Richardson v. East River Elec. Power Co-op., Inc.

• Decision Date: 17 October 1994
• Docket Number: No. 18634,18634
• Citation: 531 N.W.2d 23,130 Lab.Cas.P 57
• Parties: 130 Lab.Cas. P 57,933, 10 IER Cases 1073 Bobbi RICHARDSON, Plaintiff and Appellant, v. EAST RIVER ELECTRIC POWER COOPERATIVE, INC., and Jeffrey L. Nelson, Defendants and Appellees. . Considered on Briefs
• Court: South Dakota Supreme Court

Page 23

531 N.W.2d 23

130 Lab.Cas. P 57,933, 10 IER Cases 1073

Bobbi RICHARDSON, Plaintiff and Appellant, v. EAST RIVER ELECTRIC POWER COOPERATIVE, INC., and Jeffrey L Nelson, Defendants and Appellees.

No. 18634.

Supreme Court of South Dakota.

Considered on Briefs Oct. 17, 1994.

Decided May 3, 1995.

Rehearing Denied June 8, 1995.

Lori Purcell Fossen of Davenport, Evans, Hurwitz & Smith, Sioux Falls, for plaintiff and appellant.

William F. Day, Jr. of Lynn, Jackson, Shultz and Lebrun, Sioux Falls, for appellee, East River Elec.

Vincent J. Protsch, Howard, for appellee, Nelson.

WUEST, Retired Justice.

Bobbi Richardson had been employed by East River Electric Power Cooperative, Inc. (East River) since October 1985. In July 1992, her employment was terminated. Richardson brought action against her former employer claiming wrongful termination, negligent infliction of emotional distress, and intentional infliction of emotional distress. Richardson sought compensatory and punitive damages against both East River and its general manager, Jeffrey L. Nelson. East River and Nelson moved for summary judgment based on Richardson's employee-at-will status. The circuit court granted the defendants' motion and Richardson appeals. We affirm.

FACTS

Bobbi Richardson was an employee of East River's since October 1985. In December 1991, members of East River's board of directors received a typewritten anonymous letter accusing the managers of East River, including defendant Nelson, of various unlawful and unethical practices and asking the board to investigate. In May 1992, a second anonymous letter, similar in nature to the first, was received by some of the board members. This second letter was also sent to outside agencies, including some in Washington, D.C. In June 1992, Nelson, general manager at East River, spoke to a group of about eighty East River employees about the letters during a regular company meeting and requested employees with any knowledge of their authorship to come forward. Two employees from this group gave information to Nelson which led him to believe plaintiff Richardson had authored the first letter.

On July 20, 1992, Richardson's immediate supervisor was informed of Nelson's intention to confront Richardson that afternoon and advise her he had information indicating she had written the first anonymous letter. The supervisor knew Nelson planned to give Richardson the opportunity to resign or be terminated. Later that day, Richardson, her immediate supervisor, Nelson, and another manager met in East River's conference room. Nelson told Richardson he had credible evidence that she wrote the letter but he did not tell her what that evidence was. She denied that she was the author but indicated she knew the identity of that person. Nelson then gave Richardson the opportunity to resign. When she did not do so, he informed her she was terminated effective immediately. Her immediate supervisor escorted her to her office where she cleaned out her desk and left that afternoon.

Richardson appealed her termination under East River's employee appeals policy. While her appeal was pending, East River advertised her vacant position. When her appeal was denied, Richardson claims she sought counseling and medical attention to alleviate the psychological and physical effects of her termination. Thereafter, Richardson brought the lawsuit giving rise to this appeal.

ANALYSIS AND CONCLUSION

The trial court granted defendants' motion for summary judgment on the basis that Richardson was an employee-at-will and, as such, could be terminated at any time by East River. On a motion for summary judgment, the trial court must consider the following:

[T]he evidence must be viewed most favorably to the non-moving party; the movant has the burden of proof to clearly show that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law; summary judgment is not a substitute for trial; a belief that the non-moving party will not prevail at trial is not an appropriate basis for granting the motion on issues not shown to be sham, frivolous, or unsubstantiated; summary judgment is an extreme remedy and should be awarded only when the truth is clear and reasonable doubts touching upon the existence of a genuine issue of material fact should be resolved against the movant.

Tibke v. McDougall, 479 N.W.2d 898, 904 (S.D.1992); Pickering v. Pickering, 434 N.W.2d 758, 760 (S.D.1989); SDCL 15-6-56(c). On appeal from a motion for summary judgment, our task is to determine only whether a genuine issue of material fact exists and whether the law was correctly applied. Affirmance of a summary judgment is proper if there exists any basis which supports the ruling of the trial court. Garrett v. BankWest, Inc., 459 N.W.2d 833, 837 (S.D.1990); Pickering, 434 N.W.2d at 760. We will affirm a grant of summary judgment only if there are no genuine issues of material fact and the legal questions have been correctly decided. Butterfield v. Citibank of S.D., N.A., 437 N.W.2d 857, 858 (S.D.1989). " 'Summary judgment is generally not feasible in negligence cases because the standard of the reasonable man must be applied to conflicting testimony.... It is only when the evidence is such that reasonable men can draw but one conclusion from facts and inferences that they become a matter of law and this occurs rarely.' " Trammell v. Prairie States Ins. Co., 473 N.W.2d 460, 462 (S.D.1991) (quoting Wilson v. Great N. Ry. Co., 83 S.D. 207, 212-13, 157 N.W.2d 19, 22 (1968)) (citations omitted).

South Dakota's employment-at-will doctrine is codified at SDCL 60-4-4. The statute provides:

An employment having no specified term may be terminated at the will of either party on notice to the other, unless otherwise provided by statute.

In 1983, this court adopted a narrow exception to that doctrine in Osterkamp v. Alkota Mfg., Inc., 332 N.W.2d 275 (S.D.1983). In Osterkamp, we held that an employee handbook could constitute a contract of employment where the employer specifically agrees to discharge employees "for cause only." Where such an agreement exists in the handbook and an employer fails to abide by its terms in discharging an employee, that employee has a cause of action for wrongful discharge of employment based on breach of the agreement. We defined the Osterkamp exception in later cases as providing two possible ways an employee handbook could create a "for cause only" agreement:

First, such an agreement may be found where the handbook explicitly provides, in the same or comparable language, that discharge can occur 'for cause only.' Second, a 'for cause only' agreement may be implied where the handbook contains a detailed list of exclusive grounds for employee discipline or discharge and, a mandatory and specific procedure which the employer agrees to follow prior to any employee's termination.

Butterfield, 437 N.W.2d at 859; Breen v. Dakota Gear & Joint Co., Inc. 433 N.W.2d 221 (S.D.1988). The handbook language must clearly indicate the employer's intention to surrender his statutory power under SDCL 60-4-4 to terminate an employee at will. Butterfield, 437 N.W.2d at 859.

Richardson argues that the detailed provisions of East-River's employee handbook regarding disciplinary and termination procedures implied a "just cause only" agreement under the second exception to Osterkamp, removing her from employment-at-will status. We do not agree. Osterkamp requires a detailed list of exclusive grounds for discharge as well as a mandatory and specific termination procedure. East River's Policy No. 514, Termination of Employment, provides in Section II, B, 2, five extreme offenses which will result in immediate termination. Section II, B, 3 provides: "There are other circumstances under which an employee may be terminated." This section further provides these other circumstances must be consistent with the handbook's employee discipline policy (Policy No. 515) and that termination will be the discipline of last resort. Section II, B, 4 acknowledges that "other reasons for termination may arise from time to time which have nothing to do with employee behavior," citing reductions in force or elimination of positions. Policy No. 515, Employee Discipline, Section II, A, provides a detailed list of causes for disciplinary action. The language in this section makes clear the list is not exclusive: "Causes for which disciplinary action can be taken include but are not limited to the following items." Clearly, East River's employee handbook, which provides a non-exclusive list of grounds for termination and disciplinary actions (which includes termination), precludes a "just cause only" agreement under the second Osterkamp exception to the at-will employment doctrine.

Additionally, we point to Policy No. 515, Employee Discipline, Section III, B, 2 for further proof that Richardson's employee status at East River was at-will. This section states the notice provisions of the policy will not apply:

when the cause for disciplinary action is determined by all appropriate levels of management including the General Manager not to be cause for termination according to Policy 514 [listing specific, but not exclusive grounds for termination], but is of a sufficiently serious nature to require the imposition of some or all of the Disciplinary Actions described in section IV of this policy without administering the [notice] procedures described [above] (emphasis added).

The disciplinary actions described in section IV of the policy include termination. We believe this paragraph of East River's employee handbook provides sufficient discretion to the managers to take action, including termination of an employee without prior notice, when they feel such action is appropriate. We note termination under these circumstances can only occur when "all appropriate levels of management including the General Manager" are in agreement as to the...