Opinion ID: 169583
Heading Depth: 2
Heading Rank: 4

Heading: State Law Contract Claim

Text: Colorado law creates two contract theories under which a terminated employee can enforce termination procedures set forth in an employee manual. First, an employee may be entitled to a contract-based remedy if he or she can demonstrate that the employer made an offer to the employee by promulgating the termination procedures and that the employee's initial or continued employment constituted acceptance of and consideration for those procedures. Cont'l Air Lines, Inc. v. Keenan, 731 P.2d 708, 711 (Colo.1987). The employer's willingness to be bound can be inferred if the manual lacks a disclaimer stating that it does not constitute a contract or if the disclaimer is not clear and conspicuous. Evenson v. Colo. Farm Bureau Mut. Ins. Co., 879 P.2d 402, 409 (Colo.App.1993). But the existence of a disclaimer is not dispositive. The employer's intent to be bound can be inferred if the manual contains mandatory-termination procedures or requires just cause for termination. Id. If the record evidence creates an issue as to whether an employment contract existed, then summary judgment is inappropriate. Id. Second, an employee may also be entitled to relief under a promissory-estoppel theory if he or she can demonstrate that (1) the employer should have reasonably expected its employee to consider the employment manual as a commitment from the employer to follow the termination procedures outlined in the manual; (2) the employee reasonably relied on the procedures to his or her detriment; and (3) injustice can be avoided only by enforcing the termination procedures. Cont'l Air Lines, Inc., 731 P.2d at 712. The Colorado Court of Appeals in Evenson addressed an implied-contract claim categorized under the first contract theory identified in Cont'l Air Lines, Inc. the employer manifested an intent to be bound by the manual. The Evenson court first identified several disclaimer provisions in the plaintiff's employment manual: Employees have been hired at the discretion of the company and their employment may be terminated at its will and at any time. Evenson, 879 P.2d at 409. Although this was only one of several disclaimers appearing in the manual, Evenson held that a directed verdict was inappropriate because the employee's managers testified that they regarded and applied the disciplinary procedures as mandatory. Id. There was further evidence that the company's CEO discussed compliance with the termination procedures before terminating the plaintiff's employment. Id. Darr cannot succeed on either of the above contract theories. Contrary to Darr's inaccurate assertions, both the original and revised policies contain a disclaimer, rebutting any facial contention that Telluride manifested an intent to be bound by its policies. Compare Aplt. Br. at 58 (stating that the original policies did not contain a disclaimer), with Appx., Vol. II, at 455, 469 (the old policies' clear statements that they were undergoing revision (a statement appearing on the cover) and that they did not constitute an employment contract (a statement appearing on the first page)). We note that Darr's brief relies on two cases holding that a sufficient disclaimer would include a statement that the employment manual is not a contract and cannot become one, or a statement on the first page that the employment manual is a collection of policies, not a contract. Aplt. Br. at 57. The old policies at issue here included similar statements on the cover and on the first page. Appx., Vol. II, at 455, 469. In light of Darr's admission that the revised policies applied to him, the conspicuous statement on the old policies that they were Undergoing Revision, and the old policies' statement that they did not create an employment contract, it is clear that Telluride did not manifest an intent to be contractually bound to the old policies merely by promulgating the policies and offering Darr employment. Darr's promissory-estoppel theory is also unpersuasive. Darr argues that both the old policies and the chief marshal's past decisions to terminate employees with cause created an implied contract not to terminate him without cause. According to Darr, these claims raise a genuine dispute of material fact that the jury must resolve. But Darr's admission that the new policies applied to him vitiates his reliance claim. He cannot successfully claim that he reasonably relied on the old policies because he simultaneously concedes that only the new policies were in effect. Darr's reliance would be unreasonable as a matter of law because he allegedly relied on policies he knew were inoperative. Moreover, both the old and new policies made clear that they did not constitute an employment contract. Darr even signed a form acknowledging that he received the new manual and acknowledging that he could be terminated with or without cause or a hearing. This language makes it unreasonable as a matter of law for Darr to rely on either manual as a contract, and it is a legally indefensible position that Telluride should have reasonably expected Darr to ignore this clear language and rely on the manuals. In addition to Darr's fatal admission regarding the old policies' expiration, the new policies clearly informed employees that the Town intended to maintain an at-will employment policy regardless of other provisions in the policies or the way in which the Town terminated its employees. Neither Telluride nor Darr could reasonably believe that the new policies constituted a binding contract or that the chief marshal's alleged behavior could alter this clear language. Accordingly, we conclude that Darr did not present sufficient evidence in his favor to defeat Telluride's motion for summary judgment on this state law contract issue.