Opinion ID: 2189340
Heading Depth: 1
Heading Rank: 6

Heading: whether the trial court correctly instructed the jury on an implied-in-fact contract theory.

Text: The trial court instructed the jury as to the implied-in-fact theory of contract as follows: 6. A contract may be made in any manner sufficient to show agreement. It may be oral or written, or implied from the conduct of the parties. In an oral or written contract the terms are stated by the parties. In an implied contract, they are inferred as a matter of reason and justice from the acts and conduct of the parties, any language used, and the circumstances surrounding the transaction. Instruction No. 7 provided: 7. A contract is implied in fact where the intention as to it is not manifested by direct or explicit words by the parties, but is determined inferred from the conduct of the parties, the language used, or the acts done by them, or other pertinent circumstances attending the transaction. Instruction No. 8 provided: 8. In determining whether David Larson's employment contract with Kreiser's Inc. contained an implied promise that the employer would not act arbitrarily with respect to his employment, that is, would not terminate him without good cause, you may consider the totality of the parties' relationship. Such implied agreement may be shown by the acts and conduct of the parties, interpreted in the light of the subject matter and the surrounding circumstances. You may consider facts such as (1) the duration of David Larson's employment, (2) the commendations and his promotions he received, (3) any criticism of his work, (4) any assurances he was given, (5) the personnel policies of Kreiser's Inc. acknowledged to him, and (6) any evidence tending to negate the existence of such an implied promise. Kreiser's note that the only time that this court has recognized an implied termination for cause only contract is in a situation wherein an employee handbook contains a detailed list of exclusive grounds for employee discipline or discharge and, a mandatory and specific procedure which the employer agrees to follow prior to any employee's termination. Citing Butterfield v. Citibank of South Dakota, 437 N.W.2d 857 (S.D.1989); Osterkamp v. Alkota Mfg. Inc., 332 N.W.2d 275 (S.D.1983). Here, the trial court specifically held that Kreiser's handbook did not meet the requirements for an implied contract pursuant to the mandates of Butterfield. It therefore granted Kreiser's motion for a directed verdict based on the employee handbook theory. Nonetheless, the trial court gave the foregoing instructions dealing with implied contracts to the jury. It is settled law that South Dakota is an employment-at-will state. SDCL 60-4-4. Thus, any exceptions to this policy must be narrowly construed. Johnson v. Kreiser's, Inc., 433 N.W.2d 225 (S.D.1988). Therefore, it was error for the trial court to instruct the jury on an implied contract theory. The trial court's ruling directing a verdict for Kreiser's, aforesaid, was dispositive of the implied contract issue. See Butterfield, supra ; Osterkamp, supra .