Southwest Gas Corp. v. Ahmad

• Decision Date: 31 August 1983
• Docket Number: No. 13891,13891
• Citation: 668 P.2d 261,99 Nev. 594
• Parties: , 114 L.R.R.M. (BNA) 2633, 99 Lab.Cas. P 55,415 SOUTHWEST GAS CORPORATION, Appellant and Cross-Respondent, v. Karen AHMAD, Respondent and Cross-Appellant.
• Court: Nevada Supreme Court

Page 261

668 P.2d 261

99 Nev. 594, 114 L.R.R.M. (BNA) 2633,

99 Lab.Cas. P 55,415

SOUTHWEST GAS CORPORATION, Appellant and Cross-Respondent, v. Karen AHMAD, Respondent and Cross-Appellant.

No. 13891.

Supreme Court of Nevada.

Aug. 31, 1983.

Fitzgibbons & Beatty, and Joshua M. Landish, Las Vegas, for appellant and cross-respondent.

John Peter Lee, and Daniel Marks, Las Vegas, for respondent and cross-appellant.

OPINION

SPRINGER, Justice:

Ahmad recovered a judgment against Southwest for breach of her oral employment contract. The issue in this case is whether or not the parties are bound by a termination clause appearing in the Employee Information and Benefits Handbook provided to Ahmad by Southwest. The district court found that the handbook created employment and contractual rights between the parties and that Southwest violated the contract.

There is testimony by Ahmad that she had knowledge of the termination section of the handbook "throughout the length of [her] employment." The fact that the company issued such handbooks to its employees and that Ahmad had knowledge of the pertinent provisions therein supports an inference that the handbook formed part of the employment contract of the parties.

There is also evidence of formal delivery of the handbook after the commencement of employment. Her continued employment after formal delivery of the handbook provides sufficient consideration for modifying the employment agreement by inclusion of the handbook provisions. See Yartzoff v. Democrat-Herald Publishing Co., Inc., 281 Or. 651, 576 P.2d 356 (1978); 1A A. Corbin, Corbin on Contracts 122, § 175 (1963).

Yartzoff is similar to the instant case. There, summary judgment was entered in favor of the employer. The judgment was reversed on the ground that material issues of fact existed as to whether an employment handbook issued by the employer was part of the employment contract. A handbook was delivered by the employer to the employee several days after commencement of employment. The court held that even under such circumstances a fact finder could find that the handbook was intended by the parties to be part of the original contract of employment. The court went on to hold that even if the book were not part of the original contract, it could be considered as a subsequent modification of the contract. The court reasoned that since the employee was free to leave her employment, her continued employment after receiving the handbook provided sufficient consideration for the modifications. We agree with this reasoning and hold that the district court's action is supportable on the ground that the handbook could be found to be part of the original contract or to be a modification supported by sufficient consideration. Either way the district court's judgment should be affirmed. See Hotel Riviera, Inc. v. Torres, 97 Nev. 399, 632 P.2d 1155 (1981). It is so ordered.

MOWBRAY and GUNDERSON, JJ., concur.

STEFFEN, Justice, with whom MANOUKIAN, Chief Justice, joins, dissenting:

I respectfully dissent.

My review of the record has revealed no basis in law or the evidence upon which to sustain the decision of the district court. Additionally, it would seem that my brethren in the majority have propelled Nevada law above and beyond those jurisdictions who have carefully engrafted limited exceptions to the common law doctrine regarding "at-will" employment.

Nevada has not as yet seen fit to legislatively abrogate the common law rule concerning "at-will" employment. This rule, which remains in general effect throughout the United States, provides that employment for an indefinite term may be terminated at any time for any reason or for no reason by either the employee or the employer without legal liability. Phillips v. Goodyear Tire & Rubber Co., 651 F.2d 1051 (5th Cir.1981). Although some jurisdictions retain the rule without exception, most have limited the employer's right to terminate at-will employees to situations where such terminations undermine a firmly established public policy or statutory objective. Roberts v. Atlantic Richfield Co., 88 Wash.2d 887, 568 P.2d 764 (1977); Alford v. Life Savers, Inc., 210 Neb. 441, 315 N.W.2d 260 (1982); Bruffett v. Warner Communications, Inc., 692 F.2d 910 (3rd Cir.1982); Brower v. Holmes Transp., Inc., 140 Vt. 114, 435 A.2d 952 (1981); Petermann v. International Brotherhood of Teamsters, etc., 174 Cal.App.2d 184, 344 P.2d 25 (1959); Chin v. American Tel. & Tel. Co., 96 Misc.2d 1070, 410 N.Y.S.2d 737 (1978). In the instant case, it is uncontroverted that Ahmad was employed on an indefinite basis with Southwest. We are thus not faced with a breach of an employment contract for a specified term. Nor do we have basis for deciding a public policy limitation on the common law terminable at-will doctrine.

The trial judge found that Ahmad was discharged for cause. Nevertheless, Southwest was assessed damages by reason of its asserted failure to abide by the termination provisions of its Employee Information and Benefits Handbook. The trial court's decision was thus bottomed on either a contract or estoppel theory. In my considered judgment, neither applies.

It is clear on the record that the handbook at issue was in no sense part of the bargaining process by which Ahmad accepted employment with Southwest. At best, Ahmad became generally aware of the handbook after her employment, and with respect to the termination provision, not until at least a year after her hiring date. ¹ The majority nevertheless concludes that since Southwest issued the handbook to its employees, and since "Ahmad had knowledge of the pertinent provisions therein," an inference arises that the handbook formed part of the employment contract of the parties. The case of Yartzoff v. Democrat-Herald Publishing Co., Inc., 281 Or 651, 576 P.2d 356 (1978), is then cited by the majority as support for such an "inference." Yartzoff, I suggest, affords no such support. The Oregon court had before it a case disposed of by the lower court on summary judgment. In reversing the entry of summary judgment against the employee, the reviewing court held that at trial, a jury might infer from the employee's facts that the "statements in the handbook were intended and considered by both parties to be a part of the terms of plaintiff's original contract of employment." Finally, the Oregon court disclaimed any predisposition as to the merits of the case by anything contained in its opinion. I am unaware of any rule or principle of law which would create an inference of a contract resulting only from evidence of the unilateral dissemination of an employees' handbook coupled with an employee's awareness of the provisions or contents of such a handbook. Certainly the Yartzoff opinion provides no support or basis for such an inference.

The majority's alternative assertion that formal delivery of a revised handbook to Ahmad constituted a modification of the original contract of employment supported by the consideration of continued employment is also unsupported by the facts as well as the law. Here, delivery of the revised handbook to which the majority refers took place in April, 1980, some two years after respondent was hired. There was neither an express nor an implied representation by Southwest that the handbook was to be a part or modification of any agreement between the parties. Indeed, Ahmad has neither contended nor proved any such modification.

There further appears to be no basis for the majority's finding of reliance on or consideration for any modification of the contract. There was no evidence of bargaining between the parties for a contract modification, nor any indication that after having received the manual, Ahmad in any way changed her position or acted in any manner except to fulfill her regular job responsibilities for Southwest. The fact that Ahmad continued working after having received the manual, although she was under no obligation to do so, cannot be viewed as consideration for a contract modification. Here, the non-exercise of a pre-existing legal right was neither bargained for nor given in exchange for any promise. It certainly did not work to Ahmad's detriment, nor did it confer any new benefit on Southwest. Ahmad's continued employment falls short of being consideration for a contract modification. See Restatement of Contracts 2d §§ 17(1), 71, 73. Corbin on Contracts §§ 152-209, Williston on Contracts, 3rd ed. §§ 99-107. See also Sargent v. Illinois Institute of Technology, 78 Ill.App.3d 117, 33 Ill.Dec. 937, 397 N.E.2d 443 (1979); Edwards v. Citibank, N.A., 100 Misc.2d 59, 418 N.Y.S.2d 269 (1979); Williams v. Biscuitville, Inc., 40 N.C.App. 405, 253 S.E.2d 18 (1979); Simmons v. Westinghouse, 311 So.2d 28 (La.App.1975); Zagar v. Field Enterprises Educational Corporation, 58 Ill.App.3d 750, 16 Ill.Dec. 122, 374 N.E.2d 897 (1978).

In the instant case, the trial judge failed to make clear the theory upon which he based appellant's liability. In one sentence, the judge found evidential substantiation of reliance on the termination provision by respondent. The record simply does not support such a finding. To the contrary, as noted previously, respondent was unaware of the termination provision of the...