at-will employee, accepted a role without explicit duration commitments, the context of the recruitment and the representation of the Eugene facility's growth were significant.
Additionally, Arboireau is not required to prove Mignano's awareness of his potential unwillingness to move for less than two years to satisfy the materiality requirement. Under Oregon law, a contingency is material if its disclosure could likely influence the conduct of a reasonable person in a similar position, without needing to establish that the non-disclosure was determinative in the plaintiff's decision-making.
The Arboireaus' decision to accept a position was heavily influenced by their need for locational stability, which was not disclosed to them by Mignano, despite his awareness of its significance. The court determined that the non-disclosure of the potential relocation of the position to Germany met Oregon's materiality standard, as evidenced by previous case law. The district court's requirement for evidence of a completed reorganization plan was deemed overly restrictive; the Appellants had provided sufficient evidence indicating that relocation was highly likely due to ongoing pressure from the Appellees. The court referenced similar cases where nondisclosure of potential changes was actionable, establishing that constant pressure to relocate could satisfy the standard for a likely material contingency. Consequently, the court found that the Appellants' claim of intentional misrepresentation regarding locational stability should be presented to a jury, while upholding the dismissal of their breach-of-contract claim and the misrepresentation of job duration. The case was affirmed in part, reversed in part, and remanded for further proceedings on the intentional misrepresentation claim, with the parties bearing their own costs on appeal.
The determination of whether contract language is ambiguous is reviewed de novo, as established in United States Cellular Inv. Co. v. GTE Mobilnet, Inc. The Appellants seek to challenge the precedent set in Webb v. National Union Fire Insurance Co., which dictates that under Oregon law, parol or extrinsic evidence cannot be considered to assess contract ambiguity, a position derived from Yogman v. Parrott. They reference several Oregon Court of Appeals cases that contradict Webb’s ruling. In diversity cases, the court aims to predict the Oregon Supreme Court's stance on this issue, with intervening Oregon Court of Appeals decisions being relevant. However, since there is no ambiguity in the contract even if extrinsic evidence were considered, the issue need not be revisited.
Arboireau's proficiency in English is highlighted, including over 360 hours of training and a self-assessed "Business" level rating. His claims of cultural ignorance are countered by his demonstrated English skills and inquiries regarding the offer letter. The employment was classified as "at-will," indicating either party could terminate the employment without cause or notice. The summary judgment motion's evidentiary standard is referenced.
The Appellants allege that misrepresentations in visa applications warrant judicial estoppel against the Appellees. However, the court finds no falsehoods in the visa applications, and the Appellants’ interpretation of deposition testimony is misleading. The representations do not fulfill the criteria for judicial estoppel, which requires evidence of knowing misrepresentation or fraud, as outlined in Johnson v. Oregon. Thus, there are no grounds for applying judicial estoppel in this case.
Shorrock Arboireau's termination was executed by his supervisor, not by Mignano, prompting the district court to assert that the Appellants must establish a conspiracy involving Bennet, Shorrock, or Mignano to prove the order of events leading to Arboireau's firing. This conclusion conflicts with Oregon law, which allows a misrepresentation claim when a "likely material contingency" is undisclosed. Under Oregon law, representations can be implied, and fraud is characterized by the communication of a misimpression. Even statements that are literally true may constitute a misrepresentation if they create a false impression. Mignano's repeated requests for a long-term commitment could have suggested locational stability, warranting jury evaluation of any implied representations. The ruling also challenges the district court's finding in Meade that at-will employment negates reliance on pre-employment representations regarding locational stability. Testimony indicated that Arboireau faced pressure regarding his position's location, with a replacement noting significant pressure from the German headquarters for relocation. The evidence could lead a jury to infer that such pressure existed during Arboireau's recruitment and negotiation. While the district court did not extensively analyze all elements of the intentional misrepresentation claim, the record indicates disputed material facts regarding each element, including evidence of the Defendants' intent to quickly persuade Arboireau to accept the position.
