Case Title: MOBIL COAL PRODUCING, INC., A DELAWARE CORPORATION v. DALE PARKS

Citation: 

Docket Number: 84-262

State: wyoming

Court: Wyoming Supreme Court

Date: 1985-08-13T00:00:00Z

Document:
MOBIL COAL PRODUCING, INC., A DELAWARE CORPORATION v. DALE PARKS1985 WY 107704 P.2d 702Case Number: 84-262Decided: 08/13/1985Supreme Court of Wyoming
MOBIL COAL PRODUCING, 
INC., A DELAWARE CORPORATION, APPELLANT (DEFENDANT), 

v. 

DALE PARKS, APPELLEE 
(PLAINTIFF).

 
 
Appeal from the District 
Court, CampbellCounty, Paul T. Liamos, Jr., 
J.

 
 
Thomas D. 
Roberts of Morgan, Brorby, Price & Roberts, Gillette, and Maryann Walsh, 
Denver, Colo., for 
appellant.

Dwight F. Hurich 
of Preuit, Sowada & Hurich, Gillette, for appellee.

Before THOMAS, C.J., and 
ROSE, ROONEY, BROWN and CARDINE, JJ.

ROONEY, 
Justice.

[¶1.]     This is an appeal by 
appellant-employer from a judgment of the district court awarding 
appellee-employee damages for wrongful discharge from employment. Four of the 
issues on appeal pertain to findings based on appellee's status as an "at will" 
employee. Appellant words the other two issues on appeal:

"If defendant's 
[appellant's] employee handbook is an employment contract, whether defendant 
[appellant] substantially complied with the contract in terminating plaintiff 
[appellee] for good cause based on plaintiff's [appellee's] safety violations." 

"Whether plaintiff 
[appellee] by law or the terms of the defendant's [appellant's] employee 
handbook was entitled to a hearing prior to termination."

[¶2.]     The provisions of 
appellant's employee handbook make appellee's employment to be other than "at 
will," and inasmuch as such provisions were not substantially complied with in 
termination of appellee's employment, we affirm.

AT WILL 
EMPLOYMENT

[¶3.]     The district court 
found appellee's employment by appellant to be "at will." It then inconsistently 
found the handbook to contain controlling provisions with reference to discharge 
procedure and hearings and with reference to creating an implied covenant of 
good faith and fair dealing.

[¶4.]     Wyoming follows the 
common-law rule that either party may terminate an employment at will contract 
(one without a definite term) at any time for any reason or without reason, and 
that such is not violative of any implied covenant of good faith and fair 
dealing. Siebken v. Town of Wheatland, 
Wyo., 700 P.2d 1236 (1985); Allen v. 
Safeway Stores, Incorporated, Wyo., 699 P.2d 277 (1985); Rompf v. John Q. Hammons Hotels, Inc., 
Wyo., 685 P.2d 25 (1984); Carlson v. 
Bratton, Wyo., 681 P.2d 1333 (1984); Lukens v. Goit, Wyo., 430 P.2d 607 
(1967); Long v. Forbes, 58 Wyo. 533, 
136 P.2d 242, 158 A.L.R. 224 (1943); Casper Nat. Bank v. Curry, 51 Wyo. 284, 
65 P.2d 1116, 110 A.L.R. 360 (1937).

[¶5.]     Without more, appellee 
was an "at will" employee, subject to discharge at any time without cause. He 
was employed on March 15, 1982, by appellant as a mine technician, the title 
given to members of an hourly work force handling mining operations, maintenance 
and plant functions at a surface coal mine in CampbellCounty. His employment was not for a 
definite term. He was discharged on August 26, 1983, primarily for violations of 
safety requirements.

HANDBOOK

[¶6.]     However, in September 
1982, six months after appellee was employed, appellant distributed a handbook 
to mine employees. It contained information under six sections, with each 
section containing subsections in number from five to 
nineteen.

[¶7.]     In Carlson v. Bratton, supra, we said at 
page 1339:

"Absent a discrimination 
amounting to a violation of civil rights, a person does not have tenure in 
employment unless such tenure is established by statute or by contract or by 
rules and regulations pursuant to statute or by rules and regulations having the force 
of a contract. * * *" (Emphasis added.)1

[¶8.]     The question here, 
then, is whether or not appellant's handbook set forth rules and regulations 
having the force of a contract, and, if so, did appellee violate the terms 
thereof. In this case the trial was to the court, and the court resolved both 
questions of law and questions of fact. Three-fourth's of the court's oral 
opinion from the bench (other than comments on damages) was concerned with the 
contents of the handbook. Although the court concluded that appellee was working 
under an "at will" contract, it found that appellee's discharge was improper 
inasmuch as appellant did not comply with the handbook's procedural 
requirements, and, in effect, it found appellant to be contractually bound by 
the provisions of the handbook. The court premised its general finding "for the 
plaintiff and against the defendant" on failure to comply with the handbook's 
requirements. A general finding and judgment carries with it every finding of 
fact which can reasonably and fairly be drawn from the evidence. Burk v. Burzynski, Wyo., 672 P.2d 419, 425 (1983). There was substantial 
evidence to support the finding that the handbook's provisions were applicable 
and were not followed by appellant. In determining whether evidence is 
sufficient to sustain the findings or judgment of the trial court, we assume the 
evidence in favor of the successful party to be true, give to it every favorable 
inference which may reasonably and fairly be drawn from it, and leave out of 
consideration the evidence of the unsuccessful party in conflict therewith. 
Pine Creek Canal No. 1 v. Stadler, 
Wyo., 685 P.2d 13, 17 (1984); Anderson v. Bauer, Wyo., 
681 P.2d 1316, 1319 (1984).

[¶9.]     The handbook did more 
than set forth the hours of work, pay scale, pension rights, promotion policy, 
etc. It addressed the very basis of an at will employment, i.e., the right of 
the employer to discharge the employee at any time, with or without cause. The 
handbook recites in part:

"The following rules of 
unacceptable conduct apply to all employees. Any employee who violates these 
rules subjects himself/herself to degrees of disciplinary action, up to and 
including termination. We will apply these rules in a fair and equitable 
manner.

"Some of the actions that 
will not be condoned at the Caballo Rojo Mine are as 
follows:

"excessive absenteeism or 
tardiness

"fighting

"theft

"gambling on company 
property

"falsification of 
records

"bringing intoxicating 
liquor or narcotic on company property

"coming to work in an 
unfit physical condition or under the influence of liquor or 
drugs

"drinking or using 
narcotics on company property, which includes the parking 
lot

"smoking in areas 
designated as non-smoking areas

"violation of safety 
rules

"bringing firearms or any 
type of explosive on mine site

"bringing televisions, 
electronic devices, or cameras onto the property

"using threatening or 
abusive language toward fellow employees or supervisors

"willfully damaging plant 
or personal property

"refusing or willfully 
failing to carry out proper instructions

"sleeping during working 
hours

"violating area work 
rules

"leaving the job without 
permission

"being convicted of 
felony criminal offense

"soliciting for any 
purpose during working time

"three (3) days 
unreported absence (considered a `quit without notice')

"The above general rules 
cannot possibly cover all situations that arise. Thus, all employees are 
expected to meet a reasonable standard of conduct and work 
performance.

"Employees having 
job-related problems will receive fair and objective consideration - without 
fear of reprisal. This includes problems concerning salary, supervision, 
discipline, application of company policy, and any other working 
conditions.

"You are encouraged to 
talk on an informal basis to your immediate supervisor first about any 
job-related problem. However, should you find this procedure unacceptable, you 
should follow the steps in Caballo Rojo's Fair Treatment Policy described in 
this handbook.

"Our Employee Relations 
Program at Caballo Rojo is based on each employee accepting certain 
responsibilities. Our work is of a technical nature and very exacting, placing 
upon each employee the responsibility for a high degree of self-discipline. 
Thus, the primary source of discipline at the Caballo Rojo Mine is Self-Discipline.

"Caballo Rojo adheres to 
a policy of progressive discipline tempered by the seriousness of the offense. 
Any employee may be subject to disciplinary action for reasons including, but 
not limited to, unsatisfactory work performance (e.g. carelessness in handling 
materials, unattention to duty) or breach of conduct (e.g., overstaying rest or 
lunch period, excessive absenteeism, disregard of safety, failure to carry out 
the supervisor's instructions). Each case will be reviewed on its individual 
merits, as well as to achieve overall consistency throughout the 
mine.

"The nature of discipline 
will depend upon the nature of the offense and/or the employee's cumulative 
record. Disciplinary suspension subject to termination will be imposed when the 
seriousness of an individual offense or the employee's record of prior rule 
infractions warrants such action.

"The normal procedure for 
progressive discipline is as follows:

"Step 1 - 
Counseling

"The Supervisor will make 
the employee aware of the deficiency and documents the conversation with 
employee, sending a copy to Employee Relations.

"Step 2 - 
Counseling

"Should another incident 
arise, the supervisor will make the employee aware of the deficiency as well as 
pointing out to the employee that this is the second counseling session. This 
conversation is also documented and a copy forwarded to Employee 
Relations.

"Step 3 - Written 
Reprimand

"In the case of further 
incidents, the employee will receive a written reprimand.

"Step 4 - Three-Day 
Suspension

"The employee who has 
another incident of poor workmanship or violation of Company rules and 
regulations, will subject himself/herself to a three-day 
suspension.

"Step 5 - 
Discharge

"If another incident 
occurs, the specified rule violation along with the employee's prior record will 
be reviewed by the Mine Manager, and the employee's services may be terminated." 
(Emphasis in original.)

[¶10.]  Not only does the tenor of the foregoing 
reflect the necessity for the existence of cause for discharge, but it 
specifically requires such. The essential requirement of an at will employment 
is thus missing.

[¶11.]  This is not to say that the existence of 
a handbook or employer's manual will make employment other than at will in all 
instances. Each case must be considered on its own merits. Some handbooks or 
manuals may not contain provisions which negate the employment at will. Some 
handbooks or manuals may be ambiguous or may not have apparent meaning, making 
the determination of their effect on at will employment a question of fact. 
Normally, the construction and interpretation of a contract is for the court as 
a matter of law. Rouse v. Munroe, Wyo., 658 P.2d 74, 77 (1983); Amoco Production Company 
v. Stauffer Chemical Company of Wyoming, 
Wyo., 612 P.2d 463, 465 (1980). If the meaning of a contract is ambiguous or not apparent, it 
may be necessary to determine the intention of the parties from evidence other 
than the contract itself, and interpretation becomes a mixed question of law and 
fact. Goodman v. Kelly, 
Wyo., 390 P.2d 244, 247 
(1964).

[¶12.]  We also noted in Carlson v. Bratton, supra, 681 P.2d 
1339:

"* * * One of the 
bargaining items in labor contracts concerns the causes for termination and the 
method of establishing the same. Adoption of the Little Norris-LaGuardia Act, § 
27-7-101 et seq., W.S. 1977, was for the purpose of insuring the right of labor 
to organize and bargain for such items. * * *" (See footnote 
1).

[¶13.]  The handbook in this case reflects an 
intention to provide that usually contained in a labor agreement. It 
says:

"Mobil Coal Producing, 
Inc., Caballo Rojo Mine, recognizes that labor unions may have been necessary in 
the past and may be necessary in other companies. However, we are 
committed to maintaining an environment of mutual trust, understanding, and 
cooperation. We believe that individual consideration on employee-supervisor 
matters provides the best method for satisfying the employees' and the Company's 
needs. We do not believe that a union representing the employees can improve on 
that one-to-one relationship.

"It is policy that 
Caballo Rojo Mine will develop and maintain effective employee relations 
policies and programs. Each supervisor is responsible to administer these 
policies, so that the human dignity of each employee is preserved and all 
employees are assured security and equal opportunity for 
advancement.

"We plan to provide a 
safe work environment; competitive wages and benefits; free and open 
communications; and training which improves employees' skills and advancement 
opportunities, and ensures efficient operation of the 
mine.

"We realize that there 
will be problems and misunderstandings. We encourage our employees and 
supervisors to resolve these differences on an informal basis. However, for 
those rare occasions when differences cannot be resolved, we have a fair 
treatment procedure where employees will have the opportunity to be heard, 
without fear of recrimination or penalty.

"While we take no 
position on whether unions are good or bad, we believe union representation is 
unnecessary for employees to enjoy job security, career opportunities, fair and 
equitable treatment, and competitive wages and benefits." (Emphasis in 
original.)

[¶14.]  The handbook's provisions change the 
appellant's unfettered right to discharge appellee at any time and without 
cause. Such provisions create an expectation on the part of an employee that 
they will be followed, and they induced appellee to continue his employment with 
appellant. Appellant "secures an orderly, cooperative and loyal work force," Toussaint v. Blue Cross & Blue Shield of 
Michigan, 408 Mich. 579, 292 N.W.2d 880, 892 (1980). Benefit 
to the promisor is sufficient consideration for a contract. Laibly v. Halseth, Wyo., 345 P.2d 796, 799 (1959); Houghton v. 
Thompson, 57 Wyo. 196, 115 P.2d 654, 658 
(1941).

[¶15.]  Other jurisdictions have recognized that 
an employer's personnel manual or handbook may constitute a term of an 
employment contract, e.g., Leikvold v. 
Valley View Community Hospital, 141 Ariz. 575, 688 P.2d 201 (1983); Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458, 457 N.Y.S.2d 193, 443 N.E.2d 441, 33 A.L.R.4th 110 (1982); Walker v. Northern San Diego County Hospital 
District, 135 Cal. App. 3d 896, 185 Cal. Rptr. 617 (1982); Toussaint v. Blue Cross & Blue Shield of 
Michigan, supra.

[¶16.]  The next question, then, is whether or 
not appellant performed under the contractual provisions of the handbook. The 
trial court found that it did not. There was evidence to support the finding. 
The following occurred with reference to the five-step disciplinary procedure 
set forth in the handbook, supra:

[¶17.]  Step 1 - Counseling: On March 19, 1982, 
appellee received counseling for having operated equipment negligently, which 
operation resulted in damage to the equipment.

[¶18.]  Step 2 - Counseling: In July 1983, 
appellee received counseling for erratic work performance and general 
attitude.

[¶19.]  Step 3 - Written Reprimand: On August 17, 
1983, appellee was given a written reprimand for reporting late to work on 
August 1 and 2, 1983. His job was to perform routine procedure on the equipment 
so that shift operations could begin on time. On August 22, 1983, appellee was 
given another written reprimand for reporting late to work on August 21, 
1983.

[¶20.]  Step 4 - Three-day Suspension: On August 
22, 1983, appellee was suspended for three days without pay for unsafe operation 
of equipment on that date based on his having driven a quarter-million to 
half-million pound haul truck too fast on slippery roads, tailgating other 
trucks, losing control of his truck on two occasions causing it to strike a 
berm2, failing to inspect the truck after 
the incidents, and failing to report the incidents. 

[¶21.]  Step 5 - Discharge: The trial court found 
that appellee was discharged on August 26, 1983, without the occurrence of 
"another incident."

[¶22.]  When appellee was given the three-day 
suspension for unsafe operations on August 22, 1983, his supervisors were 
unaware that he had violated safety standards the day before by parking a dozer 
so as to partly block the road, causing truck traffic to stop. Appellee's 
discharge on August 26, 1983, was premised on the August 21, 1983 safety 
violation as being the occurrence of another incident cumulative to that for 
which action was taken in the first four steps of the discipline procedure. The 
trial court's comment in finding that Step 5 was not afforded to appellee 
was:

"I don't see where that 
was done here at all, and I don't go along with the idea that `another incident 
occurs' is something that's happened before the suspension. * * 
*"

[¶23.]  Appellant argues that the progressive 
disciplinary procedure set forth in the handbook is described as the "normal" 
procedure, and that it is not applicable to serious infractions which warrant 
discharge without following the procedure. This may be so. Certainly, the 
procedure would be unnecessary to discharge an employee attempting to set fire 
to buildings on the premises - as an example of behavior extremely 
unacceptable.3 However, in this case appellant did 
purport to use the handbook procedure in discharging appellee. At a meeting with 
three supervisors, appellee was advised of the intended discharge. The matter 
was discussed with him, and he was given an opportunity to comment.4 As provided in the handbook, the 
mine manager reviewed the decision and appellee was discharged. Appellant's 
decision to follow the handbook procedure indicates that the infractions were of 
the nature for which the procedure was designed.

[¶24.]  Another trier of fact may have found that 
the handbook procedure was substantially complied with in this instance, but 
there is evidence to support the finding that it was not and that appellant 
intended appellee's discharge to be pursuant to such 
procedure.

[¶25.]  The trial court's interpretation of the 
handbook language to the effect that Step 5 could not be used to discipline for 
an incident which occurred before imposition of the discipline under Step 4 is 
correct. The language of the handbook contract reflects such intention. Step 2 
is administered "should another incident arise." Step 3 is administered "in case 
of further incidents." Step 4 is used if there is "another incident." And the 
language of Step 5 recites "if another incident occurs." We repeat, appellant 
opted to effect the discharge under the progressive discipline procedure. If it 
had discharged appellee for an infraction, newly discovered, alleged to be 
serious enough to require action other than under the progressive discipline 
procedure, the trial court may have agreed that the transgression was 
sufficiently serious and that the progressive discipline procedure was 
unnecessary. But that was not the case.

[¶26.]  There was evidence sufficient to support 
the trial court's application of the handbook procedure to the discharge of 
appellee by appellant, and to support its finding that the procedure was not 
followed.

[¶27.]  Affirmed.

1 The quotation from Carlson v. Bratton, supra, was also 
quoted in Siebken v. Town of Wheatland, 
supra.

2 A protective dirt 
barrier.

3 Most rules and 
regulations, manuals, handbooks, etc. separate serious infractions such as 
insubordination, dishonesty, etc. from those requiring progressive disciplinary 
action before discharge.

4 Our decision makes 
unnecessary an inquiry into whether or not the requirements of Cleveland Board of Education v. Loudermill, 
___ U.S. ___, 105 S. Ct. 1487, 84 L. Ed. 2d 494 (1985) re pretermination notice 
and opportunity to be heard were complied with in this 
instance.

ROSE, Justice, specially 
concurring.

[¶28.]  I fully agree with the reasoning and 
holding in the majority opinion that the employee handbook in this case rendered 
appellee's employment contract other than an at-will contract. I also agree that 
the evidence supports the trial court's findings that the appellant/employer 
failed to comply with the handbook provisions and that, therefore, appellee's 
discharge was improper. I write separately because of my concern that the 
following statement in the majority opinion is not supported by the cited 
cases:

"Wyoming follows the 
common-law rule that either party may terminate an employment at will contract 
(one without a definite term) at any time for any reason or without reason, and 
that such is not violative of any implied covenant of good faith and fair 
dealing." 704 P.2d  at 704.

[¶29.]  In Rompf v. John Q. Hammons Hotels, Inc., 
Wyo., 685 P.2d 25 (1984), we reserved a decision on whether termination of 
employment under an at-will contract might, under certain circumstances, violate 
an implied covenant of good faith and fair dealing. We observed that a number of 
courts in other jurisdictions have recently recognized such implied covenants. 
Mitford v. de Lasala, Alas., 666 P.2d 1000 (1983); Cleary v. American 
Airlines, Inc., 111 Cal. App. 3d 443, 168 Cal. Rptr. 722 (1980); Fortune v. National Cash Register 
Company, 373 Mass. 96, 364 N.E.2d 1251 
(1977); Gates v. Life of Montana 
Insurance Company, Mont., 638 P.2d 1063 (1982). These courts have 
looked at the circumstances surrounding the employee's dismissal and the 
duration of his employment in determining whether the employee stated a valid 
claim for breach of contract. Since the employee's evidence in Rompf v. John Q. Hammons Hotels, Inc. 
failed to suggest a violation of the good-faith duty imposed upon employment 
relationships in other jurisdictions, we reached no decision concerning the 
viability of the doctrine in this state.

[¶30.]  The other cases cited in the majority 
opinion do not address the issue of implied covenants in at-will employment 
contracts. However, the cited cases of Siebken v. Town of Wheatland, Wyo., 700 P.2d 1236 (1985), and Allen v. Safeway 
Stores, Incorporated, Wyo., 699 P.2d 277 (1985), as well as the holding and 
rationale in the case at bar establish that this court is willing to consider 
the circumstances surrounding an employee's discharge under a purportedly 
at-will employment contract.