Leithead v. American Colloid Co.

• Decision Date: 24 June 1986
• Docket Number: No. 85-199,85-199
• Citation: 721 P.2d 1059
• Parties: 105 Lab.Cas. P 55,648, 1 IER Cases 864 Vance S. LEITHEAD, Appellant (Plaintiff), v. AMERICAN COLLOID COMPANY, a Delaware corporation, and Myron Durtsche, Jr., Appellees (Defendants).
• Court: Wyoming Supreme Court

Page 1059

721 P.2d 1059

105 Lab.Cas. P 55,648, 1 IER Cases 864

Vance S. LEITHEAD, Appellant (Plaintiff), v. AMERICAN COLLOID COMPANY, a Delaware corporation, and Myron Durtsche, Jr., Appellees (Defendants).

No. 85-199.

Supreme Court of Wyoming.

June 24, 1986.

Michael K. Davis of Redle, Yonkee & Arney, Sheridan, for appellant.

Robert M. Shively of Murane & Bostwick, Casper, for appellees.

Before THOMAS, C.J., and BROWN, CARDINE, URBIGKIT and MACY, JJ.

CARDINE, Justice.

After he was discharged from his job, appellant Vance Leithead sued his former employer, American Colloid Company, and his former supervisor, Myron Durtsche, Jr., alleging breach of contract, breach of the covenant of good faith, slander, misrepresentation of employment, promissory estoppel, tortious interference with contract, and intentional infliction of emotional distress. The district court granted summary judgment in favor of the employer on all the claims except slander, which the parties then settled. We must decide whether the court properly granted summary judgment.

FACTS

In June of 1978, appellant telephoned Myron Durtsche about a job opening at American Colloid's Lovell plant. The company mines and processes bentonite, a clay that is used in the oil industry. In their initial conversation, Mr. Durtsche offered appellant the job and invited him to start the following Monday. On his first day of work, appellant was given a handbook entitled "For the New Employee of American Colloid Company." Under the heading, "Employment Policies and Objectives," the following statements appeared:

"Probation

"All new employees are automatically on a probationary period at the beginning of their employment. During this period, their abilities and work performance are closely evaluated by their supervisor. If for any reason, on or before the end of this period, it is determined that an employee is not suited for the job for which he was hired, his employment may be terminated. At the completion of the probationary period, you will become a permanent employee."

"Absence from Work

* * *

* * *

"If you are absent for three days, and do not report to your supervisor, it is possible that your employment will be considered as automatically terminated.

"If you are chronically absent, or late in arriving to work, you will seriously jeopardize your employment. Please do not let this happen."

"Our Rules of Conduct

* * *

* * *

"Of course, it is impossible to list every possible type of misconduct which may result in a disciplinary action. If you will act as a reasonable, law-abiding citizen, and do your job well, you will get along all right and enjoy your membership in the family of American Colloid's employees."

"Termination of Employment

"Employees wishing to terminate their services should give a minimum of two weeks' notice to their supervisors in order to leave in good standing.

"If you are dismissed, and we certainly hope this never happens, a full explanation for the reasons given to you by your supervisor will be provided."

Sometime in 1982, a new loose-leaf personnel policy handbook entitled "Employee Information Handbook" was given to appellant. It contained essentially identical rules regarding the probationary period, conduct, absences, and termination.

Appellant changed jobs within the company several times between 1978 and his termination on June 29, 1983. In his capacity as a driller and surveyor, appellant had access to confidential information about the location of potential bentonite claims. It was important to the company that this information stay confidential and, to that end, Mr. Durtsche requested, in 1981, that the employees under his supervision sign a secrecy agreement which stated in part:

"[The employee] agrees that either during or after termination of his employment he will not disclose to any person, firm or corporation any information concerning such matters as have been disclosed to him as confidential or treated by Company as confidential during his employment with Company."

Until May of 1983, Mr. Durtsche had considered appellant to be an excellent employee. But his opinion began to change On June 29, 1983, Mr. Durtsche called appellant into his office and fired him. Mr. Durtsche told him that he did not fit into the company's long-range plan but did not accuse him of leaking information. Appellant later learned the reasons for his discharge from fellow employees who attended a safety meeting at the American Colloid Plant several months after the firing. According to Art Schatz, one of those employees, Mr. Durtsche told them:

when he became suspicious that appellant was leaking confidential information to American Colloid's competitors. According to Mr. Durtsche, appellant was the only one who could have been responsible for the leaks. But in his affidavit attached to the motion opposing summary judgment, appellant denied leaking any information to competitors. Mr. Durtsche also had become disgruntled with appellant because of poor work performance in the summer of 1982 and a change in appellant's attitude reported by appellant's immediate supervisor, Ned Walker.

"Most of you know now that I have fired Vance Leithead. Some son-of-a-bitch is talking too much. I think we have got him now, but if I did not get the right one, I will fire every damn one of you in here until I get the right one. Even if I have to run this whole field department by myself. I don't know who the mole is or what he is gaining by running to our competitors and telling them everything we are doing."

In October of 1983, appellant filed a complaint against appellees American Colloid Company and Myron Durtsche alleging slander, breach of contract, and malicious conspiracy and interference with employment. On June 19, 1984, the appellees moved for partial summary judgment on the breach of contract claim, and after a hearing, the court granted the motion. The court held that the employment contract was at will, so appellant could be discharged at any time for any reason.

With the court's permission, appellant filed an amended complaint on July 3, 1984, in which he added claims for breach of the covenant of good faith, intentional infliction of emotional distress, misrepresentation of permanent employment, and promissory estoppel. Appellees then filed a second motion for summary judgment on May 15, 1985. After a hearing, the court granted the motion on all claims except the claim for slander which the parties eventually settled. ¹

INTERPRETATION OF THE CONTRACT

Without the handbooks, the contract was at will, which meant that the employer could discharge appellant without cause. Alexander v. Phillips Oil Company, Wyo., 707 P.2d 1385, 1386 (1985). The district court held that the two handbooks did not become part of appellant's employment contract, because they were not supported by consideration running from appellant to the company. The court quoted the following from 53 Am.Jur.2d Master & Servant § 32, at 107:

"It is the general rule that a contract to give a person permanent employment, in the absence of some further express or implied stipulation as to the duration of the employment or of a good consideration in addition to the services contracted to be rendered, is no more than an indefinite general hiring terminable at the will of either party."

The rule of additional consideration relied on by the district court is directly contrary to established Wyoming authority. A handbook may change the employer's unfettered right to discharge an employee even if the handbook is given to the employee after his employment has begun. The benefits extended to the employee in the handbook are enforceable contract terms, because they are supported by consideration flowing to the employer. That consideration consists of the benefit of an The mere existence of a handbook or employer's manual will not

orderly, cooperative and loyal work force. Mobil Coal Producing, Inc. v. Parks, Wyo., 704 P.2d 702, 707 (1985). The terms in the handbooks became part of appellant's employment contract.

"make employment other than at will in all instances. Each case must be considered on its own merits. Some handbooks or manuals may not contain provisions which negate the employment at will. Some handbooks or manuals may be ambiguous or may not have apparent meaning, making the determination of their effect on at will employment a question of fact. Normally, the construction and interpretation of a contract is for the court as a matter of law. If the meaning of a contract is ambiguous or not apparent, it may be necessary to determine the intention of the parties from evidence other than the contract itself, and interpretation becomes a mixed question of law and fact." (Citations omitted.) Mobil Coal Producing, Inc. v. Parks, supra, at 706.

Our review of the handbooks convinces us that their terms are clear and unambiguous. Under the heading "Probation," the handbooks describe a probationary period during which an employee may be discharged, if he "is not suited for the job for which he was hired." ²

Then, the handbooks state:

"At the completion of the probationary period, you will become a permanent employee."

By contrasting the permanent employee with the probationary employee, and by defining the probationary employee as one that can be discharged at will, the handbooks strongly imply that a permanent employee is one that can be discharged only for cause. This use of the term "permanent employee" is not unusual.

"Permanent employment has been defined as employment which continues ' "indefinitely, and until one or the other of the parties wish, for some good reason, to sever the relation." ' Pugh v. See's Candies, Inc., 116 Cal.App.3d 311, 171 Cal.Rptr. 917, 924 (1981), quoting from Lord v. Goldberg, 81 Cal. 596, 601-602, 22 P. 1126 (1889)." (Emphasis in original.) Rompf v. John Q. Hammons Hotels, Inc., Wyo., 685 P.2d 25, 28 n. 2 (1984).

In other words, a...