# FILED
October 17, 19 97 Cecil W. Crowson Ap pellate Cou rt Clerk IN THE COU RT OF A PPEA LS OF TENN ESSEE WESTERN SECTION AT NA SHVILLE
ROBERT E. ADCOX and ) DONALD F. GRAEF, ) ) Plaintiffs/App ellants, ) Robertson Circuit No. 7987 ) VS. ) A ppeal No. 01A 01-9703-CV-001 23 ) SCT PRODU CTS, ) ) Defendant/Appellee. )
APPEAL FROM THE CI RCUI T COURT OF RO BERTSO N COU NTY

AT SPRINGFIELD , TENNESSEE THE HONORABLE JAMES E. WALTON, JUDGE

CH ARL ES R. RAY Nashvil le, Tennessee Attorney for AppellantS

RICHA RD R. PA RKER WILLIA M S. RUTC HOW Nashvil le, Tennessee Attorneys for Appellee

AF FIRMED

ALAN E. HIGHERS , J.
CONCUR: DAVID R. FA RMER, J. HOLLY K IRBY LIL LA RD, J.2

Plai ntiffs Robert E. Adcox and Donald F. Graef (collec tively , the Employees ) appeal the tria l cour

t’s or der di smi ssing thei r actions for breach of employment contract, promissoryest oppe l, a nd fraudu lent ind ucem ent a gai nst Defe ndan t/Appellee SCT Products. For the reasons hereinaf ter stated, we affirm the trial cou rt’s dismissals.
According to their complai nt, both Employees worked as grinders for SCT Products. In February

1996, the Empl oye es were di scharged by SCT on the stated g round of “irreconcilable differences.” Gr aef’s termination followed a meeti ng wit h plant manager Phillip Lomas in whi ch th ey dis cussed Graef’s opposition to recent work rule chang es unilaterallyinitiated by Lomas. Adcox’s termination also followed a me eting with Lomas, in which Adcox questi oned Lomas’s deci sion not to pay Adcox additiona l money for trai ning an employee as Adcox had been pr omised by hi s supervi sor.

The Employeessubsequently filed this action agai nst SCT Products in whic h they asserted claims for breach of employment contra ct, promissoryestoppel, and fraudul ent inducement. In asserti ng these cla ims, the Employees alleged that t hey had relied on representation s m ade by SCT that th e Employees had the right freely and cand idly to discuss problems w ith members of management without any

fear of retaliati on. According to the Employees , these repres entations app eared in the SCT Products Employee Handb oo k

and in the Code of Ethics and Busi ness Conduct Gui delines of SCT’s parent comp any, Saint-Gobain Corporation. The Employees con te nded that these documents created a contract w hich SCT breach ed when it d ischarged the Employees merely for having candid discuss ions wit h SCT’s plant manag er.

SCT responded to the complaint by filing a moti on to dismiss for failure to state a claim upon which relief could be g ranted pursuant to rule 12.02( 6) of the Tennessee Rules of Civil Procedure. S pecifically , SCT contended that, as a matter of law , the provisi ons of the Employee Hand book and the Code of Eth ics and Business Conduct Guidel ines did not constitutean employment contract. The tr ial court g ranted SCT’s moti on to dismiss, and this appeal foll owed.3

This cour

t re cent ly

summ ari zed the a ppli cabl e law fo r deter mining w hen an employee handbook distributed by an em plo yer constitutes par t of an employment contract: We begin our analysis of this iss ue with the wellest abli shed rule “that a contract for empl oyment for an indefinite term is a co ntrac t at wil l and can be ter minated by either part y a t a ny time without cause.” Bringle v. Methodist Hosp. , 701 S.W.2d 622, 625 (Ten n. App. 1985); accord Gravesv. Anchor

Wire C o rp. , 692 S.W.2d 420, 422 (Tenn. App. 1985); W hitt aker v. Care -More, Inc. , 621 S.W.2d 395, 396 (Tenn. App. 1981). Beca use Tennesse e continues to adhere to the foregoing“employee-at-will” rule, a pres umption arisesin this stat e that an employee is an emplo yee at will. Davis v. Connect icut Gen. Life Ins. Co. , 743 F. Supp. 1273, 1280 (M.D. Tenn. 1990). . . . Even in the absence of a d efinite d urational ter m, an employment

contract sti ll may ex ist wi th regard to other terms of employment. Williamsv. Mare mont Corp. , 776 S.W.2d 78, 80 (Te nn. App. 1988); accord Hooks v. Gibson , 842 S.W.2 d 625, 628 (Tenn. App. 1992) . In this regard, this court ha s recogniz ed that an employee handbook can become a part of an employment cont ract. Smith v. M or ris , 778 S.W.2d 857, 858 (Tenn. App. 19 88) (citin g Hamb y v. Gene sco, Inc. , 627 S.W.2d 373 (Tenn. App. 1981)); accord Davis v. Connecticut Gen. Life Ins. Co. , 743 F. Supp. 1273, 1278 (M.D. Ten n . 199 0). In order to constitute a contract, however, the handbook

must con tain spe cific la nguage showing the employer’s intent to be bound b y the handbook’s provisions. Smith v. Morris , 7 78 S.W .2d at 858. Unl ess an employee handbook

contains such guarantees or binding comm itments, the handbook wi ll not consti tute an em ployment contr act. Whittaker v. Care-More, Inc. , 6 2 1 S

. W. 2d 395 , 397 (Tenn. App. 1981). As st ated by one court, in order

for an employee handbook

to be considered part of an employ ment c ontra ct, “the language used must be phrased in binding terms, interpreted in the contex t of the entire handboo k, and read in conj unction with any

other relev

ant material, s uch as a n employment

application.” Claiborne v. Fr ito-Lay, Inc. , 718 F. Supp. 1319, 1321 (E.D. Tenn. 1989). Rose v. Tipton County Pub. W orks Dep’t , No. 02A01-9608- CV-00189, 1997 WL 188803, at **1-2 (Tenn. App. Apr. 18 , 1997) (perm. app. pend ing) (footnote omitted).

In accordance w ith the foregoi ng princi ples, we examine the pr ovisions of the SCT ProductsEmployee Handbook, as well as the other doc ument upon whic h the Employees based their clai ms of breach of contrac t. In maintainingtheir clai ms, the Employe es relied upon the following provis ions contained in the Code of Ethics and Business Conduct Guidelines:4 Saint -Goba in Corporation is committed to maintaining the highest business ethi cs and sta nda rds. In ord er to pres erve the integrit

y of Saint- Go bain Corporat ion’s busines s and the manner in which we are perceived by co-workers, customers, suppliers, co mpe tito rs, an d the comm unit ies in which we live and work, i t is imperati ve that each e mployee conduct his or her business and per

sonal affairs in complianc e with Sain tGobain Cor po ration’s Code of Ethics and Bu siness Conduct Guidelines.

. . . . All managers are responsi ble for seeing that Company poli cies are followed. Every

manager

is responsi ble for communicati ng Company

policies t o his or her employees, including those de aling with le gal and ethical behavior . Managers and supervisors also are re sponsible for mai ntaining a work environment

where constructi ve, frank, and open discussion is encouraged and ex pected, wi thout fear of retali ation.

The Employeesalso reli ed upon the follow ing polic ies set forth i n the SCT Products Employee Handbook:

TO assure each empl oyee the ri ght to disc uss freely with managementany problem concerning either their own welfare or the company ’s welfare.

. . . . TO develop compet ent supervi sory per sonnel who u nderstand and meet the objectives of the company and who accept wi th open-mindedne ss the ideas, sug gesti ons, and c onst ruct ive criticism of fellow employees.

. . . . TO do all these things in a spirit of friendliness and cooperation s o that our company

will continue to be known as “a g oo d place to work.”

In addition, the Empl oyee Handbook contained a prov ision stati ng that the handbook

was not an employment contract and that the company res erved the uni lateral right to revise its policies and procedures:

Please understand that this handbook

cannot anticipate every situation or answer every question about

employment. It

is not an employment cont ract. The company reser ves the right t o cha nge or revise policies and procedures whenever such action is warranted.5

After carefully re viewi ng the foregoing provisi ons, we affirm thetrial cour t’s order dismissing the Empl oyees’ act ions against SCT. This cour t has repeatedly

held that, where an empl oyee h andbook specifical ly prov ides that it i s not a contrac t and reserves to the employer

the unilateral right to amend the handbook’s pr ovisions , such handbook does not, as a m atte r of l aw, constit ute part of the employ ment contract between the employerand the employee . In Guekel v. C umb erla nd-Swan, Inc. , No. 01A01-9410-CV- 00482, 1995 WL 386558 (Tenn. App. June 30, 1995), for example, the employee handbo ok contained the fol lowing provisi on:

This Handbook

i s intended as a guide for policies, be nefits, and general information. Th ese guidelin e s should not be interpreted as a contract of any kind. The company res erves the right to make changes in the guidelines [or] their application as it dee ms appropriate, and these chang es may be made with or

without not ice. . . . Gueke l , 1 9 9 5 WL 386558, at *3. In Gaines v. Response Graphics, Inc. , No. 01A01- 9204-CV-0 0181, 1992 WL 319441, at *2 (Tenn. App. Nov . 6, 1992), the ha ndbook

similarl y prov ided that it was not a contrac t, that it shoul d not be relied on a s such, and that the prov isions therein could be revised w ithout notice. In Crigge r v. Columbia Power & Water Sys. , No. 01A01-9001- CV-00036, 1990WL 121570 (Tenn. App. Aug. 24, 1990), pe rm. app. denied (Tenn. Jan. 28, 1991) , the employee handbook contained these provisions:

The statements contai ned in this manual regarding Columbia Power and Water Syste ms’ policie s, itsempl oyee benefits, and serv ices a re in summary form and do not represent a contract between Systems an d its employees. The policies, employee benef its and servi ces outlined in this manual are intended to be a convenient and h elp ful source of information and may be changed by Systems as i t dee ms ne cess ary. Crigg er , 1990 WL 121570, at *1. Finally , in Blalock v. Hecks Discount Store s , 1 9 8 6 WL 4591 (Tenn. App. Apr. 18, 1986), the employ ee signed the followi ng statement w hen receiving the employer’s handbook:

. . . I further under stand that this handbo ok is intended as a guide for personnel pol icies, benefits and general i nformation and that t hes e guidelines should not be construe d as a contract. I understand the company reser ves the ri ght to make changes in the guidel ines or their application a s it deems appro priate.1 In cit ing t he Code of Ethi cs and Busi ness Conduct Guid eli nes, t he Employees rel ied pr imaril y on t he

provi sion regardi ng “mainta ini ng a work envi ronment where constr uct ive , fra nk , an d o pe n d isc us sio n is encouraged and expec ted , wi tho ut f ea r of ret alia tion .” B y its te rm s, th is p ro vis ion ap plie s o nly to SC T ’s m anagers and superv isor s. Moreove r, even i f th is pr ovi sion an d other provi sions ofthe Code ar e not v iewed in the c onte xt o f t he Em plo yee Ha nd bo ok , the pro vis ion s f ail to co nta in b ind ing lan gu ag e w hic h w ou ld overcome this sta te’s pr esu m ption o f at-w ill emp loym ent. See Gre goryv. Hunt , 24 F.3d 781, 787 (6th Cir. 1994); Davis v. Conn ecticut Gen. Life Ins. Co. , 743 F. Su pp. 1 273 , 128 0-81 (M .D. T enn . 199 0); W hit taker v. Care-More, Inc. , 621 S.W .2d 3 95, 3 97 (T enn . App . 198 1); Rose v. Ti pton Count y Pub. W orks Dep ’t , No. 02A 01-9608 -CV-00 189, 1997 W L 18880 3, at *3 (Tenn. App. Ap r. 18, 1997). W e li kewise concl ude thatthe Employ ees’ al legat ions of p romissory estoppel and fra udulent inducement are i nsuffi cientto ov ercome the p res um ption o f at-w ill emp loym ent. See Ram py v. I CI Acry li cs, Inc. , 898 S.W .2d 196, 211 (T enn. App. 199 4); Price v. Mercury Suppl y Co. , 682 S. W .2d 924, 934 (Tenn. App. 1984). 6 Blalock , 1986 WL 4591, at *1. In all of these cases, thi s court concl uded that the handbook’s provisi ons were insuf ficient to overcome the presumpt ion of at-wi ll employment and, thus, th at the em ployees could not maintain action s for breach of contract against their employers.

W e can conceive of no clearer way for an employer to express its intent not to be bound by an employee handbook’s prov isions than th e employer’ s specific st atement that the handbook is not a

contract or

thatthe handbook

should not be con strued as a con tract. Even without such a statement, however, the emp loyer’ s r eservatio n of a unilateral right to modify the prov isionsof its employee handbo ok generallywould preclude the handbook from being consi dered part of theemployment cont ract. Claib orne v. Frito-Lay, Inc. , 718 F. Supp. 1319, 1321 (E.D. Tenn. 1989) ; see also Gregory v. Hunt , 24 F.3d 781, 786(6th Cir. 1994); Davis v. Connecticut G en. Life Ins. Co. , 743 F. Supp. 1273, 12 79 (M.D. Tenn. 1990); Smith v. Morris , 778 S.W.2d 857, 858 (Tenn. App. 1988) Bringle v. Methodist Hosp. , 701 S.W.2d 622, 624 (Tenn. App. 1985). Inasmuch as the handbook at iss ue contained both such provis ions , we conclude that t he trial cour t properly

dismissed theEmployees’ claim s for br

each of e mploy ment co ntrac t agai nst SC T. 1

The judgment of the tr ial court i s her eby affir med. Costs of this appeal are taxed to Ap pell ants , fo r which execu tion may is sue i f ne cess ary.

HIGHERS, J.7

CONCUR:

FARMER, J.

LILLARD, J.