Court Opinion

ID: 157465
Source: CourtListenerOpinion
Date Created: 2010-08-14 05:00:50+00
Date Added: 2024-06-11T12:06:26.376041
License: Public Domain

F I L E D
                                                                   United States Court of Appeals
                                                                           Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                           FEB 1 1999
                                 TENTH CIRCUIT
                                                                     PATRICK FISHER
                                                                               Clerk

R. GARY BURKE,

          Plaintiff-Counter-Defendant-
          Appellant,

               v.                                        No. 97-2266
                                                  (D.C. No. CIV-96-784-BB)
BDM TECHNOLOGIES, INC., wholly                            (D. N.M.)
and as a subsidiary of BDM
International, Inc.,

          Defendant-Counter-Claimant-
          Appellee.

and

R. GARY BURKE,

          Plaintiff-Counter-Defendant-
          Appellee,

                v.                                       No. 97-2275
                                                  (D.C. No. CIV-96-784-BB)
BDM TECHNOLOGIES, INC., wholly                            (D. N.M.)
and as a subsidiary of BDM
International, Inc.,

          Defendant-Counter-Claimant-
          Appellant.

                            ORDER AND JUDGMENT *

      *
           This order and judgment is not binding precedent, except under the
                                                                      (continued...)
Before SEYMOUR, Chief Judge, ANDERSON, and BRISCOE, Circuit Judges.

      Plaintiff Gary Burke brought this action for wrongful termination and

breach of contract, and sought punitive damages in state court. The case was

removed to United States District Court on the basis of diversity jurisdiction, 28

U.S.C. § 1332. Defendant BDM Technologies, Inc., counterclaimed for breach of

fiduciary duty, breach of duty of loyalty, violation of trade secrets, breach of

contract, injunctive relief, and copyright infringement. BDM Technologies

dismissed its counterclaim for copyright infringement with prejudice prior to trial.

Following a trial to the court, the district court ordered that Burke take nothing on

his claims and that BDM Technologies take nothing on its counterclaims. Burke

appeals the district court’s ruling and BDM Technologies cross-appeals. We

affirm.

                                          I.

      Burke began his employment at BDM International, Inc., an information

technology corporation, in 1984. In September 1992, he took a medical leave of

absence. During his absence, BDM Technologies was created, which is a wholly-

      *
       (...continued)
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.

                                         -2-
owned subsidiary of BDM International.

      Burke returned to work in June 1993 as vice president of Promotions

Technology International, a unit of BDM Technologies. Burke signed an

agreement which contained an at-will employment provision stating his

“employment may be terminated by either party, at any time, upon such

[reasonable] notice being given.” App. at 155.

      As a part of its business objectives, Promotions Technology dealt with

developing “frequency loyalty and database marketing initiative supported by a

software program that [BDM Technologies] marketed and offered to commercial

clients.” Br. of Appellee at 4. In May 1994, Burke began reporting directly to

John Corsiglia, who was then the president of BDM Technologies. In 1993, 1994,

and 1995, Promotions Technology lost approximately $300,000, $900,000, and

$250,000, respectively. To prevent further losses, Corsiglia decided to shut down

the Promotions Technology unit. Corsiglia informed Burke in early July 1995

that he would be subject to a reduction-in-force at the end of the month, and

Burke was discharged at the end of July.

                                           II.

      Our review of the district court’s findings of fact is governed by Fed. R.

Civ. P. 52(a). Salve Regina College v. Russell, 499 U.S. 225, 233 (1991). The

rule provides: “Findings of fact, whether based on oral or documentary evidence,

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shall not be set aside unless clearly erroneous, and due regard shall be given to

the opportunity of the trial court to judge of the credibility of the witnesses.” A

finding of fact will not be adjudged clearly erroneous “unless it is without factual

support in the record, or if the appellate court, after reviewing all the evidence, is

left with the definite and firm conviction that a mistake has been made.”       Las

Vegas Ice & Cold Storage Co. v. Far West Bank          , 893 F.2d 1182, 1185 (10th Cir.

1990) (citation omitted).

                                             III.

       The general rule in New Mexico is that employment is terminable at will by

either party unless there is a contract stating otherwise.     Hartbarger v. Frank

Paxton Co. , 857 P.2d 776, 779 (N.M. 1993). An exception to this rule has been

recognized for implied contracts in which an employer has voluntarily restricted

its power to discharge.    Id.

       It is undisputed that BDM Technologies has no personnel manual.

However, BDM International, its parent company, does have a personnel manual

which contains progressive discipline procedures. Whether BDM International’s

manual governs the employment policies of BDM Technologies is irrelevant.

Even assuming the manual controls the discharge policies of BDM Technologies,

it is undisputed that the manual provides that reduction-in-force discharges do not

trigger progressive discipline requirements. The record amply supports the

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district court’s finding that Burke was discharged due to a reduction-in-force.

Corsiglia testified that he discharged Burke as part of a reduction-in-force after

he determined the poor financial performance of Promotions Technology

necessitated elimination of the entire unit. Burke acknowledged that reduction-

in-force was always a possibility at BDM Technologies. A reasonable trier of

fact could determine Burke was discharged as part of a reduction-in-force. Even

if Burke’s performance was unsatisfactory, the reduction-in-force defense is not

necessarily undermined. The two concepts are not mutually exclusive.

      Burke also contends the district court erred in rejecting his claim of breach

of implied covenant of good faith and fair dealing. Generally, every contract,

whether express or implied, imposes upon the parties a duty of good faith and fair

dealing in its performance and enforcement.     Watson Truck & Supply Co. v.

Males , 801 P.2d 639, 642 (N.M. 1990); Restatement (Second) of Contracts § 205

(1981). However, New Mexico does not recognize such a cause of action in an

at-will employment contract.   See Bourgeous v. Horizon Healthcare Corp.    , 872

P.2d 852, 856 (N.M. 1994). Nor will the state embrace such an implied covenant

“to override express provisions addressed by the terms of an integrated written

contract.” Id. The only employment context in which New Mexico has applied

the implied covenant of good faith and fair dealing is non-at-will employment

relationships where the express terms of the employment contract do not foreclose

                                          -5-
the doctrine. Id. at 856-57. In articulating its theory, the New Mexico Supreme

Court has stated:

      Although an employer may agree to restrict or limit his right to
      discharge an employee, to imply such a restriction in an employment-
      at-will relationship, which by its very nature has no restrictions, is
      inherently unsound.
              . . . [T]o imply in every employment situation a covenant of
      good faith prohibiting dismissal except for good cause could be
      likened to a judicial call for collective bargaining.

Melnick v. State Farm Mut. Auto. Ins. Co.     , 749 P.2d 1105, 1111 (N.M. 1988)

(internal citation omitted).

      Burke apparently suggests the “corporate culture and long-standing custom”

of BDM Technologies of attempting to relocate employees whose jobs are

eliminated for economic reasons created an implied contract preventing the

company from discharging an employee without first attempting to relocate that

employee. Because the implied covenant of good faith and fair dealing “requires

that neither party do anything which will deprive the other of the benefits of the

agreement,” Watson , 801 P.2d at 642, Burke reasons the company’s refusal to

transfer him to a vacant position constituted a breach of that implied covenant.

We disagree.

      An implied contract cannot be properly fashioned from the company’s

corporate culture/custom for relocating employees subject to a reduction-in-force.

A similar situation was confronted in   Hartbarger , where the employer had a

                                            -6-
tradition of maintaining long-term employment relationships. After plaintiff was

terminated, he pointed to the history of long-term employment to support his

theory that the employer did not maintain an at-will employment policy. The New

Mexico Supreme Court rejected the argument, noting:

      [Defendant’s] retention of other employees for a long time is in itself
      no indication that [plaintiff] had an implied contract requiring that
      termination be only for just cause. As a matter of policy, this Court
      will not consider evidence that a company does not usually fire
      employees without a good reason as by itself establishing that the
      company does not maintain an at-will employment policy. To do
      otherwise would encourage employers to occasionally fire employees
      for no other reason than to show that they maintain the freedom to do
      so.

857 P.2d at 785. Here, there is no contention (or evidence) that BDM

Technologies had any policy   requiring its officials to attempt to transfer

employees to vacant positions if their jobs were eliminated for economic reasons.

To the contrary, all evidence suggests this practice reflected nothing more than a

benevolent gesture on the part of the company.

      Even if an implied covenant of good faith and fair dealing existed, there is

nothing in the record to indicate a breach of such a covenant. Both Corsiglia and

the vice president of human resources undertook good faith efforts to find Burke

alternative employment in the company. Burke, despite his acknowledged

responsibility, made virtually no effort on his own to look for other positions in

the BDM family of companies. The corporate culture at BDM Technologies did

                                         -7-
not encompass a guarantee of permanent employment. The company’s practice

was simply to attempt to find vacant positions for individuals in Burke’s position.

                                         IV.

      We need not decide whether the district court erred in concluding the

counterclaims had no merit. Even assuming Burke committed the offenses

alleged in the counterclaims, the record contains no evidence that BDM

Technologies suffered damages or has been irreparably harmed in any way that

might justify equitable relief. The district court excluded all evidence regarding

damages to BDM Technologies and Promotions Technology flowing from Burke’s

activities, and BDM Technologies does not appeal that ruling.

      As far as BDM Technologies’ requested injunctive relief, the company

alleged Burke’s continued use of proprietary and confidential information in his

business “constitutes an ongoing and continuing harm” for which BDM

Technologies has no adequate remedy at law. App. at 12.    See Hines Corp. v.

City of Albuquerque , 621 P.2d 1116, 1118 (N.M. 1980) (injunctions are granted

in New Mexico to prevent irreparable injuries for which there is no adequate

remedy at law). There is no evidence in the record to support this allegation.

BDM Technologies’ only allegation of irreparable harm is that, because of

Burke’s continued misappropriation of proprietary information, the company “has

been unable to sell the TMC software” formerly utilized by Promotions

                                         -8-
Technology. Br. of Appellee at 26. The page in the transcript cited in support of

this proposition does not reflect this statement. The transcript page cited is part

of the testimony of Tom Faulders, chief financial officer of BDM International,

and it states the former assets of Promotions Technology are now being held in

BDM International’s strategic operations unit.     See Suppl. App. at 87. The record

does not suggest that any BDM entity has attempted to sell the software or

expressed a desire to resume operations in the “frequency loyalty”

marketing/software development industry. The district court’s denial of

injunctive relief is not clearly erroneous.

      AFFIRMED.

                                                 Entered for the Court

                                                 Mary Beck Briscoe
                                                 Circuit Judge

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