Hart v. Seven Resorts Inc.

• Court: Arizona Court of Appeals
• Writing for the Court: THOMPSON
• Citation: Hart v. Seven Resorts Inc., 947 P.2d 846, 190 Ariz. 272 (Ariz. App. 1997)
• Decision Date: 01 May 1997
• Docket Number: No. 1,CA-CV,1
• Parties: 12 IER Cases 1411, 242 Ariz. Adv. Rep. 26 Dora HART, Dale Hart and Jeff Ernst, Plaintiffs-Appellants Cross Appellees, v. SEVEN RESORTS INC., a Nevada Corporation dba Temple Bar Resort, Defendant-Appellee, Cross Appellant. 96-0187.

Page 846

947 P.2d 846

12 IER Cases 1411, 242 Ariz. Adv. Rep. 26

Dora HART, Dale Hart and Jeff Ernst, Plaintiffs-Appellants Cross Appellees, v. SEVEN RESORTS INC., a Nevada Corporation dba Temple Bar Resort, Defendant-Appellee, Cross Appellant.

No. 1 CA-CV 96-0187.

Court of Appeals of Arizona Division 1, Department C.

May 1, 1997.

Review Granted Dec. 16, 1997.

Brynne VanHettinga, Kingman, for Plaintiffs-Appellants Cross Appellees.

Gurtler, Kelley & Moyer by Kenneth E. Moyer, Bullhead City, for Defendant-Appellee Cross Appellant.

THOMPSON, Presiding Judge.

Plaintiffs (appellants) appeal from summary judgment for wrongful termination, breach of contract, breach of the covenant of good faith and fair dealing, promissory estoppel invasion of privacy, intentional infliction of emotional distress, and false imprisonment by their former employer. Employer-appellee (Temple Bar) cross-appeals from the denial of attorneys' fees under Ariz.Rev.Stat.Ann. (A.R.S.) § 12-341.01(A). We affirm summary judgment on all wrongful termination counts and conclude that Arizona's constitutional provision guaranteeing the right to privacy does not support a public policy claim for wrongful termination. We remand on the appropriateness of an award of attorneys' fees in the trial court.

FACTS AND PROCEDURAL HISTORY ¹

Appellants, three former at-will employees of Temple Bar, were terminated after refusing to take drug tests. At the time of their termination, appellants were working at the Temple Bar resort in the high desert of northwestern Arizona on Lake Mead. The nearest large metropolitan area is Las Vegas, Nevada, a drive of approximately one to two hours from Temple Bar. Because of the remote location, the Temple Bar employees live in low cost housing on company property.

All Temple Bar employees are provided a Personnel Policy Manual (the manual) stating that employment relationships are at-will and terminable by either party "with or without cause or advance notice, at any time." The manual further states Temple Bar's policy (drug policy) prohibiting the use, possession, sale or distribution of any illegal drugs by employees while on company property. The manual provides that the use, possession, sale or distribution of illegal drugs "shall result in immediate termination...."

The drug policy announced in the manual specifies when employees are subject to drug testing. ² Appellant Ernst signed a form acknowledging that he received a copy of the manual; the Harts signed a form acknowledging that they were expected to read, understand and adhere to the manual's provisions.

In addition to the drug policy announced in the manual, Temple Bar issued a "Drug Free Workplace Policy Statement and Employee Agreement" (drug-free agreement) to its employees in March 1993. Under the drug-free agreement, general managers could ask an employee to take a drug test "at any time." Violation of the testing policy or a failure to cooperate fully with a request for a test could result in disciplinary action, including termination. Again, appellants each signed the drug-free agreement acknowledging that they had read, understood and agreed to the policy. ³

On February 24, 1994, Robert Clark (Clark), Temple Bar's Vice President of Operations, received a call from an employee. Clark was told that this employee, B.K., and four other employees had recently used drugs at Jeff Ernst's Temple Bar residence. ⁴ Clark was told that B.K. and appellants had discussed ways to defeat drug tests, including a substance that could be mixed with water to produce a "false negative" on a drug test. Clark was told that appellants had this substance available to them in their Temple Bar residences.

The next morning Vice President Clark contacted the lab Temple Bar used to conduct drug tests to inquire whether a substance existed which could produce a false negative. Clark was told that a false negative was possible and that employees should be required to submit to testing without the opportunity to drink anything first.

Clark then contacted Eddie Tomba (Tomba), Temple Bar's general manager, to have the four employees named by B.K. tested for drugs. On the morning of February 25, 1994, Tomba gathered up the four employees in a company van. T.M., who was picked up first, was told by Tomba that he was being taken for drug testing. T.M. knew that Temple Bar's drug testing was done in Las Vegas. Dale Hart was then picked up at work during his shift. Dora Hart was picked up at her company-owned residence and Ernst was picked up in a restaurant located on company property.

Tomba asserts he informed each employee, prior to their getting into the van, that they were being taken for drug testing. Appellants each admit voluntarily entering the van, but deny that Tomba told them they were going for drug tests until approximately ten minutes into the trip.

Tomba left Temple Bar with the four employees and headed for the test site in Las Vegas. On the main road to Las Vegas appellants informed Tomba that they refused to submit to drug testing and specifically asked Tomba to let them out at the Gold Strike Casino. ⁵ Tomba advised appellants that a refusal to submit to testing would result in termination. Tomba then stopped at the Gold Strike Casino, approximately 30 miles from the test site, and appellants exited the van. Subsequently, appellants were terminated and paid for the time spent traveling to the test site.

Appellants later filed a complaint against Temple Bar asserting causes of action for wrongful termination, breach of contract and promissory estoppel, breach of the covenant of good faith and fair dealing, intentional infliction of emotional distress, invasion of privacy, and false imprisonment. After discovery, Temple Bar filed a motion for summary judgment. Appellants filed a response without a separate statement of facts. The court granted summary judgment on all counts. ⁶ Appellants timely appealed.

The court denied Temple Bar's motion for attorneys' fees under A.R.S. § 12-341.01(A) and Temple Bar cross-appeals the denial of its attorneys' fees. We have jurisdiction over this appeal pursuant to A.R.S. § 12-2101(B).

DISCUSSION

I. Wrongful Termination and the Constitutional Right to Privacy

In an at-will employment situation, either the employer or employee may terminate the contract at any time for good cause or for no cause. Wagenseller v. Scottsdale Memorial Hosp., 147 Ariz. 370, 378, 710 P.2d 1025, 1033 (1985) (reversing summary judgment against at-will employee who alleged she was fired, against public policy, for refusing to participate in arguably criminal conduct of "mooning"). Employers "may not fire for bad cause--that which violates public policy." Wagenseller, 147 Ariz. at 378, 710 P.2d at 1033. Public policy springs from constitutional, statutory, and common law. Id. at 378-79, 710 P.2d at 1033-34. ⁷

Appellants assert that they were fired in violation of public policy arising from Arizona's constitutional right to privacy (right to privacy) for their failure to submit to drug testing. ⁸ We cannot find that Arizona's constitutional right to privacy provides the requisite public policy to support a wrongful termination suit against a private employer.

This court previously rejected a similar claim against a private party in Cluff v. Farmers Ins. Exch., 10 Ariz.App. 560, 460 P.2d 666 (1969), overruled by Godbehere v. Phoenix Newspapers, Inc., 162 Ariz. 335, 783 P.2d 781 (1989). ⁹ In Cluff, one of plaintiff's allegations was that her constitutional right to privacy was violated when an insurance company adjuster cajoled her into settling her claim. We rejected her argument:

This constitutional provision was not intended to give rise to a private cause of action between private individuals, but was intended as a prohibition on the State and has the same effect as the Fourth Amendment of the Constitution of the United States.

10 Ariz.App. at 563, 460 P.2d at 669. Cluff however decided only that the constitution did not provide a direct cause of action for invasion of privacy; Cluff did not address whether the constitutional right to privacy is a matter of public policy capable of supporting a cause of action for wrongful termination.

In favor of the expansion of the right of privacy, appellants cite cases which expand the provision beyond the search and seizure context. In In re Rasmussen, the supreme court held that a person has a limited right to refuse medical treatment under the right to privacy. 154 Ariz. 207, 215, 741 P.2d 674, 682 (1987). In Weller v. Arizona Dep't of Econ. Sec., 176 Ariz. 220, 860 P.2d 487 (App.1993), we cited the right to privacy in support of a holding that an employee, discharged after a drug test revealed trace amounts of marijuana in his system, was entitled to unemployment benefits. We stated:

[The employer] ... relies on a generalized public policy against illegal drug use to justify its drug testing rule. See A.R.S. § 13-3405 (a person shall not knowingly possess, use, produce or sell marijuana). However, the unemployment compensation system also recognizes as a public policy protection of the off-duty personal lives of employees. See A.A.C. R6-3-5185(B). See also Ariz.Const. art. 2 § 8.

Id. at 227, 860 P.2d at 494. ¹⁰

While some cases do hold that the right to privacy protects interests beyond the search and seizure context, appellants fail to appreciate a crucial distinction between their facts and the facts of those cases. However broad the federal constitutional right to privacy may be, it applies only to intrusions by the government or where there is "state action." See Rasmussen, 154 Ariz. at 215 n. 9, 741 P.2d at 682 n. 9. "An individual successfully can assert his or her constitutional right to privacy only against governmental acts and not against acts of a private defendant unless 'state action' exists." Id. While Rasmussen addressed only the federal constitutional right to privacy,...