Thompson v. City of Idaho Falls

• Decision Date: 16 December 1994
• Docket Number: No. 20814,20814
• Citation: Thompson v. City of Idaho Falls, 126 Idaho 587, 887 P.2d 1094 (Idaho App. 1994)
• Parties: Denise THOMPSON, Plaintiff-Appellant, v. The CITY OF IDAHO FALLS, a municipal corporation, Richard A. Straub, individually and in his official capacity as manager of the Idaho Falls Aquatic Center, Defendants-Respondents.
• Court: Idaho Court of Appeals

Page 1094

887 P.2d 1094

126 Idaho 587

Denise THOMPSON, Plaintiff-Appellant, v. The CITY OF IDAHO FALLS, a municipal corporation, Richard A. Straub, individually and in his official capacity as manager of the Idaho Falls Aquatic Center, Defendants-Respondents.

No. 20814.

Court of Appeals of Idaho.

Dec. 16, 1994.

Skinner, Fawcett & Mauk, Boise, for appellant. Chris Kronberg, argued.

Holden, Kidwell, Hahn & Crapo, Idaho Falls, for respondents. Dale W. Storer, argued.

WALTERS, Chief Judge.

This is an appeal from a district court's order granting summary judgment against plaintiff-appellant, Denise Thompson, in an action alleging breach of contract, violation of due process rights, breach of the covenant of good faith and fair dealing, and tortious interference with contract and prospective business advantage. Thompson brought this action following her termination as an employee for respondent City of Idaho Falls. Concluding that no genuine issues of material fact exists, we affirm the summary judgment.

I. FACTUAL AND PROCEDURAL BACKGROUND

In November 1986, Denise Thompson commenced employment with the City of Idaho Falls as assistant manager of the Idaho Falls Aquatic Center. At that time, she was given a copy of the City's Personnel Policy and Procedures Handbook (the handbook) and its Code of Conduct, and on November 17, 1986, she signed a statement acknowledging that she had received them and agreed to abide by them. Shortly thereafter, she was given an updated version of the handbook, the relevant portions of which were the same as the previous version.

On March 2, 1990, Thompson received a performance appraisal and was placed on thirty days' probation. The performance appraisal set forth certain employment duties with which Thompson had to comply over the thirty-day period. On March 23, 1990, Thompson was terminated. ¹ Thompson filed a grievance with the division director of Parks and Recreation, John Johnson, and hearings were held on April 3 and 5, 1990. Johnson concluded that termination of Thompson's employment was proper, and on April 6, 1990, Johnson wrote to Thompson, setting forth the reasons for her discharge as follows: (1) Inability to work with public and staff; (2) Failure to comply with Aquatic Center operating procedures, including sign-in/out procedures; and (3) Inability to maintain a working relationship with the Aquatic Center manager.

Thompson then appealed to Craig Lords, the city municipal services director. A hearing was held on April 25, 1990, before Lords and Arthur Chandler, a city council member appointed by the mayor. Lords and Chandler affirmed Johnson's decision, and on May 4, 1990, the mayor signed the personnel action terminating Thompson, effective March 23, 1990. On October 2, 1990, Thompson filed a Notice of Tort Claim with the city clerk. On November 4, 1991, Thompson filed the complaint in the instant case and on April 23, 1992, filed an amended complaint.

The amended complaint named as a defendant the respondent Richard Straub, individually and in his official capacity as manager of the Aquatic Center. It also named the respondent City as a defendant, under the doctrine of respondeat superior. As against both respondents, Thompson alleged breach of contract, breach of covenant of good faith and fair dealing and deprivation of the right to due process. As against respondent Straub, Thompson alleged intentional interference with contract and prospective business advantage.

On May 6, 1993, the respondents filed a motion for summary judgment as to all four counts of Thompson's amended complaint, and on June 3, 1993, the district court held a hearing on the motion. The district court granted summary judgment in favor of the respondents. Thompson appeals.

II. ANALYSIS

On a motion for summary judgment, all facts and inferences must be drawn in favor of the nonmoving party, and summary judgment is proper only when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. I.R.C.P. 56(c); Perkins v. Highland Enterprises, Inc., 120 Idaho 511, 516, 817 P.2d 177, 182 (1991).

A. Breach of Contract

Unless an employee is hired pursuant to a contract which specifies the duration of the employment or limits the reasons for which an employee may be discharged, the employment is at the will of either party and the employer may terminate the relationship at any time for any reason without incurring liability. Sorensen v. Comm Tek, Inc., 118 Idaho 664, 666, 799 P.2d 70, 72 (1990); see also Metcalf v. Intermountain Gas Co., 116 Idaho 622, 624, 778 P.2d 744, 746 (1989). A limitation on the right of the employer or employee to terminate the employment can be express or implied. Sorensen, 118 Idaho at 666, 799 P.2d at 72. A limitation may be implied if, from all the circumstances surrounding the employment relationship, a reasonable person could conclude that both parties intended that the employer's (or the employee's) right to terminate the employment relationship at will had been limited by the implied-in-fact agreement of the parties. Id.

The district court concluded that there existed an at-will employment relationship. On appeal, Thompson asserts that she was not an at-will employee and that the handbook created an implied-in-fact employment contract limiting the reasons for termination. Alternatively, Thompson argues that her March 2, 1990, performance appraisal established a minimum thirty-day period of employment.

1. Handbook and Code of Conduct

The Idaho Supreme Court has recognized that an employee handbook can constitute an element of the contract. Metcalf, 116 Idaho at 625, 778 P.2d at 747. In Metcalf, the court explained:

Unless an employee handbook specifically negates any intention on the part of the employer to have it become a part of the employment contract, a court may conclude from a review of the employee handbook that a question of fact is created regarding whether the handbook was intended by the parties to impliedly express a term of the employment agreement.

116 Idaho at 625, 778 P.2d at 747. In the instant case, we conclude that even if the handbook expressed certain terms of the employment agreement, nothing in the handbook limited the reasons for which Thompson could be discharged. Moreover, the handbook, viewed as a whole, negates any intent to transform an at-will employment relationship into an employment contract requiring just cause for termination. Most significant is the language expressed in the section entitled, "Nature of Employment:"

All persons employed by the City are employed at the discretion of the Mayor and City Council and shall have no right to continued employment or employment benefits, except as may be agreed in writing and expressly approved by the City Council.

Another section of the handbook states that "[n]othing herein shall be deemed to be nor shall be construed to grant any employee any right or expectation of continued employment."

Thompson relies on the following excerpts from the handbook to support her claim that the handbook created an implied-in-fact agreement limiting the reasons for which the City could terminate her employment. First, the handbook states that its purpose is to help "maintain and assist in further developing a healthy and stable relationship between the City of Idaho Falls and its employees." In the section entitled "Employee Recruitment," the handbook further provides that "all employees of the City of Idaho Falls will be employed and retained solely on the basis of their ability and efficiency." Thompson states that this language expressly limits termination to cases involving an employee's lack of ability or efficiency. We disagree. While this language indicates the basis on which employees will be hired and retained, it does not limit the reasons for which employees may be discharged. ²

Thompson also points to language under the "Discipline" section of the handbook which states that employees have a "duty" to "maintain standards of cooperation, efficiency and economy" when working for the City and that when the employee's "work habits, attitudes, productive [sic] or personal conduct fall below acceptable levels, the supervisor is to point out deficiencies to the employee." Thompson argues that this language demonstrates that there existed an agreement between the City and Thompson that "as long as she performed her job at an acceptable level she would not be terminated." This argument is unavailing. The language set forth above creates necessary conditions for continued employment but cannot be read to guarantee a specific term of employment or to place limits on the reasons for discharge.

In addition, Thompson cites the handbook's provision that permanent employees would serve an initial six-month probationary period and the provision that full-time permanent employees are "entitled to all regular benefits." Thompson argues that pursuant to these provisions, upon completion of a six-month probationary period, she was granted "permanent" employee status and was therefore not merely an employee at-will. In support of her contention, Thompson cites Harkness, infra. In Harkness, the city council passed a resolution making a police officer a permanent employee. 110 Idaho at 358, 715 P.2d at 1288. Our Supreme Court held, "By use of the term 'permanent,' the resolution strongly inferred that Harkness was no mere 'at-will' employee." Id. Unlike the handbook in the instant case, however, the city council resolution in Harkness did not explicitly state that employees had no right to continued employment.

In addition, Thompson misinterprets the import of the handbook's provisions referring to "permanent" employees. Unlike the resolution in Harkness, the handbook cannot be read to provide employees with permanent employment. When read in context, the handbook's reference to "permanent" employees does not refer to duration of employment;...