Hepp v. Lockheed-California Co.

• Decision Date: 27 November 1978
• Docket Number: LOCKHEED-CALIFORNIA
• Citation: 150 Cal.Rptr. 408,86 Cal.App.3d 714
• Court: California Court of Appeals Court of Appeals
• Parties: Robert E. HEPP, Plaintiff and Appellant, v.COMPANY, a Division of Lockheed Aircraft Corporation, Defendant and Respondent. Civ. 53202.

Page 408

150 Cal.Rptr. 408

86 Cal.App.3d 714

Robert E. HEPP, Plaintiff and Appellant, v. LOCKHEED-CALIFORNIA COMPANY, a Division of Lockheed Aircraft Corporation, Defendant and Respondent.

Civ. 53202.

Court of Appeal, Second District, Division 5, California.

Nov. 27, 1978.

Thomas B. Barsam, Torrance, for plaintiff and appellant.

Chase, Rotchford, Drukker & Bogust, and W. Michael Hartman, Los Angeles, for defendant and respondent.

ASHBY, Associate Justice.

Plaintiff Hepp brought this action against his former employer, defendant Lockheed California Company, for breach of contract and fraud. The trial court dismissed the action after granting defendant's motion for summary judgment. Plaintiff appeals.

Plaintiff was employed by defendant as a "Procurement Price Cost Administrator, Labor Grade 7," a position which was salaried and nonrepresented, being considered a part of management. He had worked for over nine years in the procurement department, a department in which it was understood that an employee had a likelihood of being "surplused." On February 1, 1974, plaintiff's group was "surplused" and he was "laid off suitable for rehire." He was informed that the layoff certainly had nothing to do with the quality of his work but was simply a matter of having to surplus so many people, and that he should not forget Lockheed because he would be recalled from layoff.

According to plaintiff's declaration, defendant had a well-established policy that when a job opening occurred, it must be offered to those persons who within two years had been laid off suitable for rehire and who were qualified for the position, before it could be filled by promotion or transfer within the company or by a new employee. Furthermore, according to plaintiff's declaration, a laid off employee was considered qualified if he had ever held that classification.

During the two-year period following plaintiff's layoff, while plaintiff was available for rehire and had made this known to defendant, there occurred six openings for procurement price cost administrator for which plaintiff was qualified. Without contacting plaintiff, and in violation of the above policy, defendant filled these openings by three promotions within the company, one transfer within the company, and two new hires.

Defendant concedes for purposes of its motion for summary judgment and this appeal, that defendant's "rules and/or policies are as Plaintiff states," and that defendant "did violate its own policies and/or rules." (Emphasis added.) Defendant successfully argued below, and reiterates here, that this violation is irrelevant because these rules "are not contracts to which Lockheed's management is bound. They are merely statements of general policy . . . not designed for the benefit of the employees of Lockheed but rather . . . designed to provide guidelines which will assist management of Lockheed in the exercise of their managerial functions." These policies, argues defendant, are not a part of plaintiff's employment contract because they are not intended for his benefit and he did not give consideration for them. ¹

The trial court, relying upon the authorities cited by defendant, concluded that defendant's rehiring policies are "directives to assist supervision. They are not nor can they be considered contracts nor can it be said that by having such general policies that they are specifically and expressly made for the individual employee's benefit within each employment contract." We hold that the trial court erred in granting summary judgment for defendant.

Summary judgment is granted when all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. (Code Civ.Proc. § 437c.) It is a drastic remedy eliminating trial and therefore the moving party's declarations must be strictly construed and the opposing party's declaration liberally construed. (Brandlin v. Belcher, 67 Cal.App.3d 997, 999, 134 Cal.Rptr. 1.) If there is any issue of material fact to be tried, summary judgment must be denied. (D. E. Sanford Co. v. Cory Glass Etc. Co., 85 Cal.App.2d 724, 726, 194 P.2d 127.) Summary judgment may not be granted by the court based on inferences reasonably deducible from the papers submitted, if such inferences are contradicted by other inferences which raise a triable issue of fact. (Code Civ.Proc., § 437c; 4 Witkin, Cal.Procedure (2d ed. 1971, 1977 pocket supp.) Proceedings Without Trial, § 19, p. 35.)

In this case the conclusion that the policies involved were management guidelines only and not intended for the benefit of the employees is a factual inference, supported by the language of the management memos contained in the moving papers. ² However, the contrary factual inference, that the policy was intended to benefit employees, could also be drawn from the circumstances, and therefore the trial court erred in resolving that factual issue without a trial.

In Newberger v. Rifkind, 28 Cal.App.3d 1070, 104 Cal.Rptr. 663, the question was whether the employees had given "consideration" for stock options which had been granted by the employer, so that the stock options would not be revoked by the death of the grantor. The defendant argued there was no evidence that the employees had specifically been asked to continue employment in consideration for the stock options. The court held, "In the case before us the bargain was implied from the circumstances, and there was an implied request by the optionors that the optionees continue the act of remaining employees in exchange for the granting of the options. . . . The realities of the corporate market place lead us to believe that stock options are given to employees as an inducement to continue employment or to put forth greater efforts, and they are not granted as an act of philanthropy or as a magnanimous gesture." (Id., at p. 1075, 104 Cal.Rptr. at p. 666.)

In Chinn v. China Nat. Aviation Corp., 138 Cal.App.2d 98, 291 P.2d 91, the employer enacted regulations providing severance benefits to employees terminating employment. In response to the defendant's argument that the "regulations were no more than a statement of good intentions" given without consideration, the court stat...