Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-94-08080/USCOURTS-ca10-94-08080-0/pdf.json

Parties Involved:
Robert H. Gray
Appellant
Kerr-McGee Coal Corporation
Appellee
Kerr-McGee Corporation
Not Party
Allen Lee Mahoney
Appellant
Richard E. Massman
Appellant
Leroy McIlravy
Appellant

Document Text:

PUBLISH 

UNITED STATES COURT OF APPEALS 

·, 

LeROY MciLRAVY, 

ALLEN LEE MAHONEY, 

RICHARD E. MASSMAN, and 

ROBERT H. GRAY, 

TENTH CIRCUIT 

Plaintiffs-Appellants, 

FILED 

Ullfted States Court or Appeals Tenth Circuit 

JAN 2 3 1996 

PATRICK FISHER 

Clerk 

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No. 94-8080 

KERR-McGEE CORPORATION, 

Defendant, 

and 

KERR-McGEE COAL CORPORATION, 

a Delaware corporation, 

Defendant-Appellee. 

ON APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF WYOMING 

(D.C. No. 93-CV-302-B) 

Stephen H. Kline of Kline & Jenkins, Cheyenne, Wyoming (Kenneth E. 

Barker of Quinn, Eiesland, Day & Barker, Belle Fourche, South 

Dakota, with him on the briefs) for Plaintiffs-Appellants. 

Carolyn Gregg Hill (Shelia D. Tims with her on the brief) of 

Andrews, Davis, Legg, Bixler, Milsten & Price, Oklahoma City, 

Oklahoma, for Defendant-Appellee. 

Before TACHA and SETH, Circuit Judges, and BROWN, District Judge.* 

BROWN, District Judge. 

* The Honorable Wesley E. Brown, United States Senior District 

Judge for the District of Kansas, sitting by designation. 

Appellate Case: 94-8080 Document: 01019287528 Date Filed: 01/23/1996 Page: 1 
The plaintiffs are four individuals who contend their 

employment was wrongfully terminated by defendant Kerr-McGee Coal 

Corporation. Based on diversity jurisdiction, plaintiffs' amended 

complaint asserted three causes of action under Wyoming law: (1) 

breach of contract; (2) breach of the implied covenant of good 

faith and fair dealing; and (3) promissory estoppel. The district 

court granted Kerr-McGee Coal's motion for summary judgment as to 

the first two claims, while the promissory estoppel claim was 

submitted to a jury. The jury returned a verdict in favor of KerrMcGee Coal and the district court entered judgment accordingly. On 

appeal, plaintiffs contend that the district court committed error 

with respect to all three claims. We affirm. 

Breach of Contract Claim. 

Each of the plaintiffs began his employment with Kerr-McGee 

Coal between 1976 and 1978 at the Jacobs Ranch Mine south of 

Gillette, Wyoming. By 1992, each plaintiff had advanced to a 

first-level supervisory position. In March of 1992, plaintiffs 

were terminated as part of "Streamline Phase.II," a plan by KerrMcGee Coal to reduce its workforce at the Jacobs Ranch Mine. The 

plaintiffs, along with other individuals, were selected for 

termination based upon job performance rankings compiled by the 

company. Plaintiffs were at the bottom of the rankings for 

supervisors in their respective departments. The company retained 

some supervisors who had less seniority than the plaintiffs but who 

had better performance rankings. 

2 

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During plaintiffs' tenure at the Jacobs Ranch Mine, Kerr-McGee 

Coal had issued a series of employee handbooks, including 1976, 

1977, 1980, 1985 and 1988 editions. There is no dispute that 

plaintiffs received these handbooks. Plaintiffs' primary 

contention is that the initial handbook they were issued - either 

the 1976 or 1977 edition - contained language promising that they 

would be terminated only for "cause." Moreover, although 

plaintiffs concede that the handbooks informed them that there 

could be a reduction in force by the company, they contend the 

handbooks promised that any layoffs would be made in order of 

seniority. Plaintiffs argue that Kerr-McGee Coal breached these 

promises. As to Kerr-McGee Coal's 1985 and 1988 handbooks, each of 

which contained a disclaimer stating that the handbook was not an 

employment contract, plaintiffs contend these were invalid attempts 

by the company to "unilaterally modify" their existing contractual 

rights without any supporting consideration. 

In ruling on the motion for summary judgment, the district 

court only found it necessary to address the effect of the 1976 and 

1977 handbooks. 1 The court found nothing in these handbooks to 

1 Prior to summary judgment, the district court had granted 

defendant's motion to dismiss the breach of contract claim on the 

basis of the disclaimer in the 1988 handbook. The court held that 

the disclaimer was "conspicuous" and was effective to negate any 

employment contract otherwise implied in the handbook. In so 

finding, the court was consistent with its holding in a similar 

case, Hein v. Kerr-McGee Coal Corporation, 809 F.Supp. 84 (D. Wyo. 

1990), aff'd., 956 F.2d 278 {lOth Cir. 1992) (unpublished). 

The court's ruling on the motion to dismiss apparently assumed 

that the 1988 handbook, the last version issued by the employer, 

governed the breach of contract claim. After their claim was 

ordered dismissed, plaintiffs filed an amended complaint and argued 

that an employment contract had been created by the 1976 and 1977 

3 

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alter the presumption under Wyoming law that an employee serves at 

the will of the employer. The handbooks' references to employees 

becoming "permanent," the court said, were not sufficient to alter 

plaintiffs • status. Accordingly, the court granted the defendant • s 

motion for summary judgment on the grounds that plaintiffs were 

"at-will" employees who could be fired at any time, with or without 

cause. 

We review a district court's granting of summary judgment de 

novo and apply the same legal standard used by the district court. 

Hatfield v. Board of County Commissioners for Converse County, 52 

F.3d 858, 862 (lOth Cir. 1995). Under Fed.R.Civ.P. 56(c), summary 

judgment is appropriate only if the record, viewed in the light 

most favorable to the non-moving party, reveals no genuine issue of 

material fact and the moving party is entitled to judgment as a 

matter of law. ~ (citing Adickes v. S.H. Kress & Co., 398 u.s. 

144' 157 ( 1970)) 0 The substantive law of Wyoming governs the 

plaintiffs' claims in this diversity action. See Budd v. American 

Excess Ins. Co., 928 F.2d 344, 346 (lOth Cir. 1991). 

We conclude that a genuine issue of material fact exists as to 

whether Kerr-McGee Coal's 1976 and 1977 handbooks implied that 

employees would not be dismissed in the absence of "cause." It is 

true that the general presumption under Wyoming law is that 

books and that the 1988 handbook could not "unilaterally modify" 

the prior contract. Because the district court held that the 1976 

and 1977 books failed to alter the at-will presumption, it was 

unnecessary for the court to determine which version of the 

handbook governed the plaintiffs' claim or to determine whether the 

1988 disclaimer could modify an existing implied employment 

contract. 

4 

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employees serve at the will of their employers. Sanchez v. Life 

Care Ctrs. of Am., Inc., 855 P.2d 1256, 1257 (Wyo. 1993). And, as 

the district court recognized, a promise of "permanent" employment 

by itself is not sufficient to alter the at-will presumption. 

Wilder v. Cody Country Chamber of Commerce, 868 P.2d 211, 218 (Wyo. 

1994). An employee handbook may alter the presumption, however, if 

its terms reasonably create an expectation on the part of an 

employee that the company will not discharge him without cause. 

See Mobil Coal Producing, Inc. v. Parks, 704 P.2d 702, 707 (Wyo. 

1985). 

The 1976 and 1977 handbooks contained more than just a 

representation that employees were considered "permanent." Upon 

beginning employment, the plaintiffs were given a lengthy 

orientation session during which the handbook, referred to by 

company representatives as the employees• "bible," was covered in 

detail. The handbook itself stated that it "will acquaint you with 

certain Company practices and benefits, and your responsibilities 

as a Kerr-McGee employee," and when questions about such matters 

arise "the spirit and intent behind these statements will serve as 

the basis for solutions." The handbooks informed employees that 

they would become "permanent" after completing a ninety-day 

"probationary period. 11 They explained that a permanent employee is 

one who after successfully completing the probationary period "is 

expected to remain in the employment of the Company indefinitely." 

Cf. Leithead v. American Colloid Co., 721 P.2d 1059, 1063 (Wyo. 

1986) (Distinction between probationary and permanent employee, 

5 

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with an explanation that a probationary employee may be discharged 

at any time during the probationary period, was sufficient to imply 

that a permanent employee could only be discharged for cause.) The 

handbooks explained that "an employee's seniority will broken and 

employment terminated" for any of eight specific reasons, including 

"discharge." In a section entitled "Conduct on the Job," the 

handbook listed eleven "Examples of Misconduct Which Generally 

Result in Discharge for A Single Violation" and twelve "Examples of 

Misconduct Which Generally Result in Disciplinary Action Less than 

Discharge for a Single Violation." An introductory paragraph to 

these examples stated that "[t]he company may also apply 

disciplinary action up to and including discharge for other valid 

reasons." ~. Leithead, 721 P.2d at 1063 ("By listing misconduct 

that could result in discharge, the handbooks imply that cause is 

required."). The examples of misconduct were followed by a 

systematic procedure for disciplinary actions against employees 

including a "first notice," for which an employee was warned that 

an additional violation would result in three days off without pay; 

a "second notice," for which an employee was assessed three days 

off without pay and warned that an additional violation would 

result in discharge; and a "third notice," for which an employee 

would be discharged. See Sanchez, 855 P. 2d at 1259 ("Detailing 

stages of progressive discipline results in a further implication 

that cause is required to discharge.") Nowhere in the 1976 and 

1977 handbooks was it made clear that the company was not bound by 

the procedures in the handbook. or that despite the general 

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application of such policies the company intended to retain the 

absolute right to discharge employees at any time with or without 

cause. Taken as a whole, the 1976 and 1977 handbooks are 

sufficiently ambiguous that they could be said to have reasonably 

created expectations on the part of the plaintiffs that the company 

had promised not to discharge employees absent "cause" for the 

dismissal. 

Although we disagree with the district court on this point, 

we nevertheless conclude that Kerr-McGee Coal was entitled to 

summary judgment on the breach of contract claim. We may affirm 

for reasons other than those relied upon by the district court, as 

long as those reasons are supported by the record. Swoboda v. 

Dubach, 992 F.2d 286, 291 (lOth Cir. 1993). Even if a "for cause" 

standard was generally implied by the 1976 and 1977 handbooks (or 

the 1980 book2), the books also put employees on notice that they 

were subject to layoffs and termination if there was a reduction in 

force by the company. Plaintiffs conceded this in the district 

court, but argued that the company breached a promise to select 

those affected by a reduction in force on the basis of seniority. 

We conclude that no genuine issue of material fact exists as to 

whether Kerr-McGee Coal breached a promise by selecting plaintiffs 

for termination. 

Because a genuine factual issue exists as to whether the 1976 

2 We also note that the 1980 handbook issued by Kerr-McGee 

Coal stated that an employee's continuous service would be 

considered broken upon "discharge for just cause," whereas previous 

editions stated simply that it would be broken upon "discharge." 

7 

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and 1977 handbooks created an employment contract, we assume for 

purposes of summary judgment that such a contract was created. See 

Hatfield, 52 F. 2d at 862 (Record is viewed in the light most 

favorable to the party opposing summary judgment.) The issue then 

~ 

becomes what effect, if any, subsequent changes in the handbooks 

had with respect to that contract. Two changes after the 1977 

edition are potentially significant. The first involves the 

following disclaimer, which was added to the 1985 and 1988 

handbooks: 

This handbook should not be considered as a contract 

for employment. Any employee may voluntarily leave the 

company. Likewise, the Company retains the right to 

discharge employees or reduce manpower levels. Any oral 

or written statements or promises to the contrary are 

hereby disavowed. This handbook may be revised from time 

to time. 

Kerr-McGee Coal argues that, regardless of whether or not previous 

handbooks constituted an employment contract, the above disclaimer 

was "conspicuous" as a matter of law and necessarily means that 

plaintiffs could be terminated at the will of the company. 

The Wyoming Supreme Court has addressed the problem of 

disclaimers on several occasions. In McDonald v. Mobil Coal 

Producing, Inc., 820 P.2d 986 (Wyo. 1991) ("McDonald II"), the Court 

said an effective disclaimer in an employee handbook must be 

"conspicuous" and must clearly explain to the employee its effect 

on the employment relationship. Id. at 989. The disclaimer at 

issue in McDonald was found to be ambiguous despite a provision in 

the employee's application stating that "employment is terminable 

at the will of either party" and a declaration in the handbook 

8 

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stating that it was intended as a guide but was "not a 

comprehensive policies and procedures manual, nor an employment 

contract." I!;l. at 989-89. Later, in Sanchez v. Life Centers of 

America, 855 P.2d 1256 (Wyo. 1993), the Court examined a "Handbook 

Disclaimer" which stated that the company reserved "all the 

customary rights of management, including the right to • • • change 

or cancel all personnel policies with or without notice: hire, 

schedule, terminate, layoff • • • or otherwise manage associates 

and select the manner, method and means of doing so. This handbook 

is not a contract and contains no promises, guarantees, 

representations, agreements, or warranties upon which any 

prospective, current or prior associates of [the company] can 

reasonably maintain or create any expectations of such. 11 Id. at 

1257. This disclaimer was ambiguous, the Court held, because it 

did not say that the employer retained the right to deviate from 

the terms of the handbook, the right to change wages and working 

conditions without consulting the employee or obtaining his 

agreement, or the absolute power to fire anyone with or without 

good cause. Id. at 1259. More recently, in Wilder v. Cody Country 

Chamber of Commerce, 868 P.2d 211 (Wyo. 1994), an employee 

contended that his employer, the Board of Directors for the Chamber 

of Commerce, promised when he was hired that his employment was 

"permanent" for "as long as I did the work that was required." ,Ig. 

at 214. Three years after he was hired, the Board drew up a 

"memorandum of understanding" stating that it was placing him on 

"probationary status" and was conducting an audit, after which it 

9 

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would decide whether or not to offer him continued employment. Id. 

at 215. The memorandum, which the employee signed, further stated 

that "[y]ou 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." Id. 

Despite the apparently clear import of these statements, the 

Wyoming Supreme Court found that the language of the memorandum was 

ambiguous and that it created mixed questions of fact and law as to 

the parties' intentions. Id. at 219. 

Even if we assume that Kerr-McGee Coal could "amend" its 

employment contract with the plaintiffs by adding the disclaimer to 

its 1985 and 1988 handbooks, we can only conclude from the 

decisions discussed above that this disclaimer, although visually 

"conspicuous," would be considered ambiguous under Wyoming law with 

respect to its effect on plaintiffs' employment relationship. As 

a result, the disclaimer does not preclude plaintiffs' breach of 

contract claim. To warn employees that the handbook was "not an 

employment contract" was not sufficient under the circumstances to 

make clear that the company retained the right to deviate from the 

terms of the handbook. See McDonald II and Sanchez, supra. Nor was 

Kerr-McGee Coal's reservation of the right "to discharge" employees 

sufficient to clearly explain that the company retained the 

absolute power to fire anyone with or without good cause. See 

Sanchez, 855 P.2d at 1259. Cf. Lincoln v. Wackenhut Corp., 867 

P.2d 701 (Wyo. 1994) (Unambiguous disclaimer stated in part, 

10 

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,' 

"[T]his handbook is not to be construed by any employee as 

containing binding terms and conditions of employment. The Company 

retains the absolute right to terminate any employee, at any time, 

with or without good cause."); Loghry v. Unicover Corp., 878 P.2d 

510, 513 (Wyo. 1994) • We note that the ambiguity in this case 

arises in part because of the 1976, 1977 and 1980 handbooks 

initially issued to the plaintiffs; these prior handbooks contained 

no disclaimers and implied the adoption of a dismissal-for-cause 

standard. Cf. Preston v. Claridge Hotel & Casino, Ltd., 555 A.2d 

12, 15 (Sup.Ct. N.J. 1989). 

We recognize that this court previously found the very 

disclaimer at issue here to be "conspicuous" as a matter of law. 

See Hein v. Kerr-McGee Coal Corp., 809 F.Supp. 84 (D.Wyo. 1991), 

aff' d, . 956 F. 2d 278 (Table) (lOth Cir. 1992) , 1992 WL 33250. In 

light of the Wyoming Supreme Court cases discussed above, however, 

we must conclude that the disclaimer language would be considered 

ambiguous under Wyoming law. Hein is not dispositive in view of 

these intervening decisions. 3 We therefore reject Kerr-McGee 

3 In Hein, the district court initially granted the 

defendant's motion for summary judgment, finding the disclaimer to 

be "conspicuous" as a matter of law. The court appeared to base 

its conclusion on the prominent positioning and appearance of the 

disclaimer. It did not address whether the language of the 

disclaimer itself could be considered ambiguous. See Hein v. KerrMcGee Coal Corp., 809 F.Supp. 84, 86 (D.Wyo. 1991). After summary 

judgment was granted, the Wyoming Supreme Court' s McDonald I 

decision was published, prompting the plaintiff in Hein to move for 

reconsideration or for leave to amend the complaint. The district 

court denied the request, concluding that McDonald I was not 

retroactive and, in any event, did not represent a clear change in 

Wyoming law. Hein, 809 F.Supp. at 87. 

On appeal, this court agreed "with the district court's 

reasoning and its conclusion that Kerr-McGee's disclaimer is 

11 

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Coal's argument that the presence of this disclaimer entitles it to 

summary judgment. 

Aside from the disclaimer, Kerr-McGee also made changes after 

1977 to its handbook provisions on "reduction in force." The 1980 

handbook, like prior editions, informed employees that in the event 

of a reduction in force, layoffs would be made on the basis of 

qualifications and length of company service. "Qualifications" 

were defined as "the ability of an employee to perform the job in 

question to the satisfaction of the management of the company. 11 

The 1976 and 1977 editions had also contained a subparagraph 

conspicuous, as a matter of law." Hein v. Kerr-McGee Coal Corp., 

No. 91-8015, 1992 WL 33250, **2 (lOth Cir. Feb. 18, 1992) •. We also 

found that the district court did not abuse its discretion in 

denying leave to amend the complaint, noting that although the 

Wyoming Supreme Court had issued a second opinion in the McDonald 

case (McDonald II, 820 P.2d 986), "a review of Hein's pleadings 

reveals no basis for amending such that the issues presented in 

McDonald would apply." Id. at **3. In particular, we noted that 

unlike Hein, the plaintiff in McDonald argued that his employer's 

course of conduct had changed his at will employment status. We 

also pointed out that Hein had not revealed how the undisputed 

facts of his case could be applied to "the estoppel-related 

theories discussed in the McDonald opinions" and that he had 

provided no basis for determining whether an amendment to the 

complaint should be allowed. Id. 

McDonald II imposed a requirement in Wyoming law that a 

purported disclaimer of contractual liability in a handbook must be 

clear as to its effect on the employment relationship. See 

McDonald, 820 P.2d at 989. It is not clear whether we applied that 

requirement in He in when examining the Kerr-McGee disclaimer. Even 

if we had, however, He in is distinguishable for two reasons. 

First, the Wyoming Supreme Court cases since Hein have found 

similar disclaimer language to be ambiguous and we are bound to 

give effect to those decisions. Second, like McDonald, there is a 

genuine dispute of material fact in this case as to whether the 

employer initially created an employment contract with the employee 

and subsequently attempted to alter that contract through a 

handbook disclaimer. 

12 

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.· 

indicating that layoffs would be made in order of seniority. 4 The 

1980 edition, however, omitted this subparagraph and instead 

indicated that qualifications would be the primary consideration. 5 

The 1985 and 1988 handbooks subsequently changed the policy to 

state simply that "(s]hould it be necessary to reduce the number of 

employees needed to perform the available work, the Company will 

reduce the work force as equitably as possible, based on 

qualifications, job performance, length of service, and company 

requirements." The 1985 and 1988 books also stated that the 

company had the right to reduce manpower levels and that any oral 

or written promises to the contrary were disavowed. 

Pointing to the 1976 and 1977 handbooks, plaintiffs argue that 

they had a contractual right to have layoffs determined from 

seniority and that the company could not alter this right by 

issuing a different handbook because no additional consideration 

was given for the change. In Durtsche v. American Colloid Co., 958 

F.2d 1007 (lOth Cir. 1992), we concluded that Wyoming courts would 

4 The 1976 and 1977 handbooks, after stating that "the 

determination of the employee or employees to be demoted or laid 

off will be made on the basis of qualifications and seniority," 

provided that " [ 1] ayoffs will be made from the entry level 

classifications in progression lines or from non-progressional 

classifications. An employee subject to being laid off from the 

higher rated non-progressional classification (s) may only displace 

an employee with less Company Seniority who occupies either an 

entry level job in a progression line or the lowest rated nonprogressional classification (s), provided the employee has the 

qualifications to perform the work of such classification." 

5 The 1980 handbook stated: "When in the judgement of the 

company two or more employees have equal qualifications, the length 

of company service will be the determining factor." 

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.. 

permit an employer to "unilaterally" amend a handbook without the 

employee's express acceptance and additional consideration for the 

change. Id. at 1011. We interpreted McDonald v. Mobil Coal 

Producing, Inc., 798 P.2d 866 (Wyo. 1990), modified on reh'g, 820 

P.2d 986 (Wyo. 1991), as implicitly holding that an employer can 

change the terms of a handbook or disclaim the effect of a contract 

created thereby if the amendment does so conspicuously and clearly 

explains to the employee the nature of the change. Since Durtsche, 

the Wyoming Supreme Court has decided several cases involving 

employee handbooks. None of these alters our belief that Wyoming 

contract law would permit an employer to amend policies in a 

handbook provided the employee is properly informed. 6 This 

approach appears to be supported by the weight of authority and has 

been adopted by numerous states that, like Wyoming, treat handbooks 

as enforceable contracts in part because of the "strong equitable 

and social policy reasons militating against allowing employers to 

promulgate for their employees potentially misleading personnel 

manuals while reserving the right to deviate from them at their own 

caprice." Sanchez, 855 P.2d at 1258. See ~' Bankey v. Storer 

6 In Wilder, where the employer attempted to modify an 

individual employee's status with a signed "memorandum of 

understanding," the Court stated that "an issue of law exists 

whether there was sufficient consideration at the time of the 

execution of the memorandum of understanding to modify [the 

plaintiff's] employment to employment at will •••. 11 Wilder, 868 

P. 2d at 219. The Court suggested that traditional contract 

principles would determine the validity of the modification in that 

case. Id. Wilder, unlike the instant case, did not involve the 

issuance and modification of an employee handbook. It more closely 

resembled a "bilateral" contract case, where the promises in 

question could be characterized as part of a bargained-for exchange 

between the parties. 

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.. 

Broadcasting Co., 443 N.W.2d 112 (Mich. 1989) (Employer may 

unilaterally change its written policy provided the employer gives 

reasonable notice of the change.); Fleming v. Borden. Inc., 450 

S.E.2d 589 (S.C. 1994); Hogue v. Cecil I. Walker Machinery Co., 431 

S.E.2d 687 (W.Va. 1993); Gaglidari v. Denny's Restaurants, Inc., 

815 P.2d 1362 (Wash. 1991). These cases recognize that employers 

must have some flexibility in altering policies to meet changing 

business conditions. To some extent, the cases also recognize that 

traditional contract requirements have not been strictly applied by 

the courts in analyzing the formation of employee handbook 

"contracts," and thus, it is appropriate to ease the same 

requirements when it comes to modification of a handbook. See ~' 

Fleming, 450 S.E.2d at 595 (rejecting strict application of 

"bilateral" contract principles). 

We conclude that under the circumstances of this case, Wyoming 

contract law would permit Kerr-McGee Coal's adoption of the 

foregoing changes to its reduction in force policy and its 

application of those changes to the plaintiffs in 1992. We note 

that the plaintiffs continued to work at Kerr-McGee Coal for 

several years after receiving the 1988 handbook and voiced no 

objection to its provisions. 7 Each of the previous editions of the 

handbook informed employees that the policies contained in the book 

could be changed by the company. The 1988 handbook unambiguously 

7 To the extent Wyoming requires some consideration for a 

change in a handbook, we conclude that the plaintiffs' continued 

employment without objection in this case would be considered 

sufficient. 

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.. 

gave the company discretion to "reduce the work force as equitably 

as possible, based on qualifications, job performance, length of 

service, and company requirements." There is no dispute that the 

plaintiffs were selected for termination based on the company's 

assessment of their job performance; the plaintiffs received the 

lowest performance rankings in their respective departments. This 

was clearly a permissible basis upon which to select plaintiffs for 

the reduction in force. Under the handbook in effect at the time 

plaintiffs were terminated, plaintiffs' claim for breach of 

contract fails as a matter of law. 

Although we find that Wyoming contract law would permit KerrMcGee Coal to amend its handbook in this manner, that does not mean 

that an employer is free at any time to pull the rug out from under 

its employees. Wyoming courts have recognized that equitable 

factors should protect employees against an employer's capricious 

deviation from personnel manuals. Sanchez, 855 P.2d at 1258 (citing 

Wooley v. Hoffman-LaRoche. Inc., 491 A.2d 1257 (N.J.), modified, 

499 A.2d 515 (N.J. 1985)). As we noted in Hatfield, 52 F.2d at 

866, the doctrine of estoppel is designed to "prevent injury 

arising from actions or declarations which have been acted on in 

good faith and which would be inequitable to permit a party to 

retract." Id (citing Davis v. Davis, 855 P.2d 342, 347-48 (Wyo. 

1993)). We think it clear that Wyoming would offer protection 

against an employer's "capricious deviation" from a handbook by 

permitting an employee to recover damages if the employee can prove 

the elements of a claim for promissory estoppel. See Hatfield, 52 

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• . . 

F.2d at 866-67. As we discuss infra, the plaintiffs asserted such 

a claim in the instant case, but it was rejected by jury. 

Covenant of Good Faith. 

Plaintiffs' second claim alleged that Kerr-McGee Coal breached 

an implied covenant of good faith and fair dealing by terminating 

them. Plaintiffs argued that their tenure of approximately fifteen 

years with Kerr-McGee Coal and their various actions in reliance on 

the belief that they had secure employment established "a special 

relationship of trust and reliance" sufficient to support a cause 

of action for the tort of breach of good faith. The district court 

granted summary judgment on this claim after concluding plaintiffs 

had failed to show sufficient evidence of the "special 

relationship" required by Wyoming law. We agree with the district 

court. 

Under Wyoming law, every contract imposes upon each party a 

duty of good faith and fair dealing in its performance and its 

enforcement. Wilder, 868 P.2d at 220. "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. (citing Restatement (Second) of Contracts § 

205 at 100 ( 1981), comm. a.). The scope of this covenant is 

limited in the context of employment contracts, however; it does 

not create a duty for the employer to terminate an employee only 

for good cause, nor does it mandate that every termination must be 

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for a fair and honest reason. Wilder, 868 P.2d at 221. To rise to 

the level of a tortious breach, the plaintiff must show that a 

"special relationship of trust and reliance exists between the 

particular employee seeking recovery and the employer." Id (citing 

Cleary v. American Airlines, Inc., 168 Cal.Rptr. 722, 729 (Cal.App. 

1980)) • Trust and reliance may be found by the existence of 

separate consideration, common law, statutory rights, or rights 

accruing with longevity of service. xg. 

The Wilder Court cited K-Mart Corp. v. Ponsock, 732 P.2d 1364 

(Nev. 1987) as an example of the special relationship necessary to 

support a cause of action. Wilder, 868 P.2d at 221-22. InK-Mart, 

the employer terminated a nine-year employee six months before his 

retirement benefits vested and did so with the improper purpose of 

denying him these contractually earned benefits. See id. By 

contrast, the plaintiff in Wilder had no claim for tortious breach 

where he had been employed three years at the time of his 

termination and there was "no evidence that the termination 

occurred as a means to avoid payment of benefits already earned 

under the contract of employment." Id. 

We agree with the district court that plaintiffs failed to 

produce sufficient evidence to support a cause of action for breach 

of good faith. It was interference with "rights accruing with 

longevity of service," not length of service alone, that formed the 

basis of the claim in K-Mart. As the district court noted, Wilder 

requires at least some evidence of improper motive before an 

employee's termination can be characterized as an act of bad faith. 

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There is no dispute here that the plaintiffs 

because of a reduction in force by the company. 

were terminated 

The plaintiffs 

failed to submit any evidence of improper motive and the district 

court properly granted summary judgment on this claim. 

Promissory Estoppel. 

Plaintiffs' claim of promissory estoppel was submitted to and 

rejected by a jury. Plaintiffs • final argument is that the 

district court erred by giving the jury a special verdict form that 

misstated the promissory estoppel claim. In particular, plaintiffs 

point to an interrogatory that asked the jury whether the defendant 

had made clear and definite representations to each plaintiff "as 

to the terms and duration of their employment." Plaintiffs argue 

that the use of the conjunctive "terms and duration" required them 

to prove two claims, either of which would have been sufficient on 

its own to permit recovery. 

Having reviewed the record submitted on appeal in its 

entirety, we conclude that plaintiffs have demonstrated no 

prejudice from the manner in which their claim was presented to the 

jury. The jury was instructed in detail concerning the plaintiffs • 

contentions, including the allegation that the defendants made 

representations as to the "terms and duration" of plaintiffs' 

employment. The phrase "terms and duration" had been adopted by 

the district court, after much discussion between the parties, as 

a shorthand way of summarizing plaintiffs 1 allegations. 

Plaintiffs' counsel did not object to the use of this language in 

the instructions. See R.Vol.III at 470-71. The instruction on 

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estoppel explained in part that to find for the plaintiffs, the 

jury must find that defendants made clear and definite 

representations to each plaintiff as to the terms and duration of 

their employment and that each plaintiff "reasonably relied on one 

ofthese oral andjor written representations to their detriment." 

Taken as a whole, the instructions and the verdict form fairly 

presented plaintiffs • claims. We see no danger that the jury 

misunderstood plaintiffs' contentions or the requirements of 

promissory estoppel. 

Conclusion. 

The judgment of the district court is AFFIRMED. 

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