THOMAS R. McCONE & others [Note 1] VS. NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY.

LIACOS, J. The plaintiffs appeal from a judgment of a Superior Court judge allowing the defendant's motion to dismiss the complaint for failure to state a claim upon which relief can be granted. Mass. R. Civ. P. 12 (b) (6), 365 Mass. 754 (1974). [Note 2] We transferred the appeal to this court on our own motion. The plaintiffs argue that the complaint should not have been dismissed because it alleged facts sufficient to support three claims: breach of the implied covenant of good faith and fair dealing in an employment-at-will contract; defamation; and deceit. [Note 3] We affirm.

Under Mass. R. Civ. P. 12 (b) (6), the "accepted rule" is that "a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Nader v. Citron, 372 Mass. 96, 98 (1977), quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Moreover, "the allegations of the complaint, as well as such inferences as may be drawn therefrom in the plaintiff's favor, are to be taken as true." Nader v. Citron, supra.

Taking the plaintiffs' allegations as true, the following events occurred. The plaintiffs are six nonunion, management employees of the defendant, New England Telephone and Telegraph Company (company). [Note 4] When the plaintiffs were employed, the

Page 233

company promised to evaluate the plaintiffs' job performance and promotability solely on the basis of merit. At some point after the plaintiffs began their employment, the company instituted a policy requiring employee evaluations to conform to a statistically determined distribution curve (Bell Curve). Once the Bell Curve was instituted, the plaintiffs all received poor evaluations. [Note 5] These poor evaluations did not reflect the merit of the plaintiffs' actual performances. Rather, the plaintiffs received low ratings to satisfy the demand of the Bell Curve that a predetermined percentage of employees receive low ratings. In sum, the plaintiffs claim that use of the Bell Curve resulted in "arbitrary, distorted, bad faith, and non-merit related" evaluations of the plaintiffs' job performances. Due to these poor evaluations, the plaintiffs were either denied promotions or unjustly demoted. All of the plaintiffs suffered the loss of salary increases and corresponding pension benefits which they would have received had they been evaluated in good faith. The plaintiffs also suffered damage to their professional reputations, disruption of their personal lives, and great pain of body and mind.

1. Breach of the implied covenant of good faith and fair dealing. The plaintiffs argue that they have alleged facts sufficient to make a claim that the company is liable to them for breach of the implied covenant of good faith and fair dealing in the employment-at-will contracts. See Fortune v. National Cash Register Co., 373 Mass. 96 (1977) [Note 6] We do not agree. Even if we assume that the company's use of the Bell Curve resulted in arbitrary, bad faith performance evaluations; that the company's bad faith actions led to the employees' constructive termination; [Note 7] and, further, that constructive, rather than actual,

Page 234

termination would suffice under the Fortune rule, the plaintiffs' allegations nonetheless fall short of stating a claim. Cf. Kravetz v. Merchants Distribs., Inc., 387 Mass. 457, 462 (1982). The plaintiffs have alleged no damages which they would be entitled to recover under a theory of breach of an implied covenant of good faith and fair dealing.

They assert that the loss of salary increases and corresponding pension benefits constitutes a compensable loss. [Note 8] In awarding damages for breach of the implied covenant of good faith and fair dealing, "[o]ur goal is and has been simply to deny to [the employer] any readily definable, financial windfall resulting from the denial to [the employee] of compensation for past services." Gram v. Liberty Mut. Ins. Co., 391 Mass. 333, 335 (1984) (Gram II). Thus, in Fortune v. National Cash Register Co., supra, the plaintiff recovered commissions for sales he had already made; in Gram v. Liberty Mut. Ins. Co., 384 Mass. 659 (1981) (Gram I), and in Gram II, supra, the plaintiff was entitled to recover renewal commissions on policies he had already sold; and in Maddaloni v. Western Mass. Bus Lines, Inc., 386 Mass. 877 (1982), the plaintiff recovered commissions due him for his past service to the defendant employer (helping to obtain interstate charter rights). In each of these cases the plaintiffs recovered commissions they had already earned.

The plaintiffs' argument seems to be that since the decision whether to promote them was based on an evaluation of their past performances, they had "earned" promotion (and its attendant increase in salary and pension benefits) by work performed

Page 235

in the past. This argument ignores the impact of our recent decision in Gram II. There we held that, while the employee could recover renewal commissions on past sales because they constituted an "identifiable, future benefit . . . reflective of past services," Gram II, supra at 334, quoting Gram I, supra at 673, he could not recover "career credits" because they constituted "future compensation for future services." Gram II, supra at 334. This was so even though the number of career credits the employee would have received was based on the length of his past service to the employer. Because the career credits were not specifically related to a particular past service, we held them not "reflective of past services.'" Id. at 334 & n.1. Thus, the plaintiffs' argument that they earned their salary increases and increased pension payments through past work performance simply does not survive our decision in Gram II. [Note 9]

2. Defamation. The plaintiffs also argue that they alleged facts sufficient to state a claim of defamation. In their brief, they claim that the poor evaluations were defamatory and that these evaluations "were published to at least one superior." These allegations do not support a claim of defamation. "An employer has a conditional privilege to disclose defamatory information concerning an employee when the publication is reasonably necessary to serve the employer's legitimate interest in the fitness of an employee to perform his or her job." Bratt v. International Business Machs. Corp., 392 Mass. 508, 509 (1984). See Sheehan v. Tobin, 326 Mass. 185, 190-191 (1950), quoting W. Prosser, Torts Section 94, at 837 (1941) (conditional privilege exists when publisher and recipient have a "common interest" and when "the communication is . . . reasonably calculated to protect or further it"). Here the plaintiffs allege that their immediate supervisors communicated the defamatory material to the department head, in accordance with the company's stated policy of conducting employee evaluations. Such communication clearly serves "the employer's legitimate interest,"

Page 236

Bratt, supra, and is conditionally privileged. An employer can lose a conditional privilege through "unnecessary, unreasonable or excessive publication" on proof that the defendant acted "recklessly." Bratt, supra at 515, 516. Even if we assume that the immediate supervisor communicated the plaintiffs' poor evaluations to someone other than the department head, the plaintiffs have alleged no facts at all to prove that such publication was made recklessly. Thus, the plaintiffs have failed to state a claim of defamation because they have alleged nothing to overcome the company's conditional privilege.

3. Deceit. Finally, the plaintiffs contend that their complaint set out an actionable claim of deceit. We decline to consider this point, however. On appeal the plaintiffs simply state, in a cursory and conclusory fashion, that their complaint below made out a claim of deceit. They cite no legal authority to support their claim. This is "an insufficient appellate argument." Tobin v. Commissioner of Banks, 377 Mass. 909, 909 (1979). Mass. R. A. P. 16 (a) (4). See, e.g., Commonwealth v. Elder, 389 Mass. 743, 747 n.9 (1983).

We conclude that the judge properly dismissed the plaintiffs' complaint for failure to state a claim under which relief can be granted.

Judgment affirmed.