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E.I. DuPont de Nemours & Co. v. Pressman

Supreme Court of Delaware

January 30, 1996, Submitted ; May 2, 1996, Decided

No. 35, 1995

Opinion

 [*437]  VEASEY, Chief Justice:

In this appeal, we consider [**2]  the scope of the employment-at-will doctrine (the "Doctrine") and the correlative application of the implied duty or covenant of good faith and fair dealing (the "Covenant") as a limitation on the Doctrine. We conclude that the scope of the Doctrine is broad. The Covenant is applicable here, but its scope is narrower than that articulated by the trial court. We reverse the judgment of the Superior Court on the ground that the jury instructions erroneously overstated the Covenant, and we direct that a new trial be ordered consistent with this Opinion.

The Doctrine generally permits the dismissal of employees without cause and regardless of motive. Nevertheless, we hold that the Covenant permits a cause of action against an employer for the deceitful acts of its agent in manufacturing materially false grounds to cause an employee's dismissal.  [*438]  Our holding here reinforces and reaffirms the breadth of the Doctrine and the narrow and carefully crafted nature of the Covenant.

We also hold that punitive damages and damages for emotional distress are not available to remedy the breach of an employment contract absent possible circumstances not present here. Additionally, we hold that the [**3]  Superior Court did not abuse its discretion in ruling on certain evidentiary matters raised by both parties. Accordingly, we AFFIRM IN PART; REVERSE IN PART; and REMAND with instructions to order a new trial consistent with this Opinion.

I. Procedural Posture

E.I. DuPont de Nemours and Company ("DuPont"), defendant below, appeals from a judgment entered upon a jury verdict in favor of Norman J. Pressman ("Pressman"). 2 The jury verdict for Pressman, which was based on his claim that DuPont breached the Covenant, awarded Pressman $ 422,700 in compensatory damages for lost wages. The jury also awarded Pressman $ 25,000 for emotional distress and interest, and $ 75,000 in punitive damages on the breach of the Covenant claim.

 The jury rendered a verdict for DuPont on a claim for breach of an implied-in-fact contract requiring good cause for a termination of employment and for David Pensak ("Pensak"),  [**4]  Pressman's former supervisor, on a claim for defamation. Claims against DuPont for defamation and negligent evaluation were dismissed prior to trial. 3

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679 A.2d 436 *; 1996 Del. LEXIS 179 **; 11 I.E.R. Cas. (BNA) 1643; 132 Lab. Cas. (CCH) P58,138; 31 U.C.C. Rep. Serv. 2d (Callaghan) 680

E.I. DUPONT DE NEMOURS AND COMPANY, a Delaware Corporation, and DAVID A. PENSAK, Defendants Below, Appellants/Cross-Appellees, v. NORMAN J. PRESSMAN, Plaintiff Below, Appellee/Cross-Appellant.

Subsequent History:  [**1]  July 10, 1996, Revised.

Released For Publication July 12, 1996. Rehearing Denied July 10, 1996.

As Corrected September 13, 1996.

Prior History: Court Below: Superior Court of the State of Delaware in and for New Castle County. C.A. No. 90C-JL-6. Upon appeal from Superior Court.

Disposition: AFFIRMED IN PART; REVERSED IN PART; and REMANDED.

CORE TERMS

Covenant, termination, punitive damages, at-will, good faith, insured, bad faith, Contracts, fair dealing, breach of contract, damages, employment contract, employees, breached, remedies, maliciously, deceit, employment relationship, duty of good faith, trial court, parties, public policy, misrepresentation, cases, costs, emotional distress damages, termination of employment, breach of covenant, emotional distress, insurance contract

Civil Procedure, Standards of Review, Plain Error, General Overview, Criminal Law & Procedure, Definition of Plain Error, Jury Trials, Jury Instructions, Objections, Reviewability, Preservation for Review, Failure to Object, Harmless & Invited Errors, Jury Instructions, Harmless & Invited Error, Trials, Judgment as Matter of Law, Invited Errors Doctrine, Business & Corporate Compliance, Contracts Law, Types of Contracts, Covenants, Labor & Employment Law, Employment Relationships, At Will Employment, Duration of Employment, Contracts Law, Affirmative Defenses, Fraud & Misrepresentation, Contract Interpretation, Good Faith & Fair Dealing, Wrongful Termination, Breach of Contract, Exceptions, Tort Exceptions, Public Policy Violations, Fiduciary Responsibilities, Commercial Law (UCC), General Provisions (Article 1), Application & Construction, Remedies, Torts, Intentional Torts, Intentional Infliction of Emotional Distress, Elements, Measurement of Damages, Foreseeable Damages, Breach, Sales of Goods, Damages, Punitive Damages, Types of Damages, Specific Performance, Compensatory Damages, Breach of Contract Actions, Subject Matter, Definitions, General Provisions, Damages, Contract Provisions, Implied Covenant of Good Faith, Definitions & Interpretation, Sales (Article 2), Interest, Insurance Law, Punitive Damages, Evil & Malicious Intent, Aggravating Circumstances, Seller's Damages & Remedies, Limitation & Modification, Contract Formation, Consideration, Mutual Obligations, Buyer's Damages & Remedies, Contract Formation, Business Torts, Bad Faith Breach of Contract, Remedies, Employment Contracts, Claim, Contract & Practice Issues, Jurisdictional Amounts, Breaches, Evidence, Admissibility, Conduct Evidence, Prior Acts, Crimes & Wrongs, Standards of Performance, Discharge & Termination, Implied Contracts, For Cause Standard