Title: RUSSELL v. BOARD OF COUNTY COMMISSIONERS

State: oklahoma

Issuer: Oklahoma Supreme Court

Document:

RUSSELL v. BOARD OF COUNTY COMMISSIONERS  RUSSELL v. BOARD OF COUNTY COMMISSIONERS 1997 OK 80 952 P.2d 492 68 OBJ 2217 Case Number: 86358 Decided: 06/24/1997 Modified: 05/13/1998 Mandate Issued: 03/06/1998 Supreme Court of Oklahoma EARL RUSSELL, GARY WATSON, GARY SMITH, MACK WORD, STEVEN HENSON, RUBEN GARCIA, KENNETH TURNER, GREG THEOBALD, WAYNE MAGEE and BRYAN BURTON, Plaintiffs-Appellants, v. BOARD OF COUNTY COMMISSIONERS, CARTER COUNTY, STATE OF OKLAHOMA, Defendant-Appellee. ON CERTIORARI TO THE COURT OF CIVIL APPEALS, DIV. 2 ¶0 In a breach-of-contract action by ten deputy sheriffs for uncompensated overtime and holiday pay, the District Court, Carter County, Thomas S. Walker, Judge, gave summary judgment to the board of county commissioners. The Court of Civil Appeals reversed. On certiorari granted upon the board's petition, THE COURT OF CIVIL APPEALS' OPINION IS VACATED, THE TRIAL COURT'S SUMMARY JUDGMENT REVERSED AND THE CAUSE REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH TODAY'S PRONOUNCEMENT Ronald E. Worthen, Ardmore, Oklahoma, for Appellants. Rodney C. Ramsey, Hall, Estill, Hardwick, Gable, Golden & Nelson, Oklahoma City, Oklahoma, for Appellee. OPALA, J. ¶1 The dispositive issue on certiorari is whether there was error in entering summary judgment for the county. We answer in the affirmative. I THE ANATOMY OF LITIGATION ¶2 Ten deputy sheriffs of Carter County [deputies, deputy sheriffs or plaintiffs] commenced a breach-of-employment-contract action against the Board of County Commissioners [Board, county or commissioners] to recover overtime pay alleged to be due them under an at-will employment arrangement with the county. The deputies pressed for summary relief, arguing that the commissioners (a) established uniform personnel policies for county employees, (b) published the policies in a handbook which embodied the Board's practice of paying overtime to county employees, and (c) distributed the manual to county employees. They are entitled to the overtime benefits sought, the deputies argue, because (a) the handbook states that law enforcement (and other county) personnel are to be paid overtime compensation, (b) deputy sheriffs are law enforcement officers, and (c) under the terms of the manual, other sheriff employees receive overtime and holiday pay. The written policy, the deputies urge, became a part of their at-will employment contract, which the county has breached by its refusal to provide the overtime compensation pressed for payment. ¶3 The Board also sought victory by summary adjudication process, arguing that the handbook did not constitute a contract. Even if some language in the manual could create contractual obligations, the Board urges, material fact issues exist as to whether (a) the handbook rises to the level of a contract and (b) its overtime provisions apply to these deputy sheriffs. Noting the deputy sheriffs' claim to overtime pay was not founded on the Fair Labor Standards Act [FLSA or Act], ¶4 Rejecting the Board's interpretation of Nichols, although not disputing the notion [952 P.2d 496] their claim was based solely on contract, the deputy sheriffs point out the circumstances of this case are substantially different from those in Nichols. They note that here (a) the overtime policy was adopted by a statutorily authorized personnel board, (b) the deputies are further removed from the sheriff's direct supervision than those in Nichols, and (c) the size of the staff that consists of deputies, jailers and technicians is not determined solely by the sheriff's discretion, but must be approved by the county excise board. Moreover, they urge, Nichols rests on a federal-court interpretation of Oklahoma statutes, which this court is not bound to follow. ¶5 The trial court gave summary judgment to the Board, and the deputies appealed. The Court of Civil Appeals [COCA] reversed. Although agreeing that the Board's overtime policy does not create or constitute a contractual right to overtime, the COCA opinion treats that issue as nondispositive of the deputies' right to recover. The COCA (a) notes that the Board does not treat equally "all county employees who work overtime, as defined by federal fair labor standards for their particular employment," for the allowance of overtime benefits, ¶6 The COCA treated the deputies' contractual theory with a conclusory rejection, II STANDARD OF REVIEW ¶7 The focus in summary process is not on facts a plaintiff might be able to prove at trial (i.e., the legal sufficiency of evidence that could be adduced) but rather on whether the evidentiary materials as a whole (a) show undisputed facts on some or all material issues and (b) will support but a single inference in favor of a successful movant's quest for relief. III ¶9 The Board argues that the summary judgment should not be reversed on a claim - one for violation of the FLSA - that was not pressed in the trial court and is unsupported by the record. ¶10 When resolving a public-law controversy, the reviewing court is generally free to grant corrective relief upon any applicable legal theory dispositive of the case. Appellate freedom to raise and settle public-law issues sua sponte is circumscribed not by arguments tendered by the parties but rather by the record brought for review. ¶11 We cannot decide today, as explained in Part IV infra, either as a matter of law or on this record, that the FLSA is applicable to the deputy sheriffs' claim for uncompensated overtime and holiday work. IV THE FAIR LABOR STANDARDS ACT ¶12 The deputy sheriffs neither pleaded below nor urged on appeal that the FLSA's overtime provisions are applicable to their compensation claim. If the COCA intended to inject that issue sua sponte (by its reference to the fair labor standards), its holding is plain error. This is so because a FLSA-based claim is not only sans record support, but its infusion on appeal would transform the deputies' contractual claim into a different demand rather than merely supply a new theory for recovery. Moreover, the COCA's opinion did not pause to consider the timeliness of a FLSA claim. Because we hold today in Part V infra that summary judgment cannot stand on other grounds and there is a possibility of a postremand amendment to the pleadings,10 we must [952 P.2d 498] discuss and give guidance on the FLSA's impact, if any, upon this lawsuit. ¶13 The FLSA requires employers to pay their employees for overtime at a rate of one and one-half times the regular rate of pay for each hour in excess of the normal work week.11 The Act's enforcement provisions12 create a private right of action for any violation of the maximum hours and overtime pay provisions.13 Concurrent jurisdiction over FLSA-generated controversies stands conferred on both state and federal courts.14 The FLSA applies to employees of state and local governments.15 An employee who brings an action for unpaid overtime compensation under the FLSA has the burden of proving that work was performed in excess of 40 hours for which no compensation was given.16 A showing must be made of (a) the amount and extent of overtime work as a matter of just and reasonable inference and (b) the employer's knowledge of the uncompensated time.17 A FLSA claim [952 P.2d 499] must be commenced within two years after it has accrued, unless the action arises out of a "willful" violation - in which case it must be commenced within three years after accrual.18 ¶14 The FLSA provides for several exemptions from its overtime protections: (a) law enforcement organizations which employ fewer than five persons,19 (b) employees of governmental subdivisions who are not covered by civil service laws and are on the personal staff of a publicly elected officer20 and (c) persons who are employed in a bona fide executive, administrative or professional capacity.21 Because the Act establishes a presumption of coverage,22 exemptions are construed narrowly against the employer.23 A claim to a FLSA exemption is an affirmative defense on which the employer bears the burden of showing that its employees fit "plainly and unmistakably within [the exemption's] terms and spirit."24 ¶15 Nichols25 does not, as the County urges, hold that deputy sheriffs are members of the sheriff's personal staff and hence exempts them, as a matter of law, from FLSA's overtime protection. The inquiry into an employee's exempt status under the FLSA remains "intensely fact bound and case specific."26 In Nichols several former deputy sheriffs in two Oklahoma counties (LeFlore and McIntosh) pressed a FLSA [952 P.2d 500] claim for overtime pay.27 The federal court considered six factors for measuring whether these deputies would fall within the Act's "personal staff" exemption.28 Summary judgment for the Board rested on (a) the employers' (counties) showing that the sheriff and deputies had the type of relationship subject to the personal staff exception and (b) the deputies' failure to demonstrate the existence of a material fact issue. ¶16 Because in this case no FLSA-based claim had been pressed below, there was no record before the COCA to justify its sua sponte injection on appeal. If the deputies had desired to invoke the FLSA, they would have had to comply with the terms of that Act by filing a claim that would allege violations of the FLSA within two years (or three if a willful violation is implicated) of the accrual of their causes of action. We cannot, on this scant record, decide whether (a) these deputies stand exempted from the FLSA's overtime protections as a matter of federal law and (b) their FLSA claims, if pressed, would be timely. V ¶18 The deputies argue that the commissioners, sitting as a personnel board,29 adopted a personnel policy manual,30 which provides that county employees - including "law enforcement officers" - shall be compensated for overtime hours31 and receive holiday work pay.32 The deputies argue they are law enforcement officers within the meaning of the county's personnel policy. In [952 P.2d 501] support of this notion, they direct us to the statutory scheme governing county officers, which (a) classifies the sheriff as an enforcement officer charged with keeping the peace,33 (b) designates the sheriff and his deputies as the only "peace officers" for county government,34 (c) provides that each county officer shall have one "first deputy" and (d) classifies all others as "second deputies." ¶19 These written policies, the deputies urge, which codified the prior practice of paying overtime wages to county employees, have become a part of the at-will employment arrangement. According to the deputies, when they accepted the county's offer (in the handbook) of compensation for overtime worked, the county became contractually bound to pay according to the promised wage regime. Because they are county employees as well as law enforcement officers, the deputies argue, they are entitled to the benefits promised in the county's personnel policy. Moreover, they submit that the county is bound by the doctrine of promissory estoppel and cannot now deny the overtime wages after they have performed the work.35 ¶20 Although conceding that the deputy sheriffs are law enforcement officers in a general sense, the Board denies they are law enforcement officers within the meaning of the manual's overtime provisions. We are directed to evidentiary materials - the commissioners' affidavits - which show that these county officials intended by their March 12, 1992 adoption of the personnel policy to pay overtime (or compensatory time off) to the sheriff's employees acting in the capacity of jail personnel, but not to deputy sheriffs. ¶21 The Board contends it never intended to create, by the text of the handbook, an employment contract that modified the at-will employment status or authorized overtime pay for deputy sheriffs.36 Its intent, the Board argues, is clearly expressed in a disclaimer placed on the front of the handbook. The pertinent language states: THESE POLICIES ARE NOT TO BE CONSIDERED AN EMPLOYMENT CONTRACT WITH ANY EMPLOYEE The handbook is not a contract, the Board sums up, and cannot, as a matter of law, create any contractual obligations. B. The Handbook As The Basis Of An Implied Contract ¶22 The question pressed by the deputies regarding their alleged contract claim calls for an analysis of the principles that govern the legal efficacy of employee personnel handbooks (or manuals). ¶23 Oklahoma jurisprudence recognizes that an employee handbook may form the basis of an implied contract between an employer and its employees37 if [952 P.2d 502] four traditional contract requirements exist: (1) competent parties, (2) consent, (3) a legal object and (4) consideration.38 Two limitations on the scope of implied contracts via an employee handbook stand identified by extant caselaw: (1) the manual only alters the at-will relationship with respect to accrued benefits39 and (2) the promises 40 in the employee manual must be in definite terms, not in the form of vague assurances.41 Although the existence of an implied contract generally presents an issue of fact, if the alleged promises are nothing more than vague assurances the issue can be decided as a matter of law.42 This is so because in order to create an implied contract the promises must be definite.43 ¶24 While an employer may deny (or disclaim) any intent to make the provisions of a personnel manual part of the employment relationship, the disclaimer must be clear.44 An employer's conduct - i.e., representations and practices - which is inconsistent with its disclaimer may negate the disclaimer's effect.45 The efficacy of a disclaimer is generally a mixed question of law and of fact.46 [952 P.2d 503] ¶25 We cannot, on this record, decide the contractual efficacy of the handbook as a matter of law. While the manual states that its purpose is "to provide a working guide" to county officials and that the personnel policies do not represent an "employment contract," conflicting inferences may be drawn from other statements made in the same handbook. The manual's "overtime" provisions state that county employees "who are not exempt, law enforcement personnel or emergency medical personnel, shall be entitled to overtime payment."47 Under the "general statement" section, the employer offers "paid holidays" for "full-time employees of the county."48 The deputies' evidentiary materials indicate that other personnel in the sheriff's office have received overtime pay in accordance with these written personnel policies. Because they are law enforcement personnel and county employees, the deputies urge, they should receive the same benefits and stand on the same footing with others. The deputies' evidentiary materials raise a material fact question whether the effectiveness of the Board's written disclaimer is negated by inconsistent employer conduct. ¶26 If the disclaimer is found to be ineffective, there remains a material fact issue whether deputy sheriffs (a) are included in the category of law enforcement personnel eligible for overtime pay or (b) fall within the exempt classification that is excluded from these benefits. The manual fails to identify the county employees that fall within these categories. The Board's explanation (by affidavits attached to its summary judgment response) that deputy sheriffs were not intended to be included within the manual's overtime pay classifications points out an ambiguity in the handbook that must be clarified by extrinsic evidence. It is not the function of summary adjudication process to afford a trial by affidavit; rather, it is to afford a method of summarily deciding some issues or terminating a case when there is nothing presented but a question of law.49 C. The Handbook's Binding Effect As Declared Policy Under The Theory of Promissory Estoppel ¶27 The deputies argue that the county is liable for overtime pay under the theory of promissory estoppel. Promissory estoppel, which is grounded in the Restatement (Second) of Contracts § 90, has been incorporated into Oklahoma common law.50 Section 90 of the Restatement states in part: "(1) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires. * * *" The elements necessary to establish promissory estoppel are: (1) a clear and unambiguous promise, (2) foreseeability by the promisor that the promisee would rely upon it, (3) reasonable reliance upon the promise to the promisee's detriment and (4) hardship or unfairness can be avoided only by the promise's enforcement.51 [952 P.2d 504] ¶28 According to the deputies, they relied on two separate promises in the manual which entitle them to relief under the theory of promissory estoppel - (a) § 5-3, which constitutes a promise that they would be given overtime compensation as law enforcement officers,52 and (b) § 6-1, which promises that full-time county employees will receive compensation for holidays worked.53 As discussed in Part V(B), supra, the manual is ambiguous. It neither specifies what categories of sheriff's employees are designated "law enforcement personnel" nor identifies those who are exempted from the overtime pay requirements. ¶29 We hold that whether the county is liable under the doctrine of promissory estoppel - i.e., on the notion of the deputies' detrimental reliance on the personnel manual's provision for overtime or holiday pay (or compensatory time off) - tenders a material fact in dispute. It is yet to be determined. An examination of the evidentiary materials submitted in opposition to the county's quest for summary adjudication reveals that opposite inferences may be drawn from the facts presented. VI ¶31 The deputies press for the first time on appeal that the county's disparate application of its adopted personnel policies governing overtime and holiday pay to one group of law enforcement officers (deputy sheriffs) but not to others (i.e., jailers, dispatchers) within that classification is arbitrary and capricious. The county's policy as written, they argue, was not intended to distinguish between groups of law enforcement officers. ¶32 We do not reach, either for settlement or discussion, the equal protection clause's impact. When, as here, legal relief clearly is affordable upon alternative grounds, consideration of constitutional challenges is inappropriate in light of our self-erected "prudential bar" of restraint. Constitutional questions should not be reached in advance of strict necessity.54 SUMMARY ¶33 Because the deputy sheriffs had not pressed below a FLSA-based claim, that issue stood before the COCA entirely unsupported by the record and could not hence be injected on appeal sua sponte. It is not possible to declare, on this record, that these deputy sheriffs are excluded from the Act's overtime protection as a matter of law. ¶34 Whether - either on application of an implied-contract or of promissory-estoppel theory - the personnel policy handbook creates a binding obligation on the county to pay the deputy sheriffs for overtime and holiday hours worked presents a question for an evaluative determination of the trier. The record reveals disputed material facts as well as undisputed material facts from which conflicting inferences may be drawn. ¶35 We express no opinion on the Board's liability for FLSA- or contract-based theories. The cause must be remanded for a nisi prius resolution of all untried issues tendered or to be tendered. The summary judgment for the county cannot stand. When on the judgment's reversal a cause is remanded, it returns to the trial court as if it [ 952 P.2d 505 ] had never been decided, save only for the "settled law" of the case.55 ¶36 On certiorari granted upon the Board's petition, the Court of Civil Appeals' opinion is vacated, the trial court's summary judgment reversed and the cause remanded for further proceedings consistent with today's pronouncement. ¶37 KAUGER, C.J., SUMMERS, V.C.J., and HODGES, LAVENDER, HARGRAVE, OPALA and WILSON, JJ., concur; SIMMS FOOT