Idaho SC rules against onion-packing plant

Jessica M. Karmasek Aug. 12, 2011, 12:25pm


BOISE, Idaho (Legal Newsline) - The Idaho Supreme Court has upheld a jury verdict in favor of a field man who claimed he was offered a long-term employment contract with an onion-packing plant.

The plant, Four Rivers Packing Co., is located near Weiser, Idaho. In August 1999, Four Rivers' general manager, Randy Smith, suggested that the plant hire Stuart Mackay as its field man. Mackay had been in the onion business for decades and knew many onion farmers in the area.

Four Rivers authorized Smith to offer Mackay the position, but required Smith to personally pay Mackay's wages during his first year.

As field man, Mackay was responsible for purchasing enough onions to keep Four Rivers' packing shed stocked through mid-March, at a price Smith would set.

At issue are the facts regarding Mackay's contract.

Mackay alleges that in March 2000 Smith orally offered him a long-term employment contract. Mackay says he discussed the offer with his wife and accepted it the following day. Mackay says the parties intended the employment contract to continue until he chose to retire, which he claims he informed Smith he might not do for another 10 years.

Smith denies ever having any conversation with Mackay about a long-term employment contract.

During the 1999-2000 season, Smith and Mackay both procured onions for Four Rivers' shed. Mackay was able to purchase onions at prices specified by Smith, and the shed remained stocked until April, with Four Rivers packing a total 800,000 bags of onions that year.

Meanwhile, Four Rivers experienced financial and managerial hardship. As a result of a dispute between the owners, on June 2, 2000 an injunction stopped all Four Rivers' business. Mackay and other employees were laid off.

Mackay alleges that during the time that the injunction remained in effect Four Rivers asked him to keep in contact with farmers to reassure them that Four Rivers would return to normal business and fulfill its existing contracts.

Mackay claims he agreed to do so because he wanted to protect his interest in long-term employment. Four Rivers denies it made any such request.

The injunction was lifted in mid-August 2000. Four Rivers rehired Mackay and relieved Smith of responsibility for paying Mackay's wages.

In subsequent seasons, Mackay experienced difficulty purchasing onions at the prices specified by Smith.

During the 2000-2001 packing season, Four Rivers gave Mackay a contact list for more than 200 onion farmers and instructed him to build more business relationships. Smith contends Mackay failed to do so, and merely maintained his earlier relationships with farmers in the Weiser area.

That season, Four Rivers packed about 400,000 bags of onions.

Witnesses for both Mackay and Four Rivers acknowledged that the injunction in 2000 adversely affected the number of contracts Four Rivers obtained in advance of the 2000-2001 season.

It wasn't until October 2001 that Four Rivers drafted a written employment contract, at Mackay's request. The proposed contract contained an at-will provision that permitted Four Rivers to terminate Mackay's employment upon 14 days notice. Although Mackay made several handwritten notations on the contract, neither party signed the document.

Smith testified that Mackay's performance remained unsatisfactory during the 2001-2002 season. He testified that he met with Mackay twice to explain that if he did not obtain enough onions to meet Four Rivers' needs, everyone at the company would lose their jobs.

After the meetings, Mackay's travel log reflected a decrease in his travel, which Four Rivers contends indicates he failed to meet these expectations. However, Mackay testified that in response to Smith's urgings, he increased his efforts and even worked 36 days straight.

In 2003, Four Rivers once again struggled to keep the onion sheds stocked. As a consequence, the company closed its shed in mid-February, one month earlier than planned.

On March 7, 2003, Four Rivers laid off Mackay, and Mackay obtained unemployment benefits.

Smith testified that in June 2003 Mackay rejected Four Rivers' offer of employment as an outside foreman. Mackay denies Four Rivers made any such offer.

Mackay filed suit in August 2004, alleging breach of contract.

The district court initially granted Four Rivers' motion for summary judgment, holding that because the employment agreement could not be performed by its terms within one year, it violated the statute of frauds. Mackay appealed, and the state's high court vacated the grant of summary judgment, holding there was a genuine issue of material fact as to the duration of the alleged agreement.

The state Supreme Court also held the contract would fall outside the statute of frauds because Mackay could have retired within one year under the terms of the alleged contract.

At trial following remand, Four Rivers contended that the parties had not entered into an employment contract for any specified term. Four Rivers objected to a jury instruction given by the court because it suggested the parties had reached an agreement as to at least some terms of an employment contract. The company also objected to the district court's failure to provide the jury with an instruction on the statute of frauds. The district court overruled Four Rivers' objections.

The jury returned a verdict in favor of Mackay. In its answers to the questions presented in the special verdict form, the jury found that the parties had entered "into a long-term employment contract of up to 10 years, or such time as the plaintiff retired." Four Rivers appealed, challenging the jury instructions and the sufficiency of the evidence.

The Supreme Court, in its July 28 opinion, said the district court properly instructed the jury. Justice Joel D. Horton authored the 16-page opinion.

"Standing alone, the challenged jury instruction made it clear to the jury that there was no contract 'unless all of the essential terms' of such contract were communicated, understood, and accepted by both Four Rivers and Mackay. The instruction plainly conditions the existence of an enforceable contract on the parties' communication and acceptance of all essential terms of a contract," the Court wrote.

"We are unable to agree with Four Rivers' strained construction that this instruction advised the jury that the parties agreed to some, but not all terms of a contract, thereby infringing upon the jury's role as fact-finder."

The Court also determined there is substantial, competent evidence to support the jury verdict.

"Despite conflicting evidence in the record, a reasonable mind could have reached the conclusions reached by the jury. The jury weighed the parties' conflicting evidence, assessed the credibility of the witnesses, and determined Mackay's version of the facts to be more probably true," it wrote.

"Since substantial evidence in the record supports the jury's findings, we decline to second guess the jury's assessment of credibility and the weight to be given to the evidence."

Attorney fees and costs on appeal were awarded to Mackay.

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