Pendleton v. Conoco Inc.

Decision Date26 April 1994
Docket NumberNo. 93-8012,93-8012
Citation23 F.3d 281
Parties9 Indiv.Empl.Rts.Cas. (BNA) 822 Dudley PENDLETON and Thomas R. Allen, Plaintiffs-Appellees, v. CONOCO INC., Defendant-Appellant.
CourtU.S. Court of Appeals — Tenth Circuit

Frank D. Neville, Scott E. Ortiz and Richard L. Williams of Williams, Porter, Day & Neville, P.C., Casper, WY, for defendant-appellant.

Harold F. Buck of Buck Law Offices, Cheyenne, WY, for plaintiffs-appellees.

Before ANDERSON, Circuit Judge and McWILLIAMS, Senior Circuit Judge and SHADUR, Senior District Judge. *

SHADUR, Senior District Judge.

Thomas R. Allen ("Allen") and Dudley Pendleton ("Pendleton") have sued their former employer Conoco, Inc. ("Conoco"), each asserting that he was wrongfully terminated in breach of his employment contract and seeking lost wages and other consequential damages. After a jury found in favor of both ex-employees, Conoco brought this appeal. It asserts several reasons that the district court should have granted its motions for a directed verdict. 1 We affirm the decision below as to Pendleton and reverse as to Allen.

Factual Background

For a number of years before Conoco entered the scene, both Allen and Pendleton had been employed by Truck Terminals, Inc. ("Truck Terminals"), a company engaged in Conoco bought a number of the Truck Terminals truck stops in December 1989. Shortly after that purchase Conoco District Manager Dan Fleck ("Fleck") called a meeting of all former Truck Terminal employees at which he explained that although Conoco was under no obligation to do so under the express terms of the purchase agreement, it had elected (in accordance with its customary policy) to treat all employees as if they had always worked for Conoco in terms of their seniority and previous positions. Accordingly Pendleton stayed on as shift foreman and Allen retained his post as manager of the facility, subordinate to District Manager Fleck.

the business of owning and operating truck stops in Cheyenne, Wyoming. Allen, whose tenure with Truck Terminals dated back to 1959, had risen to the position of retail manager charged with overseeing three of the company's truck stops. Pendleton worked at one of those facilities beginning in 1985, first as an island attendant and then later as a shift foreman reporting to Allen.

Thomas Allen

Allen's relationship with Conoco enjoyed only a brief honeymoon. Conoco's management approach was very different from that of its predecessor, and Allen testified that he grew increasingly disenchanted with what he considered to be an oppressive load of paperwork requirements. As a result Allen was counseled repeatedly by his superior Fleck for failing to comply with Conoco's procedures: He was censured for poor performance first on February 14, 1990 and then on March 13, March 21 and April 4, and he signed off on several written counseling forms. At the April 4 meeting Allen was placed on 30-day probation pending "tremendous improvements" (Conoco App. 198). Although he was counseled by Fleck yet again on April 26, Allen weathered that probationary period.

Within a few months, however, problems erupted again--on September 28 Allen was again reprimanded in writing for numerous violations of company policies. And once again he was placed on a short-term probation, this one originally set to expire October 15 (when his continued noncompliance then led Conoco to extend the period until October 31). By their terms the written probation documents told Allen that failure to shape up could cost him his job. Finally on December 12 a group of Conoco executives higher up in the chain of command decided that termination was indeed warranted, and Allen was fired. 2

About three weeks after Conoco let him go, Allen landed a new job with HRM Enterprises ("HRM"), a competing truck stop operator in Cheyenne. Though his new annual salary of $35,000 was somewhat below the $36,960 he had been earning with Conoco, his testimony at trial reflected that he was required to work fewer hours (Vol. II at 165-66, Conoco App. 103-04 3). Allen began his employment with HRM on January 7, but less than three weeks later (on January 25) he suffered a heart attack that kept him away from his new job until February 25, when he was able to return to work in a limited capacity. On his doctor's orders Allen reduced his working hours, but although his new employer evidently attempted to accommodate him he was eventually fired on May 15. As Appellees' Br. 7 admits, "the reason for his terminated [sic] from HRM Enterprises was that 'I could not put in the hours required to do the job.' "

Dudley Pendleton

Pendleton's stint with Conoco came to a much more abrupt end. After a March 1990 audit had revealed a $4,000 discrepancy in the truck stop's inventory, Conoco sent Terry Beene ("Beene"), a representative from its From the jury's verdict in Pendleton's favor, it is plain that it credited his version. In any event the litigants agree that Pendleton said this during the course of the meeting (Vol. I at 128, Conoco App. 38 [Fleck's testimony]; Vol. I at 207, Conoco App. 62 [Pendleton's testimony]:

Security Department, from Houston to Cheyenne to investigate. On March 27 Beene convened a meeting with Pendleton and Fleck, and Conoco concedes that Pendleton was able to explain to everyone's satisfaction that there was no impropriety involved in the cash register deficit. Accounts of what then happened at the meeting vary widely. Conoco claims that Pendleton lost his temper without any reasonable provocation and proceeded to heap verbal abuse on the other two. For his part Pendleton agrees that a "heated discussion" took place, but the way Appellees' Br. 6 summarizes the episode, "Beene tried to incite Pendleton to get mad and thus give the employer a basis to terminate him."

When I get back from my vacation, I'm giving you my two-weeks' notice.

Here is Pendleton's account of what happened next (id.)--an account that the jury was of course entitled to credit:

And Dan jumped run over to where I was. He was surprised. He was surprised. It caught him by surprise. He went to protest, and Mr.--

Q. Beene?

A. Mr. Beene grabbed Dan by his arm and told him, Dan, to be quiet. And he said, "So you just quit?" I said, "No, I didn't quit. I said I'm going on my two-weeks' vacation. I have it already scheduled. When I come back I will give you my two-weeks' notice." Mr. Beene started all over again like he had earlier. He said, "You just quit." I said, "No, I didn't." And this went on for some time. And I told Mr. Beene I did not quit. And finally I asked him, "Can I go home?" When he told me yes, I just left. I needed to get some sleep. I had to [be] back in about four or five hours.

Pendleton then left the meeting. Beene called Conoco's corporate headquarters in Houston, after which he made the decision to accept what he contended was Pendleton's resignation on the spot. When Pendleton returned to the truck stop for his next shift later that day, Beene told him that the company had chosen to waive the two-week notice period and wanted him out without further delay. Though Pendleton continued to maintain that he had not in fact resigned, he had no choice other than to leave (Vol. I at 208-11, Conoco App. 63-65).

Proceedings Below

Allen and Pendleton sued Conoco 4 for the alleged breach of their respective employment contracts. Their case went to trial before a jury in Cheyenne in early January 1993. At the close of plaintiffs' case Conoco moved for a directed verdict as to Allen on four grounds, asserting:

1. Allen was an employee at will as a matter of law.

2. Allen suffered no damages or, alternatively, his damages should have been offset by the amount that he could have earned had he been able to continue with HRM.

3. Allen was terminated by Conoco for cause as a matter of law.

4. Promissory estoppel is not a viable basis for an action under Wyoming law.

As to Pendleton, Conoco advanced only the single contention that Pendleton had voluntarily resigned. Conoco's motion was denied by the district court in its entirety, as was a similar motion renewed by Conoco at the conclusion of all of the evidence. 5

At the end of the four-day trial the jury returned a verdict in favor of both ex-employees.

Judgment was entered on January 12 awarding Allen $149,583 and Pendleton $59,180 in damages. Conoco then filed this appeal.

Was Allen an Employee at Will?

When he went to work for Conoco, Allen was given a copy of Conoco's Employee Manual. It contained these provisions (for our purposes "Kayo Oil Company" means Conoco):

PERSONNEL POLICIES

AND PROCEDURES

Termination

Purpose

To provide guidelines for handling terminations under various circumstances.

General

It is the policy of Kayo Oil Company to terminate any employee at any time when it is evident that his or her performance does not meet acceptable standards or when it is clear that no work is available for the individual. However, it is important to the Company and to the employee that all terminations be handled equitably to protect both the employee and the Company.

Policy

A. Voluntary Terminations. Store employees who resign are expected to give the Company the maximum possible notice--normally, advance notice should be a minimum of two weeks.

B. Involuntary Terminations. All involuntary terminations (termination for cause, i.e., shortage, violation of policy, etc.) must be reviewed in advance and must have the concurrence of the District Manager and/or Group Manager. All involuntary terminations of store employees with more than one year of service must have the additional approval of the Area Manager. All involuntary terminations of store employee [sic] with more than three years of service must have the additional approval of the Division Manager. All involuntary terminations of store employees with more than ten years of service must have the additional approval of the Vice President-Operations.

At the time he...

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