Johnson v. Kimberly Clark Worldwide, Inc.
| Decision Date | 16 February 2000 |
| Docket Number | No. 98-CV-139 G.,98-CV-139 G. |
| Citation | 86 F.Supp.2d 1119 |
| Parties | David Scott JOHNSON, Plaintiff, v. KIMBERLY CLARK WORLDWIDE, INC., Defendant. |
| Court | U.S. District Court — District of Utah |
Lois A. Baar, Parsons Behle & Latimer, Salt Lake City, UT.
Douglas A. Barritt, Payne & Fears, Irvine, CA.
This matter is before the court on Defendant Kimberly-Clark Corporation's Motion for Summary Judgment, or in the Alternative, Partial Summary Judgment. The parties have filed memoranda, affidavits, and other documents in support of and in opposition to defendant's motion. The Court heard oral argument on January 16, 1999, and took the matter under advisement.
Now, being fully advised, the Court enters its Memorandum Decision and Order.
Defendant's evidentiary objections to the Affidavit of David S. Johnson are overruled. Plaintiff voluntarily has withdrawn his third cause of action--termination in violation of public policy--and that claim is dismissed with prejudice.
Plaintiff's first and second causes of action--claims for breach of contract and for breach of the implied covenant of good faith and fair dealing--are not ripe for summary judgment because of disputed issues of material fact.
Summary judgment is appropriate only when "`the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.'" Kaul v. Stephan, 83 F.3d 1208, 1212 (10th Cir.1996) (quoting Wolf v. Prudential Ins. Co. of America, 50 F.3d 793, 796 (10th Cir.1995)). The Court must "`examine the fact[s] and any reasonable inferences drawn therefrom in the light most favorable to the party opposing summary judgment.'" Id. Moreover, the "nonmovant is generally `given wide berth to prove a factual controversy exists.'" Woodman v. Runyon, 132 F.3d 1330, 1337 (10th Cir. 1997) (quoting Ulissey v. Shvartsman, 61 F.3d 805, 808 (10th Cir.1995)). Thus, "the relevant inquiry is `whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Bingaman v. Kansas City Power & Light Co., 1 F.3d 976, 980 (10th Cir.1993) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)).
Defendant urges dismissal of plaintiff's breach of contract claim on three grounds: first, that plaintiff cannot satisfy his burden of introducing evidence of an implied-in-fact contract sufficient to overcome Utah's at-will presumption; second, that the at-will disclaimer contained in its Personnel Guidelines effectively precludes the existence of an implied-in-fact contract; third, that even if plaintiff could establish an implied employment contract whereby defendant promised to terminate plaintiff only for cause, plaintiff's claim fails because defendant had good cause and did in fact terminate him for cause. These contentions will be considered seriatim.
Under Utah law there is a presumption that "an employee hired for an indefinite period is ... an employee at will ...." Johnson v. Morton Thiokol, Inc., 818 P.2d 997, 1000 (Utah 1991). This "arrangement allows either the employer or the employee to terminate the employment for any reason, or no reason at all, at any time; ... [and] the employer may `do so without extending any procedural safeguard to an employee, except as required by law.'" Ryan v. Dan's Food Stores, Inc., 972 P.2d 395, 400 (Utah 1998) (quoting Fox v. MCI Communications Corp., 931 P.2d 857, 859 (Utah 1997)). However, "[a] plaintiff/employee may overcome this presumption by showing that the parties created an implied-in-fact contract, modifying the employee's at-will status." Hodgson v. Bunzl Utah, Inc., 844 P.2d 331, 333 (Utah 1992).
"[E]vidence of conduct and oral statements may establish an implied-in-fact contract even without the support of written policies, bulletins, or handbooks." Hodgson, 844 P.2d at 334. However, the evidence offered to establish such a contract "must be sufficient to fulfill the requirements of a unilateral offer." Johnson, 818 P.2d at 1002. This means that "[t]he employer must communicate the intent to offer employment other than at will, the communication must be sufficiently definite to act as a contract provision, and the communicated intent must be such that the employee may reasonably believe that the employment offered is other than at-will." Hodgson, 844 P.2d at 334.1
Because "[t]he existence of such [an implied-in-fact] agreement is a question of fact which turns on the objective manifestations of the parties' intent," it is "primarily a jury question." Johnson, 818 P.2d at 1001. Thus, summary judgment is appropriate only if "the evidence presented is such that no reasonable jury could [find an implied contract] limit[ing] the employer's right to terminate the employee." Id. In this case, unless the At-Will Disclaimer controls or the undisputed facts show that plaintiff was terminated for cause, the existence or non-existence of a contract implied-in-fact must be left for the jury to determine. Plaintiff has produced sufficient evidence to raise a disputed issue of fact as to whether defendant, by the statements of agents with apparent authority and by its conduct and course of dealing with its employees, communicated to plaintiff an intent to offer him employment other than at-will.
Under Utah law the employment relationship, at least where there is no express employment contract, generally is considered to be an unilateral contract, in that the employer offers employment under certain terms and the employee accepts by performing. See Johnson v. Morton Thiokol, Inc., 818 P.2d 997, 1001 (Utah 1991). Thus, Utah courts have reasoned that the employer may change the nature and terms of the employment unilaterally.
In Trembly v. Mrs. Fields Cookies, the Utah Court of Appeals discussed how an existing employment contract can be modified or replaced by a subsequent unilateral contract which the employer offers by communicating the modified terms of employment and which the employee accepts by continuing performance. 884 P.2d 1306, 1313 (Utah App.1994).2 However, the court noted that for the modification to be effective (for the employee's continued performance to be considered assent to the modified contract) the employer must effectively communicate the modification or the new terms to the employee: "if an employee has knowledge of a distributed handbook that changes a condition of the employee's employment, and the employee remains in the company's employ, the modified conditions become part of the employee's employment contract." Id. At 1312-13 (emphasis added). Similarly, the Utah Supreme Court has reasoned:
[W]hen an employee admittedly has knowledge of a distributed handbook's provision that modifies the employment contract and continues to work for the employer after gaining such knowledge, the modified contract prevails, and previous, contradictory conditions have no effect.
Ryan v. Dan's Food Stores, Inc., 972 P.2d 395, 401 (Utah 1998) (emphasis added).
Whether plaintiff had knowledge of the disclaimer as it applied to his employment is unclear, and must be determined by the fact finder. In this case, plaintiff has introduced facts which raise a jury question as to whether defendant effectively communicated to plaintiff that his employment was terminable at will.3
In any event, the disclaimer would not necessarily be dispositive even if the plaintiff were found to have had knowledge of the at-will disclaimer promulgated by defendant in November, 1991. Indeed, an implied-in-fact contract can be established by evidence of subsequent conduct and oral statements even where the employer has promulgated an at-will disclaimer and effectively communicated it to the employee. See Hodgson v. Bunzl Utah, Inc., 844 P.2d 331, 334 (Utah 1992) ().4
Plaintiff has produced sufficient evidence to preclude summary judgment on the question of whether he was properly terminated for cause. There is a triable issue of fact as to whether plaintiff's conduct, in reaching his hand underneath and behind an interlocked guard to pull slack out of the ear material, constituted cause for dismissal and also whether the reasons advanced by defendant as justification for terminating plaintiff-the purported pattern of "horseplay" and safety violations-were pretextual.
"[E]very contract is subject to an implied covenant of good faith" even "an indefinite-term, at-will employment contract." Brehany v. Nordstrom, Inc., 812 P.2d 49, 55 (Utah 1991). The Utah Supreme Court has explained:
Under the covenant of good faith and fair dealing, each party impliedly promises that he will not intentionally or purposely do anything which will destroy or injure the other party's right to receive the fruits of the contract.
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To comply with his obligation to perform a contract in good faith, a party's actions must be consistent with the agreed common purpose and the justified expectations of the other party.
St. Benedict's Dev. Co. v. St. Benedict's Hosp., 811 P.2d 194, 199-200 (Utah 1991). Therefore, "when a party has been granted discretion under a contract, that discretion may not be exercised capriciously or in bad...
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