Title: Bouwens v. Centrilift

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Bouwens v. Centrilift1999 WY 24974 P.2d 941Case Number: 97-346Decided: 03/04/1999Supreme Court of Wyoming
 
Elizabeth A. BOUWENS, Appellant (Plaintiff),

v.

CENTRILIFT, A Baker 
Hughes Company, Appellee (Defendant).

Appeal from the District 
Court, Natrona County, W. Thomas Sullins, J.

 

Richard R. 
Wilking, Casper, Wyoming, Representing Appellant.

Stephenson D. 
Emery and Patrick J. Murphy of Williams, Porter, Day & Neville, Casper, 
Wyoming, Representing Appellee.

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

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

GOLDEN, 
Justice.

[¶1]      Betty Bouwens, 
who was orally hired for no definite duration of employment as a field secretary 
by Centrilift, which specializes in the design, manufacture, and servicing of 
electric submersible pumps used in the oil industry, was laid off from that 
employment after more than eight years of service because of Centrilift's 
legitimate economic problems. Pointing to a layoff provision in Centrilift's 
employee handbook, which she received and read approximately three years after 
she was hired, Bouwens asserted that Centrilift broke its promise to her in that 
layoff provision that it would "give particular attention" to her seniority when 
making its selection of employees to be laid off. She filed suit against 
Centrilift for wrongful termination, asserting claims of breach of implied 
contract and promissory estoppel, both based upon the handbook's layoff 
provision. Centrilift moved for summary judgment, pointing to an alleged 
disclaimer provision in the same handbook which states that the handbook 
contains some guidelines of practices and policies and nothing in the handbook 
is intended to be understood as an employment contract between Centrilift and 
the employee. The district court granted Centrilift's motion, holding that the 
disclaimer provision was conspicuous and clear and, therefore, legally 
sufficient to negate the alleged contractual status of the layoff provision and 
that the promissory estoppel claim also failed. On appeal, Bouwens challenges 
those rulings. We affirm.

ISSUES

[¶2]      Bouwens presents 
these issues for our review:

A. Under 
Wyoming's objective theory of contract formation, is an employee handbook 
disclaimer ambiguous if it provides only that: "This handbook contains some 
guidelines of practices and policies of Centrilift" and that "NOTHING IN THIS 
HANDBOOK IS INTENDED TO BE UNDERSTOOD AS AN EMPLOYMENT CONTRACT BETWEEN THE 
COMPANY AND THE EMPLOYEE."

B. Did the 
district court err in ruling that there were no genuine issues as to material 
fact concerning appellant's promissory estoppel claim?

[¶3]      Centrilift states 
that the issues are:

1. Where 
Appellant's employment was terminated as part of a company-wide reduction in 
force for economic reasons, and where she admitted that she had read the 
disclaimer in the employee handbook, did the district court err in finding that 
the disclaimer language was unambiguous, and thereby precluded her cause of 
action for breach of implied in fact contract?

2. Did the 
district court err as a matter of law in finding that, under the circumstances, 
appellant had no actionable claim for promissory estoppel?

FACTS

[¶4]      We state the 
facts in the light most favorable to Bouwens. When she was orally hired by 
Centrilift in February, 1986, there was no written employment contract and there 
was no written or oral promise of employment for a definite duration. About 
three years later, Centrilift distributed to its employees, including Bouwens, 
an employee handbook. Bouwens read it. In April, 1994, her supervisor told her 
that she was laid off. Others were also laid off. Centrilift's economic problems 
necessitated the layoffs. Management considered employee qualifications in 
selecting those employees to be laid off, but, stating the facts in the light 
most favorable to Bouwens, Centrilift did not give any attention to Bouwens' 
length of service, contrary to the layoff provision in Section B of the employee 
handbook.

[¶5]      The handbook 
contains a couple of provisions governing layoffs. In Section E, entitled "Job 
Procedures and Definitions," there is a provision at E-3 entitled "Plant 
Employee Workforce Reduction and Recall," which reads:

Should business 
be such that no other course of action is possible, the following lay-off and 
recall procedure will be used: Allow employees to voluntarily accept a lay-off, 
subject to management approval. If an inadequate number of persons accept 
voluntary lay-off, management is responsible for determining the remaining 
people who need to be laid off.

[¶6]      In Section B, 
entitled "Things You Want to Know About Your Job," there is a provision at B-3 
entitled "Continuous Service," which reads in pertinent 
part:

In its 
determination as to assignments, transfers, promotions, layoffs, shift 
preference, and recalls, the Company, in considering all employees, will give 
particular attention to the length of service with the Company, as well as 
qualifications and physical ability.

[¶7]      In Section A, 
entitled "Introduction," there is a provision at A-2 entitled "About the 
Handbook," which reads in its entirety:

As a new 
employee, you'll want to know what to expect from the Company, and what the 
Company expects from you. This handbook contains some guidelines of practices 
and polices of Centrilift which are important to each of us. This booklet has 
been designed to lend you a helping hand in your daily working 
relationships.

You will want to 
become familiar with the rules and policies included in this handbook. If 
questions come to mind that are not specifically mentioned in this handbook, see 
your supervisor. He, or she is able and eager to help you. If unable to give you 
an immediate answer to your particular question, your supervisor will get the 
answer for you.

It will be very 
helpful if you read this booklet very carefully and keep it for future 
reference. If you lose your copy, contact your supervisor for 
another.

NOTHING IN THIS 
HANDBOOK IS INTENDED TO BE UNDERSTOOD AS AN EMPLOYMENT CONTRACT BETWEEN THE 
COMPANY AND THE EMPLOYEE.

Bouwens concedes 
that this provision is conspicuous. She asserts, however, that it is not 
clear.

[¶8]      The handbook also 
contains provisions relating to a progressive discipline procedure, a commitment 
to fair play in the workplace environment in the context of following the 
necessary rules of business, an illustrative but not inclusive listing of 
personal behavior actions which could be cause for termination, good attendance, 
absenteeism and job security, and Centrilift's "Basic Concept" of mutual trust 
and security. Apart from the handbook, according to Bouwens, Centrilift's course 
of dealing was to hire new employees on a temporary basis; if they worked out, 
they became "permanent" employees who could only be fired for good 
cause.

 

DISCUSSION

[¶9]      We review this 
summary judgment appeal under W.R.C.P. 56, in accordance with our 
well-established standard of review. We need not unnecessarily extend the length 
of this opinion by reciting that standard. See, e.g., Deering v. Bd. of 
Directors of County Library of Fremont County, 954 P.2d 1359, 1363 (Wyo. 
1998).

Modification of 
"at will" employment/disclaimer

[¶10]   Bouwens asserts that Centrilift, by 
distribution of its employee handbook which contains a number of provisions 
relating to job security, discipline and personal behavior actions which could 
be cause for termination, procedures for handling disciplinary matters and 
layoff selection, and by its course of dealing with "permanent" employees, 
modified Bouwens' presumed "at-will" employment status to a status with respect 
to which Centrilift promised to use specific criteria identified in a layoff 
provision of the handbook when selecting employees to be laid off because of 
economic problems. More pertinently, Bouwens asserts that the concededly 
conspicuous disclaimer language in the employee handbook is not clear and, 
therefore, legally insufficient to negate the contractual status of the layoff 
provision because that disclaimer language does not satisfy the clarity 
requirements this Court discussed in McDonald v. Mobil Coal Producing, Inc., 820 P.2d 986 (Wyo. 1991); Sanchez v. Life Care Centers of America, Inc., 855 P.2d 1256 (Wyo. 1993); Lincoln v. Wackenhut Corp., 867 P.2d 701 (Wyo. 1994); Loghry 
v. Unicover Corp., 878 P.2d 510 (Wyo. 1994) (Loghry I); and Davis v. Wyoming 
Medical Center, Inc., 934 P.2d 1246 (Wyo. 1997). Bouwens also refers this Court 
to McIlravy v. Kerr-McGee Corp., 74 F.3d 1017 (10th Cir. 1996) (which applied 
Wyoming law); Nicosia v. Wakefern, Food Corp., 136 N.J. 401, 643 A.2d 554 
(1994); and Kern v. Levolor Lorentzen, Inc., 899 F.2d 772 (9th Cir. 1990), as 
persuasive authority on the subject of the clarity requirements of disclaimer 
language.

[¶11]   Centrilift contends that Bouwens' 
reliance on handbook and course-of-dealing modifications of the presumed 
"at-will" employment relationship is misplaced to the extent that such 
modifications relate to establishing Bouwens' status as an employee whom 
Centrilift can terminate only for good cause. Relying on Rompf v. John Q. 
Hammons Hotels, Inc., 685 P.2d 25 (Wyo. 1984), which addressed a layoff 
termination as opposed to a disciplinary "cause" termination, Centrilift notes 
that this Court held there that a handbook's disciplinary provisions have no 
application to a layoff termination in response to an employer's economic 
problems. Id. at 29. In other words, Centrilift contends that an employer may 
rightfully lay off even a "for cause" status employee for legitimate economic 
reasons without violating discipline-related policies or procedures created by 
the employee handbook provisions and the employer's course of dealing with its 
employees. Consequently, Centrilift's position is, for purposes of resolving the 
precise issue before this Court, the legal sufficiency of the disclaimer 
language as it relates to the layoff provision, it is irrelevant whether Bouwens 
was a "for cause" status employee.

[¶12]   With respect to the legal 
sufficiency of the disclaimer language, Centrilift maintains that the language 
is clear because it tells an employee what she needs to know: Centrilift has no 
intention to form an employment contract with the handbook provisions as its 
terms. Centrilift observes that this Court, in its several disclaimer cases, has 
eschewed establishing what specific language a disclaimer must contain to be 
effective. Sanchez, 855 P.2d  at 1259. Consequently, Centrilift rejects Bouwens' 
view that disclaimer language must be a mirror-image of that language which 
passed muster in Lincoln, Loghry, and Davis.

[¶13]   We believe that Centrilift's 
reference to that said in Rompf is well-taken: an employer's course-of-dealing 
and handbook provisions which relate to disciplinary actions and procedures are 
irrelevant to an analysis of a layoff termination. Rompf, 685 P.2d  at 29. 
However, as Bouwens correctly observes, the employee handbook in Rompf, unlike 
the Centrilift handbook in question, did not contain a layoff provision. Because 
Centrilift's handbook contains a layoff provision, this Court must consider it 
relevant for purposes of the analysis of the precise question of the legal 
sufficiency of the handbook's disclaimer language. Centrilift does not contend 
otherwise.

[¶14]   Moving to that precise question, 
this Court shall first succinctly review its past decisions in this troubling 
area of employment law. McDonald v. Mobil Coal Producing, Inc., 789 P.2d 866 
(Wyo. 1990) (McDonald I), and McDonald v. Mobil Coal Producing, Inc., 820 P.2d 986 (Wyo. 1991) (McDonald II), which was the rehearing, involved the employee's 
claim that he had been wrongfully discharged for alleged misconduct without the 
employer having followed the disciplinary process contained in the employee's 
handbook. In the alternative, the employee relied upon the promissory estoppel 
doctrine. The trial court granted summary judgment for the employer on the 
strength of a disclaimer statement in the handbook that the handbook was a guide 
and not an employment contract. McDonald I, 789 P.2d  at 868. On appeal, four 
members of this Court agreed with the trial court that the "express disclaimer 
demonstrates that [the employer] had no intention to form a contract." Id. at 
869, 871-72. One member of this Court thought the disclaimer was ineffective 
because it was inconspicuous. Id. at 870-71. About the promissory estoppel 
issue, two members of this Court saw the presence of genuine issues of material 
fact relating to the estoppel elements, id. at 870; three members of the Court, 
however, rejected the application of the promissory estoppel doctrine. Id. at 
871-72.

[¶15]   On rehearing in McDonald II, this 
Court was again badly divided. Two members of this Court thought the disclaimer 
statement was insufficiently conspicuous to be binding on an employee and that 
genuine issues of material fact existed relating to the parties' intentions to 
form a contract, requiring the fact finder to consider the various handbook 
provisions and the employer's course of dealing with the employee. McDonald II, 
820 P.2d  at 990-91. One member of this Court remained steadfast on the 
application of the promissory estoppel doctrine. Id. at 991-92. The remaining 
two members of the Court held firm in their views that the disclaimer statement 
effectively prevented the formation of a contract requiring good cause for 
disciplinary termination and that promissory estoppel did not apply. Id. at 
992-93.

[¶16]   From this brief review of the 
McDonald decisions, it is readily seen that they enjoy no precedential value. 
Any reliance on them is misplaced.

[¶17]   Of the several disclaimer cases 
decided after the McDonald cases, Sanchez, Lincoln, and Loghry I involved 
terminations in which the terminated employee claimed that a handbook contained 
disciplinary provisions which created a "for cause" status which fettered the 
employer's termination decision. In Sanchez, although the facts of record were 
sparse, the employee told her employer that because she was fatigued she would 
not be at work; the employer told her "to forget coming in" and removed her from 
the work schedule, effectively terminating her employment. Countering the 
employee's reliance on the handbook's illustrative list, of misconduct and 
related disciplinary provisions, the employer relied on a handbook disclaimer 
provision which stated, among other things, the guidelines in the handbook were 
for the mutual benefit of the employer and employees; management reserved the 
right to change or cancel all personnel policies with or without notice, and to 
terminate employees and select the manner, method and means of doing so; and the 
handbook was not a contract and contained no promises upon which any employee 
could reasonably maintain any expectation of a contract. Sanchez, 855 P.2d  at 
1257. Notably missing from the disclaimer language, as stated by the Court, was 
a statement that the employer retained the power to fire an employee with or 
without good cause. Id. at 1259. Because this was a straightforward termination 
case involving the basic question of whether or not the employer could terminate 
with or without cause, the court determined that the disclaimer language "does 
not tell the employee what he needs to know." Id. Disclaimer language that an 
employee could be terminated without cause would have negated the contrary 
implication of the handbook's misconduct and disciplinary provisions. Id. We 
reversed the summary judgment in the employer's favor and remanded for trial. 
Id. at 1259-60.

[¶18]   In Lincoln, this Court affirmed the 
summary judgment for the employer because the disclaimer was clear. Lincoln, 867 P.2d  at 704-05. The employee claimed she had been terminated without a specific 
charge of misconduct and her employer failed to follow the discipline procedure 
contained in its handbook. Id. at 702. The employer asserted that the handbook's 
disclaimer provision preserved employment at will. Id. This Court held that the 
disclaimer language was clear because it told the employee, among other things, 
that no contract was being formed, no binding terms or conditions of employment 
were being stated, and the employer could terminate employment at any time with 
or without good cause. Id. at 705.

[¶19]   In Loghry I, this Court affirmed a 
partial summary judgment for the employer because the disclaimer language in 
both the handbook and the acknowledgment page signed by the employee was clear. 
Loghry I, 878 P.2d  at 513. The employee claimed that her employer terminated her 
for reporting a possible breach of security which the handbook required her to 
do. Id. at 512. She charged that her employer failed to follow its normal 
disciplinary process also required by the handbook. Id. This Court held that the 
disclaimer language was clear because, among other information, it told the 
employee her employment could be terminated with or without cause at any time 
without warning; the handbook language was not intended to create and was not to 
be construed to constitute a contract between the employer and employees; there 
were no promises for continued employment; and only the employer's board of 
directors was authorized to waive these conditions of employment. Id. at 
513.

[¶20]   In Davis, in which this Court 
affirmed summary judgment for the employer, the terminated employee did not 
challenge the clarity of the disclaimers on her job application form and in the 
employee handbook; she conceded their effectiveness. Davis, 934 P.2d  at 1249. 
She claimed, rather, that her employer's course of dealing with her after she 
began working negated the effect of the disclaimers and created a genuine issue 
of fact relating to the necessity of good cause for discharge. Id. This Court 
rejected her claim, holding that the disclaimer language, investing only the' 
human resources vice-president with authority to change the employment 
relationship, validly disclaimed her supervisor's job performance evaluations 
and favorable comments as a basis for changing her employment status. Id. at 
1249-50, 1252.

[¶21]   Against the backdrop of this 
Court's disclaimer decisions, this Court must address Bouwens' claim that 
Centrilift's disclaimer language falls short of the mark established in those 
past decisions. In this exercise, it is helpful to use a contract formation 
analysis. "[A]n offer, acceptance, and consideration are the basic elements of a 
contract." Miller v. Miller, 664 P.2d 39, 40 (Wyo. 1983). More than twenty years 
ago, this Court replaced the well-known old contract expression "meeting of the 
minds" with the more accurate expression "mutual assent" as the legal standard 
for the formation of a binding contract. Shrum v. Zeltwanger, 559 P.2d 1384, 
1387 (Wyo. 1977). This Court said, "In order for there to be a binding contract, 
there must be mutual assent - a mutual manifestation to the same terms. Calamari 
& Perillo, Law of Contracts, HB, §§ 11 and 12, pp. 13-14." Id.; accord, 
Raymond v. Steen, 882 P.2d 852, 856 (Wyo. 1994). "[A]ssent . . . is implicit in 
the principal that contractual liability is consensual." 1 E. Allan Farnsworth, 
Farnsworth on Contracts, § 3.1, at 160 (1990). "[C]ourts have required that 
assent to the formation of a contract be manifested in some way, by words or 
other conduct, if it is to be effective." Id. at 160-61. Professor Farnsworth 
explains the analysis of the outward appearance of the agreement process in this 
way:

[I]t is common 
to analyze the process in terms of two distinct steps: first, a manifestation of 
assent that is called an offer, made by one party (called the offeror) to 
another (called the offeree); and second, a manifestation of assent that is 
called an acceptance, made by the offeree to the offeror.

Id. § 3.3, at 
163 (footnotes omitted). Our concern in this case is the first step, that of the 
offer. An offer "can be defined as a manifestation of assent to enter into a 
bargain made by the offeror to the offeree. . . ." Id. Concretely, our concern 
in this case is whether Centrilift's handbook layoff provision amounted to an 
offer, i.e., a manifestation of assent to enter into a bargain. Under the 
objective theory of assent, which courts, including this one, generally accept 
today, one looks "to the external or objective appearance of the parties' 
intentions as manifested by their actions." Id. § 3.6, at 168. This Court has 
stated it in this way, "A party's intention will be held to be what a reasonable 
man in the position of the other party would conclude his manifestations to 
mean." Shrum, 559 P.2d  at 1387. This Court agrees with Professor Farnsworth who 
has said, "The easiest way for a party to make clear an intention not to be 
legally bound is to say so." Farnsworth, supra, § 3.7, at 173. In saying 
"NOTHING IN THIS HANDBOOK IS INTENDED TO BE UNDERSTOOD AS AN EMPLOYMENT CONTRACT 
BETWEEN THE COMPANY AND THE EMPLOYEE," did Centrilift make clear an intention 
not to be legally bound? We hold that it did. We hold that a reasonable employee 
reading that language could form but one conclusion about Centrilift's intention 
relating to the handbook provisions: none of those provisions was an enforceable 
term of an employment contract. Consequently, we hold that the layoff provision 
did not have contractual status.

[¶22]   To be sure, of the many disclaimer 
decisions in other jurisdictions, some would support the decision here, and some 
would not. See, e.g., Castiglione v. Johns Hopkins Hosp., 69 Md. App. 325, 517 A.2d 786, 792-93 (1986) (disclaimer that handbook "does not constitute an 
express or implied contract" is clear); and cases cited in Michael A. Chagares, 
Utilization of the Disclaimer As An Effective Means to Define the Employment 
Relationship, 17 Hofstra L.Rev. 365, 382 n. 132 (1989); Nicosia v. Wakefern Food 
Corp., 136 N.J. 401, 643 A.2d 554, 560-61 (1994) (disclaimer that "[t]he terms 
and procedures contained therein are not contractual" is unclear). To the extent 
today's analysis of the clarity requirements of disclaimer language represents a 
shift away from the approach used before, we firmly believe today's contract 
formation analysis is the better-reasoned one.

Promissory 
Estoppel/Disclaimer

[¶23]   In the event this Court held that 
the disclaimer language negated the formation of a contract, Bouwens has 
presented the alternative argument that the doctrine of promissory estoppel 
applies to the facts of this case. The elements of that doctrine are captured in 
Restatement (Second) of Contracts § 90(1) (1981), which 
states:

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.

See Loghry v. 
Unicover Corp., 927 P.2d 706, 710 (Wyo. 1996) (Loghry II); Hanna State & 
Savings Bank v. Matson, 53 Wyo. 1, 16, 77 P.2d 621, 625 
(1938).

[¶24]   Bouwens contends that the handbook 
layoff provision qualifies as a clear and definite promise made by Centrilift. 
Centrilift counters that the disclaimer language also prevents the layoff 
provision from attaining "promise" status. In Loghry II, this Court decided that 
when an at-will employee presents a promissory estoppel claim, it will give 
effect to any valid disclaimers, instead of deciding under its equitable powers. 
Loghry II, 927 P.2d  at 711. In Davis, this Court said, "A valid disclaimer is 
fair notice to employees of what can be expected from the employer." Davis, 934 P.2d  at 1252. We hold that not only did Centrilift's disclaimer language prevent 
the layoff provision from being an offer, it also prevented it from being a 
promise. Consequently, the first necessary element of the promissory estoppel 
doctrine is missing.

[¶25]   This Court affirms the district 
court in all respects.