McDonald v. Mobil Coal Producing, Inc.

Citation789 P.2d 866
Decision Date06 April 1990
Docket NumberNo. 89-146,89-146
Parties115 Lab.Cas. P 56,243, 5 IER Cases 394 Craig McDONALD, Appellant (Plaintiff), v. MOBIL COAL PRODUCING, INC.; Brad Hanson; Peter Totin; and Bert Gustafson, Appellees (Defendants).
CourtUnited States State Supreme Court of Wyoming

Mary Elizabeth Galvan and Kennard F. Nelson of Kirkwood, Copenhaver, Nelson & Galvan, Laramie, for appellant.

Francis E. Stevens of Stevens, Edwards & Hallock, Gillette, and Theodore A. Olsen of Sherman & Howard, Denver, Colo., for appellees.


MACY, Justice.

This is an appeal from a summary judgment in favor of Appellees Mobil Coal Producing, Inc., Brad Hanson, Peter Totin, and Bert Gustafson, denying the claim of Appellant Craig McDonald for wrongful discharge from employment.

We reverse and remand.

McDonald states the issues as:

I. [Whether t]he trial court erred in holding that the Mobil Coal handbook did not constitute an employment contract.

II. [Whether t]he trial court erred in dismissing Craig McDonald's claim under the covenant of good faith and fair dealing.

McDonald worked at Mobil's Caballo Rojo coal mine in Campbell County, Wyoming, from August 1987 until June 1988 as a technician in the preparation plant. Hanson was the mine superintendent, Totin was the mine supervisor of employee relations, and Gustafson was the preparation plant supervisor. McDonald contends that he resigned his position at the mine following rumors that he had sexually harassed a female co-employee. McDonald also contends the resignation resulted from a meeting with Hanson, Totin, and Gustafson where McDonald was told he had the choice of either resigning or being fired.

When McDonald applied for the position at Caballo Rojo, he signed a statement on his employment application which said in part:

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 applicable state and/or federal laws.

After he started working at the mine, McDonald received an employee handbook. The stated intention of the handbook, as addressed to Mobil employees, was "to help you understand and explain to you Mobil's policies and procedures." Despite that representation, the handbook stated that it was not a company "comprehensive policies and procedures manual, nor an employment contract."

The handbook stated that Mobil was "committed to maintaining an environment of mutual trust, understanding, and cooperation" and that Mobil encouraged communication between employees and supervisors on an informal basis. It informed the reader of the existence of "a Fair Treatment Procedure that afford[ed] an employee the opportunity to be heard, without fear of reprisal." This "Fair Treatment Procedure" was a detailed four-step procedure in which an employee discussed a problem with a supervisor. If the employee was not satisfied with the outcome of this discussion, the employee could take the matter to other supervisory personnel.

The handbook also detailed a disciplinary procedure. It included a noninclusive list of behaviors which Mobil would not condone and a five-step disciplinary process. These steps were: (1) counseling; (2) written reprimand; (3) final written reprimand; (4) three-day suspension; and (5) discharge. The handbook stated that Mobil believed "union representation [was] unnecessary for employees to enjoy job security, career opportunities, consistent treatment, and competitive wages and benefits." The handbook listed seven "fundamental obligations" for Mobil to fulfill. Among these seven were:

2. To train and guide employees, allow them to develop their job abilities and regularly keep them informed of their progress.

3. To invite constructive suggestions and criticism and guarantee the right to be heard without fear of reprisal.

4. To give helpful consideration when an employee makes a mistake or has a personal problem with which we are asked to help.

After resigning, McDonald filed suit, claiming breach of contract, breach of the covenant of good faith and fair dealing, negligence, and defamation. 1 Mobil and Totin moved to dismiss the suit on the bases of W.R.C.P. 12(b)(1) (lack of jurisdiction over the subject matter) 2 and W.R.C.P. 12(b)(6) (failure to state a claim upon which relief can be granted). Hanson and Gustafson moved to dismiss on the basis of W.R.C.P. 12(b)(5) (insufficiency of service of process).

Because supplemental documents were filed with the motions, the trial court treated the motions as motions for summary judgment. W.R.C.P. 56. See, e.g., Mostert v. CBL & Associates, 741 P.2d 1090 (Wyo.1987). The court noted that the "tenor" of the handbook could cause it to appear to be a contract. However, the court held that the disclaimer in the handbook defeated any claim that the handbook was part of an employment contract. Thus, despite the "tenor" of the handbook, the court held that McDonald was an at-will employee and that his termination did not violate any concept of good faith and fair dealing. The court also held that the negligence and defamation claims failed to state a cause of action recognized in Wyoming. It granted summary judgment in favor of Appellees.

Summary judgment is proper only when there are no genuine issues of material fact and the prevailing party is entitled to judgment as a matter of law. Baros v. Wells, 780 P.2d 341 (Wyo.1989); Farr v. Link, 746 P.2d 431 (Wyo.1987). We review a summary judgment in the same light as the district court does, using the same materials and following the same standards. Baros, 780 P.2d 341; Roybal v. Bell, 778 P.2d 108 (Wyo.1989). We examine the record from the vantage point most favorable to the party opposing the motion, and we give that party the benefit of all favorable inferences which may fairly be drawn from the record. Baros, 780 P.2d 341; Doud v. First Interstate Bank of Gillette, 769 P.2d 927 (Wyo.1989). A material fact is one which, if proved, would have the effect of establishing or refuting an essential element of the cause of action or defense asserted by the parties. Albrecht v. Zwaanshoek Holding En Financiering, B.V., 762 P.2d 1174 (Wyo.1988); Johnston v. Conoco, Inc., 758 P.2d 566 (Wyo.1988).

Disposition of this case requires us to review the revision of the employee handbook discussed in Mobil Coal Producing, Inc. v. Parks, 704 P.2d 702 (Wyo.1985). We held in Parks that the provisions in the handbook constituted part of the Mobil employee contract and that the existence of the handbook elevated the nature of the Mobil employees' status beyond simple at-will employment. Id. at 706-07. In an at-will employment situation, either party may terminate the relationship for any reason at any time without incurring liability and without violating any implied covenant of good faith and fair dealing. Nelson v. Crimson Enterprises, Inc., 777 P.2d 73 (Wyo.1989); Griess v. Consolidated Freightways Corporation of Delaware, 776 P.2d 752 (Wyo.1989); Parks, 704 P.2d at 704.

Following Parks, Mobil revised its handbook. The most significant revision was the addition of a statement that the handbook was not an employment contract. A contract exists when there is a meeting of the minds. Anderson Excavating and Wrecking Company v. Certified Welding Corporation, 769 P.2d 887 (Wyo.1988). Mobil's express disclaimer demonstrates that it had no intention to form a contract. We cannot say that the handbook was part of the employment contract; however, this determination does not end our analysis. We have recognized limited exceptions to the at-will relationship. Nelson, 777 P.2d at 75. See, e.g., Leithead v. American Colloid Company, 721 P.2d 1059 (Wyo.1986); Alexander v. Phillips Oil Company, 707 P.2d 1385 (Wyo.1985), after remand 741 P.2d 117 (Wyo.1987) (employee handbook without disclaimer is part of the employment contract); Griess, 776 P.2d 752 (employer cannot terminate at-will employee for seeking benefits under worker's compensation statutes); and Parks, 704 P.2d 702. Other provisions of the handbook require us to recognize another manner in which an employer can modify the at-will employment relationship.

As the trial court noted, if it were not for the disclaimer, the "tenor" of the handbook could cause it to be viewed as a contract, and McDonald may have believed that the handbook was a contract. Our reading of the portions of the handbook included in the record reveals language which could be understood to connote promises notwithstanding a lack of a contractual obligation. Even without a contractual obligation, some promises remain enforceable. 3 This Court has adopted Restatement (Second) of Contracts § 90(1) (1981), which states:

A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.

Hanna State & Savings Bank v. Matson, 53 Wyo. 1, 77 P.2d 621 (1938). See also Tremblay v. Reid, 700 P.2d 391, 395 n. 1 (Wyo.1985). The Restatement (Second) of Contracts, supra, § 2(1) at 8, defines a promise as

a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promisee in understanding that a commitment has been made.

Despite the disclaimer of contract, the handbook did indicate its purpose was to explain the company's policies and procedures to Mobil's employees.

Having announced the policy, presumably with a view to obtaining the benefit of improved employee attitudes and behavior and improved quality of the work force, the employer may not treat its promise as illusory.

Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 292 N.W.2d 880, 895 (1980), quoted in Damrow v. Thumb...

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