Opinion ID: 579280
Heading Depth: 2
Heading Rank: 1

Heading: Durtsche's Status as a Permanent Employee.

Text: 12 American Colloid raises several issues concerning the trial court's summary judgment ruling that Durtsche was not an at-will employee. In reviewing the trial court's grant or denial of summary judgment, we apply the same standard as the trial court. Hecla Mining Co. v. United States, 909 F.2d 1371, 1373-74 (10th Cir.1990). Thus, summary judgment is proper if there is no genuine issue of material fact and ... the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). The company's central argument is that the court erred as a matter of law in concluding that its employee handbook, as amended, created an exception to the at-will rule. 1 We disagree. 13 This is not the first time this issue has been before the courts. Several years before this case, American Colloid was sued by another employee for wrongful termination. In Leithead v. American Colloid Co., 721 P.2d 1059 (Wyo.1986), the Wyoming Supreme Court reviewed language in the same employee handbook which provided that an employee who successfully completed a probationary period would become a permanent employee. The court concluded that this and other language in the handbook created a contract altering the at-will relationship and that American Colloid permanent employees could be fired only for cause. Id. at 1062-63. 14 As a consequence of Leithead, American Colloid amended the employee handbook in 1984, several years before Durtsche was terminated. The primary change was deletion of the reference to a permanent employee and substitution of the term, regular employee. The definition of this new term in the glossary of the handbook provided that designation as a regular employee does not imply guaranteed permanent employment. The Company reserves the right to terminate at-will. (R.Doc. 15, Ex. to Washow Dep.) The company distributed these changes to employees with a cover letter, which stated in part: 15 Attached are new pages to be inserted into your Employee Information Handbook. In addition to the changes in the medical coverage, there are minor changes in some of the other information. We also corrected some typographical mistakes that were in the earlier edition. 16 Please read through this information carefully and put it in your handbook. You should discard the old pages that are being updated. 17 (Id.) 18 In denying American Colloid's motion for summary judgment and granting partial summary judgment in favor of Durtsche, the trial court concluded, despite conflicting evidence that Durtsche had actually received a copy of the handbook changes, the company did not provide effective, reasonable notice of the changes to employees. Relying on Jimenez v. Colorado Interstate Gas Co., 690 F.Supp. 977, 980 (D.Wyo.1988), the trial court held that any changes to the handbook must be conspicuous, and that the company had, if anything, attempted to minimize their import. (R.Doc. 31 at 9.) In addition, the trial court held general contract principles do not permit an employer to change the terms of its handbook without acceptance by and additional consideration to the employee. We agree with the trial court's first conclusion but not its second. 19 In McDonald v. Mobil Coal Producing, Inc., 789 P.2d 866 (Wyo.1990) (McDonald I ), modified on reh'g, 820 P.2d 986 (Wyo.1991) (McDonald II ), an employee sued his former employer for wrongful termination, basing his claim on language contained in an employee handbook allegedly requiring the company to discharge employees only for cause. Five years earlier, in Mobil Coal Producing, Inc. v. Parks, 704 P.2d 702, 706-07 (Wyo.1985), the Wyoming Supreme Court construed the same handbook as a contract modifying the traditional at-will relationship. See also McDonald I, 789 P.2d at 869. After Parks, Mobil reacted by revising the handbook to provide that it was not to be construed as an employment contract. Id. Based on this revision, the trial court held that the handbook did not create a contract between the employee and his employer and that the employee could be terminated without cause. 20 In McDonald I, the Wyoming Supreme Court agreed with the trial court that Mobil's express disclaimer demonstrates that it had no intention to form a contract and that the handbook was not part of the employment contract. Id. A different plurality found, however, that the employer could be held liable under a promissory estoppel theory, based on other promises and procedures contained in the handbook. Id. at 870-71; see also McDonald II, 820 P.2d at 987. It reversed the grant of summary judgment in favor of Mobil and remanded for further proceedings. Two judges dissented. 21 On rehearing, the Wyoming Supreme Court modified its decision in McDonald II. Adopting the test of Jimenez v. Colorado Interstate Gas Co., the court held that Mobil's purported alteration of its handbook was ineffective because the disclaimer was not conspicuous. 820 P.2d at 988. It noted that the disclaimer was not set off by a border or larger print, was not capitalized, and was contained in a general welcoming section of the handbook. Id. at 989. The court criticized the disclaimer as failing to provide persons untutored in contract law with an explanation of its effect on the employment relationship, and for its ambiguity in indicating whether other policies in the handbook would be continued. Id. Since the attempted disclaimer was ineffective, the court remanded the case to the trial court for further proceedings to determine whether other handbook language and Mobil's course of dealing with employees evinced an intent to modify the employment-at-will relationship. 22 Like the employer in McDonald II, the undisputed facts in this case support the trial court's finding that American Colloid was not forthcoming in disclosing the fundamental nature of the changes it was making to the handbook. In the cover letter attached to the amendments, there is no mention of the central revision of the handbook to provide for employment at will. The letter references only the changes to medical coverage, describing the others as minor. In addition, the at-will language was contained in a definition appearing in the glossary, and there was nothing further to draw the reader's attention to the new provision, which was among six pages of other changes. 23 Whether a contract disclaimer in a handbook is conspicuous is a matter of law. McDonald II, 820 P.2d at 988; Jimenez, 690 F.Supp. at 980. Even assuming Durtsche had knowledge that there had been amendments to the handbook, 2 we agree with the trial court's conclusion that the amendments were ineffective to alter the terms of the handbook providing for termination for cause. The disclaimer was buried in a glossary definition, and there was no effort to highlight the fact or the effect of the disclaimer. Under Jimenez v. Colorado Interstate Gas Co. and McDonald II, we conclude that the trial court did not err in finding the operative changes to the handbook were inconspicuous and ineffective as a matter of law. 3 24 We do not agree with the trial court's conclusion, however, that Wyoming law does not permit an employer unilaterally to amend a handbook to reinstate the employment-at-will rule. The trial court held that Wyoming courts would apply traditional contract principles to prohibit an employer from unilaterally amending an employee handbook without the employee's express acceptance and additional consideration. In McDonald I and McDonald II, however, the Wyoming Supreme Court implicitly recognized that an employer can amend the terms of a handbook which abrogate the at-will rule. Had this not been the case, it would have been unnecessary for the Court to have considered whether the disclaimer was conspicuous. Instead, McDonald II holds that an employer's attempt to change the terms of its handbook or to disclaim the effect of the contract created thereby must be conspicuous and must clearly explain to the employee the nature of the change. Thus, we affirm the trial court's ruling on summary judgment only on the basis that the changes to the handbook were not conspicuous. 25