Title: Hatfield v. Rochelle Coal Co.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Hatfield v. Rochelle Coal Co.1991 WY 98813 P.2d 1308Case Number: 90-156Decided: 07/15/1991Supreme Court of Wyoming
JAMES N. HATFIELD, 
APPELLANT (PLAINTIFF),

v.

ROCHELLE COAL COMPANY, 
APPELLEE (DEFENDANT).

Bruce S. Asay, 
Cheyenne, 
for appellant.

Edward W. Harris, and 
Mary J. Chinnock of Holland and Hart, Cheyenne, for 
appellee.

Before URBIGKIT, C.J., 
and THOMAS, MACY, and GOLDEN, JJ., and LEHMAN, District Judge.

LEHMAN, District 
Judge.

[¶1.]     The United States 
District Court for the District of Wyoming certified to this court the following 
questions which arose during a suit concerning wrongful termination of 
employment. The stated questions are as follows:

I.

Does Wyoming recognize a claim 
for breach of the covenant of good faith and fair dealing in the context of a 
wrongful termination action in which there is an employment 
contract?

II.

Does Wyoming recognize a claim 
under Art. I, § 6 of the Wyoming Constitution when no state action is 
alleged?

[¶2.]     We answer "no" to the 
first question and "no" to the second question.

DISPOSITION OF CERTIFIED 
QUESTIONS

1. Duty of Good Faith and 
Fair Dealing in Employment Contract.

[¶3.]     The Restatement 
(Second) of Contracts § 205 (1981) states as follows:

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

[¶4.]     The question is whether 
Wyoming law 
imposes this implied covenant of good faith and fair dealing upon an employer by 
virtue of his being a party to an employment contract. We hold that it does 
not.

[¶5.]     Appellant, James N. 
Hatfield, correctly points out that we have adopted the covenant of good faith 
and fair dealing in situations where duties implied by law arise independently 
of the express terms of a contract. See McCullough v. Golden Rule Ins. Co., 789 P.2d 855, 858 (Wyo. 1990). However, this does not justify a 
presumption that the covenant applies to employment disputes. In fact, we have 
never applied it to a case in which there is alleged the wrongful termination of 
an employment contract.

[¶6.]     We have held that the 
covenant does not apply to employment which is not "at-will." In Leithead v. 
American Colloid Co., 721 P.2d 1059 (Wyo. 1986), an employee sued his employer for 
wrongful termination, alleging that the terms of his employee handbooks had 
modified his at-will employment. We held that the specific terms and general 
tenor of the handbooks gave the employee an enforceable right to be discharged 
only for cause. Id. at 1063. With regard to his claim for 
breach of the implied covenant of good faith and fair dealing, however, we 
stated that "[t]he covenant has no application here * * * because the 
parties' contract was not at will." Id. at 1064 (emphasis added).

[¶7.]     Neither, have we 
recognized such a covenant when the employment is strictly "at-will." See Ware 
v. Converse County School Dist. No. 2, 789 P.2d 872, 875 (Wyo. 1990);1 McDonald v. Mobil Coal Producing, 
Inc., 789 P.2d 866, 869 (Wyo. 1990); Nelson v. Crimson Enterprises, Inc., 777 P.2d 73, 76 n. 3 (Wyo. 1989) (specifically reserving the question); Reese v. Dow 
Chemical Co., 728 P.2d 1118, 1121 (Wyo. 1986) (not addressing the question but 
noting its academic interest and future potential); Mobil Coal Producing, Inc. 
v. Parks, 704 P.2d 702, 704 (Wyo. 1985); and Rompf v. John Q. Hammons Hotels, 
Inc., 685 P.2d 25, 28 (Wyo. 1984) (reserving the question and not applying the 
covenant to the facts in that case). 

[¶8.]     The language in the 
Nelson and Rompf cases suggests that we might apply this covenant in the context 
of wrongful termination under an employment contract, given the right case. 
Other states have either recognized or refused to recognize an implied duty of 
good faith imposed upon employment contracts in the interest of public policy. 
See generally Annotation, Modern Status of Rule That Employer May Discharge 
At-Will Employee For Any Reason, 12 A.L.R.4th 544 (1982). However, appellant has 
failed to convince us that the circumstances of his case make it "the right 
case" for adoption of the rule in this state. Thus, under the current status of 
Wyoming law, Wyoming does not recognize an implied covenant 
of good faith and fair dealing imposed upon an employer by virtue of his being a 
party to an employment contract.

2. Violation of Due 
Process in Absence of State Action.

[¶9.]     The second certified 
question involves the construction of the Wyo. Const. art. 1, § 6:

     No person shall be 
deprived of life, liberty or property without due process of law.

[¶10.]  We must determine whether this language 
in the Wyoming Constitution requires due process where private action is 
taken that deprives a citizen of an interest in property.

[¶11.]  We have implicitly recognized the 
requirement that state action be shown to activate Wyoming's due process 
clause. In Hanesworth v. Johnke, 783 P.2d 173, 176 (Wyo. 1989), we held that a 
district court's involvement in the process of extinguishing claims of 
creditors, who did not file timely claims against an estate, constituted state 
action sufficient to invoke the due process clauses of the United States and 
Wyoming Constitutions. However, we did not explicitly analyze the parameters of 
Wyoming's due 
process clause in Hanesworth. We did adopt the state action requirement and 
found it satisfied by the district court's involvement in that case. Appellant's 
arguments do not persuade us to deviate from or expand our holding in 
Hanesworth.

[¶12.]  Appellant argues that, because we 
recognize some guarantees of the Wyoming Constitution as greater in scope than 
those of the federal constitution, we ought to extend the scope of the Wyoming 
Constitution's due process clause beyond that of the federal constitution to 
include some forms of private action. Our cases, recognizing a more extensive 
scope of rights under provisions of our constitution identical or very similar 
to those of the federal constitution, have involved rights of the individual 
vis-a-vis the state - not contentions between private parties. See Simonds v. 
State, 799 P.2d 1210 (Wyo. 1990), Urbigkit, C.J., specially 
concurring (state double jeopardy provision may exceed scope of federal 
provision) and Washakie County School Dist. No. One v. Herschler, 606 P.2d 310, 
332 (Wyo.), 
cert. denied 449 U.S. 824, 101 S. Ct. 86, 66 L. Ed. 2d 28 (1980) (equal protection 
analysis under Wyoming Constitution includes wealth as a suspect 
classification).

[¶13.]  Appellant further argues that because the 
language of Wyo. Const. art. 1, § 6 is written in the passive voice ("[n]o 
person shall be deprived") and, therefore, the "depriving entity" is not 
specified, the framers intended to include private persons as well as the state. 
First, we note that private persons are not explicitly mentioned in Wyo. Const. 
art. 1, § 6. Second, appellant has not provided any legislative history or other 
pertinent authority which persuades us that the framers of our constitution 
intended to include them by implication. 

[¶14.]  Other state courts which have considered 
this question have nearly unanimously held that private employers are not 
subject to due process claims under their state constitutions for wrongful 
termination of employees, because of the lack of state action. See Dimond v. 
Samaritan Health Service, 27 Ariz. App. 682, 
558 P.2d 710, 711-12 (1976); Schreiner v. McKenzie Tank Lines, Inc., 432 So. 2d 567, 569 (Fla. 
1983); Barr v. Kelso-Burnett Co., 106 Ill. 2d 520, 88 Ill.Dec. 628, 478 N.E.2d 1354, 1356 (1985); and Vavasori v. Commission on Human Relations, 65 Md. App. 237, 500 A.2d 307, 310 (1985), cert. denied 305 Md. 419, 504 A.2d 1152 (1986).

[¶15.]  The Alaska case, Nichols v. Eckert, 504 P.2d 1359 (Alaska 1973), is 
particularly on point. That case involved a challenge by nontenured teachers 
against a school board and superintendent for alleged breach of their employment 
contracts. The Alaska Supreme Court stated that its due process provision, 
nearly identical to Wyoming's, applies only when there is state 
action. Id. at 
1362. We note that Alaska, like Wyoming, recognizes a broader scope for the 
equal protection clause of its constitution than that of the federal 
constitution, see Breese v. Smith, 501 P.2d 159, 167 n. 30 (Alaska 1972); but 
even that recognition does not extend to requiring due process of a private 
employer.

[¶16.]  Appellant has cited no authority which 
convinces us that Wyoming's Constitution differs from every 
other state constitution and the federal constitution in requiring state action 
before the due process clause is implicated. Nor has appellant persuaded us to 
abandon or modify our holding in Hanesworth. We hold that our constitution does 
not require due process in the absence of state action.

[¶17.]  Consequently, we answer the questions 
presented:

I.

Does Wyoming recognize a claim 
for breach of the covenant of good faith and fair dealing in the context of a 
wrongful termination action in which there is an employment 
contract?

NO

II.

2. Does Wyoming recognize a claim 
under Art. I, § 6 of the Wyoming Constitution when no state action is 
alleged?

NO

URBIGKIT, C.J., filed an opinion 
specially concurring in part and dissenting in part.

FOOTNOTES

1 In Ware, 789 P.2d  at 
875, a case in which a school district failed to properly post notice of a job 
vacancy in accord with its intra-district transfer policy, we did apply a 
reliance theory under the Restatement (Second) of Contracts § 90(1) (1981). 
Section 90(1) provides as follows:

A promise which the 
promisor should reasonably expect to induce action or forbearance on the part of 
the promisee or a third person and which does induce such action or forbearance 
is binding if injustice can be avoided only by enforcement of the promise. The 
remedy granted for breach may be limited as justice requires.

     It should be clear 
that this theory of reliance is not the same as the implied covenant of good 
faith and fair dealing, but may have served as a substitute for it in 
wrongful-termination cases where we found injustice in the employer's 
practices.

URBIGKIT, Chief Justice, 
specially concurring in part and dissenting in part.

[¶18.]  I dissent from the majority's response to 
the first certified question. The majority misreads Wyoming case law, 
misapplies statutory and procedural rules for answering a certified question, 
and blurs the distinction between terminable at-will employment and employment 
under an implied contract which is not at-will. Consequently, the conclusion 
that Wyoming 
does not recognize a claim for breach of the covenant of good faith and fair 
dealing in an employment contract is incorrect.

[¶19.]  The majority is correct that this court 
has not yet found "the right case" to impose the covenant of good faith and fair 
dealing to create an exception to a traditional at-will employment 
relationship. However, an implied employment contract that arises from an 
employee handbook or policy manual is, by definition, already an 
exception to at-will employment. See Mobil Coal Producing, Inc. v. Parks, 704 P.2d 702 (Wyo. 
1985). We have never expressly decided whether the covenant of good faith and 
fair dealing should apply to an implied employment contract which is not 
at-will. Thus, contrary to the majority, I believe this is a question of first 
impression before this court. We must determine whether the covenant of good 
faith and fair dealing should be recognized as a matter of law in an implied 
employment contract which is not terminable at-will. 

[¶20.]  The covenant of good faith and fair 
dealing is recognized and applied virtually everywhere else in the world of 
contractual relationships.1 If you have a general principle, an 
exceptional reason should be provided to carve out an exception. While I find no 
justification for exceptional denial of good faith and fair dealing in any 
employer-employee relationship,2 at the very least I would apply the 
covenant to an implied employment contract as presented in the first certified 
question.3

[¶21.]  I agree with the majority's decision on 
the second certified question. The constitutional issue of due process under 
Wyo. Const. art. 1, § 6 is not created within the limited context of a private 
employment termination.

I. COVENANT OF GOOD FAITH 
AND FAIR DEALING

A. Leithead v. 
American Colloid Co.

[¶22.]  The majority misunderstands what was 
decided in Leithead v. American Colloid Co., 721 P.2d 1059 (Wyo. 1986). The statement 
in the majority that "the covenant [of good faith and fair dealing] does not 
apply to employment which is not `at-will'[,]" does not apply to the issue 
determinatively presented here.4 In Leithead, the court did not 
decide that the covenant of good faith and fair dealing does not apply to an 
employment contract. Rather, because of the court's disposition of other issues, 
there was no need to resolve the question of applicability of the 
covenant.

[¶23.]  This conclusion is obvious upon reading 
Leithead in its entirety and is further reinforced by the companion case of 
Armstrong v. American Colloid Co., 721 P.2d 1069 (Wyo. 1986). Both Armstrong and 
Leithead, decided by this court on the same day, involved co-employees 
challenging essentially identical employment termination issues. In Armstrong, 
we stated, "[b]ecause we agree with appellant that he could only be discharged 
for cause under his contract, and because we will reverse and remand on that 
basis, we need not discuss his three alternative issues: promissory 
estoppel, the covenant of good faith, and discharge against public policy." 
Armstrong, 721 P.2d  at 1069 (emphasis added).

[¶24.]  Thus, notwithstanding the Leithead quote 
in the majority, this court has never actually decided whether or not the 
covenant of good faith and fair dealing applies to an implied employment 
contract which is not at-will. This is a question of first impression and we 
find ourselves writing on a clean slate. O'Brien v. State, 711 P.2d 1144, 1147 
(Wyo. 
1986).

B. The Certified 
Question

[¶25.]  W.S. 1-13-106 states:

     The supreme court may 
answer questions of law certified to it by a federal court when requested 
by the certifying court if there are involved in any proceeding before the 
federal court questions of law of this state which may be determinative 
of the cause then pending in the federal court, and as to which it appears to 
the federal court there is no controlling precedent in the existing decisions of 
the supreme court.

(Emphasis added.) 
W.R.A.P. 11.03 states:

     A certification order 
shall set forth the question of law to be answered; and a statement of 
all facts relevant to the questions certified and showing fully the nature of 
the controversy in which the questions arose.

(Emphasis 
added.)

[¶26.]  In Reliance Ins. Co. v. Chevron U.S.A. 
Inc., 713 P.2d 766 (Wyo. 1986), this court answered a certified 
question from the United States District Court. Unlike the present case, the 
parties in Reliance Ins. Co. were in agreement as to the essential facts. Citing 
W.S. 1-13-106, we stated that "[o]ur role in certified question cases does not 
include fact finding." Reliance Ins. Co., 713 P.2d  at 769.

[¶27.]  The majority's conclusion that this case 
is not "the right case" for adoption of the covenant of good faith and fair 
dealing in an implied employment contract is a finding of fact, not a 
determination of law. It is not our role to make findings of fact when 
answering a certified question. By deciding that "appellant has failed to 
convince us that the circumstances of his case make it `the right case' for 
adoption of the [covenant] in this state[,]" the majority violates W.S. 
1-13-106; W.R.A.P. 11.03; and our precedent in Reliance Ins. Co.

C. The Distinction 
Between Terminable At-Will Employment and Employment Under an Implied Contract 
Which is Not At-Will

[¶28.]  The certified question in this case 
asks:

Does Wyoming recognize a claim 
for breach of the covenant of good faith and fair dealing in the context of a 
wrongful termination action in which there is an employment 
contract.

(Emphasis added.) In the 
federal court's statement of applicable facts, it states:

The defendant [appellee 
Rochelle Coal Co.] has moved to dismiss, arguing that Wyoming does not 
recognize the covenant of good faith and fair dealing where employment is not 
at will under the terms of the handbook.

(Emphasis added.) Thus, 
for purposes of this certified question, the federal court accepts existence of 
an implied-in-fact employment contract created by terms in the employee 
handbook.

[¶29.]  There are three generally recognized 
exceptions to traditional terminable at-will employment.5 They are: (1) implied-in-fact 
contracts (the employer's right to terminate at-will is modified by such things 
as oral assurances, pre-employment statements, and employee policy manuals); (2) 
public policy exceptions (exceptions are identified to provide a remedy for 
termination when an employee is fired for acting in a way that is consistent 
with a recognized public policy; examples include employees fired for: 
whistleblowing, failing to commit illegal acts, and exercising statutory or 
constitutional rights); and (3) the implied covenant of good faith and fair 
dealing (applied when courts find that an employer breached the covenant and 
acted unfairly or in bad faith when terminating an at-will employee). See 
Chagares, Utilization of the Disclaimer as an Effective Means to Define the 
Employment Relationship, 17 Hofstra L.Rev. 365, 369-75 (1989).

[¶30.]  This court has adopted the first two 
exceptions. In Mobil Coal Producing, Inc., 704 P.2d 702, we recognized that an 
employee handbook can create circumstances which negate an employer's unfettered 
right to discharge an employee at any time and without cause. See also 
Armstrong, 721 P.2d 1069 and Leithead, 721 P.2d 1059.

[¶31.]  In Griess v. Consolidated Freightways 
Corp. of Delaware, 776 P.2d 752 (Wyo. 1989), we answered a 
certified question from the Tenth Circuit Court of Appeals. In considering two 
employees whose at-will employment had been terminated for filing worker's 
compensation claims, we acknowledged that Wyoming provides a cause of action for 
retaliatory discharge on the basis of a violation of a strong public 
policy.

[¶32.]  However, this court has left unresolved 
the question of whether Wyoming will adopt the third exception - 
imposing a covenant of good faith and fair dealing upon at-will employment 
relationships in the state. As suggested by the majority in this case, we said 
in Nelson v. Crimson Enterprises, Inc., 777 P.2d 73, 76 n. 3 (Wyo. 1989) and 
Rompf v. John Q. Hammons Hotels, Inc., 685 P.2d 25, 28 (Wyo. 1984) that we 
may impose the covenant in an appropriate case.

[¶33.]  In addition to the procedural problem 
created by the majority's fact finding to answer a certified question, there is 
also a substantive problem with the majority's application of Nelson and Rompf 
to the facts in this case. Here we already have an implied-in-fact contract 
exception to at-will employment. We need not consider whether this is "the right 
case" to recognize the covenant of good faith and fair dealing in order to 
recognize the third exception of at-will employment. Rather, we must decide 
whether we accept the principle in the Restatement (Second) of Contracts, § 205 
(1981):

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

(Emphasis 
added.)

[¶34.]  As I see it, "[e]very contract" 
encompasses all contracts - including those which are implied-in-fact. The 
alternative, as evidenced by the majority's response to the first certified 
question, is to carve out an unjustified exception to the good faith and fair 
dealing doctrine. Such an exception will leave implied-in-fact contractual 
employees entirely at the mercy of employers who are given immunity for their 
unfair and bad faith acts.

D. The Covenant of 
Good Faith and Fair Dealing Should be Imposed on Employment Contracts Which Are 
Not At-Will

[¶35.]  I contend the correct response to the 
first certified question is "yes." It is time that we enter the Twentieth 
Century and recognize basic and universal contractual rights for 
employees.

[¶36.]  I find the rationale set forth by Kansas 
Supreme Court Justice Herd, writing in concurrence in Morriss v. Coleman Co., 
Inc., 241 Kan. 501, 738 P.2d 841, 851-52 (1987), persuasive:

I think we should 
expressly adopt Restatement (Second) of Contracts § 205 (1979), which imposes a 
duty of good faith and fair dealing in the performance and enforcement of every 
contract including employment-at-will contracts. Employment contracts are the 
most sensitive of all contracts. They determine the standard of living and the 
quality of education for children, and affect the general welfare of all the 
people in this country. It is ludicrous that the covenant of good faith and fair 
dealing has been adopted pertaining to commercial transactions * * * but has not 
been adopted for transactions involving human working conditions.

[¶37.]  There are many other reasons for 
recognizing the covenant of good faith and fair dealing in an implied-in-fact 
employment contract. Though not intended as an all-inclusive list, the following 
offers persuasive argument for recognition of the covenant in this 
context.

[¶38.]  Wyoming has recognized the covenant of good 
faith and fair dealing in other settings.6 For example, the Wyoming legislature 
imposed "an obligation of good faith" on every contract under the Uniform 
Commercial Code, W.S. 34.1-1-203. Also, in McCullough v. Golden Rule Ins. Co., 
789 P.2d 855 (Wyo. 1990), this court found that an insurance 
company owes a duty of good faith to its policyholders not to unreasonably deny 
a claim for benefits under an insurance policy. Other courts have analogized the 
relationship between insurer/insured and employer/employee to conclude that the 
same covenant should be applied in the employment context as well. See Foley v. 
Interactive Data Corp., 47 Cal. 3d 654, 254 Cal. Rptr. 211, 252, 765 P.2d 373, 412 
(1988), Kaufman, J., concurring and dissenting.

[¶39.]  In addition to the courts, scholars have 
made the covenant of good faith and fair dealing the subject of much debate. 
Some have argued that employees can be victimized by the unequal bargaining 
status of their employers. See Note, Protecting At Will Employees Against 
Wrongful Discharge: The Duty to Terminate Only in Good Faith, 93 Harv.L.Rev. 
1816, 1828 (1980) ("the relative bargaining power of the parties is so unequal 
that traditional contract assumptions are invalid"). Expanded job security 
created by imposition of the covenant may promote employee productivity and a 
more cooperative work environment. Id. at 1836. Several foreign countries, 
including Germany and 
Japan, have successfully abolished 
at-will "`unjust discharges.'" Id. The requirement of "good faith" does not 
operate to forbid terminations for cause and does not unduly restrict an 
employer engaged in his course of business. See Comment, Burk v. K-Mart 
Corporation: The Oklahoma Supreme Court Adopts 
a Narrow Exception to the Employment-At-Will Rule?, 14 Okla.City U.L.Rev. 645, 653 (1989).

[¶40.]  Though briefed by the parties in this 
case, the federal court did not certify a question as to whether or not 
Wyoming would 
make tort remedies available if the covenant of good faith and fair dealing was 
recognized in an employment contract. Consequently, this complex issue is left 
for future debate. See Foley, 254 Cal. Rptr. 211, 765 P.2d 373; K Mart Corp. v. 
Ponsock, 103 Nev. 39, 732 P.2d 1364 (1987); Cavico, Punitive Damages for Breach 
of Contract - A Principled Approach, 22 St. Mary's L.J. 357, 414-420 (1990); 
Jung and Harkness, Life After Foley: The Future of Wrongful Discharge 
Litigation, 41 Hastings L.J. 131 (1989); Miller, Foley v. Interactive Data 
Corp.: The California Supreme Court Takes Uncertain Steps Toward Certainty in 
Wrongful Discharge, 11 Whittier L.Rev. 595 (1989); Note, Tort Remedies for 
Breach of Contract: The Expansion of Tortious Breach of the Implied Covenant of 
Good Faith and Fair Dealing into the Commercial Realm, 86 Colum.L.Rev. 377 
(1986); and Note, "Contort": Tortious Breach of the Implied Covenant of Good 
Faith and Fair Dealing in Noninsurance, Commercial Contracts - Its Existence and 
Desirability, 60 Notre Dame L.Rev. 510 (1985).

[¶41.]  Finally, the majority's refusal in this 
instance to recognize the fundamental nature of good faith and fairness in all 
contractual relationships does not necessarily foreclose the United States 
District Court from applying the principle if warranted by the particular facts 
in this case. This was the case in Rosales v. AT & T Information Systems, 
Inc., 702 F. Supp. 1489 (D.Colo. 1988). In Rosales, the federal court considered 
an at-will employee's claim that his employer breached an implied covenant of 
good faith and fair dealing. Id. at 1502. Though the court acknowledged 
that Colorado 
courts "do not recognize a cause of action for breach of an implied covenant of 
good faith and fair dealing in the employment context," that did not prevent the 
court from deciding that "none of these cases holds that an implied covenant of 
good faith and fair dealing cannot arise in an employment context." Id. at 1502. See also 
Price v. Federal Exp. Corp., 660 F. Supp. 1388 (D.Colo. 1987)7 and Comment, Continental Air Lines 
v. Keenan: Employee Handbooks as a Modification to Employment At Will, 60 
U.Colo.L.Rev. 169, 176 (1989).

[¶42.]  If we assume to society something 
different than a pack of wolves tearing apart the carcass, supplemented by a 
flock of vultures devouring the remains, we should have no problem recognizing 
that it is of the essence of an implied-in-fact employment contract to include a 
duty of good faith and fair dealing in its performance and enforcement. There is 
no territory of the law where the principles of good faith and fair dealing can 
be more appropriately employed than in the land of employer/employee 
relationships.

II. DUE 
PROCESS

[¶43.]  It is my conviction that in this 
majority's response to the second issue of constitutional due process, any 
answer should be confined to the actual subject of the litigation from which 
this certification is presented - namely, a wrongful termination action in which 
there is an employment contract. The law cited by the majority on that subject 
satisfies a proper certification response. I refuse, however, within this narrow 
factual situation, to attempt a generalized answer which may involve events and 
activities presently not identified or particularized. Specifically, I am 
completely unwilling to broadly suggest that "state action," whatever it may 
mean, is always a necessary requirement for effectuation of the right of the 
injured to be provided due process under Wyo. Const. art 1, § 6.

[¶44.]  I note from Wyoming law that due 
process does not always mean judicial action. State ex rel. Wyckoff v. Ross, 31 Wyo. 500, 228 P. 636 (1924). The nexus of 
state involvement with private action, which may invoke due process rights, is 
an inquiry in broad context that should not be pursued here since the 
termination of the employment situation presented does not call for that 
character of examination. See Sharrock v. Dell Buick-Cadillac, Inc., 45 N.Y.2d 152, 408 N.Y.S.2d 39, 379 N.E.2d 1169 (1978).

[¶45.]  Providing more immediate persuasion and 
confining any answer to a specified transaction as a narrow basis of decision is 
the exhibited inability of the present members of the United States Supreme 
Court to agree on a definition of due process. As that inquiry recently related 
to punitive damages, we can find four separate concepts advanced by those 
jurists to define the essential nature of due process. See Pacific Mut. Life 
Ins. Co. v. Haslip, ___ U.S. ___, 111 S. Ct. 1032, 113 L. Ed. 2d 1 (1991).8

FOOTNOTES

1 Restatement (Second) of 
Contracts, § 205 (1981) states that "[e]very contract imposes upon each party a 
duty of good faith and fair dealing in its performance and its enforcement." 
This court has never expressly stated that every contract contains an implied 
covenant of good faith and fair dealing nor have we expressly adopted 
Restatement (Second) of Contracts, supra, § 205. See Husman, Inc. v. Triton Coal 
Co., 809 P.2d 796 (Wyo. 1991). However, in Husman, Inc. and Four 
Nines Gold, Inc. v. 71 Const. Inc., 809 P.2d 236 (Wyo. 1991), we discussed the 
covenant of good faith and fair dealing. Though the result in both cases turned 
on the fact that the alleged violations of good faith and fairness occurred 
before contracts were formed, the narrow holdings reinforce the 
proposition that the covenant is imposed once the parties to a contract 
have reached agreement.

     In my dissent in Ware 
v. Converse County School Dist. No. 2, 789 P.2d 872, 875 (Wyo. 1990) (Urbigkit 
and Golden, JJ., dissenting), I argued that a jury should have the opportunity 
to determine whether Ms. Ware's employer violated her contractual rights under 
an implied covenant of good faith and fair dealing. Id. at 878. Similarly, 
Justice Golden implied in his dissenting opinion that he, too, would recognize 
the plaintiff's claim that she had been treated unfairly and that a question of 
fact remained whether the employer had breached its employment contract with Ms. 
Ware. Id. at 
880.

2 It is my contention that 
the covenant of good faith and fair dealing should be extended to all employment 
relationships - including those which are at-will. A number of jurisdictions 
have adopted the implied covenant of good faith and fair dealing in at-will 
employment relationships, including: Alaska (ARCO Alaska, Inc. v. Akers, 753 P.2d 1150 (Alaska 1988)); Arizona (Wagenseller v. Scottsdale Memorial Hosp., 147 
Ariz. 370, 710 P.2d 1025 (1985)); California (Foley v. Interactive Data Corp., 
47 Cal. 3d 654, 254 Cal. Rptr. 211, 765 P.2d 373 (1988); Koehrer v. Superior Court 
(Oak Riverside Jurupa, Ltd.), 181 Cal. App. 3d 1155, 226 Cal. Rptr. 820 (1986); 
Gray v. Superior Court (Cipher Data Products, Inc.), 181 Cal. App. 3d 813, 226 Cal. Rptr. 570 (1986)); Massachusetts (Kravetz v. Merchants Distributors, Inc., 
387 Mass. 457, 440 N.E.2d 1278 (1982); Fortune v. National Cash Register Co., 
373 Mass. 96, 364 N.E.2d 1251 (1977)); Nevada (K Mart Corp. v. Ponsock, 103 Nev. 
39, 732 P.2d 1364 (1987)); New Hampshire (Cilley v. New Hampshire Ball Bearings, 
Inc., 128 N.H. 401, 514 A.2d 818 (1986); Howard v. Dorr Woolen Co., 120 N.H. 
295, 414 A.2d 1273 (1980); Monge v. Beebe Rubber Co., 114 N.H. 130, 316 A.2d 549 
(1974)); and Oregon (Wyss v. Inskeep, 73 Or. App. 661, 699 P.2d 1161 (1985)).

3 A number of states have 
accepted the view that a covenant of good faith and fair dealing exists in 
implied-in-fact employment contracts, including: Alaska (ARCO Alaska, Inc. v. 
Akers, 753 P.2d 1150 (Alaska 1988)); Arizona (Wagenseller v. Scottsdale Memorial 
Hosp., 147 Ariz. 370, 710 P.2d 1025 (1985)); California (Foley v. Interactive 
Data Corp., 47 Cal. 3d 654, 254 Cal. Rptr. 211, 765 P.2d 373 (1988)); Idaho 
(Metcalf v. Intermountain Gas Co., 116 Idaho 622, 778 P.2d 744 (1989)); Illinois 
(Martin v. Federal Life Ins. Co., 109 Ill. App.3d 596, 65 Ill.Dec. 143, 440 N.E.2d 998 (1982)); Nevada (K Mart Corp. v. Ponsock, 103 Nev. 39, 732 P.2d 1364 
(1987) (extending tort liability to encompass a breach of the implied 
covenant)); New Jersey (Noye v. Hoffmann-La Roche, Inc., 238 N.J. Super. 430, 
570 A.2d 12, cert. denied 122 N.J. 146, 584 A.2d 218 (1990)); New York (Murphy 
v. American Home Products Corp., 58 N.Y.2d 293, 461 N.Y.S.2d 232, 448 N.E.2d 86 
(1983)); and Utah (Berube v. Fashion Centre, Ltd., 771 P.2d 1033 (Utah 
1989)).

4 Unfortunately, Leithead 
has been relied upon erroneously in other cases. For example, in Jimenez v. 
Colorado Interstate Gas Co., 690 F. Supp. 977, 982-83 (D.Wyo. 1988), the court 
stated that "Wyoming does not allow claims for breach of 
the implied covenant of good faith in employment contracts that are not at-will. 
Leithead, 721 P.2d  at 1064." This is the same misapplication of Leithead 
replicated by the majority in this case.

     Exactly the opposite 
result occurred in Lesh v. Allstate Ins. Co., 723 F. Supp. 624 (D.Wyo. 1989). In 
Lesh, the court stated:

     The defendant has also 
moved for summary judgment against the plaintiff's claim for breach of the 
implied covenant of good faith and fair dealing. The cause of action only 
applies to an employment contract that is not at will, Mobil Coal Producing, 
Inc. v. Parks, 704 P.2d 702, 704 (Wyo. 1985), and was recognized by the Wyoming 
Supreme Court in Leithead v. American Colloid Co., 721 P.2d 1059 (Wyo. 
1986).

Id. at 628 (emphasis added). 
In Lesh, the court refused to impose the covenant of good faith and fair dealing 
since the plaintiff failed to demonstrate that his employment was something 
other than at-will. Id. It is implicitly understood in Lesh that 
the court would have imposed the covenant had the plaintiff shown evidence of an 
implied-in-fact employment contract.

     The critical point in 
this comparison is that the aberrant results attributable to Leithead do not 
gain credence simply on the basis of repetitive citation. A fallacious statement 
does not become factual with age or frequent citation.

5 For a concise history of 
the terminable at-will employment doctrine, see generally Comment, Burk v. 
K-Mart Corporation: The Oklahoma Supreme Court Adopts a Narrow Exception to the 
Employment-At-Will Rule? 14 Okla.City U.L. Rev. 645, 647-48 (1989); 
Note, Berube v. Fashion Centre, Ltd.: Utah's Exceptions to the Employment-at-Will 
Doctrine, 16 J. Contempt.L. 77, 78-80 (1990); and Note, Protecting At Will 
Employees Against Wrongful Discharge: The Duty to Terminate Only in Good Faith, 
93 Harv.L.Rev. 1816, 1824-28 (1980).

6 For purposes of timely 
emphasis, I repeat, in part, my recent analysis in Ware v. Converse County 
School Dist. No. 2, 789 P.2d 872, 876 (Wyo. 1990) (Urbigkit, J., dissenting), in 
which I stated:

In Reese v. Dow Chemical 
Co., 728 P.2d 1118, 1120 (Wyo. 1986), this court harmonized jury findings after 
a trial court instructed the jury how to calculate damages for "breach of the 
implied covenant of good faith and fair dealing" despite the fact the court did 
"not address" appellee's cross-appeal issue that such a covenant is not 
recognized in Wyoming. But that harmonization seems to require tacit recognition 
of such a covenant. This court would presumably correct, under W.R.A.P. 7.05, a 
jury instruction which informed a jury how to calculate damages for breach of an 
implied covenant of good faith and fair dealing if no such covenant operated in 
Wyoming. See 
Baird v. School Dist. No. 25, Fremont County, 41 Wyo. 451, 458, 287 P. 308, 310 
(1930).

7 In Price, 660 F. Supp. 
at 1392-93, the court stated:

     Amid all of its 
incantations of good faith and promises of fair treatment, defendant [employer] 
now, surprisingly and quite boldly, asks me to grant summary judgment against 
plaintiff's [employee's] claim based on an implied covenant of good faith and 
fair dealing because plaintiff is a "mere" at-will employee who is owed nothing 
- not even fair treatment - and can be fired at the whim of the employer. I 
shall do no such thing. Employers must realize that if they are going to reap 
the profits and rewards of employee loyalty and enhanced workmanship which are 
coaxed by implied promises made to the workforce, then such employers must be 
held to their word. Thus, plaintiff's claim for breach of an implied covenant of 
good faith and fair dealing survives the motion for summary judgment given the 
special facts of this case.

8 
For further confusion of due process, see generally DeShaney v. Winnebago County 
Dept. of Social Services, 489 U.S. 189, 109 S. Ct. 998, 103 L. Ed. 2d 249 (1989); 
National Collegiate Athletic Ass'n v. Tarkanian, 488 U.S. 179, 109 S. Ct. 454, 
102 L. Ed. 2d 469 (1988); Comment, The NCAA and State Action: Does the Creature 
Control its Master?, 16 J.Contempt.L. 333 (1990); Comment, Constitutional Law - 
United States Supreme Court Finds NCAA Not State Actor Under Fourteenth 
Amendment - National Collegiate Athletic Association v. Tarkanian, 488 U.S. 179, 
109 S. Ct. 454, 102 L. Ed. 2d 469 (1988), XXIII Suffolk U.L.Rev. 1124 (1989); and 
Note, Constitutional Law - Enforcement of NCAA Sanctions by a Public Institution 
- Is There State Action by the NCAA? National Collegiate Athletic Association v. 
Tarkanian, 488 S. Ct. 179, 109 S. Ct. 454, 102 L. Ed. 2d 469 (1988), XXVLand & Water L.Rev. 281 
(1990).