Court Opinion

ID: 159147
Source: CourtListenerOpinion
Date Created: 2010-08-14 06:18:45+00
Date Added: 2024-06-11T09:41:38.322589
License: Public Domain

202 F.3d 1282 (10th Cir. 2000)
DOUGLAS BOWEN ,  Plaintiff-Appellee and Cross-Appellant,v.INCOME PRODUCING  MANAGEMENT OF OKLAHOMA,  INC., a Kansas corporation ,  Defendant-Appellant and Cross-Appellee .
Nos. 98-5037 and 98-5051
UNITED STATES COURT OF APPEALS TENTH CIRCUIT
February 1, 2000

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTH DISTRICT OF OKLAHOMA. D.C. No. 96-c-603-K  David R. Cordell (Deirdre O. Dexter and Rebecca S. Woodward, with him on  the  briefs), Conner & Winters, P.C., Tulsa, Oklahoma, for Plaintiff - Appellant.
Mark D. Lyons (Kevin Danielson and Charles T. Plake, with him on the briefs),  Lyons & Clark, Tulsa, Oklahoma, for Defendant - Appellee.
Before BALDOCK , EBEL , and KELLY , Circuit Judges.
KELLY, Circuit Judge.

1
Defendant-Appellant and Cross-Appellee Income Producing Management  of Oklahoma, Inc. (IPMO) appeals from a judgment entered on a jury verdict  awarding Plaintiff-Appellee and Cross-Appellant Douglas Bowen money damages  of $372,230 on an implied contract claim.  IPMO claims that the district court  erred in denying its motion for judgment as a matter of law as to the existence of  an implied contract.  Mr. Bowen, in turn, cross appeals from the jury verdict  which held that IPMO did not violate the Americans with Disabilities Act (ADA). The implied contract claim is governed by Oklahoma law, and we exercise  jurisdiction under 28 U.S.C. § 1291.  We reverse the judgment on the implied  contract claim and affirm the ADA claim.

Background

2
From 1985 to 1993, Mr. Bowen was employed by Income Producing  Management, Inc. (IPM), a corporation which owns and operates several Wendy's  restaurants in Kansas.  During this time, he was promoted to store manager and  area supervisor.  In June 1993, a new corporation, IPMO, was formed to buy and  manage Wendy's restaurants in Oklahoma.  Mr. Bowen, upon his request, was  transferred to IPMO and began serving as the area director of the Tulsa  restaurants.

3
On February 15, 1994, an IPMO employee walked into one of the Wendy's  restaurants and shot several people.  Mr. Bowen sustained a gunshot wound to the  head and was forced to undergo emergency brain surgery.  The surgery was  successful, although Mr. Bowen complained of short term memory loss, an  inability to concentrate, and difficulty in doing simple math as a result of the  injury.  He returned to work as an area director for IPMO on April 5, 1994. After his return to work, Mr. Bowen expressed concerns about needing to spend  more time with his family.  He met with IPMO management in November 1994  and, as a result of this meeting, was voluntarily demoted to the position of store  manager with fewer hours.

4
Both before and after this reassignment, IPMO continued to have  difficulties with Mr. Bowen's work performance, particularly with his ability to  work in cooperation with other employees.  On February 21, 1995, IPMO  transferred Mr. Bowen to a different Wendy's restaurant due to employee  conflicts at the previous store.  When this new arrangement did not prove  satisfactory, Mr. Bowen was asked to resign.  Whether he finally resigned or was  terminated is contested, but Mr. Bowen no longer worked for IPMO as of March  15, 1995.

5
Mr. Bowen brought five claims against IPMO in district court relating to  his alleged termination.  The district court granted partial summary judgment  against him on three of them leaving only an ADA claim and an implied contract  claim for trial.  A jury found for IPMO on the ADA claim, but also found that the  company had breached an implied contract created by its employee manual when  it terminated Mr. Bowen without following certain disciplinary procedures.

A.   Implied Contract

6
IPMO argues that the district court erred in denying its motion for  judgment as a matter of law regarding the existence of an implied contract. Review of a district court's denial of judgment as a matter of law is de novo. Wolfgang v. Mid-America Motorsports, Inc., 111 F.3d 1515, 1522 (10th Cir.  1997).  Judgment as a matter of law should only be granted if "there is no legally  sufficient evidentiary basis for a reasonable jury to find for that party on that  issue."  Fed. R. Civ. P. 50(a)(1).  In making this determination, we construe the  evidence in the light most favorable to the non-moving party and do not substitute  our judgment of the facts for that of the jury.

7
Oklahoma follows the doctrine of "employment-at-will"; i.e. an employer  can discharge an employee for any reason, in the absence of a contractual  provision to the contrary.  See Hayes v. Eateries, Inc., 905 P.2d 778, 781 (Okla.  1995).  The issue is whether the record contains sufficient evidence to show that  IPMO's Policy and Procedure Manual altered Mr. Bowen's at-will employment by  creating an implied contract.

8
The existence of an implied contract is typically a factual question but "[i]f  the alleged promises are nothing more than vague assurances, . . . , the issue can  be decided as a matter of law."  Vice v. Conoco, Inc., 150 F.3d 1286, 1289 (10th  Cir. 1998) (applying Oklahoma law).    Employer guarantees are merely "vague  assurances" unless they place substantive restrictions on the reasons an employer  may terminate an employee.  See Hayes, 905 P.2d at 783.  See  also Black v.  Baker Tools, Inc., 107 F.3d 1457, 1461 (10th Cir. 1997); Russell v. Board of  County Comm'rs, 952 P.2d 492, 502 (Okla. 1997) ("[I]n order to create an  implied contract the promises must be definite.").

9
To determine whether the parties intended to form a contract, five factors  are balanced: (a) evidence of "separate consideration" beyond the employee's  services; (b) length of employment; (c) employer handbooks and policy manuals;  (d) detrimental reliance by the employee; and (e) promotions and commendations. Hinson v. Cameron, 742 P.2d 549, 554-55 (Okla. 1987).  As Mr. Bowen's implied  contract claim is based primarily upon IPMO's policy manual, we will begin with  that factor.

10
Mr. Bowen points to three sections of the employee manual as "substantive  restrictions" sufficient to form an implied contract.  First, there is the Personnel  Practices: Discipline section:

11
The Company uses a system of progressive discipline. Employees are first verbally warned then receive a  written warning prior to discharge.  However, some  actions are so serious that the Company reserves the  right to discharge for cause without warning.  The  following are considered grounds for immediate  discharge without progressive warning: [listing 14  specific grounds]1

12
Aplt. App. at 406.  The second section ("Termination of Employment") lists five  reasons IPMO uses to discharge employees.  It then states that "[u]nder all  conditions, proper documentation should be completed prior to the date of  termination. . . . Terminations for poor work performance should be consistent  with Disciplinary Action/Documentation Policy."  Aplt. App. at 338.  Finally, the  Disciplinary Action/ Documentation Policy specifies a three step process of  discipline which IPMO "generally adheres to" and which "can be followed" before  terminating an employee: oral warning, written warning, and suspension.  Aplt.  App. at 321.

13
Even viewed in the light most favorable to Mr. Bowen, we question  whether this language rises to the level of "substantive restrictions" on IPMO's  right to terminate.  The sections that Mr. Bowen relies upon are replete with  permissive language ("generally adheres to"; "are usually handled"; "should be  used"; "can be followed"), in contrast to other sections of the manual which speak  in a mandatory fashion (i.e. the Sexual Harassment section uses phrases like "will  be", "shall not", and "must be").

14
However, it is unnecessary to decide this issue.  Under Oklahoma law, "an  employer may deny (or disclaim) any intent to make the provisions of a personnel  manual part of an employment relationship" so long as the disclaimer is clear and  the employer's conduct does not negate the disclaimer's effect.   Russell, 952  P.2d at 502.   See also Avey v. Hillcrest Med. Ctr., 815 P.2d 1215, 1217 (Okla.  Ct. App. 1991) (upholding disclaimers that were bold, clear and unambiguous). IPMO has met this standard.

15
The opening page of the Policy manual states:

16
This policy Manual has been prepared as a guide and  reference for management personnel at all levels of  authority.  It describes the basic personnel policies and  practices of our Company.  You should understand that  the Manual does not modify our Company's "at will"  employment doctrine nor provide employees any kind of  contractual rights.

17
Aplt. App. at 314.  The next page entitled "Introduction to Policy Manual"  provides:

18
The Manual contains general statements of Company  policy and does not include fine details, nor does it form  an expressed or implied contract or promise that the  policies outlined will be applied in all cases.  The  Company may add, revoke or modify policies at any  time. Id. at 315.  These two sections are almost identical to those involved in Avey where the court found the disclaimers to be clear and unambiguous.  815 P.2d at  1216.  A few pages later, the Manual contains an "At Will Employment Notice." "It is the policy of the Company to employ individuals for an indefinite period of  time.  Employment is 'at will', so it can be terminated at any time, with or  without cause being shown, by either the employee or employer."  Aplt. App. at  318.  Finally, the Manual provides further on: "This Manual is for informational  purposes and does not create any contract."  Id. at 344.

19
It is hard to imagine a clearer example of a disclaimer.  So long as IPMO's  conduct did not negate this disclaimer, it must be upheld.  Mr. Bowen points to Johnson v. Nasca, 802 P.2d 1294 (Okla. Ct. App. 1990) to support his argument  that IPMO waived the disclaimer language by its conduct.

20
In Johnson, an at-will employee argued that she should not have been fired  until the company followed the procedures listed in an employee handbook.  The  company pointed to disclaimer language listed in the handbook which stated:  "This employee handbook has been written as a guide for employees.  It should  not be considered a contract or employment agreement between the hospital and  employee."  Id. at 1295.  The employee, however, produced evidence that the  company always used the handbook procedures when terminating employees.  In  reversing the grant of summary judgment for the company, the Oklahoma Court  of Appeals held:

21
While an employer may disclaim the creation of  contractual rights, such a disclaimer must be clear. Here, the handbook, when viewed in conjunction with a  pattern of practice indicating the adoption and consistent  use of these procedures, may lead reasonable minds to  differing conclusions about the existence of implied  contractual rights to use of the procedures.

22
Id. at 1297 (footnote omitted).

23
The present case is distinguishable.  First, the disclaimer language used by IPMO is clearer, more specific, and more abundant.  Second, the Johnson handbook contained additional language relating to the procedures on  the  same page as the disclaimer, thus possibly rendering the company's intent  ambiguous.  No such ambiguous language is present here.  Third, Johnson relied  upon the fact that there was "no evidence of prior notice of unsatisfactory service"  when the employee was terminated.  Id. at 1296.  Here, Mr. Bowen was  transferred on at least one occasion as store manager for his failure to interact  well with other IPMO employees.  Finally, the record in Johnson showed that  other employees were discharged using the handbook procedures.  Neither in his  brief nor during oral argument did Mr. Bowen direct us to any part of the record  containing evidence that IPMO always used its handbook procedures when  dealing with other employees.  His single proof of past practice was a written  warning he received in 1991 while working for IPM, a fact clearly irrelevant with  regard to IPMO.

24
Mr. Bowen's strongest evidence consists of a trial statement made by Don  Haynes, IPMO's president, that Mr. Bowen would have been entitled to "due  diligence procedure" if he had been terminated.2  Aplee. App. at 663.  Mr. Bowen  would have us take this statement in lieu of other evidence of the practice of the  company.  However, in analyzing a company's practices relating to an implied  contract, the focus must be on actions taken prior to the disputed termination.  A  post-hoc hypothetical statement without more is simply insufficient to create an  employer "pattern of practice" which negates a clearly stated handbook  disclaimer.

25
The other four factors of the Hinson test are:

26
* Separate Consideration:  As evidence of additional  consideration to  support an implied contract, Mr. Bowen points to a Compliance  Agreement he signed which restricts his ability to disclose  confidential business secrets.  However, this agreement was signed  with IPM on June 1, 1993, and cannot serve as consideration for the  alleged contract with IPMO.

27
* Length of Employment:  Mr. Bowen was employed with IPMO for  less than two years, from June 1993 until March 1995.

28
* Detrimental Reliance:  Mr. Bowen testified that he turned down  another job offer in partial reliance upon IPMO's disciplinary  procedures.  Aplee. App. at 657-58.  However, he could not recall  which company offered him the job and the policy manual was only  one of several reasons for turning down the offer.  ("I relied on the  fact that I had been promoted, everything was going well and I knew  with the policies and procedures manual that we had, if there was a  problem, we would go through a disciplinary policy . . . ."  Id. at  658).

29
* Promotions and Commendations:  Mr. Bowen was promoted from a  temporary to a permanent area director, but was then demoted to  store manager.  A promotion which is not coupled with "definite  statements by the employer sufficient to substantively restrict the  reasons the employer might terminate the employee" cannot alone  form an implied contract.  Hayes, 905 P.2d at 784.

30
In summary, four of the five factors weigh against Mr. Bowen: (1) the  employee handbook clearly disclaimed any intent to form an implied contract; (2) the Compliance Agreement could not serve as separate consideration since it  was signed with IPM, and not IPMO; (3) Mr. Bowen's length of employment with  IPMO was under two years; and (4) Mr. Bowen was both promoted and demoted. Only the detrimental reliance factor weighs in his favor.  "Unfortunately, neither  the Hinson Court nor any subsequent Oklahoma court has indicated how the five Hinson factors should be weighed when, as here, they weigh in opposite  directions."  Black, 107 F.3d at 1463.  However, Mr. Bowen's partial detrimental  reliance in this case in the face of the clear and unambiguous disclaimer is  insufficient without more to overcome the other factors.  We hold that as a matter  of law, no implied contract existed between IPMO and Mr. Bowen.3  On remand,  the district court should vacate the money award and enter judgment for IPMO.

B.   ADA Claim

31
Mr. Bowen challenges the judgment against him on his ADA claim,  asserting that his injuries from the gunshot wound have substantially limited his  ability to work and learn.  In particular, he introduced evidence that he suffered  from memory loss, inability to concentrate, and difficulty in doing simple math.  The jury returned a special verdict specifically finding that Mr. Bowen was not  substantially limited in either his ability to work or to learn.  When a jury verdict  is challenged on appeal, review is limited to determining whether that verdict is  supported by substantial evidence when viewed in the light most favorable to the  prevailing party. See Beck v. Northern Natural Gas Co., 170 F.3d 1018, 1021  (10th Cir. 1999).  "'Substantial evidence, while something less than the weight of  the evidence, is such relevant evidence as a reasonable mind might accept as  adequate to support a conclusion, even if different conclusions also might be  supported by the evidence.'"  Id. (citation omitted).

32
In order to bring a claim under the ADA, Mr. Bowen must first show that  he is a disabled person entitled to the protections of the Act.  A disability is "a  physical or mental impairment that substantially limits one or more of the major  life activities of such individual."  42 U.S.C. § 12102(2)(A).   Both working and  learning are major life activities under the ADA.  29 C.F.R. § 1630.2(i).  The  issue is whether there was substantial evidence in the record for the jury to  determine that Mr. Bowen was not "substantially limited" in either of these  activities.

33
The EEOC has adopted differing regulations as to the definition of  "substantially limits" with regard to working and learning.  For learning, a person  suffers a substantial limitation if he is either unable to perform or significantly  restricted in performing a major life activity "that the average person in the  general population can perform."  29 C.F.R. § 1630.2(j).  For working, "[t]he term substantially limits means significantly restricted in the ability to perform either a  class of jobs or a broad range of jobs in various classes as compared to the  average person having comparable training, skills and abilities."  29 C.F.R. §  1630.2(j)(3).  Inability to perform a single, particular job is not a substantial  limitation under the Act.  Id.

34
When viewed in the light most favorable to the verdict, the evidence is  sufficient to show that, even after his injury, Mr. Bowen retained greater skills  and abilities than the average person in general, as well as the average person  having comparable training, skills and abilities.  Dr. Russell Adams, a clinical  neuropsychologist, performed a series of approximately 25 tests on Mr. Bowen to  determine the effects of the gunshot injury.  In testifying, Dr. Adams noted that  even after the injury: * Mr. Bowen's memory and learning "was basically in the average  range."  Aplee. App. at 379, 407;

35
* His "general intellectual function" was in the superior range.  Id. at  406;

36
* His attention and concentration ranged between high average and  superior.  Id. at 406-07;

37
* His "speed of information processing" ranged from average to high  average.  Id. at 407.

38
Moreover, Mr. Bowen himself testified that, even after his injury, he was  able to adequately perform each of the individual tasks required of an area  director.  Aplt. Supp. App. at 963-65 ("I was able to do all of these functions  individually.").

39
We realize that much of the evidence in the record could lead to differing  inferences regarding Mr. Bowen's ability to work and learn.  However, based on  the testimony recited above, we find that there is substantial evidence in the  record to support the judgment.

40
AFFIRMED in part, REVERSED in part, and REMANDED.

Notes:

1
 IPMO does not allege that Mr. Bowen was  fired for violating one of these  grounds.

2
 The dissent relies exclusively upon this  statement as evidence that IPMO  routinely applied its progressive discipline system, thus waiving the handbook  disclaimers.   However, this is not supported by the evidence in the case.  First,  Haynes was responding to a hypothetical question.  The dissent thus interprets a  statement of what IPMO might have hypothetically done as evidence of what  IPMO regularly did.  Second, the statement related solely to Bowen, and it would  be entirely speculative to deem it sufficient evidence of past company policy or  practice with regard to other employees.  Third, and most important, Bowen did  not produce any evidence that IPMO ever used the progressive discipline system  when dealing with any of its employees.

3
 Given our holding that no implied contract  existed, we need not address  IPMO's arguments that the district court abused its discretion in refusing to grant  a continuance, and that the damages award was inconsistent with the jury  instructions.

41
EBEL, Circuit Judge, dissenting in part and concurring in part:

42
Although I am in agreement with much of the majority opinion, I disagree  with the majority's conclusion that a reasonable jury could not have found  Bowen was entitled through the doctrine of implied contract to a course of  progressive discipline before his discharge by IPMO.  Although IPMO could  have terminated Bowen for any reason or no reason, there was, in my opinion,  enough evidence on this record to support a jury verdict that IPMO was obligated  under an implied contract to follow its disciplinary procedures.  I agree with the  majority that if the evidence presented at trial had been limited to the employee  handbooks, no implied contract rights would have arisen in the face of clear  disclaimers contained therein.  Under our standard of review and in light of  additional evidence presented at trial, however, I would affirm the jury's finding  that IPMO breached its implied employment contract with Bowen.

43
As the majority correctly notes, it is not proper to disturb a jury's verdict  unless "there is no legally sufficient evidentiary basis for a reasonable jury to  find for that party on that issue."  Fed. R. Civ. P. 50(a)(1).  In order to reverse  the district court's denial of a motion for judgment as a matter of law, we must  conclude that no reasonable jury could have reached this result on the evidence  presented.  While I believe the majority's analysis of this issue would be  persuasive under a less restrictive standard of review, I believe that there was  evidence before the jury supporting an alternative interpretation of Bowen's  employment relationship with IPMO.  Under the procedural posture of this case, I  am bound to assume that the jury chose to believe and rely on this other evidence  in reaching its conclusion.

44
Under Oklahoma law, where disclaimers in an employee handbook purport  to negate any contractual reliance on the procedures outlined within, an implied  contract may nonetheless arise where additional evidence indicates that the  procedures were consistently followed.  See Johnson v. Nasca, 802 P.2d  1294,  1297 (Okla. App. 1990) ("[T]he handbook, when viewed in conjunction with a  pattern of practice indicating the adoption and consistent use of these procedures,  may lead reasonable minds to differing conclusions about the existence of  implied contractual rights to use of these procedures."); Russell v. Board of  County Commissioners, 952 P.2d 492, 502 (Okla. 1997) ("An employer's  conduct i.e., representations and practices which is inconsistent with its  disclaimer may negate the disclaimer's effect.").  In Nasca, the court found the  testimony of the employer's personnel director that certain disciplinary  procedures outlined in the manual were consistently applied rendered ambiguous  the manual's attempt to disclaim any right to the procedures.  See id.  Thus, an  implied contract may result from the consistent pattern or practice of an employer  in conformity with its policies, despite disavowing language in the manuals.

45
In the present case, the jury was presented with evidence that IPMO  consistently applied its system of progressive discipline and that Bowen was  entitled to those procedural safeguards of his employment.  At trial, IPMO's  president, Don Haynes, was asked whether, "[i]f Mr. Bowen was terminated due  to poor work performance, was he entitled to have due process and the  disciplinary/action documentation policies followed?"  Haynes replied: "Sure.  If  [Bowen] told me he didn't want to resign and he still felt that he wanted to work  out of where he was, we would have started the due diligence process of sitting  down and creating the documents and being fair in the time frame of doing those  documents."4  (Aple. App. at 663.)  This  admission by the president of IPMO is  sufficient evidence that the progressive discipline system was so routinely  applied that it was at least a question for the jury whether the practices and  representations of IPMO should defeat the disclaimers.  In light of such evidence,  the majority's reversal of the jury verdict is unwarranted.

46
I would also affirm the jury's award of $372,230 in breach of contract  damages to Bowen.

47
Before a verdict of the jury will be set aside as excessive it must  appear that the verdict is so excessive as to strike mankind, at first  blush, as being beyond all measure unreasonable and outrageous and  such as manifestly shows the jury to have been actuated by passion,  partiality, prejudice or corruption.

48
Park v. Security Bank and Trust Co., 512 P.2d 113, 116 (Okla. 1973).  The jury's  award was apparently based on the testimony of Dr. Bonham, who calculated the  present value of the difference between Bowen's salary with IPMO and his  current wages, assuming that Bowen would have continued to work for IPMO  until age 65.  Once the jury had decided that Bowen had a contractual right to  progressive discipline, it might also draw the reasonable inference that Bowen  could have thereby corrected any deficiencies in his performance and continued  his employment with IPMO until retirement.  The damages award therefore does  not warrant reversal.

49
IPMO's claim that the jury misinterpreted the damages instruction is also  unpersuasive.  The instruction clearly stated that damages should be awarded in  the amount "that is needed to put him in as good a position as he would have been  if the contract had not been breached."  (Aplt. App. at 170.)  Generally,  "[a]ppellate courts do not impute to a jury the inability to understand correctly  the totality of the trial court's instructions, even in a complicated case, nor will  courts impute nonfeasance, by disregard of a court's instructions, to a jury." Rasmussen Drilling, Inc. v. Kerr-McGee Nuclear Corp., 571 F.2d 1144, 1149  (10th Cir. 1978) (citation omitted); see also Whiteley v. OKC  Corp, 719 F.2d  1051, 1059 (10th Cir. 1983).  In the present case, as previously stated, I find it  perfectly reasonable for a jury to decide that the progressive discipline  procedures guaranteed by the implied contract would allow him to correct  deficient work performance and continue with IPMO.  Thus, the instruction  allows the jury to award lost wages until Bowen's anticipated retirement.

50
Finally, I agree with the majority that there was sufficient evidence  supporting the jury's finding that Bowen was not substantially limited in his  ability to work or learn under the Americans with Disabilities Act.  I would  therefore reject his cross-appeal for substantially the same reasons presented in  the majority's opinion.

51
For the foregoing reasons, I respectfully dissent from the majority's  conclusion that the jury could not reasonably have found the existence of an  implied contract between Bowen and IPMO entitling Bowen to a course of  progressive discipline.  I would therefore affirm the jury's verdict, as well as its  damages award.  I concur in the majority's rejection of Bowen's cross-appeal.

Notes:

4
 One part of Appellant's defense at trial was that Appellee had voluntarily resigned, while Appellee contended he was terminated. Under our standard of review, we must assume the jury found that Appellee was, in fact, terminated.