Court Opinion

ID: 9594802
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:33:06.933671+00
Date Added: 2024-06-11T09:40:27.753785
License: Public Domain

Dore, J.
(dissenting) — I dissent.
The majority holds that St. Yves was subject to termination at will regardless of the terms of Mid State's personnel policy manual. It bases this conclusion on an isolated term in St. Yves' employment contract, despite the fact that that contract is ambiguous on its face and despite the fact that the personnel manual is needed to resolve the contract's ambiguity. In fact, the majority's supposed reconciliation of the contract's conflicting terms demonstrates not only that the contract is ambiguous but also that the employee manual is needed to resolve that ambiguity. Since an issue of fact exists as to whether the contract and the employee manual restrict the right of the Bank to terminate St. Yves as it has done, I would remand the case for trial.
The Contract Is Ambiguous
Paragraph II of the employment contract between St. Yves and Mid State provides that he shall be employed for 2 years and that that term will be renewed automatically if neither side gives notice of nonrenewal 60 days before the contract's expiration. The Bank gave no notice within the prescribed period and St. Yves' contract had been renewed for a second 2-year term when the Bank purported to discharge him. If paragraph II stood alone in this contract, there would be no question that the contract had been breached. St. Yves would have been deprived of job security he had evidently bargained for. Paragraph II, which is *381unambiguous in itself, serves no other purpose than to ensure St. Yves' employment for the agreed-on term.
Paragraph II does not stand alone, however. As the majority points out, paragraph X provides that St. Yves can be discharged for any reason, at any time and that such a termination "shall not constitute a breach of this agreement by bank." The obvious question is: if this is so, why did the parties adopt paragraph II? What paragraph II gives, paragraph X takes away and vice versa. One provision can be given effect only by depriving the other of all force. Read together, they make no sense. In other words, the two paragraphs render the contract ambiguous.
The majority attempts to avoid this obvious conclusion.
St. Yves asserts that paragraphs II and X of the employment agreement create an ambiguity. However, paragraph II has to do with the term of employment, whereas paragraph X is a more specific clause dealing with discharge. It qualifies the rest of the agreement. . . Paragraph II creates only a presumptive term of employment, which may be terminated under the procedures of paragraph X. Thus, each clause of the employment agreement can be given effect, and it is not ambiguous.
(Italics mine.) Majority, at 377-78.
This argument only demonstrates that paragraphs II and X do render the contract ambiguous. The majority recognizes that a true resolution of an apparent contract ambiguity may limit the effect of one or another of the inconsistent terms, but that it must give some effect to each. A purported resolution which, in contrast, gives one contract term absolute priority over another simply points up the contract's ambiguity by confirming that the conflicting provisions are indeed irreconcilable. Consequently, in attempting to reconcile these two inconsistent terms, the majority suggests that paragraph X permits paragraph II some scope to operate as a "presumptive term of employment." On close examination, however, the majority's purported "resolution" of the contract's ambiguity turns out to *382be the second, specious kind of resolution because it gives paragraph X absolute priority over paragraph II.
This can be demonstrated by asking an obvious question: What is a "presumptive term of employment"? If that term has any meaning at all, the presumption cannot be one which is rebutted by the employer's decree alone. If the employer can simply dismiss the employee unilaterally, there is no "presumption" of employment at all. Unless the employer carries a real burden of justification, paragraph II has no force or effect. Unless this "presumption" of continued employment actually entitles the employee to something — a right to notice and an opportunity to speak, probation and review, and so on — it is not even a bump on the road to the unemployment office.
The majority attempts to give some body to its ghostly "presumption" when it writes that St. Yves was terminated "under the procedures of paragraph X." But those "procedures" consist of a right to termination pay, not the rights — an explanation, an opportunity to speak, probation and review or some right of appeal — which would place a real burden of justification on the employer and give meaning and content to the "presumption" of continued employment purportedly contained in paragraph II.
In fact, the majority's "presumptive term of employment" is an illusion and its interpretation of paragraph II simply reads that paragraph out of the contract. The majority's enforcement of paragraph X is simply an arbitrary preference of one of two inconsistent contract terms. According to the majority, the Bank has the right to terminate St. Yves' employment unilaterally and this right is unfettered — regardless of the 2-year term of employment granted in paragraph II. However, the majority's giving one inconsistent term complete priority over another in this way only confirms that the terms are indeed irreconcilable, and confirms that the contract is ambiguous.
*383The Employment Manual Can Resolve the Ambiguity
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.
*384In 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 *385lower court to resolve the ambiguity. The proper course is clearly to remand for consideration of that evidence.
Conclusion
The employment contract is ambiguous on its face. Parol evidence is required to resolve the ambiguity. The Bank's personnel policy manual is relevant to the issue of resolving the ambiguity. I would therefore remand this case for further proceedings in accord with our previous holdings in Thompson and Brady.
Goodloe, J., concurs with Dore, J.