Opinion ID: 1350666
Heading Depth: 1
Heading Rank: 2

Heading: the employment manual can resolve the ambiguity

Text: The majority is on the right track in its attempt to reconcile paragraphs II and X, but it refrains from drawing the logical conclusion of its argument: the Bank's employee manual is necessary to transform paragraph II's presumptive term of employment into a meaningful contract term. The place of the employee manual in the analysis of this case can best be explained by considering our prior holdings in Thompson v. St. Regis Paper Co., 102 Wn.2d 219, 685 P.2d 1081 (1984) and Brady v. Daily World, 105 Wn.2d 770, 718 P.2d 785 (1986). The majority is correct that neither of those cases involved a written employment contract. It does not follow, however, that they have no bearing on this case. Those cases demonstrate that the employment manual is relevant to determining the intent of St. Yves and Mid State, given that their written agreement is ambiguous. In Thompson, we declined to hold that all employment relationships have an implied covenant of good faith such that termination must always be for cause. However, we also declined to leave the terminable at will doctrine in full force. Instead, we held that, depending on the facts of the particular case, the employer's actions vis-a-vis the employee may result in the creation of an implied promise not to terminate except for cause. Therefore, we hold that if an employer, for whatever reason, creates an atmosphere of job security and fair treatment with promises of specific treatment in specific situations and an employee is induced thereby to remain on the job and not actively seek other employment, those promises are enforceable components of the employment relationship. Thompson, at 230. We applied the same rule in Brady. In both Thompson and Brady we remanded for further proceedings in light of the fact that the employer had promulgated an employee manual which arguably gave rise to such a covenant. In the present case, there is an express contract of employment, but on the subject of duration of employment and the manner of discharge, it is ambiguous. It is therefore necessary to consider parol evidence in order to resolve that ambiguity. Ladum v. Utility Cartage, Inc., 68 Wn.2d 109, 411 P.2d 868 (1966). Is the employee manual promulgated by Mid State relevant, admissible parol evidence on this question? Thompson and Brady clearly indicate that it is. If such a manual can give rise to an implied covenant of good faith and termination only for cause, it certainly is relevant and admissible to resolve an ambiguity on that point in an express contract. The manual may be just what the majority's analysis suggests it is: the employee rights that give meaning and content to paragraph II's presumptive term of employment. Two points need emphasis here. First, the manual is not being used to create an ambiguity in the contract; that ambiguity exists on the face of the contract because paragraphs II and X are flatly inconsistent with one another. The manual is needed to resolve that ambiguity. Second, the manual is not determinative; I do not suggest that we simply read the manual into the contract. However, the manual clearly is relevant evidence of the parties' intent, to be considered along with other such evidence on remand. This case is distinguishable from our recent decision in Willis v. Champlain Cable Corp., 109 Wn.2d 747, 748 P.2d 621 (1988). In that case, the plaintiff claimed he was entitled to commissions on sales made after his discharge under the Restatement's procuring cause rule. See Restatement (Second) of Agency § 454, at 370 (1958). We declined to read such a provision into the contract in light of the fact that the contract explicitly provided for calculation of commissions due on termination. We were presented with an unambiguous contract with an unambiguous governing term which controlled the matter. We therefore declined to go outside the four corners of the employment contract. In the present case, however, we have an ambiguous employment contract and relevant evidence which may permit a lower court to resolve the ambiguity. The proper course is clearly to remand for consideration of that evidence.