Opinion ID: 2638592
Heading Depth: 2
Heading Rank: 6

Heading: Independent Contract Actions

Text: {25} Although we conclude that the State has not waived sovereign immunity with respect to Cockrell's federal claims under the FLSA, we do not intend to dispose of Cockrell's separate cause of action for breach of contract under state law. In his amended complaint, Cockrell alleged that NMSU entered into a valid written contract with him for the payment of overtime wages by providing in a personnel manual that NMSU would comply with the terms of the FLSA. While we conclude that NMSU does not have authority to waive the State's constitutional sovereign immunity and to agree to be bound by the remedial provisions of the FLSA under 29 U.S.C. § 216(b), we do not mean to dispose of the question whether NMSU had the authority to enter into an employment contract with Cockrell and to determine the appropriate terms of compensation under that employment contract, including compensation for overtime wages, thereby possibly subjecting NMSU to a contract claim, and potential contract damages, rather than a direct FLSA claim. {26} The waiver of sovereign immunity in Section 37-1-23 extends to the written terms of a personnel manual if the manual constitutes an implied-in-fact contract. Garcia, 1996-NMSC-029, ¶¶ 14-15, 121 N.M. 728, 918 P.2d 7. Under New Mexico law, a personnel manual gives rise to an implied contract if it controlled the employer-employee relationship and an employee could reasonably expect his employer to conform to the procedures it outlined. Newberry v. Allied Stores, Inc., 108 N.M. 424, 427, 773 P.2d 1231, 1234 (1989). However, `[e]mployers are certainly free to issue no personnel manual at all or to issue a personnel manual that clearly and conspicuously tells their employees that the manual is not part of the employment contract....' Lukoski v. Sandia Indian Mgmt. Co., 106 N.M. 664, 666, 748 P.2d 507, 509 (1988) (quoting Leikvold v. Valley View Cmty. Hosp., 141 Ariz. 544, 688 P.2d 170, 174 (1984)). NMSU argues on appeal that its personnel manual could not have supported a reasonable expectation of conformity by NMSU with the terms of the manual. NMSU highlights that the manual expressly states that its provisions are merely general statements of policy and procedure, are not contractual commitments, and are subject to unilateral alteration by NMSU with or without notice to employees. See Lukoski, 106 N.M. at 666, 748 P.2d at 509 ([T]he language of the handbook does nothing to alert an employee against placing reliance on any statement contained therein or against viewing such discipline and termination policy as only a unilateral expression of [the employer's] intention that is subject to revocation or change at any time, in any manner, at the pleasure of [the employer].). Nevertheless, because the district court did not reach Cockrell's breach of contract claim in its order of dismissal, we believe this issue is more appropriately resolved by the district court on remand. [W]hether an employee handbook has modified the employment relationship is a question of fact to be discerned from the totality of the parties' statements and actions regarding the employment relationship. Newberry, 108 N.M. at 427, 773 P.2d at 1234.