Title: Wilder v. Cody Country Chamber of Commerce

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Wilder v. Cody Country Chamber of Commerce1994 WY 7868 P.2d 211Case Number: 93-22Decided: 01/25/1994Supreme Court of Wyoming

Rick  
WILDER, Appellant (Plaintiff),

v.

CODY COUNTRY CHAMBER OF COMMERCE, a Wyoming 
non-profit corporation, Appellee (Defendant).

 

L.B. Cozzens of Crowley, 
Haughey, Hanson, Toole & Dietrich, Billings, MO, for appellant.

Gary R. Scott of Hirst & 
Applegate, Cheyenne, for appellee. 

Before MACY, C.J., and THOMAS, CARDINE, GOLDEN and 
TAYLOR, JJ.

TAYLOR, Justice.

[¶1]      Following the termination of his employment, a former 
executive director of a non-profit corporation brought this action. In a 
multi-count complaint, the former executive director alleged breach of contract, 
bad faith and various tort claims against the corporation. The district court 
granted summary judgment on all counts in favor of the corporation. The district 
court found that despite the terms of a letter placing the former executive 
director on probationary status pending completion of an audit, his employment 
was "at will" and could be terminated without cause.

[¶2]      We affirm in 
part, reverse in part and remand.

I. 
ISSUES

[¶3]      Appellant, the 
former executive director of the non-profit corporation, presents two issues for 
review:

A. Are there genuine issues of material fact which 
preclude summary judgment in favor of the Appellee on any of the claims asserted 
by the Appellant?

B. Did the trial court abuse its discretion in 
denying the Appellant's timely motion for leave to amend his 
complaint?

[¶4]      Appellee, the 
non-profit corporation, states three issues:

A. Did the Trial Court Err in granting summary 
judgment for Appellee upon the Appellant's claims for breach of contract, bad 
faith termination, intentional infliction of emotional harm, negligence, libel 
and slander, and intentional interference with prospective business 
relations?

B. Did the Trial Court abuse its discretion in 
denying Appellant's Motion for Leave to Amend his 
Complaint?

C. Can this Court properly consider as part of the 
record the Attorney's Affidavit filed by Appellant?

II. 
FACTS

[¶5]      In 1986, Rick 
Wilder (Wilder) closed his real estate brokerage to accept the position of 
executive director of the Cody Country Chamber of Commerce (Chamber) in Cody, 
Wyoming. The Chamber is a non-profit corporation controlled by a Board of 
Directors (Board) and a President who serve for terms of office. Wilder 
considered his employment to be "permanent" for "as long as I did the work that 
was required." Wilder commenced his employment without a written contract; 
however, he maintained that Chamber officials promised, during an annual 
performance review, to prepare a written agreement similar to the one under 
which his predecessor had been employed.

[¶6]      As the chief 
administrator for the Chamber, Wilder's duties required that he supervise the 
Chamber's staff, including the budget manager. The budget manager's duties 
involved preparation of monthly financial statements and controlling the 
accounts receivable and accounts payable transactions of the Chamber. During 
portions of 1987 and 1988, the budget manager failed to pay certain taxes due to 
the Internal Revenue Service (IRS). The budget manager claimed that periodic 
cash flow problems prevented the prompt payment of the taxes and other 
bills.

[¶7]      In late 1988, an 
IRS agent notified Wilder of the delinquent taxes. Wilder and the budget manager 
met with the IRS agent in January of 1989 and agreed to a payment schedule. 
Wilder did not disclose the financial problem to the Board or to the 
President.

[¶8]      While Wilder was 
traveling in March of 1989, the budget manager became ill and other staff 
members were required to review her files. The review disclosed that numerous 
checks payable to the Chamber had not been deposited, bills owed by the Chamber 
were unpaid and taxes were delinquent. The Board learned of the financial 
problems from members of the Chamber staff.

[¶9]      On March 29, 
1989, the Board met with Wilder when he returned to Cody and discussed the 
Chamber's financial problems. After the meeting, the President presented Wilder 
with a "memorandum of understanding." Dated March 31, 1989, the memorandum 
placed limits on Wilder's non-employment related activities. Additionally, the 
memorandum stated, in pertinent part:

Your status is probationary through July 1, 1989, or 
upon completion of an audit of the Chamber books, which may be completed sooner 
than July 1, 1989. Upon completion of the audit, and the opportunity to review 
it, the Board will evaluate your status and whether or not to offer you 
continued employment. The Board reserves the right to consider past employment 
performance, and review will not be limited to your performance during the 
probationary period. The Board believes that the entire financial and management 
picture of Chamber operations should be before them prior to a decision 
regarding your future employment. In other words, the Board wants all the facts 
before them, and as such the probationary period is in no way to operate as a 
waiver of the Board's right to consider performance prior to the probationary 
period. You are an at will employee, and the Board has the right to terminate at 
any time for any reason, or for no reason at all. However, we insist on knowing 
all the facts before any action is taken. Again, you serve at the pleasure of 
the Board.

Additionally, the memorandum 
required Wilder to spend a minimum of one day per week improving financial 
oversight at the Chamber and to receive prior approval for all out-of-town 
travel. Another term of the memorandum deleted a car allowance and insurance 
coverage from Wilder's compensation package. Despite his belief that he was an 
employee subject to dismissal only for cause, Wilder signed and accepted the 
terms of the memorandum of understanding on April 4, 1989.

[¶10]   On April 18, 1989, the Board met 
with Wilder and the budget manager. Board members inquired about the financial 
problems at the Chamber and when Wilder learned of the delinquent taxes. At the 
conclusion of the meeting, the Board informed Wilder that he had the option of 
resigning his position immediately or being terminated the next day. Wilder 
resigned. It is undisputed that the audit referred to in the memorandum of 
understanding with Wilder had not yet been completed.

[¶11]   Following his termination, Wilder 
attempted to secure other employment in Cody. When Wilder was considered for a 
position with the Park County Travel Council, the Park County Travel Council was 
informed by the Chamber President that the Chamber could not work with Wilder. 
The President suggested that a Chamber employee perform the desired work for the 
Park County Travel Council instead of Wilder. Later, Wilder also sought 
employment with the Yellowstone Airport Board and presented a marketing 
proposal. Again, Chamber officials objected to Wilder's employment. The Chamber 
presented an unsolicited alternative marketing plan that utilized a Chamber 
employee's services. The Chamber's plan was implemented.

[¶12]   On October 10, 1991, Wilder filed a 
complaint seeking compensatory and punitive damages from the Chamber. Wilder 
based his damage claims on several causes of action including: breach of 
contract; bad faith termination; negligence; intentional infliction of emotional 
harm; libel and slander; intentional interference with prospective business 
relations; and negligent interference with prospective business relations. 
Subsequently, Wilder withdrew the claim for negligent interference with 
prospective business relations. The Chamber denied the allegations of the 
complaint and filed a counterclaim seeking damages for Wilder's negligent breach 
of his employment duties; breach of his oral, at will, employment contract; and 
negligent misrepresentation.

[¶13]   On October 26, 1992, the Chamber 
filed a motion for summary judgment. Three days later, Wilder filed a motion for 
leave to amend the complaint to bring individual actions against some present 
and former officers, members of the Board, and employees of the Chamber. Wilder 
also sought to state additional causes of action against the Chamber, including 
promissory estoppel, fraud, and negligent 
misrepresentation.

[¶14]   The district court denied Wilder's 
motion for leave to amend the complaint and granted summary judgment, on all 
counts, in favor of the Chamber. Specifically, the district court determined 
that Wilder was an at will employee at the time of his termination. The district 
court refused to consider whether Wilder had stated a cause of action for bad 
faith termination because that action was not recognized in Wyoming. The 
district court found that the evidence was close, but the Chamber had not 
intentionally interfered with prospective business relations by performing tasks 
that other organizations had considered hiring Wilder to 
do.

[¶15]   Subsequently, the Chamber filed a 
motion to dismiss the counterclaim against Wilder, without prejudice, which was 
granted. Wilder filed this appeal to challenge the summary 
judgment.

III. 
DISCUSSION

[¶16]   A summary judgment is affirmed when 
there is no genuine issue of material fact and the moving party is entitled to a 
judgment as a matter of law. W.R.C.P. 56(c). Summary judgment serves the purpose 
of eliminating formal trials where only questions of law are involved. Bryant v. 
Hornbuckle, 728 P.2d 1132, 1135 (Wyo. 1986). Summary judgment is inappropriate 
to resolve factual disputes, so the court does not weigh disputed evidence. 
Cordova v. Gosar, 719 P.2d 625, 637-38 n. 6 (Wyo. 1986) (collecting cases); 
Territorial Sav. & Loan Ass'n v. Baird, 781 P.2d 452, 456 (Utah App. 
1989).

[¶17]   At the appellate level, the party 
who opposed the motion is given the benefit of any reasonable doubt and 
inferences drawn from the affidavits, depositions, and exhibits presented as 
underlying facts and are viewed in the light most favorable to that party. Keehn 
v. Town of Torrington, 834 P.2d 112, 114 (Wyo. 1992); Powder River Oil Co. v. 
Powder River Petroleum Corp., 830 P.2d 403, 406-07 (Wyo. 1992); 10 Charles A. 
Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure: 
Civil 2d § 2716 at 643 (1983 & Cum.Supp. 1993). An issue of material fact 
which would preclude summary judgment is found when a disputed fact, if proven, 
would establish or refute one of the essential elements of a cause of action or 
a defense which has been asserted. Keehn, 834 P.2d  at 114; Stratman v. Admiral 
Beverage Corp., 760 P.2d 974, 978 (Wyo. 1988). This court accords no deference 
to the district court's decisions on issues of law. Prudential Preferred 
Properties v. J and J Ventures, Inc., 859 P.2d 1267, 1271 (Wyo. 
1993).

A. BREACH OF CONTRACT

[¶18]   Wyoming has long recognized that 
the hiring of an employee by an employer occurs by contract. See, e.g., Casper 
Nat. Bank v. Curry, 51 Wyo. 284, 65 P.2d 1116, 1120 (1937). When reviewing the 
terms of a contract of employment, we apply our usual rules of contract 
interpretation. McDonald v. Mobil Coal Producing, Inc., 820 P.2d 986, 988 (Wyo. 
1991) (McDonald II). Whether a contract is ambiguous is a question of law for 
the reviewing court. Prudential Preferred Properties, 859 P.2d  at 1271. "`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.'" Alexander 
v. Phillips Oil Co., 707 P.2d 1385, 1387 (Wyo. 1985) (quoting Mobil Coal 
Producing, Inc. v. Parks, 704 P.2d 702, 706 (Wyo. 1985)).

[¶19]   The contract of employment is 
created by either an express contract or a contract implied in fact. Express 
contracts are ones in which the terms are declared by the parties either in 
writing or orally at the time the contract is formed. 17 C.J.S. Contracts § 3 at 
552 (1963). Express contracts of employment, both written and oral, were 
recently at issue in Hopper v. All Pet Animal Clinic, Inc., 861 P.2d 531, 540 
(Wyo. 1993) (holding covenant not to compete which was ancillary to a valid 
contract of employment would be enforced to the extent its terms were 
reasonable).

[¶20]   The implied in fact contract of 
employment arises from a mutual agreement and intent to promise which is found 
in the acts or conduct of the party sought to be bound. 17 C.J.S. Contracts, 
supra, § 4 at 555; Restatement (Second) of Contracts §§ 18-19 (1981) (stating 
rules that assent to the formation of informal contracts must be manifested by 
words, acts or conduct). See McDonald II, 820 P.2d  at 990 (adopting Restatement 
(Second) of Contracts, supra, § 19). Contracts of employment which are found 
from employee handbooks or policies are implied in fact contracts. See, e.g., 
Sanchez v. Life Care Centers of America, Inc., 855 P.2d 1256 (Wyo. 1993) and 
McDonald v. Mobil Coal Producing, Inc., 789 P.2d 866, 869 (Wyo. 1990) 
(hereinafter McDonald I). Both express and implied in fact contracts of 
employment are enforceable to the same degree. Bell v. Superior Court (20th 
Century Ins. Co.), 215 Cal. App. 3d 1103, 263 Cal. Rptr. 787, 789 (1989). The 
distinctions in form, however, create different modes of proof. Id. at 789; 17 
C.J.S. Contracts, supra, § 3 at 553.

[¶21]   Wilder contends that two express 
agreements governed his relationship with the Chamber: an oral contract of 
employment which was formed at the time Wilder accepted the position of 
executive director; and a written contract of employment, in the form of the 
memorandum of understanding, which may have governed the relationship between 
Wilder and the Chamber at the time of termination. Wilder challenges that 
disputed material facts regarding these agreements preclude summary judgment on 
this cause of action. We agree.

[¶22]   At the time the Chamber told Wilder 
to resign or be terminated, no cause was stated for termination. While cause may 
have existed to terminate Wilder, its role in the termination is not at issue. 
Wilder was terminated as an at will employee without cause. Also, we acknowledge 
that an employee who resigned after being told to resign or be terminated was 
terminated for purposes of a breach of contract action. Kass v. Brown Boveri 
Corp., 199 N.J. Super. 42, 488 A.2d 242, 246-49 (1985) (holding action for 
breach of employment contract is not barred when resignation is a product of 
employer coercion); Sheets v. Knight, 308 Or. 220, 779 P.2d 1000, 1004-05 (1989) 
(recognizing that termination occurs when employer unconditionally orders 
employee to resign or be fired).

[¶23]   We begin our analysis by 
considering the oral contract of employment. The oral contract was formed when 
the Chamber offered employment to Wilder and he accepted. The consideration for 
this unilateral contract was supplied by Wilder when he performed his duties as 
an employee in the bargained for exchange. Leithead v. American Colloid Co., 721 P.2d 1059, 1062-63 (Wyo. 1986); Toussaint v. Blue Cross & Blue Shield of 
Michigan, 408 Mich. 579, 292 N.W.2d 880, 885 (1980); 1 Henry H. Perritt, Jr., 
Employee Dismissal Law And Practice, § 4.34 at 331 (3rd ed. 1992). See 
Prudential Preferred Properties, 859 P.2d  at 1272 (adopting Restatement (Second) 
of Contracts § 71 (1981) rule that consideration is supplied by bargained for 
performance).

[¶24]   The status of Wilder's employment 
under the oral contract with the Chamber is in dispute. Wilder asserts that his 
employment was "permanent" for "as long as I did the work that was required." 
The Chamber contends that Wilder was employed "at will."

[¶25]   Wyoming continues to accept the 
common-law employment at will rule which states that either party may terminate 
a contract of employment, which is for an indefinite duration, at any time, for 
any reason or for no reason at all. Lankford v. True Ranches, Inc., 822 P.2d 868, 872 (Wyo. 1991); Chasson v. Community Action of Laramie County, Inc., 768 P.2d 572, 575 n. 1 (Wyo. 1989); Rompf v. John Q. Hammons Hotels, Inc., 685 P.2d 25, 27 (Wyo. 1984). The employment at will rule creates a rebuttal presumption 
which affects only contracts of employment of indefinite duration. Leithead, 721 P.2d  at 1062; Casper Nat. Bank, 65 P.2d at 1120-21; Toussaint, 292 N.W.2d  at 
885-92. While the employment at will rule is frequently criticized for its 
dubious historical origin, it continues to have application, with modifications, 
in present employer-employee relationships. Berube v. Fashion Centre, Ltd., 771 P.2d 1033, 1040-41 (Utah 1989).

[¶26]   The converse to the employment at 
will rule is that when a contract of employment states a definite duration, 
dismissal only for cause is presumed. Pine River State Bank v. Mettille, 333 N.W.2d 622, 628 (Minn. 1983). However, this rule incorporates two restrictions. 
First, performance under a contract of definite duration is within the statute 
of frauds, Wyo. Stat. § 1-23-105 (1988), making evidence of a writing necessary 
if the terms are not performed within one year. Toussaint, 292 N.W.2d  at 891 n. 
24 (discussing applicability of statute of frauds to contracts of employment for 
a definite duration and inapplicability of statute of frauds to a contract of 
employment for an indefinite duration); Restatement (Second) of Contracts § 130, 
cmt. a (1981) (stating inapplicability of statute of frauds to contracts of 
uncertain duration). Second, employers and employees are free to enter into 
express contracts which state a duration but contain specific language 
preserving the right to terminate at will by either party. Toussaint, 292 N.W.2d  
at 890. An example of such a contract would be a three year agreement, in 
writing, identifying wages and benefits to be paid to the employee in return for 
performance of required duties, but specifically permitting either party to 
terminate the agreement at will.

[¶27]   Wilder does not assert that the 
oral contract of employment with the Chamber was for a definite duration. 
Instead, he argues his employment was "permanent." The word "permanent" as used 
in employment contracts is subject to multiple definitions. Under one standard, 
"permanent" employment is indefinite employment which continues until a party to 
the contract terminates the agreement with cause. Leithead, 721 P.2d  at 1063; 
Rompf, 685 P.2d  at 28 n. 2. However, "permanent" may also be used to refer to 
employment status, such as distinguishing between an employee on probation or 
hired temporarily and another who is considered "permanent." Beales v. 
Hillhaven, Inc., 108 Nev. 96, 825 P.2d 212, 216 (1992). We hold that a claim by 
an employee that the employer promised "permanent" employment does not alter the 
at will presumption without additional consideration supplied by the employee or 
explicit language in the contract of employment stating that termination may 
only be for cause. Leithead, 721 P.2d  at 1063 (holding language in handbook 
which contrasted "probationary" at will employee with "permanent" employee 
implied "permanent" employee could only be discharged for cause); Pine River 
State Bank, 333 N.W.2d  at 627 (holding without additional consideration supplied 
by the employee which is uncharacteristic of the employment relationship itself, 
"permanent" or "lifetime" employment is presumed at will); Beales, 825 P.2d  at 
216 (holding that status of "permanent" employee, standing alone, is 
insufficient to alter presumption of at will employment).

[¶28]   Wilder attempts to find additional 
consideration for "permanent" employment in the fact that he closed his real 
estate brokerage to accept the position with the Chamber. We agree that in some 
situations, such as giving up a competitive business as part of a promise not to 
compete, sufficient additional consideration may be present to create 
"permanent" employment subject to dismissal for cause. Hartbarger v. SCA 
Services, Inc., 200 Ill. App.3d 1000, 146 Ill.Dec. 633, 641, 558 N.E.2d 596, 
604, appeal denied, 135 Ill. 2d 556, 151 Ill.Dec. 382, 564 N.E.2d 837 (1990). 
However, this court has held in Rompf, 685 P.2d  at 28-29, that leaving a prior 
position to accept new employment, without more, is insufficient to create 
"permanent" employment.

[¶29]   Wilder claims that an additional 
explicit promise contained in the oral contract of employment was the promise by 
the Chamber to employee Wilder for "as long as I did the work that was 
required." The Chamber contends that Wilder's employment was at will and without 
an express promise making him subject to dismissal for cause.

[¶30]   Whether an oral contract exists, the 
terms and conditions of the oral contract and the intent of the parties are 
generally questions of fact. Hartbarger, 558 N.E.2d  at 604. Only when the terms 
of an oral contract are shown without any conflict in the evidence does the 
interpretation become a question of law for the court. Engle v. First Nat. Bank 
of Chugwater, 590 P.2d 826, 830 (Wyo. 1979).

[¶31]   We accept the proposition, inherent in 
Wilder's argument, that the parties may choose to provide that termination is 
for cause even in a contract of employment of indefinite duration. Pine River 
State Bank, 333 N.W.2d  at 628. This proposition is present in employment 
handbook litigation, since no duration of employment is usually found in the 
implied in fact contract. See, e.g., McDonald II, 820 P.2d  at 991. However, the 
terms of the oral contract of employment purporting to provide that Wilder would 
be dismissed only for cause are sufficiently controverted to constitute disputed 
material facts.

[¶32]   The relevance of the oral contract of 
employment is that its terms were in effect at the time Wilder and the Chamber 
agreed to the memorandum of understanding. If, under the oral contract of 
employment, Wilder's employment could only be terminated for cause, a disputed 
material fact, then an issue of law exists whether there was sufficient 
consideration at the time of the execution of the memorandum of understanding to 
modify Wilder's employment to employment at will under the terms of the 
memorandum of understanding.

[¶33]   The traditional view recognizes that "a 
promise by an employer or an employee under a subsisting contract to do more or 
take less than that contract requires is invalid unless the other party gives or 
promises to give something capable of serving as consideration." 3 Richard A. 
Lord, Williston on Contracts § 7:37 at 605 (4th ed. 1992). See Hopper, 861 P.2d  
at 541 (adopting rule in Wyoming that separate consideration is required to 
enforce a covenant not to compete created after employment relationship is in 
existence). The Restatement (Second) of Contracts § 89 at 237 (1981) states the 
applicable rule:

A promise modifying a duty under 
a contract not fully performed on either side is binding

(a) if the modification is fair 
and equitable in view of circumstances not anticipated by the parties when the 
contract was made; or

(b) to the extent provided by 
statute; or

(c) to the extent that justice 
requires enforcement in view of material change of position in reliance on the 
promise.

The Restatement illustrates the operation of this rule with 
a hypothetical in which an employee is given a pay raise following a job offer 
from a competitor and a new contract of employment is written. Id. at 239, ill. 
3. The consideration for the new contract is provided by the employee refusing 
the job offer from the competitor.

[¶34]   In executing the memorandum of 
understanding, the Chamber reduced portions of Wilder's compensation and stated 
he was an at will employee. The possible consideration the Chamber provided in 
return for Wilder's promise to take less was that Wilder would not be terminated 
until an audit of the Chamber's financial records was completed. We need not 
determine at this point if that consideration was adequate or whether other 
consideration exists. The parties will be able to litigate this question on 
remand.

[¶35]   The memorandum of understanding 
declared Wilder's employment was "probationary" and that he was "an at will 
employee," giving the Chamber the right to terminate at any time for any reason 
or for no reason at all. In the same paragraph, however, the Chamber promised: 
"Upon completion of the audit, and the opportunity to review it, the Board will 
evaluate your status and whether or not to offer you continued employment."

[¶36]   The language of the memorandum of 
understanding is ambiguous creating mixed questions of law and fact over the 
parties' intentions. If Wilder was an at will employee under either the oral 
contract of employment or after adequate consideration was supplied to create 
the memorandum of understanding, he was subject to termination, as the Chamber 
indicated, at any time, for any reason or for no reason at all. Lankford, 822 P.2d  at 872. As an at will employee, the Chamber was free to terminate Wilder's 
employment, or conduct an audit without establishing a probationary status. 
Placing an employee on probation as part of a disciplinary procedure is 
inconsistent with the employment at will presumption. Stephen P. Pepe & 
Scott H. Dunham, Avoiding and Defending Wrongful Discharge Claims, § 2.21 at 
49-50 (1993). Furthermore, the Chamber promised to perform the audit to 
determine the extent of financial problems "prior to a decision" regarding 
Wilder's future employment. Whether this language placed a condition on Wilder's 
at will status under terms of the memorandum of understanding is a question of 
intent. Holmes v. Union Oil Co. of California, 114 Idaho 773, 760 P.2d 1189, 
1194 (1988); Stone v. Mission Bay Mortg. Co., 99 Nev. 802, 672 P.2d 629, 630 
(1983).

[¶37]   We reverse summary judgment in favor of 
the Chamber on this cause of action. The evidence demonstrates, when viewed in 
the light most favorable to the party opposing summary judgment, that disputed 
material facts exist regarding the terms of the oral contract of employment and 
the intent of the parties in executing the memorandum of understanding.

B. 
IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING

[¶38]   The Restatement (Second) of Contracts § 
205 at 99 (1981) recognizes an implied duty under every contract:

§ 205 Duty of Good Faith and 
Fair Dealing

Every contract imposes upon each 
party a duty of good faith and fair dealing in its performance and its 
enforcement.

Good faith means "faithfulness to an agreed common purpose 
and consistency with the justified expectations of the other party; it excludes 
a variety of types of conduct characterized as involving `bad faith' because 
they violate community standards of decency, fairness or reasonableness." Id. at 
100, cmt. a (emphasis added). See Garner v. Hickman, 709 P.2d 407, 411 (Wyo. 
1985) (referring to definition of "good faith" under Uniform Commercial Code as 
honesty in fact in the conduct of the transaction concerned).

[¶39]   Prior decisions of this court have 
addressed the implied covenant of good faith and fair dealing in the context of 
employment litigation. See, e.g., Hatfield v. Rochelle Coal Co., 813 P.2d 1308, 
1309-10 (Wyo. 1991); Nelson v. Crimson Enterprises, Inc., 777 P.2d 73, 76 n. 3 
(Wyo. 1989); Reese v. Dow Chemical Co., 728 P.2d 1118, 1120-21 (Wyo. 1986); 
Leithead, 721 P.2d  at 1064; and Rompf, 685 P.2d  at 27-28. The consistent theme 
of this line of cases has been that the court would "reserve a decision on the 
viability of this doctrine in this state until a proper case is before us." 
Rompf, 685 P.2d  at 28.

[¶40]   During the period in which the "proper 
case" has been sought, litigants have continued to present claims under the 
implied covenant which have been rejected. Wilder, too, claims that the 
Chamber's actions breached the implied covenant because the Chamber terminated 
his employment after promising in the memorandum of understanding to conduct an 
audit. We believe continued delay in recognizing the application of the implied 
covenant to contracts of employment wastes judicial resources with needless 
review of varied precedents and creative argument. Therefore, we hold that all 
contracts of employment contain an implied covenant of good faith and fair 
dealing; however, the Chamber's actions do not constitute a breach of the 
implied covenant as applied to contracts of employment in Wyoming.

[¶41]   During the decade in which this court 
has considered the applicability of the implied covenant of good faith and fair 
dealing to contracts of employment, common law has recognized the role of the 
implied covenant in contracts of insurance. Hatch v. State Farm Fire and Cas. 
Co., 842 P.2d 1089 (Wyo. 1992); Darlow v. Farmers Ins. Exchange, 822 P.2d 820 
(Wyo. 1991); McCullough v. Golden Rule Ins. Co., 789 P.2d 855 (Wyo. 1990). In 
McCullough, this court permitted recovery, in tort, for breach of the implied 
covenant based upon the special relationship created by the unequal bargaining 
power that an insurer has over an insured. McCullough, 789 P.2d  at 858. A 
similar special relationship may be present between an employer-employee which 
permits recovery in tort for egregious conduct.

[¶42]   In other jurisdictions, the implied 
covenant has been applied to all types of contracts of employment. 1 Perritt, 
supra, § 4.26 (collecting cases). "Good faith and fair dealing between parties 
are pervasive requirements in our law; it can be said fairly, that parties to 
contracts or commercial transactions are bound by this standard." Fortune v. 
National Cash Register Co., 373 Mass. 96, 364 N.E.2d 1251, 1256 (1977). In 
Fortune, the Supreme Judicial Court of Massachusetts held the implied covenant 
governed relations between an employer and a commission salesperson under a 
written contract of employment. Id. at 1255-56. The court found that the 
employer's actions in terminating the employee after twenty-five years of 
service to avoid paying a bonus for a just completed $5,000,000.00 sale 
constituted a breach of the implied covenant. Id. at 1258. The Supreme Court of 
New Hampshire has determined that the implied covenant governed relations 
between an employer and employee under all contracts of employment, including 
those that are at will or for a definite term. Monge v. Beebe Rubber Co., 114 
N.H. 130, 316 A.2d 549, 551 (1974). In Monge, the court held that terminating an 
employee hired under an oral at will contract of employment for refusing to date 
a supervisor constituted a breach of the implied covenant. Id. at 552. In Kerr 
v. Rose, 216 Cal. App. 3d 1551, 265 Cal. Rptr. 597, 603 (1990), the court 
determined that the implied covenant applied to implied in fact contracts under 
a written termination and layoff policy. A fundamental limitation of the implied 
covenant is that it can not create duties that supersede express provisions of 
written contracts. Farris v. Hutchinson, 254 Mont. 334, 838 P.2d 374, 377 
(1992).

[¶43]   The application of the implied covenant 
of good faith and fair dealing to contracts of employment has been not 
universally accepted. See, e.g., Parnar v. Americana Hotels, Inc., 65 Haw. 370, 
652 P.2d 625, 629 (1982) and Thompson v. St. Regis Paper Co., 102 Wn.2d 219, 685 P.2d 1081, 1086 (1984). The Thompson court called the concept of bad faith 
"amorphous." Thompson 685 P.2d  at 1086. When viewed too broadly, we agree the 
implied covenant can be misapplied.

[¶44]   The Supreme Court of Arizona correctly 
summarized that the implied covenant "does not create a duty for the employer to 
terminate the employee only for good cause." Wagenseller v. Scottsdale Memorial 
Hosp., 147 Ariz. 370, 710 P.2d 1025, 1040 (1985) (adopting implied covenant to 
protect employee from termination to avoid payment of benefits already earned). 
Accord Metcalf v. Intermountain Gas Co., 116 Idaho 622, 778 P.2d 744, 750 
(1989), modified sub nom., Sorensen v. Comm Tek, Inc., 118 Idaho 664, 799 P.2d 70, 75 (1990). For example, we do not consider it appropriate to read into the 
implied covenant language mandating that every termination must be for a "fair 
and honest reason." Coombs v. Gamer Shoe Co., 239 Mont. 20, 778 P.2d 885, 887 
(1989). However, we conclude that the implied covenant, with appropriate 
limitations, serves to balance the inherently unequal relationship between an 
employer and an employee. See McCullough, 789 P.2d  at 858.

[¶45]   We hold that recovery of damages is 
permitted for tortious conduct which arises out of a contractual relationship of 
employment in breach of the implied covenant of good faith and fair dealing. 
D'Angelo v. Gardner, 107 Nev. 704, 819 P.2d 206, 215 (1991).

A tort, however, requires the 
presence of a duty created by law, not merely a duty created by contract; and, 
although a duty of good faith and fair dealing is created by law in all cases, 
it is only in rare and exceptional cases that the duty is of such a nature as to 
give rise to tort liability. The kind of breach of duty that brings into play 
the bad faith tort arises only when there are special relationships between the 
tort-victim and the tort-feasor * * *.

K Mart Corp. v. Ponsock, 103 Nev. 39, 732 P.2d 1364, 1370 
(1987) (emphasis added). The special relationship necessary to permit recovery 
is not established merely by the employer-employee relationship. A showing is 
required that a special relationship of trust and reliance exists between the 
particular employee seeking recovery and the employer. Cleary v. American 
Airlines, Inc., 111 Cal. App. 3d 443, 168 Cal. Rptr. 722, 729 (1980); K Mart Corp., 
732 P.2d  at 1372. Trust and reliance may be found by the existence of separate 
consideration, common law, statutory rights, or rights accruing with longevity 
of service. Cleary, 168 Cal. Rptr.  at 729.

[¶46]   Two Nevada cases illustrate the 
necessary showing of trust and reliance. In K Mart Corp., the employee worked 
under an implied in fact contract of employment that made him subject to 
dismissal only for cause. K Mart Corp., 732 P.2d  at 1366. Six months before his 
retirement benefits vested, the employee was terminated for a minor violation of 
company policy. The court held the employer breached the implied covenant of 
good faith and fair dealing by terminating the employee with the improper motive 
of denying contractually earned retirement benefits. Id. at 1370. But see 
Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 111 S. Ct. 478, 112 L. Ed. 2d 474 
(1990) (holding that ERISA preempts state law wrongful discharge claim based on 
termination to avoid pension fund payments). In K Mart Corp., 732 P.2d  at 1372, 
the employee was "specially relying" on the employer's commitment to extended 
employment and retirement benefits for which he had remained with the company 
for nine and one-half years. By contrast, in D'Angelo, the employee, despite 
having "permanent" status under an implied in fact contract, could not show a 
breach of the implied covenant where he had been employed for less than two 
years and a special relationship had not "ripened." D'Angelo, 819 P.2d  at 
215.

[¶47]   When a special relationship of trust 
and reliance is demonstrated, a breach of the implied covenant is actionable as 
a tort. McCullough, 789 P.2d  at 861. Therefore, compensatory damages are 
available to hold employers accountable for a breach of the implied covenant. K 
Mart Corp., 732 P.2d  at 1372. We adhere to the mandates of Wyoming law that 
punitive damages will only be awarded upon a showing of willful or wanton 
misconduct. McCullough, 789 P.2d  at 861.

[¶48]   The Chamber's conduct in terminating 
Wilder did not breach the implied covenant of good faith and fair dealing as a 
matter of law. Initially, we do not find sufficient longevity in Wilder's three 
years of employment with the Chamber or other bases to establish a special 
relationship. Fundamentally, we find no evidence that termination occurred as a 
means to avoid payment of benefits already earned under the contract of 
employment. Wagenseller, 710 P.2d  at 1040; Metcalf, 778 P.2d  at 749; Fortune, 
364 N.E.2d  at 1258; K Mart Corp., 732 P.2d  at 1370.

[¶49]   We affirm summary judgment in favor of 
the Chamber on this cause of action.

C. 
NEGLIGENCE

[¶50]   Wilder next claims Chamber officials 
acted negligently in terminating his employment prior to completion of the 
audit. Specifically, Wilder alleges that a duty of reasonable care was breached 
by the failure to properly investigate the financial problems at the Chamber. 
The only support for Wilder's position is the Supreme Court of Montana's 
decision in Crenshaw v. Bozeman Deaconess Hosp., 213 Mont. 488, 693 P.2d 487, 
493 (1984). Crenshaw held that a negligence cause of action was stated by the 
employer's failure to properly investigate allegations of impropriety before 
terminating the employee for cause. Id.

[¶51]   We are persuaded that no tort cause of 
action exists for negligent investigation in employment relationships. As we 
have previously stated, employment creates a contractual relationship. If that 
contract is breached, relief lies with an action for breach of contract. "To the 
extent an employee has an employment contract requiring specific reasons for 
dismissal, then the employer must conduct an adequate investigation or be liable 
for breach of that contract." Lambert v. Morehouse, 68 Wn. App. 500, 843 P.2d 1116, 1119 (1993) (declining to recognize cause of action for negligent 
investigation in employee termination). See Morris v. Hartford Courant Co., 200 
Conn. 676, 513 A.2d 66, 68 (1986).

[¶52]   Furthermore, Crenshaw does not support 
a cause of action for negligent investigation under the present facts. In 
Heltborg v. Modern Machinery, 244 Mont. 24, 795 P.2d 954, 961 (1990), the court 
held a termination decision for economic reasons did not state a tort cause of 
action because an employer is not under a duty to use reasonable care in all 
decision making. We read Heltborg as limiting Crenshaw by stating that the 
employer's duty to use reasonable care is restricted to situations involving 
negligent investigation of a for cause termination. Wilder was not dismissed for 
cause. It is undisputed that the Chamber dismissed Wilder as an at will 
employee, despite the investigation into financial problems that was being 
conducted.

[¶53]   We affirm summary judgment in favor of 
the Chamber on this cause of action. 

D. 
INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS

[¶54]   In Leithead, 721 P.2d  at 1064-68, this 
court recognized a cause of action in Wyoming for intentional infliction of 
emotional distress. As adopted, damages may be recovered in tort for 
intentionally or recklessly extreme and outrageous conduct which causes severe 
emotional distress. Id. See Restatement (Second) of Torts § 46(1) (1965). 
Outrageous conduct is defined as conduct "which goes beyond all possible bounds 
of decency, is regarded as atrocious, and is utterly intolerable in a civilized 
community." Leithead, 721 P.2d  at 1066 (citing Restatement (Second) of Torts, 
supra, § 46, cmt. d). Recovery is permitted when emotional distress, which 
includes reactions such as shame, humiliation, embarrassment and worry, is 
extreme. Leithead, 721 P.2d  at 1066-67.

[¶55]   Wilder claims that the Chamber's 
actions constituted intentional infliction of emotional distress. Wilder 
declares that the Chamber sought to make him publicly responsible for the 
financial problems as a "scapegoat" prior to and at the time of termination. As 
a result, he suffered shame and public humiliation. Further, Wilder contends 
that after his termination, the Chamber's intentionally tortious conduct 
continued. When the Chamber received the audit report, Wilder asserts that 
Chamber officials failed to disclose that there was no misconduct on his part, 
but instead made statements in the press regarding a continuing investigation in 
the form of "fraud tests" causing additional humiliation. Later, Wilder 
maintains Chamber officials acted outrageously in repeatedly seeking to prevent 
Wilder from obtaining employment. As a result, Wilder alleges he suffered severe 
emotional distress over a lengthy period following his termination.

[¶56]   The court determines, as a question of 
law, whether the conduct of the tortfeasor "`may reasonably be regarded as so 
extreme and outrageous to permit recovery, or whether it is necessarily so.'" 
Leithead, 721 P.2d  at 1066 (quoting Restatement (Second) of Torts, supra, § 46, 
cmt. h); Hogan v. Forsyth Country Club Co., 79 N.C. App. 483, 340 S.E.2d 116, 
121 (1986). Once conduct is shown which may be reasonably regarded as extreme 
and outrageous, the jury must determine, with proper instruction, "`whether, in 
the particular case, the conduct has been sufficiently extreme and outrageous to 
result in liability.'" Leithead, 721 P.2d  at 1066 (quoting Restatement (Second) 
of Torts, supra, § 46, cmt. h). See Hogan, 340 S.E.2d  at 121.

[¶57]   We must consider the allegations of 
outrageous conduct from two points in time: conduct prior to and at the time of 
termination; and conduct following termination. In Leithead, this court 
recognized that if the employee's emotional distress is caused solely by 
termination and termination is permitted under terms of the contract of 
employment, no recovery is permitted for intentional infliction of emotional 
distress. Leithead, 721 P.2d  at 1066. "The ordinary person who is fired from his 
job might worry about his future and his ability to pay his bills. He might also 
lose sleep over it. But this is the kind of distress with which the ordinary 
person must be expected to cope." Id. at 1067.

[¶58]   Sufficient evidence exists of 
outrageous conduct by the Chamber prior to and at the time of termination. 
Chamber officials at the March 29, 1989 meeting placed Wilder on probation, 
reduced his compensation, possibly altered his employment status and required 
him to publicly address a community group to "accept the responsibility" for the 
financial problems. These harsh actions were taken prior to the completion of 
any formal investigation and despite Wilder's denial of any prior knowledge or 
responsibility for the financial problems. Shortly after Wilder's public 
address, the Chamber terminated his employment without fulfilling the promise to 
conduct an audit contained in the memorandum of understanding. Viewing the 
evidence in the light most favorable to Wilder as the party opposing summary 
judgment, the Chamber's actions may reasonably be regarded as outrageous. See 
Havens v. Tomball Community Hosp., 793 S.W.2d 690, 691 (Tex. App. 1990) (holding 
employer's course of conduct in seeking to humiliate and degrade employee's good 
name prior to termination stated a cause of action for intentional infliction of 
emotional distress) and Retherford v. AT & T Communications of Mountain 
States, Inc., 844 P.2d 949, 978 (Utah 1992) (holding co-employees' course of 
conduct in retaliation for good faith sexual harassment complaint stated a cause 
of action for intentional infliction of emotional distress).

[¶59]   Sufficient evidence is also present of 
outrageous conduct by the Chamber following termination. The Chamber 
aggressively sought to prevent Wilder from obtaining employment following his 
termination on at least two occasions. Chamber officials publicly objected to 
Wilder's possible employment with the Park County Travel Council and offered the 
services of a Chamber employee to perform the desired work. These actions were 
repeated when Wilder attempted to secure employment with the Yellowstone Airport 
Board. There is no record of whether the Chamber was compensated for the work. 
No reasonable person expects a former employer to mount an active campaign to 
prevent a former employee from obtaining work. Giving Wilder the benefit of 
every reasonable doubt and inference, this conduct may reasonably be regarded as 
outrageous. See M.B.M. Co., Inc. v. Counce, 268 Ark. 269, 596 S.W.2d 681, 688 
(1980) (holding former employer's course of conduct following termination stated 
a cause of action for intentional infliction of emotional distress).

[¶60]   We do not find outrageous conduct in 
the Chamber's release of the audit report. The audit report was presented to the 
Chamber after Wilder was terminated. It disclosed intentional errors or 
omissions which created inaccurate financial records. The Chamber announced this 
conclusion and revealed that further "fraud tests" of the financial records 
would be conducted. These actions, under the circumstances, were reasonable as a 
matter of law.

[¶61]   The Chamber maintains, despite the 
nature of the conduct, that Wilder has not suffered severe emotional distress. 
We disagree. "`The intensity and the duration of the distress are factors to be 
considered in determining its severity.'" Leithead, 721 P.2d  at 1067 (quoting 
Restatement (Second) of Torts, supra, § 46, cmt. j). The shame and public 
humiliation which Wilder alleges he suffered extended over a period of two 
years. This duration is sufficient to create a jury question on the issue of 
liability. As we announced in Leithead, 721 P.2d  at 1067 (quoting Restatement 
(Second) of Torts § 46, supra, cmt. j), "`[i]t is for the court to determine 
whether on the evidence severe emotional distress can be found; it is for the 
jury to determine whether, on the evidence, it has in fact existed.'"

[¶62]   Summary judgment in favor of the 
Chamber on this cause of action is reversed.

E. 
DEFAMATION

[¶63]   "A defamatory communication is one 
which tends to hold the plaintiff up to hatred, contempt, ridicule or scorn or 
which causes him to be shunned or avoided; one that tends to injure his 
reputation as to diminish the esteem, respect, goodwill or confidence in which 
he is held." Tschirgi v. Lander Wyoming State Journal, 706 P.2d 1116, 1119 (Wyo. 
1985). Accord Century Ready-Mix Co. v. Campbell County School Dist., 816 P.2d 795, 799 (Wyo. 1991).

[¶64]   Wilder alleges that defamatory 
statements were made about him by a Chamber officer and an employee at a travel 
industry conference in Denver in May of 1991. The statements were published to a 
security guard who was told by the Chamber official and employee not to admit 
Wilder because he was no longer a Chamber employee and might "steal" their work. 
Specifically, a Chamber employee said Wilder was "sneaky," "lazy," 
"good-for-nothing," and a "son-of-a-bitch." The Chamber official told the guard 
Wilder "got fired" and should not be admitted to the conference.

[¶65]   The tenor of the language quoted and 
other language allegedly used by the Chamber official and employee is 
disparaging and offensive, but is not actionable as defamation. "Disparaging 
words, to be actionable per se * * * must affect the plaintiff in some way that 
is peculiarly harmful to one engaged in his trade or profession." Restatement 
(Second) of Torts § 573 at 194, cmt. e. (1977). None of the comments to the 
security guard meet this standard. 

[¶66]   Summary judgment in favor of the 
Chamber on this cause of action is affirmed.

F. 
INTENTIONAL INTERFERENCE WITH A PROSPECTIVE CONTRACTUAL RELATIONSHIP

[¶67]   Wyoming recognizes the tort of 
intentional interference with a prospective contractual relationship. Four Nines 
Gold, Inc. v. 71 Const., Inc., 809 P.2d 236, 238 (Wyo. 1991); Martin v. Wing, 
667 P.2d 1159, 1162 (Wyo. 1983).

"One who intentionally and 
improperly interferes with another's prospective contractual relation (except a 
contract to marry) is subject to liability to the other for the pecuniary harm 
resulting from loss of the benefits of the relation, whether the interference 
consists of

(a) inducing or otherwise 
causing a third person not to enter into or continue the prospective relation 
or

(b) preventing the other from 
acquiring or continuing the prospective relation."

Four Nines Gold, Inc., 809 P.2d  at 238 (quoting Restatement 
(Second) of Torts § 766B (1979)). To be actionable as intentional interference 
with prospective contractual relations, the claimed interference must be 
improper, although malice need not be shown. Four Nines Gold, Inc., 809 P.2d  at 
238. Therefore, truthful statements, solicited or volunteered, are not 
actionable and interference is permitted when the actor acts in good faith to 
protect an economic interest. Id.

[¶68]   Wilder contends that the Chamber 
intentionally interfered with prospective contractual relations by repeatedly 
attempting to block his employment and by attempting to exclude him from the 
travel industry conference in Denver in May of 1991. The Chamber maintains these 
actions were competitive but not improper.

[¶69]   Restatement (Second) of Torts § 768 
(1979), in pertinent part, recognizes that legitimate competition does not 
result in intentional interference with prospective contractual relations:

(1) One who intentionally causes 
a third person not to enter into a prospective contractual relation with another 
who is his competitor or not to continue an existing contract terminable at will 
does not interfere improperly with the other's relation if

(a) the relation concerns a 
matter involved in the competition between the actor and the other and

(b) the actor does not employ 
wrongful means and

(c) his action does not create 
or continue an unlawful restraint of trade and

(d) his purpose is at least in 
part to advance his interest in competing with the other.

The Restatement authors note that as long as some 
competitive interest is served, the fact that a competitor may also be directed 
by a desire for revenge or other improper motive is not sufficient, alone, to 
create improper interference. Id. at 43, cmt. g.

[¶70]   The Chamber's actions do not constitute 
intentional interference with prospective contractual relations as a matter of 
law. The Chamber acted as a competitor. When Wilder sought employment from the 
Park County Travel Council and the Yellowstone Airport Board, the Chamber sought 
potential economic gain for itself by offering to perform the work Wilder 
desired. As a competitor at the travel industry conference, the Chamber also 
acted to protect its business interests, although admittedly not in a 
businesslike manner. While the Chamber's motives may be suspect, as a non-profit 
corporation engaged in travel promotion, the Chamber had a right to compete with 
Wilder in this business.

[¶71]   Summary judgment in favor of the 
Chamber on this cause of action is affirmed.

G. 
PROCEDURAL ISSUES

[¶72]   Wilder contends that the district court 
abused its discretion in denying a motion for leave to amend the complaint. The 
motion to amend was filed at the completion of discovery. The district court 
denied the motion finding that Wilder had not acted in a timely manner and 
granted summary judgment in favor of the Chamber.

[¶73]   This court has adopted the view that 
leave to amend a complaint "should be freely granted when the amendment will 
serve a good purpose and when it will not unduly prejudice the defendant." 
Herrig v. Herrig, 844 P.2d 487, 490 (Wyo. 1992); W.R.C.P. 15. The denial of a 
motion to amend is only reversed when an abuse of discretion is found. Herrig, 
844 P.2d  at 490. Abuse of discretion implies the court has acted in a manner 
that exceeds the bounds of reason under the circumstances. Boller v. Key Bank of 
Wyoming, 829 P.2d 260, 266 (Wyo. 1992) (quoting Martinez v. State, 611 P.2d 831, 
838 (Wyo. 1980)).

[¶74]   Wilder sought leave of the district 
court to amend his complaint to add three additional causes of action against 
the Chamber and to state causes of action against several individual defendants. 
At oral argument, Wilder admitted that separate proceedings have been filed 
against the individual defendants he sought to make a party to this action. 
Therefore, we need only consider whether an abuse of discretion occurred in 
denying leave to state the additional causes of action.

[¶75]   Wilder's motion to amend and the 
Chamber's motion for summary judgment were presented together to the district 
court during a combined hearing. The applicable rule permits the district court 
to consider the motion for summary judgment as being addressed to the complaint 
in the form in which it is sought to be amended.

If plaintiff's claim, even with 
the complaint amended, still is vulnerable to a summary judgment, the court need 
not formally decide the motion to amend. As a result, the denial of leave to 
amend a pleading in such a case, even if technically erroneous, is not 
prejudicial if the amendment would not have affected the decision to grant 
summary judgment against plaintiff. Conversely, if an amendment would change the 
result on the motion, it should be permitted and summary judgment denied.

10A Charles A. Wright, Arthur R. Miller & Mary Kay 
Kane, Federal Practice and Procedure; Civil 2d § 2722 at 47-48 (1983) (footnotes 
omitted).

[¶76]   The record discloses that the 
additional causes of action which Wilder sought against the Chamber were not 
addressed in considering the motion for summary judgment. Therefore, we hold the 
district court abused its discretion by not considering what effect, if any, 
Wilder's claims of promissory estoppel, fraud and negligent misrepresentation 
against the Chamber may have had on the motion for summary judgment. We 
acknowledge the view expressed by the district court that Wilder has fired a 
shotgun at the lake in hopes of hitting a mallard. Despite the numerous causes 
of action presented by Wilder, judicial economy has not been served by forcing 
two proceedings against different parties each with substantially similar claims 
and witnesses.

[¶77]   The Chamber contends that an affidavit 
from Wilder's counsel included in the record on appeal should not be considered. 
The affidavit states that exhibits attached to it are true and correct copies of 
the original documents. Some of those documents were apparently used as exhibits 
during depositions; however, no exhibits were attached to the portions of the 
depositions designated for the record on appeal. We need not address this issue 
because the Chamber offered no objection, in the form of a motion to strike the 
affidavit, at the district court level. Therefore, we consider any objection as 
having been waived. Conway v. Guernsey Cable TV, 713 P.2d 786, 788 (Wyo. 1986). 
See 10A Wright, Miller & Kane, supra, § 2722 at 60-61.

[¶78]   Finally, we address a procedural issue 
under W.R.A.P. 7.04. This court permits citation at oral argument of any 
"relevant authority published since the filing of a party's brief, or other 
authority which was not discovered until after the brief was served * * *" so 
long as notice is provided to the court and opposing counsel "five days prior to 
argument." W.R.A.P. 7.04. The Chamber filed a notice of additional authority on 
Friday, September 17, 1993. The notice stated an intent to cite five additional 
cases, all published several years ago, at oral argument supporting termination 
of an employee while on probation. Oral argument for this case occurred on 
Tuesday, September 21, 1993. The Chamber's notice was untimely and the cases 
cited were not considered. W.R.A.P. 7.04; W.R.C.P. 6(a).

IV. 
CONCLUSION

[¶79]   Lessons in the employer-employee 
relationship are not easily learned. The common law attempts to preserve a 
careful balance premised on employment at will. However, when the facts of a 
particular employer-employee relationship support modifications in the at will 
relationship, additional care must be exercised to insure compliance with those 
modified terms of employment. In this instance, disputed material facts over the 
nature of the relationship and the conduct of the parties preclude summary 
judgment on certain causes of action.

[¶80]   We reverse and remand the summary 
judgment granted in favor of the Chamber on the cause of action for breach of 
contract.

[¶81]   We reverse and remand the summary 
judgment granted in favor of the Chamber in the cause of action for intentional 
infliction of emotional distress.

[¶82]   We affirm the summary judgment granted 
in favor of the Chamber on the cause of action for breach of the implied 
covenant of good faith and fair dealing.

[¶83]   We affirm the summary judgment granted 
in favor of the Chamber on the cause of action for negligence.

[¶84]   We affirm the summary judgment granted 
in favor of the Chamber on the cause of action for defamation.

[¶85]   We affirm the summary judgment granted 
in favor of the Chamber on the cause of action for intentional interference with 
a prospective contractual relationship.

[¶86]   We hold that the district court abused 
its discretion in denying the motion for leave to amend the complaint.

[¶87]   We hold any objection to a challenged 
affidavit was waived.

[¶88]   We hold that the notice of additional 
authority filed by the Chamber was untimely.

[¶89]   Therefore, the decision of the district 
court is affirmed in part, reversed in part and remanded for further proceedings 
in accord with this opinion.

MACY, Chief Justice, concurring in 
part and dissenting in part, with whom CARDINE, 
Justice, joins.

[¶90]   I dissent from that portion of the 
majority opinion in which the Court affirms the district court's grant of a 
summary judgment on Wilder's defamation claim.

[¶91]   Wilder pleaded defamation with an 
adequate degree of specificity, including special damages to his professional 
reputation. A fact finder might conclude that the alleged defamatory language, 
i.e., that Wilder might "steal" work and that he was "sneaky," "lazy," 
"good-for-nothing," and a "son-of-a-bitch," was peculiarly harmful to a person 
engaged in Wilder's profession, especially given the setting and the 
circumstances in which the words were uttered. The recitation of RESTATEMENT 
(SECOND) OF TORTS § 573 cmt. e (1977) in the majority opinion is sound as far as 
it goes. However, numerous other sections in that chapter of the RESTATEMENT are 
also applicable here. See generally §§ 558 to 581A. When all the chapters are 
considered in the light of this case, many others temper the apparent harshness 
of § 573.

[¶92]   I have noted on at least two occasions 
that members of society must cope with life's indignities and failures. Osborn 
v. Emporium Videos, 848 P.2d 237, 242 (Wyo. 1993) (Macy, C.J., dissenting); 
Skane v. Star Valley Ranch Association, 826 P.2d 266, 270 (Wyo. 1992). What 
occurred in this instance is not one of those indignities which an individual 
should be required to absorb without redress. The context in which these 
statements were made is as important as any other factor in this case. These 
statements were made at a trade association meeting where persons in Wilder's 
profession may do their "networking," seek advancements in their profession, and 
tout their skills and accomplishments. Indeed, the record demonstrates that 
Wilder was involved in a fight to salvage his professional life. I cannot 
disagree that some of the epithets used in this case, including 
"son-of-a-bitch," might be considered as being mere disparagement - or a 
statement of opinion - in some contexts, but this was not office gossip or 
banter or a social situation where such language might pass as "loose talk." See 
Rambo v. Cohen, 587 N.E.2d 140 (Ind. Ct. App. 1992); Petula v. Mellody, 138 
Pa.Cmwlth. 411, 588 A.2d 103 (1991); Lee v. Metropolitan Airport Commission, 428 N.W.2d 815 (Minn. Ct. App. 1988); PAUL ALEXANDER & VANESSA WELLS, EMPLOYEE, 
BUSINESS & PROFESSIONAL DEFAMATION § 7.02 (1991); C.C. Marvel, Annotation, 
Libel and Slander: Actionability of Charge of Being a "Slut," "Bitch," or "Son 
of a Bitch," 13 A.L.R.3d 1286 (1967); R.P. Davis, Annotation, Libel and Slander: 
Charge of Being a "Crook," 1 A.L.R.3d 844 (1965); and Jonathan M. Purver, 
Liability for Abusive Language, 16 P.O.F.2d 493 (1978).

[¶93]   Given the circumstances present in this 
case, I would also reverse the summary judgment as to the defamation issue and 
remand that matter for further proceedings as well.

GOLDEN, Justice, concurring in part 
and dissenting in part.

[¶94]   I concur in those parts of the majority 
opinion which address the negligence, defamation, intentional interference with 
prospective business relations, and procedural issues. I dissent, however, to 
those parts of the majority opinion which address the breach of contract, the 
implied covenant of good faith and fair dealing, and outrageous conduct 
issues.

[¶95]   About the breach of contract issue, in 
my judgment Mr. Wilder's employment at all times was as an at-will employee. 
When the Chamber hired him in 1986, there was no written employment agreement. 
The sum and substance of the chamber's hiring of him is revealed in Mr. Wilder's 
deposition testimony. Four Chamber representatives - Joe Bush, Bill Weiss, Tom 
Cook and Doug Weed-in-interviewed him for the executive director position. 
Questioned by the Chamber's lawyer at his deposition about his job interview, 
Mr. Wilder testified as follows:

Q. What were you told at the 
time you were hired as far as the term or length of your employment? 
Anything?

A. Well, I expected to be 
permanently employed.

Q. What were you told as far as 
the term or the length of your employment?

A. I was told that I would be 
employed for as long as I did the work.

A. And that's your best 
recollection as far as the words that were used to describe your length or term 
of employment?

A. I was told * * * that they 
thought I should be there for a long time, as long as I did the work that was 
required.

Q. Was it your understanding 
that your employment was at will between the time you were hired in 1986 and 
March 31st, 1989?

A. No.

Q. What was your understanding 
as to what your agreement was with the board during that period of time, as far 
as your employment?

A. It was that I was a permanent 
employee; that I was there permanently employed; that I expected to be 
permanently employed; and that at an annual review, I was promised an employment 
contract.

* * * * * *

Q. Someone from the board 
promised you a written contract, is that right?

A. Well, at one of the annual 
reviews, I brought it up. And we discussed that I would be an employee with [a 
written] employment contract * * *.

* * * * * *

Q. What steps were undertaken 
from that point forward by either you or the board to prepare such a written 
contract?

A. You know * * * it wasn't for 
me to prepare it. And I left it to them, and I just didn't hear back.

Q. Did you ever get back to any 
of the board members about that written contract? 

A. Not that I recall.

Q. Your understanding at the 
time you were hired was that you were verbally told that so long as you 
continued to do your duties as executive director in a satisfactory manner, you 
would continue to be employed?

A. That's correct.

Q. [Were] there any other 
discussions or [was there] any other agreement that you recall as far as how 
long you would be employed with the Chamber?

A. I can only assume. Well, 
assumptions don't matter.

Q. Do you recall there being any 
other conversations about the length or the term of your employment?

A. No.

[¶96]   This court has made it clear in our 
wrongful discharge cases that the employee's "[s]ubjective understandings and 
expectations do not establish an employment contract with a definite term of 
duration." Allen v. Safeway Stores, Inc., 699 P.2d 277, 282 (Wyo. 1985). Thus, 
if the employment is for an indefinite term, as Mr. Wilder's clearly was, it is 
terminable at will by either party. Allen, at 281-82. Based upon Mr. Wilder's 
own testimony describing his interview and hiring, I conclude no genuine issue 
of material fact exists about the nature of his employment status. As a matter 
of law, his status was at will.

[¶97]   Mr. Wilder next asserts that, in any 
event, the letter agreement dated March 31, 1989, changed the status of his 
employment. He concedes that by the letter's language his employment was at will 
except as to the financial problem; he contends that with respect to that 
problem his status was "discharge for cause." I do not agree. From my reading of 
the letter I conclude that the Chamber unambiguously expressly states that Mr. 
Wilder's status is at will. In the pertinent second paragraph of the letter, the 
Chamber states:

Your status is probationary 
through July 1, 1989, or upon completion of an audit of the Chamber books, which 
may be completed sooner than July 1, 1989. Upon completion of the audit, and the 
opportunity to review it, the Board will evaluate your status and whether or not 
to offer you continued employment. The board reserves the right to consider past 
employment performance, and review will not be limited to your performance 
during the probationary period. The Board believes that the entire financial and 
management picture of Chamber operations should be before them prior to a 
decision regarding your future employment. In other words, the Board wants all 
the facts before them, and as such the probationary period is in no way to 
operate as a waiver of the Board's right to consider performance prior to the 
probationary period. You are an at will employee, and the Board has the right to 
terminate at any time for any reason, or for no reason at all. However, we 
insist on knowing all the facts before any action is taken. Again, you serve at 
the pleasure of the Board.

[¶98]   In my judgment, the sum and substance 
of the Chamber's statement to Mr. Wilder is this:

Although we are going to audit 
the books and review that audit and although we are going to review your past 
performance as well as your future performance so that we have all the facts, 
"[y]ou are an at will employee, and [we have] the right to terminate at any time 
for any reason, or for no reason at all * * *. Again, you serve at the pleasure 
of the Board."

[¶99]   The letter simply does not contain any 
language that the Chamber has created a "discharge for cause" exception on the 
financial item. I see no ambiguity about this language. I would hold, as a 
matter of law, Mr. Wilder's employment was at will.

[¶100] 
Concerning the majority's treatment of the issue of the implied covenant 
of good faith and fair dealing, I have several areas of disagreement. First, 
given the form of the covenant as presented by Mr. Wilder and the manner in 
which Mr. Wilder presented this issue, and given the manner in which the 
majority has resolved the breach of contract issue, I see no need for the 
majority to decide the implied covenant issue as presented by Mr. Wilder. 
Second, I disagree with the majority's recognition, however qualified, of a tort 
cause of action for the breach of the implied covenant. I shall explain these 
several disagreements.

[¶101] 
Because the majority reverses the summary judgment on the breach of 
contract issue, I see no need for the majority to decide the implied covenant 
issue. In Mr. Wilder's complaint, in addition to alleging, as contract actions, 
a breach of an employment agreement and the March 31, 1989 agreement, he also 
alleged, as a tort action, the breach of an implied covenant of good faith and 
fair dealing. In Mr. Wilder's memorandum in opposition to the Chamber's motion 
for summary judgment, he explained the nature and extent of this implied 
covenant claim he was advancing. He predicated this claim only on the March 31, 
1989 letter agreement, not on his employment status for the earlier three-year 
period. As to the March 31 letter agreement, he asserted that if the court 
construed that agreement to mean his employment status was at will, then this 
was the right case in which the court should recognize the covenant. His 
reasoning was that the Chamber, in that agreement, promised him it would take no 
action on his employment until the investigation and audit of the books were 
completed; he relied on that promise; the Chamber broke that promise; therefore, 
the Chamber did not act in good faith, i.e., "honesty in fact in the conduct [of 
the] transaction concerned." Garner v. Hickman, 709 P.2d 407, 411 (Wyo. 1985). 
He argued that a question of fact existed whether the Chamber met that standard 
of conduct.

[¶102] 
In his appellate brief Mr. Wilder expressly states that if this court 
accepts his construction of the March 31, 1989 letter agreement, that his 
employment status was "discharge for cause" as to the financial problem, then 
"it will not be necessary for the Court to consider [the implied covenant] 
claim." After setting forth his "implied covenant" argument for consideration in 
the event the court finds that his status under that letter agreement is only at 
will, he concludes by stating "summary judgment on Mr. Wilder's [implied 
covenant] claim should be reversed if this court does not reverse the judgment 
on the breach of contract claim." (Emphasis added).

[¶103] 
In my judgment, Mr. Wilder conditionally presented a narrowly drawn 
implied covenant tort claim. It was narrowly drawn since it was predicated only 
on a perceived promise contained in the written March 31, 1989 letter agreement; 
it was presented conditionally since its consideration was explicitly premised 
on this court's affirmance of the summary judgment on the contract action for 
breach of contract. This court's majority opinion, however, does not affirm the 
summary judgment on the contract action - it reverses it; therefore, it is 
premature and unnecessary to decide at this time the narrowly drawn implied 
covenant tort claim.

[¶104] 
Be that as it may, the majority has treated the implied covenant 
question, but not in the narrowly drawn form in which Mr. Wilder conditionally 
presented it. Because the majority does not treat the implied covenant question 
in the form in which Mr. Wilder presented it, the majority works in a vacuum: 
there are no facts which frame the form of the implied covenant question which 
the majority chooses to treat and there are no advocates on either side of the 
question being treated. Such a sterile environment is not conducive to good 
appellate decision-making.

[¶105] 
I disagree with both the majority's treatment of the implied covenant 
question and the results of that treatment, viz., recognition of a tort of 
breach of an implied covenant of good faith and fair dealing. Having carefully 
reviewed this court's wrongful discharge jurisprudence, I have concluded that 
this court previously expressly rejected the implied covenant concept. In Rompf 
v. John Q. Hammons Hotel, Inc., 685 P.2d 25 (Wyo. 1984), this court affirmed the 
district court's summary judgment against the motel's recently hired at-will 
chief engineer who in his complaint had alleged, among other theories, a breach 
of the implied covenant, inherent in every contract, by terminating him instead 
of employees under his supervision hired more recently than he. Rompf, 685 P.2d  
at 27-28. Conceding that his employer reduced staff because of budgetary 
constraints, Mr. Rompf asserted that concepts of good faith required his 
employer to retain him rather than those employees subordinate to him. Id. 
Although this court expressly reserved a decision on the implied covenant's 
viability in Wyoming "until a proper case is before us," this court held that 
the evidence failed to show a violation of the good-faith duty imposed upon 
employment relationships in other jurisdictions. Rompf, 685 P.2d  at 28.

[¶106] 
In Leithead v. American Colloid Co., 721 P.2d 1059, 1064 (Wyo. 1986), 
this court reversed the district court's summary judgment against the discharged 
employee, holding as a matter of law that the employee handbook changed the 
employee's at-will status to "discharge for cause only" status. Importantly, the 
majority treated the employee's claim which alleged the employer's breach of the 
implied covenant. Said the majority:

In some jurisdictions, an 
implied covenant of good faith is imposed on employers when they discharge 
employees under a contract at will. The covenant has no application here, 
however, because the parties' contract was not at will.

Leithead, 721 P.2d  at 1064 (citations omitted).

[¶107] 
By using this explanation, the court was recognizing that historically 
courts had seen the implied covenant theory advanced by discharged at-will 
employees trying to create an exception to the widely followed at-will doctrine. 
The court was also expressly holding that the implied covenant theory does not 
apply in employment relationships which require just cause for discharge. In 
Leithead's case, the employer's use of the handbook had created a "discharge for 
just cause" employment status; therefore, the implied covenant theory was not 
applicable.

[¶108] 
The question whether this court would recognize the implied covenant in 
an at-will employment was partially answered in Leonard v. Converse County Sch. 
Dist. No. 2, 788 P.2d 1119 (Wyo. 1990). This court expressly held that neither 
the implied covenant theory nor the public policy tort theory apply to an 
initial contract teacher's employment. Leonard, 788 P.2d  at 1122. In my view, 
this court expanded that partial answer to a complete answer in Ware v. Converse 
County Sch. Dist. No. 2, 789 P.2d 872 (Wyo. 1990), by holding that the implied 
covenant theory does not apply to a discharged school custodian who was an 
at-will employee of the school district. Id. at 875. This court's rejection of 
the implied covenant theory was reaffirmed in Hatfield v. Rochelle Coal Co., 813 P.2d 1308 (Wyo. 1991), by answering certified questions from the federal 
district court.

[¶109] 
Despite this court's clear authority, the majority today reverses 
direction and holds, without sufficient consideration and analysis in my 
judgment, that we now recognize a tort action available against every type of 
Wyoming employer for breach by tortious "egregious conduct" of the implied 
covenant if a "special relationship of trust and reliance exists between the 
particular employee seeking recovery and the employer." The majority 
uncritically relies in large part upon Cleary v. Am. Airlines, Inc., 111 Cal. App. 3d 443, 168 Cal. Rptr. 722 (Ct.App. 2 Dist. (1980) in support of this new 
tort action. The California Supreme Court, however, expressly rejected this 
particular feature of Cleary five years ago in Foley v. Interactive Data Corp., 
47 Cal. 3d 654, 254 Cal. Rptr. 211, 765 P.2d 373 (1988). More about Foley 
shortly.

[¶110] 
The majority also appears to rely on two Nevada cases as support for 
recognition of this new tort theory. In the first case, the employee was a 
tenured, not an at-will, employee. K-Mart Corp. v. Ponsock, 103 Nev. 39, 732 P.2d 1364, 1365, 1366, 1368 (1987). He had been hired for a definite term, viz., 
until retirement. In its employee handbook, K-Mart had agreed that Ponsock could 
be terminated only for cause; if his performance were deficient, K-Mart would 
assist him and would terminate him only after giving him a series of correction 
notices and a determination that his performance remained unacceptable. K-Mart, 
at 1366. K-Mart discharged him without following these handbook provisions. Id. 
At the time, Ponsock was about six months shy from 100 percent vesting of his 
retirement benefits which were to be fully paid by K-Mart. Id. Based upon these 
facts, the Nevada court recognized "a bad faith discharge case in this 
fact-specific instance of discharge by a large, nationwide employer of an 
employee in bad faith for the improper motive of defeating contractual 
retirement benefits." Id. at 1370. In its analysis, the Nevada court seizes upon 
the "special relationship' notion recognized in the insurance contract context 
and applies that notion to Ponsock's tenured "discharge for just cause" 
employment relationship with his nationwide employer. Id. at 1371-72. Ponsock is 
a fact-specific case, not one of general application. In my judgment, it is a 
poor model from which to construct, without deep consideration, a new tort cause 
of action applicable to the universe of all at-will employment relationships in 
Wyoming.

[¶111] 
The second Nevada case, D'Angelo v. Gardner, 107 Nev. 704, 819 P.2d 206 
(1991), simply confirms Ponsock's holding and then holds that the facts 
presented by the terminated two-year employee Jones do not fit the Ponsock 
"special relationship/bad faith" mold. Accordingly, the Nevada court rejected 
Jones' implied covenant tort claim. D'Angelo, at 215. So, D'Angelo offers 
nothing new.

[¶112] 
From this analysis of the cases upon which the majority relies for the 
recognition of this new implied covenant tort claim, I must conclude that the 
discredited Cleary and the fact-specific obscure Ponsock are hardly strong 
support for the majority's decision.

[¶113] 
The majority opinion is less than candid when it states "[t]he 
application of the implied covenant of good faith and fair dealing to contracts 
of employment has not been universally accepted." My research reveals that the 
acceptance of the implied covenant's application has been quite limited. In 
rejecting consideration of the breach of the implied covenant as a tort in Iowa, 
the Iowa Supreme Court observed in the fall of 1989:

Only a small handful of states 
have adopted the doctrine. Although [the plaintiff] suggests we adopt the action 
as a tort, four of the five states that recognize the covenant treat it as a 
contract-based action. Hoffman-LaRoche, Inc. v. Campbell, 512 So. 2d 725, 738 
(Ala. 1987) (contract); Foley v. Interactive Data Corp., 47 Cal. 3d 654, 670, 254 Cal. Rptr. 211, 234-39, 765 P.2d 373, 389-96 (1988) (contract); Fortune v. 
National Cash Register Co., 373 Mass. 96, 102, 364 N.E.2d 1251, 1256 (1977) 
(contract); Gates v. Life of Montana Ins. Co., 196 Mont. 178, 638 P.2d 1063, 
1067 (1982) (tort); Monge [v. Beebe Rubber Co., 114 N.H. 130, 131, 316 A.2d 549, 
551 (1974)] (contract). New Hampshire, the leading state recognizing the 
covenant of good faith, has since limited the action to dismissals that are in 
violation of public policy. Howard v. Dorr Woolen Co., 120 N.H. 295, 297, 414 A.2d 1273, 1274 (1980).

Fogel v. Trustees of Iowa College, 446 N.W.2d 451, 456-58 
(Iowa 1989).

[¶114] 
According to the Iowa court,

[t]he majority of jurisdictions 
that have addressed the covenant have unequivocally rejected it. See, e.g., 
Parnar v. Americana Hotels, Inc., 65 Haw. 370, 377, 652 P.2d 625, 629 (1982); 
Thompson v. St. Regis Paper Co., 102 Wn.2d 219, 227, 685 P.2d 1081, 1086 (1984); 
Brockmeyer v. Dun & Bradstreet, 113 Wis.2d 561, 569, 335 N.W.2d 834, 838 
(1983); Butterfield v. Citibank of South Dakota, 437 N.W.2d [857] at 860 (S.D. 
1989); Morriss v. Coleman Co., Inc., 241 Kan. 501, 738 P.2d 841, 851 (1987); 
Sadler v. Basin Elec. Power Co-op, 409 N.W.2d 87, 89 (N.D. 1987); Cockels v. 
Inter. Business Expositions, Inc., 159 Mich. App. 30, 36-37, 406 N.W.2d 465, 468 
(1987); Hunt v. IBM Mid-America Employees Fed. Credit Union, 384 N.W.2d [853] at 
858 (Minn. 1986); Neighbors v. Kirksville College of Osteopathic Medicine, 694 S.W.2d 822, 824 (Mo. App. 1985); Larrabee v. Penobscot Frozen Foods Inc., 486 A.2d 97, 100 (Me. 1984).

Fogel, 446 N.W.2d  at 457.

[¶115] 
The following additional jurisdictions have rejected the covenant: 
Harrison v. Sears, Roebuck & Co., 189 Ill. App.3d 980, 137 Ill. Dec. 494, 
546 N.E.2d 248, 256 (1989); Hostettler v. Pioneer Hi-Bred Int'l, Inc., 624 F. Supp. 169, 172 (S.D.Ind. 1985); Suburban Hosp., Inc. v. Dwiggins, 324 Md. 294, 
596 A.2d 1069 (1991); Melnick v. State Farm Mut. Auto Ins. Co., 106 N.M. 726, 
749 P.2d 1105, 1111 (1988); Amos v. Oakdale Knitting Co., 331 N.C. 348, 416 S.E.2d 166, 167 (1992); Elliot v. Tektronix, Inc., 102 Or. App. 388, 796 P.2d 361, 365 (1990); Randolph v. Dominion Bank, 826 S.W.2d 477, 480 (Tenn. App. 
1991); Fed. Express Corp. v. Dutschmann, 846 S.W.2d 282, 283-84 (Tex. 1993); 
Brehany v. Nordstrom, 812 P.2d 49, 55 (Utah 1991); and Shell v. Metropolitan 
Life Ins. Co., 183 W. Va. 407, 396 S.E.2d 174, 181 (1990). Although Alaska 
recognizes the covenant, breach of it does not give rise to recovery of tort 
damages unless public policy is involved. ARCO Alaska, Inc. v. Akers, 753 P.2d 1150, 1154 (Alaska 1988).

[¶116] 
Because the majority has, without analysis and thorough consideration, 
latched onto the "special relationship" concept first considered in Cleary in 
which that intermediate appellate court relied on insurance cases, and which 
concept was echoed by the Nevada court in Ponsock, I find it revealing to 
consider the convincing rejection of that concept by the California Supreme 
Court. Foley v. Interactive Data Corp., 47 Cal. 3d 654, 254 Cal. Rptr. 211, 765 P.2d 373, 389-401 (1988). The California Supreme Court's major criticism of the 
inferior court's Cleary decision was that decision's

uncritical incorporation of the 
insurance model into the employment context, without careful consideration of 
the fundamental policies underlying the development of tort and contract law in 
general or of significant differences between the insurer/insured and 
employer/employee relationships.

Foley, 254 Cal. Rptr.  at 230, 765 P.2d  at 393.

[¶117] 
Having identified the chief flaw in Cleary, the California Supreme Court 
next considered "the bases upon which extension of the insurance model to the 
employment sphere has been urged." Foley, 254 Cal. Rptr.  at 232, 765 P.2d  at 394. 
In this undertaking, the court reviewed scholarly commentary critical of the 
special relationship model. Foley, 254 Cal. Rptr.  at 232-34, 765 P.2d  at 394-95. 
From this review and from independent consideration of the similarities between 
insurance contracts and employment contracts, the court concluded:

We are not convinced that a 
"special relationship" analogous to that between insurer and insured should be 
deemed to exist in the usual employment relationship which would warrant 
recognition of a tort action for breach of the implied covenant.

Foley, 254 Cal. Rptr.  at 233, 765 P.2d  at 395. Explaining 
this conclusion, the court stated:

Even if we were to assume that 
the special relationship model is an appropriate one to follow in determining 
whether to expand tort recovery, a breach in the employment context does not 
place the employee in the same economic dilemma that an insured faces when an 
insurer in bad faith refuses to pay a claim or to accept a settlement offer 
within policy limits. When an insurer takes such actions, the insured cannot 
turn to the marketplace to find another insurance company willing to pay for the 
loss already incurred. The wrongfully terminated employee, on the other hand, 
can (and must, in order to mitigate damages [see Parker v. Twentieth Century-Fox 
Film Corp. (1970) 3 Cal. 3d 176, 181-182, 89 Cal. Rptr. 737, 474 P.2d 689]) make 
reasonable efforts to seek alternative employment. (See Mauk, supra, 21 Idaho 
L.Rev. 201, 208). Moreover, the role of the employer differs from that of the 
"quasi-public" insurance company with whom individuals contract specifically in 
order to obtain protection from potential specified economic harm. The employer 
does not similarly "sell" protection to its employees; it is not providing a 
public service. Nor do we find convincing the idea that the employee is 
necessarily seeking a different kind of financial security than those entering a 
typical commercial contract. If a small dealer contracts for goods from a large 
supplier, and those goods are vital to the small dealer's business, breach by 
the supplier may have financial significance for individuals employed by the 
dealer or to the dealer himself. Permitting only contract damages in such a 
situation has ramifications no different from a similar limitation in the direct 
employer-employee relationship.

Finally, there is a 
fundamental difference between insurance and employment relationships. In the 
insurance relationship, the insurer's and insured's interest are financially at 
odds. If the insurer pays a claim, it diminishes its fiscal resources. The 
insured of course has paid for protection and expects to have its losses 
recompensed. When a claim is paid, money shifts from insurer to insured, or, if 
appropriate, to a third party claimant.

Putting aside already 
specifically barred improper motives for termination which may be based on both 
economic and noneconomic considerations, as a general rule it is to the 
employer's economic benefit to retain good employees. The interests of employer 
and employee are most frequently in alignment. If there is a job to be done, the 
employer must still pay some one to do it. This is not to say there may never be 
a "bad motive" for discharge not otherwise covered by law. Nevertheless, in 
terms of abstract employment relationships as contrasted with abstract insurance 
relationships, there is less inherent relevant tension between the interests of 
employers and employees than exists between that of insurers and insureds. Thus 
the need to place disincentives on an employer's conduct in addition to those 
already imposed by law simply does not rise to the same level as that created by 
the conflicting interests at stake in the insurance context. Nor is this to say 
that the Legislature would have no basis for affording employees additional 
protections. It is, however, to say that the need to extend the special 
relationship model in the form of judicially created relief of the kind sought 
here is less compelling.

We therefore conclude that the 
employment relationship is not sufficiently similar to that of insurer and 
insured to warrant judicial extension of the proposed additional tort remedies 
in view of the countervailing concerns about economic policy and stability, the 
traditional separation of tort and contract law, and finally, the numerous 
protections against improper terminations already afforded employees.

Foley, 254 Cal. Rptr.  at 233-35, 765 P.2d  at 395-96 
(footnote omitted).

[¶118] 
For the remainder of its opinion, the Foley court explored the propriety 
of judicial, rather than legislative, expansion of remedies for employees 
improperly discharged. Foley, 254 Cal. Rptr.  at 235-40, 765 P.2d  at 397-401. In 
this regard, several factors joined to persuade the court that contractual, not 
tort, remedies "should remain the sole available relief for breaches of the 
implied covenant of good faith and fair dealing in the employment context" 
absent legislative action. Id., 254 Cal. Rptr.  at 236, 765 P.2d  at 398. 
Discussing these factors, the court said:

Initially, predictability of the 
consequences of actions related to employment contracts is important to 
commercial stability. In order to achieve such stability, it is also important 
that employers not be unduly deprived of discretion to dismiss an employee by 
the fear that doing so will give rise to potential tort recovery in every 
case.

Moreover, it would be difficult 
if not impossible to formulate a rule that would assure that only deserving" 
cases give rise to tort relief. Professor Summers, in his seminal article, 
described the term "good faith" as used in the duty of good faith imposed in 
contract law and the Uniform Commercial Code, as an "excluder" phrase which is 
"without general meaning (or meanings) of its own and serves to exclude a wide 
range of heterogenous forms of bad faith. In a particular context the phrase 
takes on specific meaning, but usually this is only by way of contrast with the 
specific form of bad faith actually or hypothetically ruled out." (Summers, 
"Good Faith" in General Contract Law and the Sales Provisions of the Uniform 
Commercial Code (1968) 54 Va.L.Rev. 195, 201, fn. omitted.) In a tort action 
based on an employee's discharge, it is highly likely that each case would 
involve a dispute as to material facts regarding the subjective intentions of 
the employer. As a result, these actions could rarely be disposed of at the 
demurrer or summary judgment stage.

* * * * * *

Thus, recitation of the 
parameters of the implied covenant alone is unsatisfactory. If the covenant is 
implied in every contract, but its breach does not in every contract give rise 
to tort damages, attempts to define when tort damages are appropriate simply by 
interjecting a requirement of "bad faith" do nothing to limit the potential 
reach of tort remedies or to differentiate between those cases properly and 
traditionally compensable by contract damages and those in which tort damages 
should flow. Virtually any firing (indeed any breach of a contract term in any 
context) could provide the basis for a pleading alleging the discharge was in 
bad faith under the cited 

Finally, and of primary 
significance, we believe that focus on available contract remedies offers the 
most appropriate method of expanding available relief for wrongful terminations. 
The expansion of tort remedies in the employment context has potentially 
enormous consequences for the stability of the business community.

We are not unmindful of the 
legitimate concerns of employees who fear arbitrary and improper discharges that 
may have a devastating effect on their economic and social status. Nor are we 
unaware of or unsympathetic to claims that contract remedies for breaches of 
contract are insufficient because they do not fully compensate due to their 
failure to include attorney fees and their restrictions on foreseeable damages. 
These defects, however, exist generally in contract situations. As discussed 
above, the variety of possible courses to remedy the problem is well 
demonstrated in the literature and include increased contract damages, provision 
for award of attorney fees, establishment of arbitration or other speedier and 
less expensive dispute resolution, or the tort remedies (the scope of which is 
also subject to dispute) sought by plaintiff here.

The diversity of possible 
solutions demonstrates the confusion that occurs when we look outside the realm 
of contract law in attempting to fashion remedies for a breach of a contract 
provision. As noted, numerous legislative provisions have imposed obligations on 
parties to contract which vindicate significant social policies extraneous to 
the contract itself. As Justice Kaus observed in his concurring and dissenting 
opinion in White v. Western Title Ins. Co. (1985) 40 Cal. 3d 870, 901, 221 Cal. Rptr. 509, 710 P.2d 309, "our experience in Seaman's [Seaman's Direct Buying 
Serv., Inc. v. Standard Oil Co., 36 Cal. 3d 752, 206 Cal. Rptr. 354, 686 P.2d 1158 
(1984)] surely tells us that there are real problems in applying the substitute 
remedy of a tort recovery - with or without punitive damages - outside the 
insurance area. In other words, I believe that under all the circumstances, the 
problem is one for the Legislature. . . ."

Foley, 254 Cal. Rptr.  at 236-40, 765 P.2d  at 398-401 
(footnotes omitted).

[¶119] 
At the present time, the Foley analysis best captures my thinking on this 
subject - if we must today decide the point, which, as I have said earlier, I do 
not think we need do.

[¶120] 
Finally, about the majority's holding that sufficient evidence of the 
Chamber's outrageous conduct exists, I respectfully disagree. Particularly with 
reference to the Chamber's conduct following termination, I find it incongruous 
to hold that the Chamber's aggressiveness as a competitor is outrageous conduct 
but does not constitute intentional interference with prospective business 
relations. Perhaps these two concepts can legally coexist, but I am not 
convinced at this point. As I understand the concept of outrageous conduct as 
explained in Leithead, the claim contains two requirements, viz., outrageous 
conduct and severe emotional distress. Leithead, 721 P.2d  at 1065-67. Outrageous 
conduct is "conduct which goes beyond all possible bounds of decency, is 
regarded as atrocious, and is utterly intolerable in a civilized community." 
Leithead, at 1066. Severe emotional distress is "distress which is so severe 
that no reasonable [person] could be expected to endure it." Id. From my reading 
of the record, the Chamber's conduct was not "outrageous," and Mr. Wilder's 
distress was not "severe emotional distress" as the law defines those terms.