Case Title: Rompf v. John Q. Hammons Hotels, Inc.

Citation: 

Docket Number: 84-7

State: wyoming

Court: Wyoming Supreme Court

Date: 1984-08-06T00:00:00Z

Document:
Rompf v. John Q. Hammons Hotels, Inc.1984 WY 82685 P.2d 25Case Number: 84-7Decided: 08/06/1984JOHN ROMPF, APPELLANT (PLAINTIFF), 

v. 

JOHN Q. HAMMONS HOTELS, INC., A MISSOURI CORPORATION AND SUGARLAND ENTERPRISES, A PARTNERSHIP CONSISTING OF HOMER SCOTT, JR., AND JOHN Q. HAMMONS, APPELLEES (DEFENDANTS).

Supreme Court of Wyoming
JOHN ROMPF, APPELLANT 
(PLAINTIFF), 

v. 

JOHN Q. HAMMONS HOTELS, 
INC., A MISSOURI CORPORATION AND SUGARLAND ENTERPRISES, A PARTNERSHIP CONSISTING 
OF HOMER SCOTT, JR., AND JOHN Q. HAMMONS, APPELLEES 
(DEFENDANTS).

 
 
Appeal from the 
DistrictCourtofSheridanCounty, Terrence L. 
O'Brien, J.

 
 
Rex O. Arney of 
Redle, Yonkee & Arney, Sheridan, for 
appellant.

Kim D. Cannon of 
Burgess & Davis, Sheridan, for 
appellees.

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

ROSE, 
Justice.

[¶1.]     This dispute centers 
around an oral contract for employment. Appellant-employee claims that his 
termination after only six weeks of employment with the appellees constituted a 
breach of contract for which he is entitled to an award of damages. The trial 
court, after interpreting the express terms of the contract and considering the 
propriety of implying certain terms, granted appellees summary judgment as a 
matter of law. We will affirm.

FACTS

[¶2.]     Appellant John Rompf 
resigned from his position as vice-president and general manager of Frickey's 
Heating and Air Conditioning, Inc. (Frickey's), where he had been employed since 
1969, when he was offered the job of chief engineer at the new Holiday Inn in 
Sheridan. The 
Holiday Inn is owned by Sugarland Enterprises and is managed by John Q. Hammons 
Hotels, Inc. Both organizations are appellees before this 
court.

[¶3.]     In changing employment, 
Rompf took a pay cut but expected a "better opportunity" with the Holiday Inn. 
However, he had neither a written contract with the Holiday Inn specifying the 
terms of employment nor any oral guarantee that his employment would be for a 
specific period. Rompf stated in his deposition that the management gave no 
indication through conduct or statement that he would have this position for 
life.

[¶4.]     Rompf began his job at 
the Holiday Inn on August 16, 1982. At a meeting on August 24, Rompf received a 
copy of the employee manual which outlined the benefits, probation period and 
disciplinary measures as well as other job-related information. Rompf performed 
his duties and was never informed of any dissatisfaction with his work pursuant 
to the measures delineated in the manual. On September 29, 1982, Rompf's 
employment with the Holiday Inn was terminated for economic 
reasons.

[¶5.]     Appellant's amended 
complaint sets forth four claims against Sugarland Enterprises and John Q. 
Hammons Hotels, Inc. The first and third counts allege that the appellees 
breached an implied covenant of good faith and fair dealing in Rompf's contract 
by terminating his position without "just or sufficient cause and without taking 
all practical steps to salvage [his] employment." The second claim alleges that 
the appellees breached the terms of Rompf's employment contract set forth in the 
employee manual. In the final claim, appellant alleges malicious and intentional 
conduct on the part of appellees and seeks $100,000 in punitive damages. Rompf 
claims $362,440 in compensatory damages - the amount he would have earned 
between his termination date and age 65.

[¶6.]     In granting appellees' 
motion for summary judgment, the district court judge found no evidence 
supporting a contract for lifetime employment. He also found that the employee 
manual did not contribute to the "basis of the bargain" between the parties, and 
that even if the manual provisions were incorporated into the contract, they had 
no application to this case. The judge declined to imply a covenant of good 
faith and fair dealing in appellant's employment contract, concluding that the 
situation failed to present the kind of major policy considerations which would 
warrant imposing such a duty.

STANDARD OF 
REVIEW

[¶7.]     When reviewing an order 
for summary judgment, this court 

"* * * views the record 
in the light most favorable to the party against whom the summary judgment was 
entered, giving to that party the benefit of all favorable inferences which can 
be drawn from any of the materials which are submitted in support of or in 
opposition to the motion." Schepps v. 
Howe, Wyo., 665 P.2d 504, 506 (1983), and cases cited 
therein.

Our duty is the 
same as that of the district court, and the propriety of summary judgment 
depends upon the dual findings that there is no genuine issue of material fact 
and that the prevailing party is entitled to judgment as a matter of law. Schepps v. Howe, supra, 665 P.2d  at 506; 
Blackmore v. Davis Oil Company, 
Wyo., 671 P.2d 334, 336 (1983); Reno Livestock Corporation v. Sun Oil 
Company (Delaware), Wyo., 638 P.2d 147, 150 
(1981).

[¶8.]     In the instant case, 
the basic facts are undisputed. Appellant contends, however, that the ultimate 
facts and legal conclusions which flow from these facts justify a finding that 
appellees breached his employment contract and that he is entitled to damages. 
For appellant's argument to succeed, this court would need to modify the "at 
will" rule with respect to employment contracts.

THE "AT WILL" EMPLOYMENT 
CONTRACT

[¶9.]     Historically, the rule 
in Wyoming has 
been that employment for an indefinite period may be terminated by either party 
at any time and for any reason without incurring liability. Lukens v. Goit, Wyo., 430 P.2d 607, 611 (1967); Long v. Forbes, 58 
Wyo. 533, 136 P.2d 242, 246, 158 A.L.R. 224 
(1943); Casper National Bank v. 
Curry, 51 Wyo. 284, 65 P.2d 1116, 1120-1121, 110 A.L.R. 
360 (1937). In recent years many jurisdictions have recognized exceptions to 
this "at will" rule, based on public-policy considerations or implied-contract 
terms, including the duty of good faith and fair dealing. Novosel v. Nationwide Insurance Company, 
721 F.2d 894 (3rd Cir. 1983); Note, Protecting Employees at Will Against 
Wrongful Discharge: The Public Policy Exception, 96 Harv.L.Rev. 1931, 1935 
(June, 1983). Appellant urges this court to update the law of employment 
contracts in this state and to recognize an enforceable contract claim in 
discharge cases. He presents three alternative bases for such a claim under the 
present factual situation:

1. Appellees breached the 
covenant of good faith and fair dealing, inherent in every contract, when they 
discharged appellant instead of one of the subsequently hired employees under 
his supervision;

2. Dismissal violated the 
permanent or lifetime employment contract which arose as a result of the 
consideration supplied by appellant's relinquishment of a prior long-term 
position which afforded substantial fringe benefits; and

3. Appellees breached 
provisions in the employee manual which were part of the employment contract and 
which afforded appellant certain protections and remedies.

Without deciding 
whether we might, in an appropriate situation, be persuaded to recognize an 
exception to the "at will" rule, we conclude that the present case fails to 
present any factual justification for the modifications urged by 
appellant.

Implied Covenant of Good 
Faith and Fair Dealing

[¶10.]  A number of jurisdictions have recently 
held that at-will employment contracts, like other contracts, contain an implied 
covenant of good faith and fair dealing in their performance or enforcement. Mitford v. de 
Lasala, Alas., 666 P.2d 1000 
(1983); Gates v. Life of Montana 
Insurance Company, Mont., 638 P.2d 1063 (1982); 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).1 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. In Mitford v. de Lasala, 
supra, and Fortune v. National Cash 
Register Company, supra, the courts held that the duty of good faith 
inherent in an at-will employment contract prohibited an employer from 
dismissing a long-term employee in order to prevent his sharing in profits or 
collecting commissions pursuant to the contract. In Gates v. Life of Montana Insurance 
Company, supra, and Cleary v. 
American Airlines, Inc., supra, the courts overturned summary judgments 
against employees who alleged that their employment contracts for indefinite 
terms had been terminated contrary to established termination 
procedures.

[¶11.]  Appellant in the instant case agrees that 
legitimate economic concerns motivated appellees to reduce the Holiday Inn 
staff. Appellant contends, however, that appellees breached an obligation of 
good faith when they dismissed him rather than one of the three individuals 
hired after appellant and subordinate to him. Rompf asserts that appellees' 
knowledge that he relinquished a long-term job with accumulated benefits to take 
the new position compounds their bad faith. No cases are cited and we are aware 
of none which support appellant's position that concepts of good faith require 
an employer facing budgetary constraints to retain a particular employee of six 
weeks under an at-will contract. To the contrary, those courts which recognize 
an implied covenant of good faith in employment contracts also emphasize the 
employer's right to act in accordance with legitimate business 
interests:

"We do not question the 
general principles that an employer is entitled to be motivated by and to serve 
its own legitimate business interests; that an employer must have wide latitude 
in deciding whom it will employ in the face of the uncertainties of the business 
world; and that an employer needs flexibility in the face of changing 
circumstances. We recognize the employer's need for a large amount of control 
over its work force." Fortune v. National Cash Register Company, supra, 364 N.E.2d  at 1256.

We conclude that 
appellant's evidence fails to suggest that his dismissal constituted a violation 
of the good-faith duty imposed upon employment relationships in other 
jurisdictions. We will reserve a decision on the viability of this doctrine in 
this state until a proper case is before us.

Consideration for 
Permanent Employment

[¶12.]  Appellant contends that an "at will" 
employment situation may be converted to permanent employment2 where the employer knows that the 
prospective employee left his former position because of a permanent employment 
opportunity. Appellant cites several cases, all of which hold that an employee 
who leaves one position furnishes sufficient consideration to support a promise 
of permanent employment in a new position. Rowe v. Noren Pattern and Foundry Co., 
91 Mich. App. 
254, 283 N.W.2d 713 (1979); Rabago-Alvarez v. Dart Industries, Inc., 
55 Cal. App. 3d 91, 127 Cal. Rptr. 222 (1976); Brawthen v. H & R Block, Inc., 52 Cal. App. 3d 139, 124 Cal. Rptr. 845 (1975); Collins v. Parsons College, 
Iowa, 203 N.W.2d 594, 60 A.L.R.3d 218 (1973). 

[¶13.]  While it is true that appellant in the 
instant case gave up a Thirteen-and-one-half year management-level position with 
Frickey's, he did not do so as a result of assurances that he would have a 
permanent or lifetime position with Holiday Inn. Appellant presents no evidence 
of any representations by appellees that his new position carried 
permanent-employment status. Relinquishment of a prior responsible position, 
without more, is insufficient to create a permanent-employment contract and we 
agree with the trial court's conclusion to that effect.

Employee 
Manual

[¶14.]  Appellant contends that the employee 
manual that he received a week after he began working for the Holiday Inn became 
part of his employment contract and afforded him certain protections which 
appellees violated in connection with his dismissal. The trial court determined 
that the handbook provisions cited by appellant either furnished no guarantees 
of permanent employment or were not violated by appellees.

[¶15.]  The authorities are split as to whether 
procedures and policies set out in an employee handbook give rise to rights 
under the employment contract. See, e.g., Toussaint v. Blue Cross & Blue Shield of 
Michigan, 408 Mich. 579, 292 N.W.2d 880 (1980) (manual gave rise to 
contractual rights even though employee learned of its existence after his 
hiring); Gates v. Life of Montana 
Insurance Company, supra, 638 P.2d  at 1066 (handbook distributed subsequent 
to hiring did not become part of employee's contract). We need not decide this 
issue to dispose of the instant case, however, because none of the cited manual 
provisions offer comfort to an employee dismissed in response to economic 
adversity. We emphasize that nothing in the record suggests that the hotel's 
budget concerns were a pretext.

[¶16.]  Appellant claims that appellees violated 
two specific sections of the manual, one entitled "Disciplinary Memos" and the 
other, "Probationary Period." The written warnings to an erring employee 
required under the "Disciplinary Memos" section have no application to the facts 
at hand, since the inn's management faced a financial, not a disciplinary, 
problem.

[¶17.]  The "Probationary Period" provision 
contemplates a written evaluation of the employee's performance after 30 days of 
employment:

"All employees hired are 
on a 30-day probationary period. After this time, your Department Head will 
evaluate you in writing, to determine your suitability for continued employment 
and make suggestions and requirements for you to use as a tool for 
improvement."

Rompf contends 
that appellees' failure to evaluate him within his six weeks of employment 
constitutes an actionable breach of contract.

[¶18.]  Even if it were reasonable to expect the 
department heads of a newly opened hotel to have evaluated the many recently 
hired employees within six weeks, an exemplary report would not have prevented 
appellees from dismissing Rompf for economic reasons. Thus, the alleged breach 
of this particular section did not cause damages to the appellant. We have found 
no provision in the manual governing staff reductions brought on by declining 
revenues. In short, appellant's evidence fails to support his contention that 
appellees breached the terms of the employee manual in discharging him to ease 
economic problems.

[¶19.]  Appellant has proposed three bases upon 
which to modify the "at will" rule concerning employment contracts. Appellant's 
evidence, however, fails to support application of any of these doctrines. We 
conclude, therefore, that appellees are entitled to prevail as a matter of law 
with respect to appellant's claim of breach of his employment 
contract.

[¶20.]  The summary judgment is 
affirmed.

1 Several courts also have 
been willing to recognize a cause of action in tort where the discharge of an 
employee violates fundamental principles of public policy. Tameny v. Atlantic Richfield Company, 27 Cal. 3d 167, 164 Cal. Rptr. 839, 610 P.2d 1330, 9 A.L.R.4th 314 (1980) (employee 
wrongfully dismissed for refusing to participate in an illegal price-fixing 
scheme); Nees v. Hocks, 272 Or. 210, 
536 P.2d 512 (1975) (employee discharged for complying with jury duty stated 
valid claim against employer); Frampton 
v. Central Indiana Gas Company, 260 Ind. 249, 297 N.E.2d 425, 63 A.L.R.3d 
973 (1973) (employee wrongfully dismissed for filing a worker's compensation 
claim). Appellant's theory on appeal does not depend on this line of 
cases.

2 Permanent employment has 
been defined as employment which continues "`indefinitely, and until one or the 
other of the parties wish, for some good reason, to sever the relation.'" Pugh v. See's Candies, Inc., 116 Cal. App. 3d 311, 171 Cal. Rptr. 917, 924 (1981), quoting from Lord v. Goldberg, 81 Cal. 596, 601-602, 
22 P. 1126 (1889).