Case Title: Andrews v. Southwest Wyoming Rehabilitation Center

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1999-03-15T00:00:00Z

Document:
Andrews v. Southwest Wyoming Rehabilitation Center1999 WY 26974 P.2d 948Case Number: 97-189Decided: 03/15/1999Supreme Court of Wyoming

Phil 
ANDREWS, Appellant (Plaintiff),

v.

SOUTHWEST WYOMING REHABILITATION 
CENTER, Appellee (Defendant).

 

                                

Appeal from the District Court, 
Sweetwater County, Jere A. Ryckman, J.

    

     Bernard Q. Phelan, 
Cheyenne, WY, Representing Appellant.

     
Gary R. Scott of Hirst & Applegate, Cheyenne, WY, Representing 
Appellee.

 

     Before LEHMAN, 
C.J., and THOMAS, MACY, GOLDEN, and TAYLOR,* JJ.

    * 
Chief Justice at time of expedited case conference; retired November 2, 
1998.

 

     LEHMAN, Chief 
Justice.

    
[¶1]     Phil Andrews (Andrews) filed this 
wrongful termination action against his former employer, Southwest Wyoming 
Rehabilitation Center (SWRC), claiming breach of the implied covenant of good 
faith and fair dealing and breach of an implied contract of employment. Andrews 
appeals from the summary judgment granted in favor of SWRC. We 
affirm.

 

                                
ISSUES

 

   [¶2]   Appellant Andrews states the issues 
as:

 

I. In a wrongful discharge case was summary judgment 
appropriate where the employee was a corporate officer with fiduciary 
responsibility and there was evidence the termination was improperly motivated? 
II. Was summary judgment appropriate in a wrongful discharge case where 
personnel rules do not disclaim 
contractual intent in conformity with Sanchez [v. Life Care Centers, 855 P.2d 1256 (Wyo. 1993)] and Lincoln, where the actual practice of the employer is to 
require cause for termination, and where there are enumerated grounds for 
termination and a grievance policy in the rules, does inconspicuous "at-will" 
language apply simply because the terminated employee knew about 
it?

 

   SWRC, as appellee, states the 
issues as:

 

A. Did the Trial Court err in granting summary 
judgment for Appellee upon the Appellant's claim for breach of the implied 
covenant of good faith and fair dealing?

 

B. Did the Trial Court err in granting summary 
judgment for Appellee upon the Appellant's claim for breach of an implied 
contract of employment?

 

                                 
FACTS

 

   [¶3]     SWRC hired Andrews on January 2, 1990, 
for the position of employee relations coordinator. In May 1991, he was promoted 
to vice president of SWRC, the position he held when his employment was 
terminated on June 21, 1995. Andrews' supervisor was Kathy Horn-Dalton, the 
president of SWRC. According to Andrews, Horn-Dalton fired him because he tried 
to inform SWRC's board of directors that she was mishandling corporate assets 
and causing employee morale problems.

 

    [¶4]  On February 5, 1996, Andrews filed suit 
against SWRC. Andrews alleged that he had a special fiduciary relationship with 
SWRC and that his termination was wrongfully motivated, and, thus, SWRC breached 
the duty of good faith and fair dealing. He also alleged that his termination 
violated an implied contract of employment established by SWRC's employee handbook, 
coupled with the corporation's personnel policies and practices. The district 
court granted SWRC's motion for summary judgment on both claims. Andrews timely 
appealed the district court's order.

 

                          
STANDARD OF REVIEW

 

   [¶5]     Summary judgment is appropriate where 
there is no genuine issue of material fact and the moving party is entitled to 
judgment as a matter of law. Terry v. Pioneer Press, Inc., 947 P.2d 273, 275 
(Wyo. 1997). This court evaluates the propriety of summary judgment using the 
same standards and materials used by the district court, affording no deference 
to the district court's decision on issues of law. Id. We look at the record 
from a vantage most favorable to the party opposing the motion, allowing that 
party all reasonable inferences which may be fairly drawn from the record. 
Id.

 

                              
DISCUSSION

 

   
Implied Covenant of Good Faith and Fair Dealing

 

   [¶6]     Wyoming recognizes a limited tort claim 
for breach of the implied covenant of good faith and fair dealing in employment 
contracts.  Springer v. Blue Cross 
& Blue Shield of Wyoming, 944 P.2d 1173, 1178 (Wyo. 1997); Wilder v. Cody 
Country Chamber of Commerce, 868 P.2d 211, 220 (Wyo. 1994). Only in those rare 
and exceptional cases where a special relationship of trust and reliance exists 
between the employer and employee is a duty created which can give rise to tort 
liability. Springer, 944 P.2d  at 1178. A special relationship sufficient to 
support a cause of action can be found by the existence of separate consideration, rights created by common law or 
statute, or rights accruing with longevity of service. Id.

 

   [¶7]     Andrews contends that a special 
relationship existed between him and SWRC by virtue of Wyo. Stat. Ann. § 
17-19-842 (Michie 1997) of the Wyoming Nonprofit Corporation Act (Act), which 
provides in pertinent part:

 

(a) An officer who is an employee of the corporation 
with discretionary authority shall discharge his duties under that 
authority:

 

                        
(i) In good faith;

 

(ii)  
With the care an ordinarily prudent person in a like position would 
exercise under similar circumstances; and

 

(iii) In a manner the officer reasonably believes to 
be in the best interests of the corporation and its members, if 
any.

 

He argues that, as a 
corporate officer with a fiduciary duty to the corporation and its members, he 
was not an "ordinary employee," but occupied a position of trust and reliance. 
In essence, Andrews' argument is that the "fiduciary relationship" created by 
the statute amounts to the "special relationship" necessary to support a cause 
of action for breach of the implied covenant.

 

   [¶8]     We do not agree with Andrews' position. 
The implied good faith covenant involves a "special element of reliance" by the 
aggrieved party, the type of trust and dependency that is found, for example, in 
insurance relationships.  Wilder, 
868 P.2d  at 220; K Mart Corp. v. Ponsock, 103 Nev. 39, 732 P.2d 1364, 1371 
(1987). Section 17-19-842 establishes the standard of conduct for corporate 
officers, imposing on officers a duty of care to their corporations. Revised 
Model Nonprofit Corp. Act § 8.42 official cmt. (1987). While an officer may be 
able to rely on the statute to protect him from personal liability if he has 
acted in accordance therewith, see Wyo. Stat. Ann. § 17-19-842(d), it goes too 
far to say that an officer exercising his duty of care under the statute has a 
right not to be terminated. On the contrary, the Act provides that a board may 
remove an officer at any time with or without cause. Wyo. Stat. Ann. § 
17-19-843(b) (Michie 1997). Section 843(b) clearly vitiates Andrews' contention 
that he should be allowed to rely on his employer to maintain his employment 
until it is determined that he has not acted, or can no longer act, in the 
corporation's best interest.

 

   [¶9]     In sum, Wyo. Stat. Ann. § 17-19-842 
simply does not establish rights on which Andrews was entitled to rely and which 
would create a special relationship upon which tort liability can rest. Because 
Andrews did not establish the existence of a special relationship of trust and 
reliance, the court properly entered summary judgment on Andrews' claim for 
breach of the implied covenant of good faith and fair 
dealing.

 

   
Implied-In-Fact Contract

 

   [¶10]  Andrews contends that the SWRC handbook 
and personnel policies created an implied-in-fact contract of employment such 
that he could only be terminated for cause or after progressive disciplinary 
steps were taken. "In Wyoming, employment for an indefinite time is presumed to 
be a contract for at-will employment which either party can terminate at any 
time for any or no reason." Terry v. Pioneer Press, Inc., 947 P.2d 273, 275 
(Wyo. 1997). An employee may overcome the at-will presumption by showing that 
the parties created an implied-in-fact contract, modifying the employee's 
at-will status. Brodie v. General Chemical Corp., 934 P.2d 1263, 1265 (Wyo. 
1997). We examine, under an objective test, whether the employer has intended, 
either by words or conduct, to include job security or discharge procedures as 
part of the implied employment contract. Id. at 1265-66. A conspicuous and 
unambiguous disclaimer, in the employment application or subsequent relevant 
documents, places an employee on notice that general statements or conduct do 
not promise employment security and are 
not to be relied upon by the employee. Lincoln v. Wackenhut Corp., 867 P.2d 701, 
703 (Wyo. 1994).

 

   [¶11]  In determining whether SWRC made 
objective manifestations of assent to an employment contract containing a job 
security provision and discharge procedures, our analysis must figure in the 
provisions of the documents issued to Andrews, the effect of disclaimers, and 
SWRC's course of dealing with its employees. Davis v. Wyoming Medical Center, 
Inc., 934 P.2d 1246, 1249 (Wyo. 1997). When he was hired, Andrews received an 
offer letter from Horn-Dalton, which stated that "[i]n accordance with SWRC 
Personnel Policy, all employment is 'at-will' and for an indefinite period, 
i.e., SWRC observes no employment contracts." Andrews testified that he received 
a policy manual when he was hired, although that document is not included in the 
record on appeal. In addition, he testified that he recalled signing a sheet of 
paper that was included with the manual 
indicating that employment was at will.  
Andrews' testimony, along with the offer letter from Horn-Dalton, 
demonstrates nothing more than a promise of at-will employment at the time 
Andrews was hired.

 

  [¶12] 
   Andrews points to the 
revised handbook and the actual personnel practices of SWRC as creating an 
implied-in-fact contract. The summary judgment materials include a revised 
version of the employee handbook that was issued to employees sometime in 1993. 
The revised handbook does not contain a progressive discipline procedure or for 
cause language.  Nonetheless, 
Andrews contends that several provisions in the handbook raise an issue of fact 
as to whether SWRC employees were at will. Specifically, he directs our 
attention to the employment categories established therein, a list of twenty-six 
behaviors that could result in immediate termination, the delineation of a 
probationary period, and the grievance procedure. He also contends that, in 
practice, documentation of employee problems over a period of time was required 
prior to termination.

 

   [¶13]  The handbook contains several 
disclaimers. A subsection entitled "The Employee Handbook," in the introductory 
section of the handbook, contains a caveat stating that no one other than the 
board or president of SWRC has authority to bind the company to a contract of 
any sort. That subsection also warns employees that historical and current 
practices may be indicative of what has been typical or what may be expected 
with respect to wages, hours, terms and conditions of employment, but are 
subject to change at any time with or without cause. The disclaimer further 
provides: "Neither this handbook nor other written or oral  representations are to be construed as 
constituting a contract between the company and an employee. The company 
reserves the right to change, suspend, revoke, terminate, or supersede current 
policies, practices, procedures or 
benefits from time to time, with or without cause."

 

   [¶14]  The handbook contains a separate 
subsection entitled "Employment-at-Will." This subsection expressly provides 
that employees are employed at the will of the company and that the employer may 
terminate employment at any time and for any reason. In addition, the subsection 
clearly expresses that the handbook or other statements shall not be considered 
to create an express or implied contract unless in writing and signed by the 
president; that only the president of SWRC is authorized to modify the 
employment-at-will policy; that employment at will shall not be modified by any 
verbal or written statements or completion of a probationary period; and that 
just cause is not required to terminate. The subsection entitled "Employee 
Conduct" lists examples of prohibited employee behavior which could result in 
immediate termination, but the list is prefaced with the statement that it is 
not all-inclusive and does not restrict the company's right to terminate at 
will. The subsection delineating a probationary period specifies that "[a]n 
employee may be terminated without cause anytime while on or off probation. The 
conference of non-probationary status does not imply that the employee's 
employment-at-will has changed."

 

   [¶15]  Andrews acknowledges that the revised 
handbook contains a disclaimer,1 but argues that it is invalid 
because it is not conspicuous. A conspicuous disclaimer maintains the at-will 
relationship because it puts the employee on notice that general statements or 
conduct do not promise employment security and are not to be relied upon by the 
employee.  Lincoln, 867 P.2d  at 703. 
An employee cannot reasonably rely on the conduct or statements of an employer 
if he has been sufficiently informed that his employment is at will. Id. As a 
general rule, this court considers the prominence, placement and language of a 
disclaimer to determine if it is conspicuous and unambiguous as a matter of law. 
Id. However, whether the disclaimers in SWRC's handbook were placed on the first 
page, or were bold or highlighted to draw an employee's attention, is irrelevant 
under the facts of this case. Andrews testified during his deposition that he 
was the primary author of the revised handbook. Therefore, he had actual 
knowledge of the at-will provisions in the handbook. Those provisions, outlined 
above, are unambiguous and plainly demonstrate SWRC's intent to maintain the 
at-will status of its employees. Accordingly, Andrews could not reasonably 
believe that the handbook promised job 
security. Nor could he reasonably rely on SWRC's practice of following 
progressive discipline prior to termination as a promise that similar procedures 
would be followed in his case.

 

   [¶16]  Andrews failed to rebut the presumption 
that his employment was at will. Therefore, the court properly entered summary 
judgment on his claim for breach of an implied-in-fact 
contract.

 

                              
CONCLUSION

 

  [¶17] 
   Andrews' summary 
judgment materials do not raise a genuine issue of material fact as to either of 
his claims. SWRC was entitled to summary judgment as a matter of law, and the 
district court's order hereby is affirmed.

 

   

FOOTNOTES

1 Andrews 
refers only to the disclaimer in the "Employment-at-Will" subsection, ignoring 
other language found throughout the handbook disclaiming the intent to form a 
contract.