Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_06-cv-03082/USCOURTS-cand-4_06-cv-03082-0/pdf.json

Parties Involved:
Bill Maley
Plaintiff
Pulte Home Corporation
Defendant
Pulte Homes, Inc.
Defendant

Document Text:

United States District Court

For the Northern District of California

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According to Defendant, it was erroneously sued as "Pulte

Home Corporation."

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

BILL MALEY,

Plaintiff,

v.

PULTE HOME CORPORATION,

Defendant.

 /

No. C 06-3082 CW

ORDER DENYING

DEFENDANT'S

MOTION TO DISMISS

Defendant Pulte Homes, Inc.,1 moves to dismiss under Federal

Rule of Civil Procedure 12(b)(6) Plaintiff Bill Maley's claim for

breach of an implied-in-fact employment contract. Plaintiff

opposes the motion, and the matter was taken under submission on

the papers. Having considered the papers filed by the parties, the

Court denies Defendant's motion to dismiss. 

BACKGROUND

The following facts are taken from the Complaint, unless

otherwise noted, and are assumed to be true. Defendant asks the

Court also to consider its Employee Handbook and a Power Point

presentation on "Managing Human Performance," attached as Exhibits

A and B to the Brown Declaration, on the grounds that Plaintiff

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United States District Court

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refers throughout his complaint to the progressive discipline

policies set forth therein. See United States v. Ritchie, 342 F.3d

903, 908 (9th Cir. 2003) (noting that courts may consider on a

motion to dismiss documents incorporated by reference into a

complaint if referred to extensively or if they form the basis for

the plaintiff's claim). Plaintiff does not oppose the Court's

consideration of the Employee Handbook and the presentation,

although he notes that the Handbook is not signed by him. The

Court therefore considers these materials in deciding Defendant's

motion. 

Plaintiff asks the Court to consider excerpts from a document

entitled, "California Human Resources Law Guide," prepared by

Defendant's counsel, Foley & Lardner, LLP, and received by

Plaintiff during his employment. This document is not referred to

in the Complaint, and the Court will not consider it on a motion to

dismiss. 

Plaintiff was hired on October 6, 2003, as Defendant's Area

Director of Human Resources. Neither the offer of employment nor

any discussion of terms and conditions referred to Plaintiff's

employment as "at-will." Plaintiff's performance on the job was

"exceptionally" strong, and he received positive performance

evaluations and a substantial raise. Id. ¶¶ 14-17. 

During Plaintiff's tenure, senior management officials "made

it abundantly clear to Plaintiff that Defendant executed a policy,

pattern and practice of adhering to a progressive discipline model

of discipline and termination," and that Defendant had a

"longstanding policy and practice of only terminating an employee

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for good cause after the employee failed to improve the behavior or

performance after receiving the aforementioned warnings." 

Complaint ¶¶ 23, 26. Plaintiff's manager stated on several

occasions that he "would never fire Plaintiff and he would let

Plaintiff know if he was doing something wrong." Id. ¶ 40. 

The Employee Handbook's "Employment At-Will" section provides,

[a]ll employees of Pulte Homes are employed at-will. This

means that either the Company or an employee may terminate

employment with or without cause and with or without advance

notice. 

No representative of Pulte Homes, or any of its

subsidiaries or affiliates, has the authority to enter into

any contrary understanding or agreement.

Employee Handbook § 2.1; see also § 3.7, Termination of Employment

("An employee may be discharged at any time with or without cause

and with or without advance notice at the Company's sole

discretion"). The section on "Employee Discipline Policy" further

provides, 

Employment with the Company is terminable at-will. This means

that either the Company or an employee may terminate any

employment relationship with or without cause and with or

without advance notice. No representative of the Company has

any authority to enter into any contrary understanding or

agreement.

Employees are expected to conduct themselves in a

reasonable manner as well as follow rules that the Company has

expressly established. Th fact that some guidelines are

published or posted and made public does not in and of itself

limit or proscribe the requirement of inherent good conduct. 

. . . [L]ack of publication does not preclude disciplinary

action up to and including discharge as determined at the

Company's sole discretion.

Id. § 3.6. 

The Power Point presentation on "Managing Human Performance"

sets forth a progressive discipline process by which employees are

given verbal and written warnings and opportunities to improve

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before being fired. Brown Decl., Ex. B, Managing Human Performance

Power Point Presentation at 85. However, it notes that the

progressive discipline process "is not a one size fits all

approach," and that "[i]n severe cases, termination may need to be

immediate." Id. 

Plaintiff was abruptly fired, without good cause, without an

adequate investigation, and without an opportunity to respond to

accusations against him. Defendant cited an alleged "zero

tolerance" policy as the reason for Plaintiff's termination;

listeners would have understood this statement to mean that

Plaintiff had violated Defendant's sexual harassment policy. 

Complaint ¶ 46. Plaintiff alleges that his termination violated an

implied-in-fact employment agreement whereby he would not be fired

absent good cause and verbal and written warnings and opportunities

to improve. 

Plaintiff brings claims for (1) breach of an implied-in-fact

employment contract and (2) defamation. Defendant's motion to

dismiss addresses only the claim for breach of an implied contract.

LEGAL STANDARD

A motion to dismiss for failure to state a claim will be

denied unless it is “clear that no relief could be granted under

any set of facts that could be proved consistent with the

allegations.” Falkowski v. Imation Corp., 309 F.3d 1123, 1132 (9th

Cir. 2002), citing Swierkiewicz v. Sorema N.A., 534 U.S. 506

(2002). All material allegations in the complaint will be taken as

true and construed in the light most favorable to the plaintiff. 

NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). 

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Although the court is generally confined to consideration of the

allegations in the pleadings, when the complaint is accompanied by

attached documents, such documents are deemed part of the complaint

and may be considered in evaluating the merits of a Rule 12(b)(6)

motion. Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th

Cir. 1987).

A complaint must contain a “short and plain statement of the

claim showing that the pleader is entitled to relief.” Fed. R.

Civ. P. 8(a). “Each averment of a pleading shall be simple,

concise, and direct. No technical forms of pleading or motions are

required.” Fed. R. Civ. P. 8(e). These rules “do not require a

claimant to set out in detail the facts upon which he bases his

claim. To the contrary, all the Rules require is ‘a short and

plain statement of the claim’ that will give the defendant fair

notice of what the plaintiff’s claim is and the grounds on which it

rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957).

DISCUSSION

Defendant moves to dismiss Plaintiff's claim for breach of an

implied-in-fact employment contract on the grounds that the facts

alleged in the Complaint are inconsistent with Defendant's written

policies and, if proved, are insufficient to overcome the

presumption of at-will employment. 

California Labor Code § 2922 provides that "an employment,

having no specified term, may be terminated at the will of either

party on notice to the other." However, the "at-will" presumption

provided in section 2922 may be overcome by an implied agreement

not to terminate without good cause. Foley v. Interactive Data

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Corp., 47 Cal. 3d 654, 680 (1988). The Foley court cited several

factors that may be considered in determining whether such an

implied agreement exists, including "'the personnel policies or

practices of the employer, the employee's longevity of service,

actions or communications by the employer reflecting assurances of

continued employment, and the practices of the industry in which

the employee is engaged.'" Id. (quoting Pugh v. See's Candies, 116

Cal. App. 3d 311, 326-27 (1981)). Courts look to the "totality of

the circumstances [to] determine the nature of the contract. 

Agreement may be shown by the acts and conduct of the parties,

interpreted in the light of the subject matter and of the

surrounding circumstances." Id. at 681 (internal quotations

omitted). The existence of an implied-in-fact contract to

discharge only for good cause is normally a question of fact. 

Alexander v. Nextel Communications, Inc., 52 Cal. App. 4th 1376,

1381 (1997) (citing Haycock v. Hughes Aircraft Co., 22 Cal. App.

4th 1473, 1490 (1994)). 

Where an employer chooses to maintain written personnel

policies, "the terms they describe must be a central focus of the

contractual analysis." Guz v. Bechtel Nat., Inc., 24 Cal. 4th 317,

345 (2000). However, "at-will provisions in personnel handbooks,

manuals, or memoranda do not bar, or necessarily overcome, other

evidence of the employer's contrary intent, particularly where

other provisions in the employer's personnel documents themselves

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By contrast, if there is an express, written at-will

employment contract signed by the employee, the at-will presumption

cannot be overcome. Guz, 24 Cal. 4th at 340 n.10.

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suggest limits on the employer's termination rights."2 Id. at 339

(internal citations omitted). An employee's longevity, raises and

promotions may be relevant, but these factors "do not, in and of

themselves, . . . constitute a contractual guarantee of employment

security." Id. at 342 (emphasis omitted). A "brief and vague

statement" by a president that his or her company seeks to avoid

arbitrary firings is insufficient as a matter of law to permit a

finding of an implied-in-fact contract to fire only for good cause. 

Id. at 345. Additionally, the fact that a company has a policy of

progressive discipline does not establish that the company has a

policy or requirement of good cause for termination, where the

company also has a written policy of at-will employment. Davis v.

Consol. Freightways, 29 Cal. App. 4th 354, 367 (1994). 

Defendant points to portions of the Employee Handbook stating

that employment is at-will, as well as the statement in the

"Managing Human Performance" presentation that termination may be

immediate in severe cases. These policies are likely strong

evidence that Defendant had a policy of at-will employment. 

However, these written policies are not necessarily conclusive. 

Plaintiff alleges that Defendant had a policy and practice,

understood by him and all other employees, that they would only be

fired for documented good cause and in accordance with the

progressive discipline policy. He also alleges some additional

specific facts, such his manager's assurances that he would not be

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fired and that he would be informed if he was doing something

wrong, and the application of the progressive discipline policy

even in cases of severe misconduct, such as drinking or using drugs

on the job. 

Plaintiff does not have to allege in detail all the facts upon

which he bases his claim. To the extent that Defendant argues that

Plaintiff's allegations, if true, are insufficient in themselves to

establish the existence of an implied-in-fact contract, that is not

the standard used to decide a motion to dismiss. Plaintiff could,

consistent with the Complaint, prove facts sufficient to overcome

the presumption of at-will employment. Therefore, the Court will

not dismiss Plaintiff's claim for breach of an implied-in-fact

contract. 

CONCLUSION

For the foregoing reasons, the Court DENIES Defendant's motion

to dismiss under Rule 12(b)(6) (Docket No. 27). 

IT IS SO ORDERED.

Dated: 7/31/06 

CLAUDIA WILKEN

United States District Judge

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