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Parties Involved:
Delmed, Inc.
Appellee
Robert F. Gephart
Appellant
Larry F. Hearn
Appellant
Robert D. Stephens
Appellant
Thomas G. Turner
Appellant
Wendell L. Weeks
Appellant
Lorin Brent Weston
Appellant

Document Text:

UNITED STATES COURT OF 

TENTH CIRCUIT 

ROBERT F. GEPHART; ROBERT D. 

STEPHENS; LARRY F. HEARN; 

WENDELL L. WEEKS; LORIN BRENT 

WESTON and THOMAS G. TURNER, 

Plaintiffs-Appellants, 

v. 

DELMED, INC., a Massachusetts 

corporation, 

Defendant -Appellee. 

APPEALS 

FIL ., il 

Untt.d Stat.et Court of Appealt Teflth Cirell\t 

DEC 10 1992 

ROBERT L. HOECKER 

Clerk 

No. 90-4190 

(D . C. No. 88-NC-0047) 

(Dist. Utah) 

ORDER AND JUDGMENT* 

Before SEYMOUR and HOLLOWAY, Circuit Judges, and ROGERS, District 

Judge.** 

Plaintiffs-Appellants, six former employees of Delmed, Inc., 

brought suit against Delmed alleging that it violated 29 U.S.C. §§ 

621 et~ (1988) [ADEA], the Age Discrimination in Employment 

Act, and breached implied-in-fact contracts. Thomas Turner also 

brought a claim for negligent infliction of emotional distress. 

The district court granted summary judgment for Delmed on each 

claim. The employees appeal, and we affirm. 

*This order and judgment has no precedential value and shall not 

be cited, or used by any court within the Tenth Circuit, except 

for purposes of establishing the doctrines of the law of the case, 

res judicata, or collateral estoppel. 10th Cir. R. 36.3. 

**The Honorable Richard D. Rogers, United States District Judge, 

District of Kansas, sitting by designation. 

Appellate Case: 90-4190 Document: 010110151597 Date Filed: 12/10/1992 Page: 1 
Plaintiffs held management positions in an Ogden, Utah plant, 

which Delmed purchased in 1982. Prior to beginning employment 

with Delmed, each plaintiff signed an "Employment Agreement." 

Five years later, Delmed discharged plaintiffs (and twelve others) 

as part of a reduction in force. 

We review de novo the district court's grant of summary 

judgment. Barnson v. United States, 816 F.2d 549, 552 (10th 

Cir.), cert. denied, 484 U.S. 896 (1987). Summary judgment is 

appropriate only if there is no genuine issue as to a material 

fact. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). 

Plaintiffs allege age discrimination stemming from the 

reduction in force. Although on appeal plaintiffs contend that 

Delmed carried out the reduction in force with the intent to 

discriminate against older employees, plaintiffs relied on a 

disparate impact claim below. When plaintiffs announced their 

intention in district court to proceed on a disparate impact 

theory, they did attempt to reserve a disparate treatment claim: 

"The Plaintiffs intend to proceed under a 'disparate impact' 

theory .... However, the Plaintiffs do not hereby abandon their 

claim that Delmed acted with discriminatory intent." Memorandum 

in Opposition to Defendant's Motion for Summary Judgment, 

Appellee's App. at 165 & n.1. 

Notwithstanding these efforts to preserve a disparate 

treatment claim, there is no indication in the record before us 

that plaintiffs set forth specific facts in the district court to 

support such a claim in opposing Delmed's motion for summary 

judgment. "A party having evidence tending to create a genuine 

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Appellate Case: 90-4190 Document: 010110151597 Date Filed: 12/10/1992 Page: 2 
issue of fact must present that evidence to the trial judge 

If he fails to do so, summary judgment may be properly 

granted against him." Otteson v. United States, 622 F.2d 516, 520 

(10th Cir. 1980). Moreover, the nonmoving party in a summary 

judgment motion may not rest on its pleadings but must set forth 

specific facts." See Celotex, 477 U.S. at 324. Much of the 

deposition testimony plaintiffs cite to us on appeal as evidence 

of pretext was not cited to the district court in response to 

Delmed's motion for summary judgment. As a consequence of the 

manner in which plaintiffs responded to the motion for summary 

judgment, the district court did not discuss the disparate 

treatment claim, but held instead that plaintiffs failed to state 

a prima facie case of disparate impact under the ADEA. Under 

these circumstances, we hold that plaintiffs may not now raise a 

1 disparate treatment claim on appeal. 

To state a prima facie case of disparate impact, plaintiffs 

must show a statistical disparity demonstrating that some 

protected group has been adversely impacted by an employment 

practice of Delmed. Watson v. Fort Worth Bank & Trust, 487 U.S. 

977, 994 (1988) (plurality opinion); see also id. at 1001 

(Blackmun, J., concurring in part and in judgment). Plaintiffs 

have not identified the employment practice at issue, nor have 

1 Plaintiffs also appeal the district court's disposition of 

their failure-to-rehire allegation. The district court treated 

this allegation as a separate claim and found that it had not been 

raised with the EEOC and was therefore barred. The plaintiffs now 

argue that they were not asserting a separate failure-to-rehire 

claim but instead that the failure to rehire is evidence of 

disparate treatment. This argument was not presented to the 

district court, and we consequently do not consider it. 

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Appellate Case: 90-4190 Document: 010110151597 Date Filed: 12/10/1992 Page: 3 
they presented any statistical evidence. Therefore, the district 

1 t d ' d t D 1 d h' ' 2 court proper y gran e summary JU gmen to e me on tis issue. 

All six employees also allege that Delmed breached an implied 

contract with them to fire only for cause, to rehire according to 

seniority, and to find other positions in the company for 

employees removed during a reduction in force. They contend that 

a reduction in force is not a discharge "for cause." The implied 

contract, according to plaintiffs, arose from the employment 

manual, oral statements made by the employer during negotiations, 

and the practices of the company in regard to transferring 

workers. 

Utah state law recognizes that an implied contract may alter 

the presumption of at-will employment. See Berube v. Fashion 

Centre. Ltd., 771 P.2d 1033 (Utah 1989). Evidence of an intent to 

terminate only for cause may be derived from employment manuals 

and oral statements. See id. at 1044. However, "[a]n implied-infact promise cannot, of course, contradict a written contract 

term." Id. The district court held that the language in 

plaintiffs' employment agreements expressly created at-will 

employment . We agree. The employment agreements state that 

"DELMED hereby employs the EMPLOYEE to serve it in such capacity 

as Delmed's needs may from time to time require .. II 

2 Because plaintiffs have failed to state a disparate impact 

claim, we need not reach their contention that Congress in section 

105 of the 1991 Civil Rights Act, Pub. L. No. 102-166, 105 Stat. 

1071 (1991), 42 U.S.C. § 2000e(2) (K), retroactively reinstated the 

procedures for proving disparate impact claims that governed 

before the Supreme Court's decision in Wards Cove Packing Co. v . Atonio, 490 U.S. 642 (1989). 

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Appellate Case: 90-4190 Document: 010110151597 Date Filed: 12/10/1992 Page: 4 
Appellants' App. at 183. In light of this express language 

creating at-will employment, an implied agreement to fire only for 

cause arising out of alleged oral promises made prior to the 

express agreement cannot stand. 

We recognize that an express contract may be modified by a 

subsequent implied contract. Johnson v. Morton Thiokol, Inc., 818 

P.2d 997, 1004 n.29 (Utah 1991). In the instant case, however, 

there is no evidence to support a modification. First, the oral 

statements were made prior to the express agreements. Second, the 

employment manual applies its seniority provisions to non-exempt 

employees only and plaintiffs were exempt employees. Finally, 

plaintiffs cite to no evidence in the record of a company practice 

of placing discharged exempt employees in different positions 

within the company or of otherwise finding alternatives to 

reductions in force of such employees. We therefore affirm the 

district court's dismissal of plaintiffs' breach of implied 

contract claims. 

Finally, we must also affirm the district court's dismissal 

of Mr. Turner's claim for negligent infliction of emotional 

distress. Mr. Turner was on disability leave due to a heart 

condition. One month after open heart surgery, Mr. Turner was on 

his way to the doctor's office when he was called into the 

company's office and told that his position would be eliminated at 

the end of his disability leave. One week later, Mr. Turner's 

heart condition worsened. Mr. Turner alleges that the 

deterioration of his health was caused by the discharge. 

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Appellate Case: 90-4190 Document: 010110151597 Date Filed: 12/10/1992 Page: 5 
The district court held Mr. Turner's claim to be barred by 

the Utah Worker's Compensation Act. The statute reads in 

pertinent part: "The right to recover compensation ... shall be 

the exclusive remedy against the employer 

accident or injury or death, in any way. 

.. on account of any 

. aggravated or 

incurred by such employee in the course of or because of or 

arising out of his employment. II Utah Code Ann. § 35-1-60 

(1988). See Mounteer v. Utah Power & Light Co., 823 P.2d 1055, 

1059 (Utah 1991) (negligent infliction of emotional distress comes 

within purview of Workers' Compensation Act). When the alleged 

injury occurred, Mr. Turner was still in the employ of Delmed. 

Notification of termination is clearly an activity in the course 

of employment. Therefore, Mr. Turner's claim is barred. 

The judgment of the district court is AFFIRMED. 

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Entered for the Court 

Stephanie K. Seymour 

Circuit Judge 

Appellate Case: 90-4190 Document: 010110151597 Date Filed: 12/10/1992 Page: 6