Case Title: WEST PARK HOSPITAL DISTRICT, IN RE: RECOMMENDED TERMINATION OF EMPLOYMENT OF GLENDA R. REYNOLDS: GLENDA R. REYNOLDS V. WEST PARK HOSPITAL DISTRICT

Citation: 

Docket Number: S-09-0201

State: wyoming

Court: Wyoming Supreme Court

Date: 2010-05-27T00:00:00Z

Document:
WEST PARK HOSPITAL DISTRICT, IN RE:  RECOMMENDED TERMINATION OF EMPLOYMENT OF GLENDA R. REYNOLDS: GLENDA R. REYNOLDS V. WEST PARK HOSPITAL DISTRICT2010 WY 69Case Number: S-09-0201Decided: 05/27/2010NOTICE:  This opinion is subject to formal revision before publication in Pacific Reporter Third.  Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume.
APRIL 
TERM, A.D. 2010

 
 
WEST 
PARK HOSPITAL DISTRICT, IN RE:  
RECOMMENDED TERMINATION OF EMPLOYMENT OF GLENDA R. 
REYNOLDS:

 
 
GLENDA 
R. REYNOLDS,

 
 
Appellant

(Petitioner),

 
 
v.

 
 
WEST 
PARK HOSPITAL DISTRICT,

 
 
Appellee

(Respondent).

 
 
Appeal 
from the District Court of Park County

The 
Honorable Steven R. Cranfill, Judge

 
 

Representing 
Appellant:

G. 
Mark Garrison of Garrison & Krisjansons, P.C., Cody, 
Wyoming.

 
 

Representing 
Appellee:

Chris 
Edwards of Simpson, Kepler & Edwards, LLC, The Cody, Wyoming Division of 
Burg Simpson Eldredge Hersh & Jardine, PC.

 
 
Before 
VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, 
JJ.

 
 
VOIGT, 
Chief Justice.

 
 
[¶1]      Glenda Reynolds 
(Reynolds) appeals the West Park Hospital District's Board of Trustees' 
(Hospital District) decision to terminate her employment.  Finding no error in the Hospital 
District's decision, we will affirm.  

 
 
ISSUES

 
 
[¶2]      Reynolds raises 
three issues on appeal.  We have 
rephrased those issues as follows for clarity's sake:

 
 
1.   Was the Hospital District's 
decision to terminate Reynolds arbitrary, capricious, or contrary to law because 
it applied the wrong personnel handbook?

 
 
2.   Was the Hospital District's 
decision to terminate Reynolds arbitrary, capricious, or contrary to law because 
it followed a discipline procedure that did not exist in the 
handbook?

 
 
3.   Was the Hospital District's 
decision to terminate Reynolds a breach of its duty of good faith and fair 
dealing?

 
 
FACTS

 
 
[¶3]      Reynolds began 
working for the Hospital District in 1984.  
On September 29, 2003, Reynolds entered into a Separation and 
Non-Disclosure Agreement (Agreement) with the Hospital District.  By the terms of the Agreement, Reynolds 
voluntarily resigned her employment and released any claims she may have had 
against the Hospital District.  The 
Agreement provided that Reynolds' resignation would be retroactive, effective at 
the close of business on September 24, 2003.  In consideration for Reynolds' 
resignation and waiver of potential claims, the Hospital District paid Reynolds 
twelve weeks pay and continued providing her with health coverage.  At about the same time, however, a 
different position was found for Reynolds, and she returned to work for the 
Hospital District.

 
 
[¶4]      In 2002, the 
Hospital District had adopted a new employee handbook which generally provided 
that employees hired after January 1, 2002, would be "at-will" employees and 
could be terminated for any reason or no reason.  The 2002 handbook also provided a step 
discipline procedure that applied to "for cause" employees who had been hired 
prior to 2002.  The adoption of the 
2002 handbook will be discussed further below.   

 
 
[¶5]      After Reynolds 
began her new position in 2003, there were several incidents wherein she 
received some form of discipline.  
The discipline occurred primarily as a result of Reynolds falling asleep 
during her work shift, beginning in June of 2003.1  There were seven documented occurrences 
of Reynolds falling asleep during her shift.  Following each incident, the Hospital 
District disciplined Reynolds by verbally warning her that she must remain awake 
during her shift and that such conduct could result in her being terminated, 
providing her with written warnings relating to the offenses, suspending her on 
one occasion, and having an employee conference with her.  Reynolds was also verbally warned on 
August 14, 2007, about having excessive absences from work.  On September 13, 2007, following the 
seventh time that Reynolds was found sleeping on the job, she received 
notification that the Chief Executive Officer for the Hospital District and the 
Cedar Mountain Center Director recommended to the Hospital District that her 
employment be terminated.  Reynolds 
requested, and was granted, a hearing on the termination recommendation before 
the Hospital District.  Following 
the hearing, the Hospital District accepted the termination recommendation and 
entered an order to that effect.  
Reynolds timely filed an appeal to the district court.  The district court affirmed the Hospital 
District's decision.  This appeal by 
Reynolds followed.

 
 
STANDARD 
OF REVIEW

 
 
[¶6]      The Hospital 
District is a Wyoming Governmental Entity organized pursuant to Wyo. Stat. Ann. 
§§ 35-2-401 through 35-2-404 (LexisNexis 2009).  The Hospital District is an "agency" as 
defined by Wyo. Stat. Ann. § 16-3-101(b)(i) (LexisNexis 2009).  Accordingly, we will review the Hospital 
District's decision to terminate Reynolds as we would any other agency's 
decision.

 

"When 
we consider an appeal from a district court's review of an administrative 
agency's decision, we give no special deference to the district court's 
decision."  Dale v. S & S 
Builders, LLC, 2008 WY 84, 
¶ 8, 188 P.3d 554, 557 (Wyo. 2008).  We review the case as though it had come 
directly from the administrative agency.  Id. We review an administrative 
agency's decision pursuant to the Wyoming Administrative Procedure Act, which 
provides in pertinent part that the reviewing court shall:

 
 

(ii)     Hold unlawful and set 
aside agency action, findings and conclusions found to 
be:

 
 
(A)    Arbitrary, capricious, an 
abuse of discretion or otherwise not in accordance with 
law;

 
 
(B)    Contrary to constitutional 
right, power, privilege or immunity;

 
 
(C)    In excess of statutory 
jurisdiction, authority or limitations or lacking statutory 
right;

 
 
(D)    Without observance of 
procedure required by law; or

 
 
(E)    Unsupported by substantial 
evidence in a case reviewed on the record of an agency hearing provided by 
statute.

 Wyo. 
Stat. Ann. § 16-3-114(c)(ii) (LexisNexis 2009).  We affirm an agency's findings of fact 
if they are supported by substantial evidence.  Dale, ¶ 22, 188 P.3d  at 561.  "Substantial evidence is relevant 
evidence which a reasonable mind might accept in support of the agency's 
conclusions."  Id., ¶ 11, 188 P.3d  at 558, quoting 
Newman v. State ex rel. Wyo. Workers' Safety & Comp. Div., 2002 WY 91, ¶ 12, 49 P.3d 163, 168 
(Wyo. 2002), quoting State ex rel. Wyo. Workers' Safety and Comp. Div. v. 
Jensen, 2001 WY 51, 
¶ 10, 24 P.3d 1133, 1136 (Wyo. 2001).  We review an agency's conclusions of law 
de novo.  Dale, ¶ 26, 188 P.3d  at 561.  We employ the arbitrary and capricious 
standard as a "safety net" against agency action that is contrary to law but not 
readily correctible under the other applicable standards of review.  See id., ¶¶ 23-24, 188 P.3d  at 
561.

 
 

Shelest 
v. State ex rel. Wyo. Workers' Safety & Comp. Div., 2010 
WY 3, ¶ 7, 222 P.3d 167, 169-70 (Wyo. 2010).2  

 
 
DISCUSSION

 
 
Was 
the Hospital District's decision to terminate Reynolds arbitrary, capricious, or 
contrary to law because it applied the wrong personnel 
handbook?

 
 
[¶7]      Reynolds argues 
that the Hospital District's decision to terminate her was arbitrary and 
capricious because it followed the procedures for termination and discipline 
outlined in the 2002 handbook, rather than the handbook and policies in place 
when Reynolds was first hired by the Hospital District in 1984.  Specifically, Reynolds argues that when 
she was hired in 1984, the handbook in place at that time governed her 
employment, and continued to do so until her termination in 2007.  She claims this is so because she was 
never paid additional consideration to modify her employment contract whereby 
the 2002 handbook would control.

 
 
[¶8]      Reynolds' 
argument fails for two reasons.  
First, Reynolds entered into an agreement with the Hospital District in 
2003, wherein she voluntarily resigned her employment and released any claims 
that she may have had against the Hospital District in relation to that 
employment.  The Agreement states in 
part as follows: 

 
 
. 
. . .

 
 
1.      Termination of 
Employment.  Employee resigns 
effective at the close of business September 24, 2003.  Employee acknowledges that his/her 
decision to resign was free, voluntary, and not the result of coercion, 
influence, or pressure by [the Hospital District].

 
 
2.      
Consideration.  As 
consideration for the commitments contained in this Agreement, [the Hospital 
District] agrees to provide the following consideration to the Employee, 
provided Employee does not revoke this Agreement within the revocation period 
described in paragraph no. 6 and 17 below:

 
 
[The 
Hospital District] shall continue to pay Employee her current base rate of pay 
times forty hours a week for a period of twelve (12) weeks.  Employee will receive compensation for 
twelve weeks commencing September 24, 2003 to be paid on the regularly scheduled 
paydays until paid in full. . . . Employee shall not be required to perform any 
duties for [the Hospital District] or come to [the Hospital 
District].

 
 
a.    . . . [the Hospital District] 
agrees to pay COBRA health insurance coverage for the employee for a period of 
three months, commencing November 3, 2003 and terminating January 31, 2004. 

 
 
. 
. . .

 
 
4.      Release of 
Claims.  In exchange for the 
payments and commitments provided above, to which Employee is otherwise not 
entitled, and in consideration of the foregoing, Employee, on behalf of herself, 
her heirs, executors, administrators, personal representatives, and assigns, 
without any reservations whatsoever, forever releases and waives any claim or 
liability under the laws of the United States or other foreign jurisdiction, 
whether presently asserted or otherwise, and whether known or unknown, against 
[the Hospital District] arising out of, prior to, or in any way related to her 
employment with [the Hospital District], or any acts or omissions of [the 
Hospital District] occurring on or before the date this Agreement is signed and 
executed by Employee.  This release 
and waiver includes, but is not limited to, the following:

 
 
                                 
. . . .

 
 
b.    Any other claims arising 
under any federal, state, provincial or local constitution provision, statute, 
regulation or common law or equity, including, but not limited to, claims for 
breach of contract, breach of the implied covenant of good faith and fair 
dealing, promissory estoppel, retaliatory discharge, violation of public policy, 
intentional infliction of emotional distress, defamation, libel, slander, 
violation of any civil right, or any other claim arising in tort, contract or 
equity;

 
 
c.     Any claims of right or 
entitlement arising under any [Hospital District] rule, bylaw, policy, procedure 
or course of dealing;

 
 
. 
. . .

 
 
[¶9]      In her brief, 
Reynolds claims that it is "uncontroverted" that no consideration was ever paid 
to her to accept the 2002 handbook and thus the 2002 handbook did not govern her 
employment.  However, Reynolds 
admitted during her testimony at the Hospital District hearing that she did 
receive twelve weeks pay and medical insurance.  By signing the Agreement and being paid 
consideration in return, Reynolds not only resigned effective September 24, 
2003, but she also waived any rights she may have had under the 1984 
handbook.  When Reynolds was then 
rehired for a new position, which she began in 2003, her new employment date was 
2003, making her employment subject to the 2002 handbook.  Reynolds argues that she never quit 
working for the Hospital District, she only switched positions in 2003, and thus 
she maintained continuous employment from the time she was hired in 1984 until 
the time she was terminated in 2007.  
However, it is clear by the language of the Agreement that the intent was 
that her employment with the Hospital District was to be deemed terminated as of 
September 24, 2003.  This is 
evidenced by the fact that the Agreement does not state that Reynolds was 
resigning from a particular position, but rather, it refers to her resignation 
from the Hospital District generally.

 
 
[¶10]   It is true that, when employment is 
governed by an employee handbook that provides that termination can only be for 
just cause, new consideration must be given to the employee in order to modify 
that relationship to at-will employment.  
Brodie v. General Chemical 
Corp., 934 P.2d 1263, 1268 (Wyo. 1997).  That scenario does not fit the facts of 
this case.  Here, Reynolds was paid 
consideration for her termination from employment, and for her release of 
potential claims.  That ended her 
employment under the "old" personnel policies.  Her new employment, beginning in 2003, 
was always under the 2002 personnel policies, and she had no right to further 
consideration for employment under those policies. 

 
 
[¶11]   Furthermore, Reynolds failed to 
obtain a copy of the alleged 1984 handbook through the discovery process, failed 
to present it to this Court or at any prior proceedings, and perhaps most 
significantly, failed to demonstrate that even if that handbook controlled her 
employment, the outcome of the case would have been different.  Consequently, we find that the Hospital 
District did not act arbitrarily, capriciously, or contrary to law when it 
relied on the 2002 handbook to terminate Reynolds. 

 
 
Was 
the Hospital District's decision to terminate Reynolds arbitrary, capricious, or 
contrary to law because it followed a discipline procedure that did not exist in 
the handbook?

 
 
[¶12]   Reynolds next argues that even if 
the 2002 handbook governed her employment, the Hospital District's decision to 
terminate her was arbitrary, capricious, or contrary to law because that 
handbook did not contain progressive discipline procedures applicable to her 
situation.  We will not address the 
totality of Reynolds' arguments in regard to this issue because Reynolds was an 
at-will employee to whom a "step discipline" policy did not apply.  As noted above, when Reynolds 
voluntarily resigned her employment in 2003, signed a release of claims, was 
paid consideration in return, and then began a new position, her new 2003 
employment date made her employment subject to the 2002 handbook.  Section 167 of the 2002 handbook states 
in pertinent part that 

 
 
[a]ny 
employee of [the Hospital District], who begins work after January 1, 2002, may be 
terminated at any time for any reason, or for no reason.  No employee shall have any right or 
expectation of future employment, unless they are a party to a written 
contract with [the Hospital District], which outlines other requirements for 
dismissal.

 
 
(Emphasis 
in original.)  At the time of her 
termination in 2007, Reynolds was an at-will employee, without "any right or 
expectation of future employment," and the Hospital District could terminate her 
for any reason or no reason.  
Consequently, the Hospital District's decision to terminate Reynolds was 
not arbitrary, capricious, or contrary to law in that it did what the 2002 
handbook permitted it to do.  

 
 
Was 
the Hospital District's decision to terminate Reynolds a breach of its duty of 
good faith and fair dealing?

 
 
[¶13]   Reynolds' final argument is that, 
because she was provided discipline short of termination on prior occasions, she 
had a reasonable expectation that the Hospital District would "continue[] 
discipline, short of termination" for the most recent offenses, and by 
terminating her instead, the Hospital District breached its duty of good faith 
and fair dealing.  Reynolds does not 
cite any case law in support of this theory, and we have held that "[t]he 
existence of a contractual implied covenant [of good faith and fair dealing] is 
obviously incompatible with the at-will presumption and is not applicable in 
those situations."  Scherer Constr., LLC v. Hedquist Constr., 
Inc., 2001 WY 23, ¶ 23, 18 P.3d 645, 655 (Wyo. 2001).  In the absence of any further development 
of Reynolds' position in this regard, we will affirm the action of the Hospital 
District.3

 
 
CONCLUSION

 
 
[¶14]   Reynolds' resignation and release 
of claims in 2003 terminated any rights she may have had under whatever employee 
handbook may have been in effect before that date.  Furthermore, those rights cannot be 
determined because neither that handbook, nor its specific terms of employment, 
became part of the record.  
Reynolds' 2003 employment was at-will, under the applicable 2002 employee 
handbook, and her rights thereunder were not violated when she was terminated in 
2007.  Reynolds has not shown the 
conduct of the Hospital District to have been arbitrary, capricious, or contrary 
to law, and she has not shown such conduct to have violated a covenant of good 
faith and fair dealing.          

 
 
[¶15]   Affirmed.

 
 
FOOTNOTES

 
 

1The other instances in which Reynolds was caught sleeping during her 
shift were December 18 and 20, 2004, July 1 and 15, 2005, April 30, 2007, and 
August 27, 2007.

 
 

2Reynolds 
has presented her issues primarily under the arbitrary and capricious standard 
of review, so that is how they will be considered.  

 
 

3Reynolds' brief is not clear as to whether she intended to raise breach 
of the duty of good faith and fair dealing as a contract claim or a tort 
claim.  The result would be the same 
under either theory.  See Metz v. Laramie County Sch. Dist. No. 
1, 2007 WY 166, ¶ 63, 173 P.3d 334, 350 (Wyo. 
2007).