Wagner v. City of Globe, 18564-PR

• Citation: 150 Ariz. 82,722 P.2d 250
• Decision Date: 24 June 1986
• Docket Number: No. 18564-PR,18564-PR
• Parties: , 55 USLW 2032, 104 Lab.Cas. P 55,601, 1 IER Cases 501 Edward A. WAGNER and Andrea Wagner, husband and wife, Appellants, v. CITY OF GLOBE, a municipal corporation, Appellee.
• Court: Supreme Court of Arizona

Page 250

722 P.2d 250

150 Ariz. 82, 55 USLW 2032, 104 Lab.Cas. P 55,601,

1 IER Cases 501

Edward A. WAGNER and Andrea Wagner, husband and wife, Appellants, v. CITY OF GLOBE, a municipal corporation, Appellee.

No. 18564-PR.

Supreme Court of Arizona, In Banc.

June 24, 1986.

Mesch, Clark & Rothschild, P.C. by Tom R. Clark, Tucson, for appellants.

William L. Tifft, Globe, for appellee.

GORDON, Vice Chief Justice.

We granted this Petition for Review to determine whether summary judgment was properly entered against the petitioner in light of allegations that his at-will employment was terminated in breach of implied contract and in violation of public policy.

The court of appeals affirmed the entry of summary judgment by memorandum decision. Wagner et ux v. City of Globe, 2 CA-CIV 5361 (filed Oct. 11, 1985). We have jurisdiction pursuant to Ariz. Const. art. 6 § 5(3) and Rule 23, Ariz.R.Civ.App.P., 17A A.R.S.

As a preliminary matter, we note that summary judgment is improper if, upon examination of the entire record, it may be determined that there is a disputed fact which, if true, could affect the final judgment. Livingston v. Citizens Utility, Inc., 107 Ariz. 62, 481 P.2d 855 (1971). Summary judgment is not proper where there is the slightest doubt as to the facts, Peterson v. Valley Nat'l Bank of Phoenix, 90 Ariz. 361, 368 P.2d 317 (1962), and even where the facts are undisputed, summary judgment is not proper if the evidence is of such a character that reasonable minds could draw different conclusions or inferences therefrom. Livingston v. Citizens Utility, Inc., supra; Creamer v. Raffety, 145 Ariz. 34, 699 P.2d 908 (App.1984). Moreover, when reviewing on appeal the propriety of summary judgment we will consider the record in the light most favorable to the losing party. Livingston v. Citizens Utility, Inc., supra; Creamer v Edward Wagner was hired as a police officer for the City of Globe on May 20, 1974. The minutes of the Globe City Council indicate that he was hired by the city council after recommendation from the police department. It is undisputed that Wagner was placed on a six-month probationary status.

                [150 Ariz. 84] Raffety, supra.   With these precepts in mind, we turn to the facts
                

Approximately two months after Wagner was hired his attention was drawn to the strange case of Mr. Hicks. Hicks had been sitting on a bus stop bench, and when approached by two police officers refused to produce any identification. He was then arrested for vagrancy pursuant to a city code section which had been amended or abolished over a year earlier. Eventually Hicks was given a ten-day jail term. Several days later Hicks approached Wagner and asked him when he would be arraigned. Wagner then determined that Hicks had been in jail for 21 days, despite his original sentence of ten days, and had not yet been arraigned. Wagner further determined that Hicks was being held under a statute amended more than a year earlier. Wagner arranged to take Hicks before the local magistrate, where he was sentenced to ninety days. Wagner then pointed out to the judge that the arrest was illegal and that Hicks had been detained eleven days beyond his original sentence. Although the judge then suspended the sentence, he became upset and indicated that he was going to talk to Wagner's chief. Later that day, the Chief of Police, Dale Van Buskirk, told Wagner he did not appreciate "big city cops" coming to Globe to tell him how to run his department. Fearing that he might be terminated, Wagner photocopied police documents which he believed would show he had done nothing wrong. In his affidavit Van Buskirk stated that Wagner was fired because "it became apparent to me that the continued employment of Patrolman Wagner ... was not in the best interest of the City...."

On August 2, 1974, Wagner received a written notice of termination from Van Buskirk effective immediately. On August 5, 1974, Wagner addressed a meeting of the city council to protest his termination. No official action was taken by the council at that time. On May 15, 1975, Wagner filed suit against the City of Globe, the city council members, and Van Buskirk, alleging wrongful discharge, slander, and racial discrimination. ¹ On July 7, 1975, the city council met and approved the firing of Wagner. The trial court granted the defendant's summary judgment on all three counts on December 12, 1980. Wagner has appealed only on Count I, his allegation of wrongful discharge.

Every employment contract for an indefinite term is presumed to be terminable at will. See Note, Protecting At-Will Employees Against Wrongful Discharge: The Duty to Terminate Only In Good Faith, 93 Harv.L.Rev. 1816 (1980). All parties have agreed that Wagner was an "at-will" employee; that is, his employment was for an indefinite term, at sufferance, and the employment could be terminated by either party, at will, for no cause or any cause. See Mauk, Wrongful Discharge: The Erosion of 100 Years of Employer Privilege, 21 Idaho L.Rev. 201 (1985). This principle, generally referred to as the employment-at-will doctrine, is uniquely a product of the American common law. The at-will rule has been traced to an 1877 treatise by Horace G. Wood entitled Law of Master and Servant. H.G. Wood, Master and Servant (1877). No doubt the title of the treatise says all that need be said regarding Woods' view of employment relations. ² The doctrine of employment-at-will

                [150 Ariz. 85] found fertile ground in the laissez-faire climate of nineteenth century America and thrived until very recently.  Increasingly, however, the doctrine is under attack.  See, e.g., Mauk, 21 Idaho L.Rev. 201, supra;  Mallor, Punitive Damages for Wrongful Discharge of At Will Employees, 26 Wm. and Mary L.Rev. 449 (1985);  Note, 93 Harv.L.Rev. 1816, supra.   Today three-fifths of the states have recognized some form of a cause of action for "wrongful discharge".  26 Wm. and Mary L.Rev. at 452.  The trend has been to modify the at-will doctrine by creating exceptions to its operation. 3  Three major exceptions have been developed:  the "implied contract" exception, which relies upon proof of an implied promise of continued employment absent just cause for termination to protect the legitimate expectations of workers, and which may be established by oral representations, a course of dealing, personnel manuals or memoranda;  the "public policy" exception, which permits recovery upon a finding that the employer's conduct undermined some important public policy;  and the implied covenant of "good faith and fair dealing", which protects employees from termination for bad cause.  See Wagenseller v. Scottsdale Memorial Hospital, 147 Ariz. 370, 376, 710 P.2d 1025, 1031 (1985);  Leikvold v. Valley View Community Hospital, 141 Ariz. 544, 545-546 n. 1, 688 P.2d 170, 171-172 n. 1 (1984). 4  Arizona recognizes all three exceptions.  Wagenseller v. Scottsdale Memorial Hospital, supra.   Petitioner Wagner raises two theories of wrongful discharge:  breach of contract and violation of public policy
                

BREACH OF CONTRACT

The at-will employment relationship, despite its limitations, is nonetheless contractual. Employment contracts, particularly those which would be considered at-will, are the best and most typical examples of unilateral contracts. See Mauk, 21 Idaho L.Rev. at 212-213; Note, Employee Handbooks and Employment-At-Will Contracts, 1985 Duke L.J. 196, 212-219. Unlike a bilateral contract, a unilateral contract does not require mutuality of obligation; but there is sufficient consideration in the form of services rendered. This is true despite the fact that the employee may quit at any time. See 1A A. Corbin, Corbin on Contracts § 152, at pp. 13-14 (1963). Because the at-will employment relationship is contractual, it can be modified by the parties at any time just as other One widely accepted means of modifying the at-will contract is use or publication of personnel manuals, guides, or rules by employers. An employer's representations contained in a personnel manual "can become terms of the employment contract and limit an employer's ability to discharge his or her employees....", Leikvold v. Valley View Community Hospital, 141 Ariz. at 546, 688 P.2d at 172, even though the personnel policies were not bargained for at the time of hiring.

                [150 Ariz. 86] contracts can be modified.  Accordingly, the presumption that employment contracts of indefinite duration are terminable at will can be modified by the parties.  Wagenseller v. Scottsdale Memorial Hospital, supra;  Leikvold v. Valley View Community Hospital, supra.   The parties may create a different relationship, and define the parameters of that relationship, based upon the totality of their statements and actions regarding the employment relationship.  Wagenseller v. Scottsdale Community Hospital, 147 Ariz. at 383, 710 P.2d at 1038
                

Wagner claims that his discharge was accomplished in violation of the City of Globe's own personnel rules, and therefore in breach of contract. In order to establish a breach of contract claim based upon a violation of personnel rules a plaintiff must prove two things: the personnel manual actually became part of the employment contract and the terms of the manual were breached.

Whether the parties intended to modify their at-will contract, by use of a personnel manual or otherwise, is a question of fact. Leikvold v. Valley View Community Hospital, 141 Ariz. at 548, 688 P.2d at 174. Evidence relevant to this decision includes the language of the personnel manual, any representations made by the employer, and the course of dealing between the employer and employee. Id. ⁵ Reliance is not an essential predicate to the action, but is only one of the several relevant factors. Wagenseller v. Scottsdale Memorial Hospital, 147 Ariz. at 381, 710 P.2d at 1036. Summary judgment is inappropriate where a genuine dispute exists as to material facts, Leikvold v. Valley View...