Whittington v. STATE DEPT. OF PUBLIC SAFETY, 24,376.

• Decision Date: 27 August 2004
• Docket Number: No. 24,376.,24,376.
• Citation: 136 N.M. 503,100 P.3d 209
• Parties: Stephen R. WHITTINGTON, et al., Plaintiffs-Appellants, v. STATE of New Mexico DEPARTMENT OF PUBLIC SAFETY, John Denko, in his capacity as Secretary of the New Mexico Department of Public Safety, and Carlos Maldonado, in his capacity as Chief of the New Mexico State Police, Defendants-Appellees.
• Court: Court of Appeals of New Mexico

100 P.3d 209

136 N.M. 503

Stephen R. WHITTINGTON, et al., Plaintiffs-Appellants, v. STATE of New Mexico DEPARTMENT OF PUBLIC SAFETY, John Denko, in his capacity as Secretary of the New Mexico Department of Public Safety, and Carlos Maldonado, in his capacity as Chief of the New Mexico State Police, Defendants-Appellees.

No. 24,376.

Court of Appeals of New Mexico.

August 27, 2004.

Certiorari Denied October 20, 2004.

Richard F. Rowley II, Richard F. Rowley III, Rowley Law Firm, P.C. Clovis, NM, for Appellants.

Ellen Casey, S. Barry Paisner, Hinkle, Hensley, Shanor & Martin, L.L.P., Santa Fe, NM, for Appellees.

Certiorari Denied, No. 28,893, October 20, 2004.

OPINION

CASTILLO, Judge.

{1} This appeal requires us to review the trial court's entry of summary judgment against Plaintiffs on the one remaining count in their complaint, that of breach of contract. We consider whether policies and procedures governing the employment of state police officers create an implied contract regarding terms of employment and, if so, whether the implied contract constitutes a "valid written contract," such that immunity is waived under the terms of NMSA 1978, § 37-1-23(A) (1976). We answer in the affirmative; however, the trial court must still determine the remaining issues. In this case, the trial court bifurcated consideration of the summary judgment motion into parts and postponed consideration of issues related to grievance procedures and the statute of limitations until after the contract issues were decided. It appears that the implied contract requires certain procedures to be followed when an employee believes a term of employment has not been followed and that these procedures do not contemplate direct suit to district court.¹ We do not reach this procedural issue in this opinion but confine our discussion to whether there is a valid written contract giving rise to a waiver of immunity. Accordingly, we reverse the trial court's summary judgment and remand for consideration of the remaining arguments in Defendants' motion for summary judgment.

I. BACKGROUND

{2} This case has a long history. Plaintiffs are a large group of state police officers who originally filed this suit in 1996 against the State of New Mexico Department of Public Safety (Department), the Secretary of the Department (Secretary), and the Chief of the New Mexico State Police (collectively referred to as Defendants) for violations of the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201-219 (2000). The case was removed to federal court and then remanded to state court, based on the holding in Seminole Tribe v. Florida, 517 U.S. 44, 61-66, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996), that the federal court did not have jurisdiction to hear FLSA claims against a state. Once back in district court, the Department moved to dismiss the employees' claims for violations of the FLSA, based on state sovereign immunity. This Court, holding that the Eleventh Amendment of the United States Constitution does not give Defendants sovereign immunity from suit in state court for violations of the FLSA, originally reversed the district court's decision to dismiss Plaintiffs' suit against Defendants. See Whittington v. State Dep't of Pub. Safety, 1998-NMCA-156, ¶ 16, 126 N.M. 21, 966 P.2d 188. Defendants appealed to the United States Supreme Court, which, based on its decision in Alden v. Maine, 527 U.S. 706, 119 S.Ct. 2240, 144 L.Ed.2d 636 (1999), vacated the judgment. See N.M. Dep't of Pub. Safety v. Whittington, 527 U.S. 1031, 119 S.Ct. 2388, 144 L.Ed.2d 790 (1999). We then withdrew our previous opinion and affirmed the decision of the district court dismissing the direct FLSA claims, as set forth in counts one, three, and four of Plaintiffs' second amended complaint. Whittington v. State Dep't of Pub. Safety, 2000-NMCA-055, ¶ 5, 129 N.M. 221, 4 P.3d 668. Because there was no final order as to Plaintiffs' claim for breach of contract, we noted that a disposition of the direct FLSA claims should not be understood as precluding Plaintiffs "from asserting in the context of Count II that the written employment policies of the Department constitute a contract within the scope of NMSA 1978, § 37-1-23 (1976)." Id.

{3} Count two sets forth Plaintiffs' claim for breach of contract. On November 4, 2002, Defendants filed a motion for summary judgment on count two, together with a comprehensive memorandum containing several arguments. In response, Plaintiffs filed a motion for an extension of time to respond to the motion and to submit affidavits and a memorandum. At the hearing on Plaintiffs' motion, the trial court bifurcated the summary judgment motion into two parts. In part one, the parties were directed to address the existence of an enforceable contract concerning compensation arising out of the Department's policies and procedures, as well as the effect of such a contract on the immunity issue. The trial court ruled that if Defendants were unsuccessful in this part of their motion, a status conference would be convened to determine if further discovery was necessary to enable Plaintiffs to respond to Defendants' remaining arguments. These arguments relate to the issues of whether Plaintiffs are bound by the grievance and appeals procedure set out in the Department's policies and procedures and whether Defendants are entitled to summary judgment on all contract claims for overtime compensation that occurred prior to September 16, 1995.

{4} On August 25, 2003, the trial court entered an order granting summary judgment on count two of Plaintiffs' complaint. In the order, the trial court assumed that the policies and procedures issued by the Department created an implied employment contract, pursuant to Garcia v. Middle Rio Grande Conservancy District, 1996-NMSC-029, 121 N.M. 728, 918 P.2d 7. Based on this assumption, the trial court explicitly rejected the argument that an implied employment contract only extends to termination of employees. The trial court noted that there are two exceptions to the general rule of at-will employment in New Mexico: the tort of retaliatory discharge and an implied contract term that restricts the employer's power to discharge. Relying on the New Mexico Supreme Court's decision in Silva v. American Federation of State, County and Municipal Employees, 2001-NMSC-038, 131 N.M. 364, 37 P.3d 81, the trial court held that a cause of action for breach of an implied contract for overtime compensation is available only to at-will employees. There is no dispute that New Mexico state police officers are by statute not at-will employees. As a consequence, the trial court granted the summary judgment, holding that Plaintiffs "may not utilize an exception to the at will employment rule to pursue claims against Defendants."

II. DISCUSSION

A. Standard of Review

{5} While it appears that there is a dispute as to whether the policies were distributed to Department personnel or not, Defendants concede that this dispute is not a material fact relevant to the appeal. We agree and conclude that there are no material facts in dispute. Our review, therefore, is de novo. Barreras v. State Corr. Dep't, 2003-NMCA-027, ¶ 5, 133 N.M. 313, 62 P.3d 770 (stating that the court applies a de novo standard of review when issues on appeal present questions of law arising out of undisputed facts).

B. Implied Contract

1. Manual

{6} The policies that Plaintiffs allege were breached are attached to Defendants' memorandum. They relate to overtime compensation, jury and witness fees, holiday compensation and duties, and physical fitness time. Defendants attached as exhibits additional policies and procedures. During the hearing on the motion for summary judgment, Defendants agreed with the trial court that the Department's manual is much more extensive than the portions contained in the record. However, for purposes of this appeal, there is no dispute that the record contains those portions of the manual that are material to our decision and that those portions not included in the record are not necessary for a determination in this case. For ease of reference in this opinion, we will refer to policies that are contained in the record as the Manual and will rely on these documents in our analysis.

{7} It is well established that employee handbooks, personnel policy guides, and similar documents may constitute implied employment contracts. Garcia, 1996-NMSC-029, ¶ 11,121 N.M. 728,918 P.2d 7 (holding that an employee handbook may constitute an implied employment contract). The test to determine whether a document rises to the level of an implied contract is based on the degree of the parties' reliance on it: when the document controls the employer-employee relationship such that employees may reasonably rely on the document's provisions and may expect the employer to conform to the procedures it outlines, the terms of the document constitute the contract. Id. ¶ 11 ("[A] personnel manual gives rise to an implied contract if it control[s] the employer-employee relationship and an employee could reasonably expect his employer to conform to the procedures it outlines." (internal quotation marks and citations omitted)).

{8} Defendants argue that the Manual contains general statements of policy and does not exhibit any of the elements of an express or implied contract. The trial court made no specific determination regarding the contract and "assumed" that the Manual constituted an employment contract under Garcia. Normally, the question of whether a manual modifies the employment relationship is "a question of fact to be discerned from the totality of the parties' statements and actions regarding the employment relationship." Cockrell v. Bd. of Regents of N.M. State Univ., 2002-NMSC-009, ¶ 26, 132 N.M. 156, 45 P.3d 876 (quoting Newberry v. Allied Stores, Inc., 108 N.M. 424, 427, 773 P.2d 1231, 1234 (1989) (internal quotation marks omitted)).

{9} Since this case comes to u...