Qualls v. Hickory Springs Mfg. Co., Inc.

• Decision Date: 09 July 1993
• Docket Number: No. 92-2420,92-2420
• Citation: 994 F.2d 505
• Parties: 125 Lab.Cas. P 57,430, 8 IER Cases 854 Peggy Sue QUALLS, Appellant, v. HICKORY SPRINGS MANUFACTURING COMPANY, INC., Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 505

994 F.2d 505

125 Lab.Cas. P 57,430, 8 IER Cases 854

Peggy Sue QUALLS, Appellant, v. HICKORY SPRINGS MANUFACTURING COMPANY, INC., Appellee.

No. 92-2420.

United States Court of Appeals Eighth Circuit.

Submitted Jan. 15, 1993.

Decided June 1, 1993.

Rehearing and Suggestion for Rehearing En Banc Denied July 9, 1993.

W. Asa Hutchinson, Fort Smith, AR, argued, for appellant.

Charles W. Reynolds, Little Rock, AR, argued (Allen C. Dobson, on the brief), for appellee.

Before JOHN R. GIBSON, Circuit Judge, BRIGHT, Senior Circuit Judge, and BOWMAN, Circuit Judge.

BRIGHT, Senior Circuit Judge.

Peggy Sue Qualls filed suit against Hickory Springs Manufacturing Company (Hickory Springs), her employer, for wrongfully discharging her from her job. The district court granted summary judgment, dismissing her claims and determining that: (1) Qualls worked as an at-will employee; and (2) Hickory Springs' actions did not give rise to the tort of outrageous conduct.

On appeal, Qualls contends genuine issues of material fact exist on the breach of contract and outrageous tort claims. For the reasons discussed below, we reverse and remand only on the breach of contract claim.

I.

On November 1, 1989, Hickory Springs, a manufacturer of metal products, issued a personnel policy entitled "Official Policy on a Drug-Free Workplace." The policy stated that employees were subject to drug testing upon a reasonable suspicion of illegal drug use. Under the policy, an employee could be terminated for refusing to take the test. In December 1990, Hickory Springs issued an employee handbook. The last part of the handbook contains a statement which provides that employment is terminable at any time at the will of either the employee or company. Directly below this statement is a line for an employee to sign, acknowledging the handbook has been read and the conditions set forth in the statement accepted.

Hickory Springs hired Peggy Sue Qualls on January 21, 1991, to work as a press operator on the night shift. Upon beginning work, Qualls signed the acknowledgement at the end of the handbook.

Three days later, on January 24, Hickory Springs adopted its "Rules of Conduct, Discipline and Discharge Procedure" (the Rules of Conduct). In June of 1991, Hickory Springs amended Rule 15 of the Rules of Conduct, making an employee's refusal to submit to, or otherwise interfere with the administration of, a drug or alcohol test, cause for immediate discharge. Hickory Springs posted this amended version of Rule 15 on the company bulletin board on or around July 1, 1991.

On the morning of November 21, 1991, after receiving information that Qualls and others might be using illegal drugs on the work premises, Hickory Springs' personnel manager, Bill Coleman, requested that Qualls and five other employees report to the Convenient Medical Clinic (the Clinic) to submit to a drug screen. Coleman explained to them that any employee testing positive would not be terminated, but would be placed on suspension for up to sixty days and permitted to return to work after passing a second drug test. Coleman added that any employee refusing either to submit to the test or to sign the consent form would be terminated. Qualls and the others signed the consent form and went to the Clinic.

At the Clinic, Qualls provided a urine sample, which the clinic nurse refused to accept because the temperature gauge fastened to the side of the urine specimen bottle had become dislodged. Stating that she had to leave to take her daughter to school, Qualls left the Clinic. She returned approximately an hour later and provided a second sample, which the nurse rejected because of an insufficient amount of urine in the specimen bottle. The Clinic nurse told Qualls to go home, drink some water, and then return before the Clinic closed at 8:00 p.m. After picking her daughter up from school, Qualls returned to the Clinic at approximately 3:30 p.m., at which time a nurse told her that a test specimen was no longer needed.

Qualls immediately called Hickory Springs and spoke with a supervisor, Jonie Horn, who told her Hickory Springs had terminated her for providing an "invalid urine specimen." ¹

The following day, Qualls went to Coleman and asked for her job back, stating she would voluntarily take another drug test. Coleman denied her request.

Qualls, nevertheless, returned to the Clinic later that day and voluntarily submitted, at her own expense, to another test. She tested negative and presented the results to Hickory Springs, which refused to reconsider its decision.

Qualls then brought suit against Hickory Springs in Arkansas state court for breach of employment contract, and the tort of outrageous conduct. Hickory Springs removed the action to federal court on diversity grounds, and then moved for summary judgment. The district court granted the motion, ruling: (1) Hickory Springs' employee manuals did not contain a "for cause" discharge provision and, therefore, Qualls' status remained as an at-will employee, subject to discharge without reason; and (2) Hickory Springs did not act outrageously.

Qualls timely appealed the entry of summary judgment.

II.

We turn first to the breach of contract claim. Qualls alleges, in effect, that Hickory Springs' drug testing policy statements contain termination "for cause" provisions, and her reliance on those provisions modified her status as an at-will employee. The parties concede that to the extent these provisions altered Qualls' at-will status, they did so only with regard to Hickory Springs' drug testing policy. In all other respects, they agree Qualls remained an at-will employee whom Hickory Springs was free to discharge for any reason.

In determining the propriety of summary judgment, this court is bound to draw all reasonable inferences in the light most favorable to the non-moving party. Krause v. Perryman, 827 F.2d 346, 350 (8th Cir.1987). We are bound to review the district court's ruling de novo. McKee v. Federal Kemper Life Assurance Co., 927 F.2d 326, 328 (8th Cir.1991).

The crucial question in this case is whether Rule 15 of Hickory Springs' Rules of Conduct, as well as Hickory Springs' other statements relating to Qualls' discharge, present sufficient evidence for a jury to decide she was fired in breach of an employment contract.

Rule 15 states:

Any of the following types of misconduct is considered inexcusable and may result in immediate discharge.

....

15. Refusal to submit to a drug or alcohol test at time and place directed or failure to cooperate with those administering the test or delaying, tampering, diluting, or otherwise altering test specimens or attendant records thereof.

App. at 97. Relying on this rule, Hickory Springs asserts it fired Qualls, in part, because she tampered with her morning test sample. Qualls, on the other hand, denies tampering with the sample. Hickory Springs further argues that regardless of its stated reason for discharge, Qualls has no claim for breach of contract because Rule 15 creates no modification of Qualls' at-will status. In support of its position, Hickory Springs directs us to Mertyris v. P.A.M. Transport, Inc., 310 Ark. 132, 832 S.W.2d 823 (1992); Smith v. American Greetings Corp., 304 Ark. 596, 804 S.W.2d 683 (1991); and Gladden v. Arkansas Children's Hospital, 292 Ark. 130, 728 S.W.2d 501 (1987). Qualls asserts the statements are binding, claiming Gladden, and Crain Industries, Inc. v. Cass, 305 Ark. 566, 810 S.W.2d 910 (1991) support her position that the district court erred and should be reversed.

Gladden was a consolidation of two separate wrongful termination actions. In the first case, a nurse, Loretta Samples, brought a breach of contract claim against a hospital, which had discharged her for absenteeism. A provision in the hospital's personnel manual stated that any of thirteen offenses, including "chronic tardiness and/or absenteeism," constituted grounds for discharge. Samples interpreted this language to mean the hospital could terminate her only for those thirteen prescribed offenses. Among other things, the manual provided that in the event of terminating an employee for absenteeism, certain steps were to be followed, including issuing written warnings. The hospital subsequently agreed to reinstate her, subject to a ninety-day probationary period. Because Samples refused to accept the probation, the hospital fired her.

Affirming the trial court, the Arkansas Supreme Court ruled that the hospital's actions did not constitute a breach of the manual, noting "[t]he manual simply lists conduct which could result in termination, with no implications that those infractions alone constitute cause for discharge." Gladden, 728 S.W.2d at 503-04.

In the second case, Gail Gladden asserted that certain personnel regulations of her employer, a hospital, constituted an employment contract that the hospital breached in discharging her. Gladden argued for a change in the employment at-will doctrine "to allow a written contract of employment to be enforced which limits the right of an employer to discharge an employee, in the absence of a definite term of employment." Id. at 504.

In affirming both cases, the court stated:

Neither appellant claims she was employed for a definite length of time. Both contend the personnel manuals of the hospitals limit the right to discharge except for cause. We disagree. While the manuals contain provisions describing methods for dismissal under certain circumstances and specifying kinds of conduct that could result in summary dismissal, they do not contain provisions that an employee will not be discharged except for cause. That being so, the cases do not present the issues we defined.

Id. at 505. The court added this gloss on the at-will doctrine:

We do, however, believe that a modification of the at-will rule is appropriate in two respects: where an employee relies upon a personnel manual that contains an express...