Case Title: Stinson v. American Sterilizer Co.

Citation: 570 So. 2d 618

Docket Number: 

State: alabama

Court: Alabama Supreme Court

Date: 1990-09-14T00:00:00Z

Document:
570 So. 2d 618 (1990)
Louis STINSON
v.
AMERICAN STERILIZER COMPANY, et al.
89-813.

Supreme Court of Alabama.
September 14, 1990.
Rehearing Denied October 19, 1990.
*619 Jim L. DeBardelaben of McPhillips, DeBardelaben & Hawthorne, Montgomery, for appellant.
Stephen X. Munger and Jay D. Milone of Jackson, Lewis, Schnitzler & Krupman, Atlanta, Ga., and Henry C. Barnett, Jr. of Capell, Howard, Knabe & Cobbs, Montgomery, for appellees.
HOUSTON, Justice.
This is an appeal from a summary judgment in favor of the defendants, American Sterilizer Company ("the Company"), Donald J. Ryan, Keith Long, Kenneth D. Thomas, and Bill Robertsall management members at the Company's Montgomery, Alabama, facilityand against Louis Stinson on Count II of his complaint, which alleged breach of an employment contract. The trial court made that judgment final pursuant to Rule 54(b), A.R.Civ.P. We affirm.
The issues presented for our review are whether the Company's employee handbook created an employment contract and, if so, whether that handbook required periodic performance evaluations for transferred employees. In essence, Stinson alleges that, because he did not receive periodic performance evaluations after his transfer and because his annual review was not timely submitted to him, prior to the termination of his employment, the defendants breached the contract based on the Company's employee handbook.
This case was filed after June 11, 1987; therefore, the applicable standard of review is the "substantial evidence" rule. See Ala.Code 1975, § 12-21-12. In West v. Founders Life Assurance Co. of Florida, 547 So. 2d 870, 871 (Ala.1989), this Court, construing § 12-21-12, stated that "substantial evidence" is "evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved." See Thomas v. Principal Mutual Financial Group, 566 So. 2d 735 (Ala.1990).
Absent an agreement between Stinson and the Company requiring the Company to provide Stinson with periodic performance evaluations at specified intervals and with an annual review at a specific *620 time, Stinson had no cause of action for breach of an employment contract. Hoffman-La Roche, Inc. v. Campbell, 512 So. 2d 725 (Ala.1987). Stinson argues that the Company's employee handbook created an employment contract upon which he was entitled to rely. Therefore, we must first address the issue of whether the Company's employee handbook did in fact create a contract of employment between Stinson and the Company and, if it did, whether the Company breached that contract by failing to provide Stinson with periodic performance evaluations at specified intervals and with an annual review at a specific time after he had been transferred to another job.
The Company's employee handbook introduces the employee to the Company and describes, along with other things, the benefits, employment conditions, and safety provisions. In the handbook, the Company expressly reserves the right to deviate from the policy provisions contained therein. That portion of the handbook styled "Summary" reads as follows:
(Emphasis added.)
In the handbook, the Company also reserves the right to deviate from its policies pertaining to discipline. After listing examples of inappropriate conductconduct that could result in immediate discharge and after stating the procedures for the positive reinforcement and corrective action for such conduct, the handbook provides as follows:
(Emphasis added.)
Furthermore, after listing the types of inappropriate conduct for which corrective action might be applied, the handbook informed its employees that the examples of conduct that could lead to progressive action techniques, up to and including discharge, were not all-inclusive:
(Emphasis added.)
In addition, the following portion of the performance review provision that Stinson relies upon is discretionary:
It does not state that employees will or must be reviewed on a periodic basis after transfer. Rather, it simply states that supervisors *621 of transferred employees plan to hold several sessions with the employee during the early stages of his job.
Furthermore, although another portion of that provision mandates an annual review, it does not designate a specific date on which the Company must submit that review to the employee:
Although the Company did not review Stinson at each interval, it did conduct an annual review of his performance and it did provide him with a copy of that annual review prior to his termination, albeit several months after the annual review had been conducted.
In Hoffman-La Roche, supra, this Court, recognizing that the language in a policy contained in an employee manual may become an offer to create a binding unilateral contract, enunciated a three-pronged test in order to determine whether a policy contained in a handbook constitutes an offer to create a binding contract between an employer and an employee:
512 So. 2d  at 735. However, whether a handbook policy meets this test is a matter of law to be determined by the court. See Hoffman-La Roche, supra; see, also, Bailey v. Intergraph Corp., 537 So. 2d 21 (Ala. 1988).
Under the facts in Hoffman-La Roche, the Court emphasized that the mandatory language in the disciplinary procedure in the handbook made no provision for deviation, reserved no discretion to the company, and contained no language stating that the list of inappropriate conduct was not all-inclusive. Furthermore, the Court in Hoffman-La Roche, 512 So. 2d  at 734-35, noted the following:
(Citations omitted.) (Emphasis added.)
Clearly, in the instant case, the language in the Company's handbook, taken in its entirety, is not sufficiently specific to constitute an offer of employment. Rather, the handbook expressly reserves the Company's discretion to follow, to ignore, or to unilaterally add to or change the reasons for discipline and to deviate from the policies entirely. Specifically, the closing remarks in the handbook clearly evince the employer's intent not to be bound by the terms of the disciplinary provision:
In this case, the Company's employee handbook contains express disclaimers reserving the Company's right to deviate *622 from all the policies stated in that handbook. Stinson does not contest or dispute the existence of these disclaimers. Accordingly, Stinson could not reasonably conclude that the Company was committed to always adhere to the policy stated in the handbook; therefore, the handbook, as a matter of law, could not reasonably be construed as a unilateral contract of employment, modifying Stinson's employment-at-will status; the handbook, as a matter of law, could not be construed as constituting an enforceable contract of employment. Therefore, the trial court properly entered the summary judgment in favor of the defendants.
AFFIRMED.
HORNSBY, C.J., and SHORES and KENNEDY, JJ., concur.
JONES, J., concurs in the result.