The Massachusetts Supreme Judicial Court has held that there is no implied contract based on the terms of a personnel manual where: (1) the employer retained the right to unilaterally modify terms; (2) the terms of the manual were not negotiated; (3) the manual stated that it provided only guidance regarding the employer's policies; (4) no term of employment was specified in the manual; and (5) the employee did not sign the manual to manifest assent. Jackson v. Action for Boston Cmty. Dev., Inc., 525 N.E.2d 411, 415-16 (Mass. 1988). There is no "rigid list of prerequisites, but rather . . . factors that would make a difference or might make a difference in deciding whether the terms of a personnel manual were at least impliedly part of an employment contract." O'Brien, 664 N.E.2d at 847; see also LeMaitre v. Mass. Tpk. Auth., 897 N.E.2d 1218, 1218-19 (Mass. 2008) (finding enforceable an incentive program
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described in employee handbook and clarifying that the case did not raise claim that handbook modified at-will status of a dismissed employee).
Day's characterization of the Code of Ethics as a contract ignores the express contrary language in the documents accompanying the Code. Day's initial offer explicitly stated, "[t]his letter, along with the enclosures [including the Code of Ethics], contains our complete offer of employment and in no way changes your status as an at-will employee." Further, the Associate Handbook Acknowledgment Form, contained within the Staples Associate Handbook, states (in all capital letters): "I also understand that this handbook is not a contract of employment, and that employment with Staples is on an at-will basis." The Associate Handbook also contains a notification that the first 90 days of an associate's employment are considered the introductory period, and that "[s]ince employment is at the will of the company and of the associate, completion of the introductory period is not a guarantee or a right to continued employment." These statements make clear that the Code and benefits provided in the Handbook did not alter Day's at-will employment status.
Given these disclaimers, the absence of any negotiation over the terms, and the absence of any specified term of employment, Day could not "reasonably have believed that the 'employment manuals he . . . was given constituted the terms or conditions of
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employment, equally binding on employee and employer.'" Hinchey, 144 F.3d at 141 (quoting Derrig v. Wal-Mart Stores, Inc., 942 F. Supp. 49, 55 (D. Mass. 1996)).
B. Wrongful Termination Claim Based on Public Policy Exception to Massachusetts's Doctrine of At-Will Employment
Lastly, Day argues that Staples's violation of § 1514A provides him with a basis for a wrongful discharge claim pursuant to the public policy exception to Massachusetts's employment-at-will doctrine. He further relies on Massachusetts case law giving protection to whistleblowers under state law. See, e.g., Mello v. Stop & Shop Cos., 524 N.E.2d 105, 108 n.6 (Mass. 1988).
Massachusetts courts recognize an exception to the general at-will employment rule "when employment is terminated contrary to a well-defined public policy." Wright v. Shriners Hosp. for Crippled Children, 589 N.E.2d 1241, 1244 (Mass. 1992). Under this doctrine, employees may seek redress if they "are terminated for asserting a legally guaranteed right (e.g., filing workers' compensation claim), for doing what the law requires (e.g., serving on a jury), or for refusing to do that which the law forbids (e.g., committing perjury)." Smith-Pfeffer v. Superintendent of the Walter E. Fernald State Sch., 533 N.E.2d 1368, 1371 (Mass. 1989). This public policy exception is construed narrowly. King v. Driscoll, 638 N.E.2d 488, 492 (Mass. 1994).
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Day does not have a claim for wrongful termination under Massachusetts common law. In passing SOX, Congress aimed to create comprehensive legislation to fill the gaps in a patchwork of state laws governing corporate fraud and protections for whistleblowers. It would be entirely inappropriate for plaintiff to be able to use a federal statute designed to address the inadequacies of state law to create a new common law cause of action under Massachusetts law. Nor does Day meet the requirements of existing state law. The Massachusetts public policy exception for whistleblowing does not protect "an employee's internal complaint about company policies." Shea v. Emmanuel Coll., 682 N.E.2d 1348, 1350 (Mass. 1997).
V.
The district court's grant of summary judgment to Staples is affirmed.
[ENDNOTES]
* Of the District of Puerto Rico, sitting by designation.
1 Day was told that Staples policy mandated that before issuing a credit to a customer, Staples required two pieces of supporting documentation: a return authorization form indicating the item had been picked up from a customer and a pallet manifest showing the item was on the pallet on its way back to Staples's warehouse.
2 Day also filed a complaint against Staples in state court, but withdrew the action before the court reached a decision on Staples's motion for summary judgment.
3 Day does not appeal from the district court's entry of summary judgment on his state law promissory estoppel claim.
4 The Secretary of Labor has delegated responsibility for receiving and investigating whistleblower complaints to OSHA, an agency within the DOL. See Carnero,433 F.3d at 3, n.1; Delegation of Authority and Assignment of Responsibility to the Assistant Secretary for Occupational Safety and Health, 67 Fed. Reg. 65,008, 65,008 (Oct. 22, 2002); see 29 C.F.R. § 1980.103(c).
5 If the Secretary of Labor has not issued a final decision within 180 days of the filing of the complaint and there is no showing that such delay is due to the bad faith of the claimant, the claimant may file suit for de novo review in the appropriate federal district court, which will have jurisdiction over such action regardless of the amount in controversy. 18 U.S.C. § 1514A(b)(1)(B).
6 This prima facie case under SOX is not identical to that under Title VII and McDonnell Douglas, which requires the plaintiff to show (1) he is a member of a protected class; (2) he was qualified for the job; (3) the employer took an adverse employment action; and (4) the position remained open or was filled by a person with similar qualifications. See St. Mary's Honor Ctr. v. Hicks, 509 U.S. 502, 506 (1993). Indeed, the SOX burden may be more difficult to meet because an inference does not arise automatically if the four criteria are met, but only when the circumstances are sufficient to raise an inference and because the employee must show that he engaged in the protected activity.
7 Chevron deference is appropriate when it appears from the "statutory circumstances that Congress would expect the agency to be able to speak with the force of law." United States v. Mead Corp., 533 U.S. 218, 229 (2001); see also Rucker v. Lee Holding Co., 471 F.3d 6, 11-12 (1st Cir. 2006). The Supreme Court has instructed that "Congress['s] contemplat[ion] [of] administrative action with the effect of law [can be assumed] when it provides for a relatively formal administrative procedure" such as formal adjudication. Mead, 533 U.S. at 230 & n.12. Congress explicitly delegated to the Secretary of Labor authority to enforce § 1514A by formal adjudication, see 18 U.S.C. § 1514A(b)(1)(A), and the Secretary has delegated her enforcement authority to the ARB, see Delegation of Authority and Assignment of Responsibility to the Administrative Review Board, 67 Fed. Reg. 64,272 (Oct. 17, 2002).
8 See Welch, 536 F.3d at 275 (holding that an employee had to show both a subjective belief and an objectively reasonable belief that the conduct he complained of constituted a violation of relevant law); Livingston v. Wyeth, Inc., 520 F.3d 344, 352 (4th Cir. 2008); Allen, 514 F.3d at 477; Melendez, ARB No. 96-051 (July 14, 2000), available at http://www.oalj.dol.gov/PUBLIC/ WHISTLEBLOWER/DECISIONS/ARB_DECISIONS/ERA/93ERA06E.HTM.
9 The legislative history states that Congress "intended to impose the normal reasonable person standard used and interpreted in a wide variety of legal contexts . . . ." S. Rep. No. 107-146, at 19. It also states that "[t]he threshold is intended to include all good faith and reasonable reporting of fraud, and there should be no presumption that reporting is otherwise, absent specific evidence." 148 Cong. Rec. 57420 (daily ed. July 26, 2002) (statement of Sen. Leahy).
10 We consider the district court's concern about the plaintiff's particular educational background and sophistication to be relevant to the subjective component. Subjective reasonableness requires that the employee "actually believed the conduct complained of constituted a violation of pertinent law." Welch, 536 F.3d at 277 n.4.
11 In comments to the final regulations implementing the whistleblower provision, DOL stated it:
[B]elieve[d] that it would be overly restrictive to require a complaint to include detailed analyses when the purpose of the complaint is to trigger an investigation to determine whether evidence of discrimination exists . . . . Although the [SOX] complainant often is highly educated, not all employees have the sophistication or legal expertise to specifically aver the elements of a prima facie case and/or supply evidence in support thereof.
Procedures for the Handling of Discrimination Complaints Under the Sarbanes-Oxley Act, 69 Fed. Reg. 163, 52106 (Aug. 24, 2004).
12 Day specifically theorizes that all three practices "violated the Act's enumerated laws," without citing a specific statue or SEC regulation. Although he has waived the argument on appeal, with respect to the use of log notes in issuing credits to contract customers, he also alleges a violation of the Foreign Corrupt Practices Act's ("FCPA") requirement that publicly traded companies "make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer." 15 U.S.C. § 78m(b)(2)(A). This claim is subject to the same infirmities as his other claims, as explained later.
13 This is true of the two claims about the company's practices that benefit Staples customers or couriers to the possible detriment of the company's bottom line.
14 The brief also makes an unspecified reference to SEC regulations; without more, the argument is waived.
15 Day's citation to the FCPA does not help him. Even assuming arguendo that the FCPA falls within the scope of § 1514A, but see Diamond, Case No. 2006-SOX-00044, 2007 DOLSOX LEXIS 97, at *15-16 (2007) (questioning whether FCPA sufficiently relates to fraud against shareholders within the meaning of § 1514A), Day's argument that Staples inaccurately "report[ed] increased revenues" is itself inaccurate in two ways: first, his criticism about the practice attacks the fairness, rather than the accuracy per se of Staples's calculation of its total revenues; second, Day's claim is unreasonable in light of the business reasons Staples articulated for adopting its policies.
16 This provision states, "Staples will not tolerate retaliation against anyone who in good faith reports a violation or potential violation of this Code."
17 Day cites Noonan v. Staples, Inc., 539 F.3d 1 (1st Cir. 2008), for the proposition that this court has previously treated the Code as a binding contract, and that Staples cannot fire Noonan for a violation of the Code in one case while arguing that Day lacks a reasonable belief in shareholder fraud. Day's reliance is misplaced. Noonan examined the Code in the context of a claim for breach of a severance agreement where the terms of the severance agreement stated that Staples could rely on a violation of the Code to establish cause for termination. See id. at 14. Noonan has no bearing on Day's case.