Court Opinion

ID: 9689246
Source: CourtListenerOpinion
Date Created: 2023-08-24 18:26:22.334491+00
Date Added: 2024-06-11T18:18:46.443783
License: Public Domain

SABERS, Justice
(dissenting).
For the purpose of summary judgment, the facts must be taken in the light most favorable to the non-moving party. Groseth International, Inc. v. Tenneco, Inc., 410 N.W.2d 159 (S.D.1987); Wilson v. *861Great Northern Railway, 83 S.D. 207, 157 N.W.2d 19 (1968). In this case, the trial court viewed the evidence most favorable to the moving party, Citibank, instead of the non-moving party, Butterfield. Butter-field had worked for Citibank from January 18, 1982, and was a senior planning consultant in telecommunications until his forced discharge on September 30, 1986.
Butterfield’s complaint alleged the following facts and claims:
During the time of Butterfield’s employment, he was a loyal, industrious employee who performed his work well. He received regular performance appraisals which were all well above the average standard as set by Citibank. Based upon these appraisals, Butterfield was promoted twice during his employment with Citibank and it was upon these appraisals that he was being considered for a salary increase at the time of his discharge. In addition, he made major contributions to service quality improvement for Citibank’s operations.
Citibank provided Butterfield and all its employees an employment manual entitled WORKING TOGETHER. WORKING TOGETHER is thirty pages long, contains seven divisions, and sixty-four subdivisions. WORKING TOGETHER makes numerous statements concerning employment at Citibank, including but not limited to: Citibank’s commitment to its employees, its work environment, its respect for human dignity, its standards for work performance and business conduct, its performance evaluations, its policy regarding the avoidance of terminating the jobs of its employees, its policies regarding discipline, problem review, and requested resignation. It also specifically deals with the buying and selling of market securities and outlines a procedure whereby the employees can establish an account with Citibank to buy and sell securities.
On September 10, 1984, Charles E. Long, Citibank’s employee, published and approved a memorandum about clearing public contacts and public statements, but specifically limited the clearance prerequisite to statements concerning the operation of Citibank. On March 31, 1986, the Sioux Falls Argus Leader, a daily newspaper published in Sioux Falls, South Dakota, carried a profile article about Butterfield and his personal hobby, pursued in his spare time, of researching and investing in the stock market. A copy of this article is attached to this dissent. On the same day the profile was published in the Argus Leader, Butterfield was called in by a senior vice president of Citibank who said that allowing the Argus Leader to publish the profile about him was a serious error in judgment. Butterfield was informed that he was no longer a value to Citibank, that he obviously would rather be in the stock market than working for Citibank, and that he must sign a letter of resignation. Citibank claimed that the profile article reflected negatively on Citibank in the eyes of the community. See attached article.
At the time of this forced resignation, Butterfield was advised he was being fired because of the publication of the profile in the newspaper. There was no mention of any other reason for the termination. Sometime after his forced resignation, he was advised, for the first time, that his management style and career objectives were not in harmony with those of Citibank and that was why his employment was terminated.
Although these allegations were denied by Citibank’s answer, they are basically supported by Butterfield’s affidavit, deposition, and the files and records herein.
The trial court conceded that WORKING TOGETHER was a contract of employment, stating:
... Plaintiff understood that his employment was for as long as he performed and met the expectations of the employer. For the purposes of this motion, the parties agreed that the manual prepared by Defendant and distributed to its employees, Working Together [was] the contract agreement between the parties as it relates to this employment relationship.
When Butterfield began his job, he was on probation for a three-month period of time. According to WORKING TOGETHER, his job could be terminated by Citibank *862for any reason and without notice. The inference is that his job could be terminated only for specified reasons after the probationary period. WORKING TOGETHER provided that after probation and performance evaluations the employee would get changed to the status of a non-probationary, full-time, “staff member,” entitled to all the benefits and security promised in WORKING TOGETHER — since all non-probationary employees were designated “staff members.” When Butterfield finished his probationary period, his supervisor told him that he had a job with Citibank for as long as he performed within the perimeters of WORKING TOGETHER. Butterfield specifically stated in his affidavit that he relied upon the contents of WORKING TOGETHER and considered it to be his employment contract with Citibank. These material facts cannot now be disputed. WORKING TOGETHER was a unilateral offer of employment terms and conditions from Citibank to its employees. Woolley v. Hoffmann-La Roche, Inc., 99 N.J. 284, 491 A.2d 1257 (1985).
A summary of the relevant provisions of WORKING TOGETHER provides:
Staff Member Responsibilities (which includes all non-probationary employees) establishes the Citibank guidelines for behavior and appearance, which the handbook says are mostly common sense items which the employee doesn’t have to think about twice.
Employment Classifications varied from the permanent full-time, eligible for all the benefits and with all the contractual employment rights, to temporary part-time, having no benefits and dis-chargeable "at will.”
Job Security admits that job security is as important to Citibank as it is to the employee and that is why Citibank has a policy to avoid, whenever practical, terminating the services of employees....
Investigations (of theft and the like) which provided that the employee must submit to polygraph examination and a search of his locker and desk, etc. Failure of the employee to submit could lead to his dismissal, but before dismissal, an employee must be given a final review by senior staff members.
Corrective Action is the detailed remedial procedure which applies to all permanent employees after they have completed their probationary period. It is used as a guide to help supervisors deal with performance or disciplinary problems. The employee is given basic due process rights regarding problems he is having at Citibank. Corrective Action says that at all times employees are expected to meet Citibank’s standards for work performance and business conduct, and to follow the procedures covered in Working Together. Through Corrective Action, however, employees are given a chance to improve, when their performance doesn’t meet these standards. The purpose of Corrective Action is to correct the problem, improve performance and retain the employee’s services for the bank. The first step is discussions with the employee and his supervisor; step two, is a formal warning; and step three, is the final warning which means that if the employee doesn’t improve he may be released. The employee is guaranteed that he has an opportunity for review. Corrective Action also says that in serious cases, a formal or final warning may be the first step in the process, and if the employee’s actions are seriously disrupting department or if the problem requires immediate attention, the employee can be suspended without pay during the investigation of the problem. Corrective Action also makes it necessary for the employee to sign a Corrective Action Form saying that he has read it and understands it.
Also contained in Corrective Action is the statement which says, “However, in appropriate instances, failure to meet the Bank’s standards can result in release without notice or severance pay.”
The majority affirms summary judgment by holding that the provisions of WORKING TOGETHER create merely an at-will employment contract, as a matter of law. To reach this result, the majority reasons that the “corrective action” procedures are merely optional “guidelines.” The opinion *863asserts that the phrase, “in appropriate instances, failure to meet the Bank’s standards can result in release without notice or severance pay” unambiguously limits the “corrective action” procedures and creates an at-will employment relationship.
If the majority’s analysis were correct, WORKING TOGETHER should be renamed “WORKING TOGETHER UNTIL FIRED AT WILL OR AT WHIM.” The majority claims that these standards and policies are completely subjective and that it does not have to give the employees even a hint as to what they might be. Such arbitrary and capricious action, if accepted, would negate all other provisions contained in WORKING TOGETHER.
The phrase “appropriate instances” is ambiguous. A contract is ambiguous where there is a genuine uncertainty as to which of two or more interpretations is proper. North River Ins. Co. v. Golden Rule Constr., 296 N.W.2d 910 (S.D.1980). “Appropriate instances” has at least two different meanings. The majority interprets “appropriate instances” to mean that “Citibank reserves the right to discharge its employees whenever it determines such action is appropriate.” However, the majority concedes that the handbook contains specific grounds for employee discipline.1 In light of this fact, and the other provisions in the handbook, “appropriate instances” may also be interpreted to mean that Citibank may only discharge an employee without following the “corrective action” procedures where one of the specific enumerated grounds for employee dismissal has been violated. An ambiguous contract creates a question of fact for the jury and evidence must be introduced to determine the intentions of the parties. Bauer v. American Freight System, Inc., 422 N.W.2d 435, 438 (S.D.1988) (Sabers, J., dissenting); North River, supra.
In his undisputed affidavit, Butterfield said that he was lead to believe that if he had a problem at Citibank, he would be entitled to the corrective action procedure, and based upon WORKING TOGETHER he had at least three chances to change any problem called to his attention before his job could be terminated. He was not aware of anyone at Citibank being forced to resign without Citibank at least going through the steps as outlined within the corrective action procedure.
Butterfield was never advised of a specified or even implied standard set out in WORKING TOGETHER which he had violated, including work performance, business conduct or bank policy. If Citibank contends that Butterfield breached some specified standard, that would be a fact question precluding summary judgment. Groseth, supra; Wilson, supra.
The “Internal Memorandum” to all officers of Citibank discussed media pressure for information about Citibank’s operations and pointed out that public statements about Citibank could be harmful to its competitive position or could be inaccurate or imprudent. It was obviously intended only to prevent Citibank employees from making public statements about the operations of Citibank or its personnel without clearance. In the Argus Leader profile, the only reference to Citibank is a statement that Butterfield worked there. The article had absolutely nothing to do with Citibank’s operations.
Butterfield also stated in his affidavit that Richard McCrossen, the president of Citibank South Dakota, specifically ordered that he be fired and left it to the next tier in the hierarchy to determine an appropriate reason. The firing was more aggravated by the belated official reason given Butterfield for his job termination, that his “management style and career objectives” were not suited to Citibank. A jury could infer that Citibank began to realize that the “on the spot” reason given for the termination on March 31, was neither legal nor substantial and it decided to come up with something a little more convincing to defend the arbitrary action. If Butterfield’s management style and career objectives *864were not suited to Citibank, it stands to reason that some place along the line it would have surfaced in his job performance appraisals. Citibank apparently forgot that, by publishing and disseminating WORKING TOGETHER, Citibank relinquished the power to fire employees “at will” and promised them the corrective action procedure before severing the employment connection. Through its corrective action procedure, WORKING TOGETHER affords the employee basic due process rights along with a second chance to improve and is similar to the employee handbook in Osterkamp v. Alkota Mfg., Inc., 332 N.W.2d 275 (S.D.1983).
I submit that the majority opinion’s reliance on Cutter v. Lincoln Nat’l Life Ins. Co., 794 F.2d 352 (8th Cir.1986), is misplaced.2 The Cutter case erroneously interpreted South Dakota law. as stated in Osterkamp. As stated in Circuit Judge Richard Arnold’s dissent in Cutter, supra at 357:
I respectfully dissent from the Court’s holding that no cause of action for breach of contract was made out in this case. It is apparently undisputed that the procedures specified in defendant’s employee handbook were not followed. The handbook promised that an immediate investigation would be held if the company became aware of any apparent dishonesty, misrepresentation, or other failure to fulfill the responsibilities of a life insurance agent. Further, the handbook assured employees that penalties appropriate to the offense, including termination, would be imposed “[i]f that investigation confirms any wrongdoing” (emphasis mine). Part of the employment contract, therefore, was a promise by the employer that the employee accused of misconduct falling within any of the defined categories would not be terminated or otherwise punished unless an investigation confirmed that an employee was in fact guilty of the alleged wrongdoing.
Butterfield had a reasonable belief that he would not be terminated without corrective action being taken, without notice, and a reasonable time to take corrective action unless he was discharged for one of the enumerated reasons. For the majority opinion to claim that the language of the handbook permitting Citibank to discharge employees without notice in “appropriate instances” merely reflects the terminable at will status of its employees constitutes reversal by implication of the letter and spirit of Osterkamp.
If this conduct is upheld on summary judgment and without a trial it means that even today the employees of Citibank are employees at sufferance — the sufferance being the unilateral whim of collective upper management. Butterfield argues that Citibank refused to give an example, refused to give a warning — they stand on their pedestal and say, “We don’t know what it is, we can't tell you what it is — but whatever it is, when it happens we’ll let you know — on your way out.” The law of the state of South Dakota requires more. The handbook WORKING TOGETHER requires more. The best interests of Citibank requires more. This case should be reversed and remanded for a jury trial.
I would also reverse and remand for a jury trial because Citibank breached its obligation to Butterfield of good faith and fair dealing. See my special writings in Breen v. Dakota Gear & Joint Co., Inc., 433 N.W.2d 221, 224 (S.D.1988); Johnson v. Kreiser’s, Inc., 433 N.W.2d 225, 228 (S.D.1988); French v. Dell Rapids Community Hospital, 432 N.W.2d 285, 292 *865(S.D.1988); Larson v. Kreiser’s, Inc., 427 N.W.2d 833, 835 (S.D.1988); Blote v. First Fed. Sav. & Loan, 422 N.W.2d 834, 838 (S.D.1988).
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. The enumerated reasons for employee dismissal are: 1) theft; 2) selling or passing illegal drugs to Citibank employment; and 3) failure to notify supervisor of absences three times in a row.

. See Note, Cutter v. Lincoln Nat'l Life Ins. Co., 32 S.D.L.Rev. 104 (1987), in which the author criticizes the Eighth Circuit decision for setting up a standard, not found in Osterkamp, supra or Hopes v. Black Hills Power & Light, 386 N.W.2d 490 (S.D.1986), by saying that the employment contract must contain specific, detailed, explicit promises of termination for "cause only" in order to support an exception to the termination at will doctrine. The author writes that the Eighth Circuit standard is unprecedented and effectively denies employees the protection of South Dakota law. The question simply is whether Citibank followed its own procedural handbook.