McDonald v. Mobil Coal Producing, Inc.
| Decision Date | 20 November 1991 |
| Docket Number | No. 89-146,89-146 |
| Citation | 820 P.2d 986 |
| Parties | , 122 Lab.Cas. P 57,053, 6 IER Cases 1615 Craig McDONALD, Appellant, (Plaintiff), v. MOBIL COAL PRODUCING, INC.; Brad Hanson; Peter Totin; and Bert Gustafson, Appellees, (Defendants). |
| Court | Wyoming Supreme Court |
Mary Elizabeth Galvan and Kennard F. Nelson of Kirkwood, Nelson & Galvan, Laramie, for appellant.
Francis E. Stevens of Stevens, Edwards & Hallock, Gillette; Theodore A. Olsen and Jack Stewart of Sherman & Howard, Denver, Colo., for appellee Mobil Coal Producing Inc.
Before URBIGKIT, C.J., and THOMAS, CARDINE, MACY and GOLDEN, JJ.
This employment termination case comes before the court on appellee Mobil Coal Producing's motion for rehearing. In our previous decision, McDonald v. Mobil Coal Producing, Inc., 789 P.2d 866 (Wyo.1990) (McDonald I ), we ruled that summary judgment in favor of the appellees must be reversed and the case remanded for further proceedings. The five justices of this court rendered a total of four opinions, including a special concurrence and two separate dissents. Following our decision, we granted Mobil's petition for rehearing to review and clarify our earlier decision.
The relevant facts of this case are more fully set out in McDonald I. We need not refer to them here in detail except as they become pertinent to our discussion of the legal issues on rehearing.
Appellant Craig McDonald challenged his dismissal from employment with Mobil at Mobil's Caballo Rojo coal mine in Campbell County, Wyoming. After the trial court granted summary judgment against him, he appealed to this court, claiming breach of contract based on the terms of his employee handbook, and breach of the covenant of good faith and fair dealing. A plurality of this court rejected the claims that Mobil's handbook constituted a valid contract sufficient to modify the terms of McDonald's at-will employment and that Mobil was subject to the implied covenant of good faith and fair dealing. However, a different plurality reversed summary judgment and remanded for a determination of whether the principle of promissory estoppel applied to the facts of this case.
Justice Golden, specially concurring, rejected the application of promissory estoppel, stating that he would have remanded to resolve the ambiguity in the effect of the disclaimer contained in Mobil's employee handbook. Justice Cardine, dissenting, found the disclaimer effective to assure there was not an employment contract and We reaffirm our earlier decision reversing summary judgment and remanding this case for further proceedings. We hold that a question of material fact exists concerning whether the employee handbook and Mobil's course of dealing with appellant modified the terms of appellant's at-will employment.
rejected McDonald's other claims. Justice Thomas, also dissenting, agreed with Justice Cardine, noting that he could see no difference between the effect of seeing the handbook as creating a contract and finding it to be a binding promise under the doctrine of promissory estoppel.
The construction and interpretation of the employment contract is the main issue to be resolved by this court. The standard of review for that type determination has been stated in this way:
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.
Mobil Coal Producing, Inc. v. Parks, 704 P.2d 702, 706 (Wyo.1985) (citations omitted).
The entry of summary judgment requires that there be no genuine issue of material fact. Miller v. Rissler & McMurry Co., 794 P.2d 91, 92 (Wyo.1990). Affirmance of summary judgment in this case requires the absence of any genuine issue of material fact concerning whether appellant's at-will employment was modified by the handbook's provisions and appellee's course of dealing with the appellant.
We find a genuine issue of material fact presented over whether the parties altered their contractual relationship. See Alexander v. Phillips Oil Company, 707 P.2d 1385, 1386 (Wyo.1985). Mobil claims it effectively disclaimed any employment relationship other than at-will. McDonald argues Mobil objectively manifested its intent to modify the initial at-will contract with the employment manual and by its course of dealing. We examine both the effect of the disclaimer and Mobil's manifestation of intent.
The Federal District Court of Wyoming explored the issue of effective contract disclaimers in Jimenez v. Colorado Interstate Gas Company, 690 F.Supp. 977 (D.Wyo.1988). The plaintiff's employer had adopted standard operating procedures relating to cause for termination. The employer had inserted a disclaimer in these procedures to the effect that they did not constitute terms of a contract. The court stated that for a disclaimer to be effective it must be conspicuous and whether it was conspicuous was a matter of law. Jiminez, at 980. Where the disclaimer was not set off in any way, was placed under a general subheading, was not capitalized, and contained the same type size as another provision on the same page, it was not conspicuous. Id.
We adopt the rule in Jiminez that disclaimers must be conspicuous to be effective against employees and that conspicuousness is a matter of law. The trial court erred in its statement that there was no requirement that the disclaimers be conspicuous. We examine the disclaimers in this case to see whether they were sufficiently conspicuous to be binding on appellant.
The application form which Craig McDonald signed on July 20, 1987, contained the following disclaimer:
READ CAREFULLY BEFORE
I agree that any offer of employment, and acceptance thereof, does not constitute a binding contract of any length, and that such employment is terminable at the will of either party, subject to appropriate state and/or federal laws.
The MCPI Employee Handbook which he received contained the following disclaimer,
located on its first page, which we reproduce in full to show the context in which the disclaimer was made:
WELCOME
Mobil Coal Producing Inc., Caballo Rojo Mine, is proud to welcome you as an employee. We believe you will find safety, opportunity and satisfaction while making your contribution to Mobil's growth as a major supplier of coal.
This handbook is intended to be used as a guide for our nonexempt mine technicians and salaried support personnel, to help you understand and explain to you Mobil's policies and procedures. It is not a comprehensive policies and procedures manual, nor an employment contract. More detailed policies and procedures are maintained by the Employee Relations supervisor and your supervisor. While we intend to continue policies, benefits and rules contained in this handbook, changes or improvements may be made from time to time by the company. If you have any questions, please feel free to discuss them with your supervisor, a member of our Employee Relations staff, and/or any member of Caballo Rojo's Management. We urge you to read your handbook carefully and keep it in a safe and readily available place for future reference. Sections will be revised as conditions affecting your employment or benefits change.
Sincerely,
/s/
R.J. Kovacich
Mine Manager
The circumstances surrounding this disclaimer are nearly identical to those of the Jiminez case. The disclaimer in this case was not set off by a border or larger print, was not capitalized, and was contained in a general welcoming section of the handbook.
Additionally, the disclaimer was unclear as to its effect on the employment relationship. For persons untutored in contract law, such clarity is essential, as stated in this apt language from a New Jersey Supreme Court opinion:
It would be unfair to allow an employer to distribute a policy manual that makes the workforce believe that certain promises have been made and then to allow the employer to renege on those promises. What is sought here is basic honesty: if the employer, for whatever reason, does not want the manual to be capable of being construed by the court as a binding contract, there are simple ways to attain that goal. All that need be done is the inclusion in a very prominent position of an appropriate statement that there is no promise of any kind by the employer contained in the manual; that regardless of what the manual says or provides, the employer promises nothing and remains free to change wages and all other working conditions without having to consult anyone and without anyone's agreement; and that the employer continues to have the absolute power to fire anyone with or without good cause.
Woolley v. Hoffman-La Roche, Inc., 99 N.J. 284, 309, 491 A.2d 1257, 1271 (1985), mod. 101 N.J. 10, 499 A.2d 515 (1985). No explanation was given in the disclaimer that Mobil did not consider itself bound by the terms of the handbook. Instead, McDonald would have been led to draw inferences from the handbook language: that it was intended to be a guide, and that Mobil intended to continue the policies, benefits and rules contained in the handbook. The same paragraph which disclaimed a contract also informed Mr. McDonald that he could discuss "any questions" he might have with his supervisor, employee relations staff and management and urged him to read the handbook carefully and to keep it in a safe and readily available place.
The trial court erred in finding that the disclaimer was conspicuous. We hold that the attempted disclaimers in the employee handbook and in the employment application were insufficiently conspicuous to be binding on McDonald. Mobil's Assent to Contract
In our earlier opinion, this court stated:
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