Court Opinion

ID: 168763
Source: CourtListenerOpinion
Date Created: 2010-08-14 16:50:31+00
Date Added: 2024-06-11T12:29:07.361071
License: Public Domain

F I L E D
                                                                   United States Court of Appeals
                                                                           Tenth Circuit
                 UNITED STATES COURT OF APPEALS
                                                                        February 12, 2007
                                 TENTH CIRCUIT
                                                                       Elisabeth A. Shumaker
                                                                           Clerk of Court

 SER EE SU LLIV A N ,

          Plaintiff-Appellant,
                                                           No. 06-2129
 v.                                                   (D.C. No. CIV-04-864)
                                                          (New M exico)
 AM ERICA ONLIN E, IN C.,

          Defendant-Appellee.

                          ORDER AND JUDGMENT *

Before M U PR HY, SE YM OU R, and TYM KOVICH, Circuit Judges.

      Seree Sullivan appeals the district court’s dismissal of her retaliatory

discharge, defamation, intentional infliction of emotional distress, prima facie

tort, and punitive damages claims, and the court’s grant of summary judgment to

the defendant on her breach of contract claims. W e affirm.

      M s. Sullivan began her employment with A OL in D ecember of 1999 as a

M ember Retention Consultant. On December 1, she signed an employment

application containing the following language:

      *
        This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. It may be cited, however, for its
persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
      I understand that employment at AOL is on an at will basis, and that
      my employment may be terminated with or without cause, and
      without notice, at any time, at my option, or that of AOL. I further
      understand that no AOL employee or representative has the authority
      to enter into a contract regarding duration or terms and conditions of
      employment other than an officer or official of AOL, and then only
      by means of signed written document.

Aplt. App. at 174. The offer letter given to her by AOL and signed by her on

December 10 stated that her “employment at America Online is at will and [she]

or the company is free to terminate the employment at any time with or without

cause.” Id. at 175. On the same day, she signed a “Business and Personal

Conduct” form outlining certain actions, including “[d]isrespectful or

discourteous conduct . . . to other personnel,” that present “grounds for immediate

disciplinary action up to and including termination of employment.” Id. at 176.

      In October 2001, AOL promoted M s. Sullivan to a supervisor or “coach”

position. Between February and M ay of 2002, several employees complained that

M s. Sullivan made derogatory comments about consultants and coaches, dressed

in sexually suggestive clothing at work, made sexually explicit and vulgar

comm ents, rubbed her breasts against a male consultant, and revealed an

abdominal scar after unfastening her clothing. Craig Alter, a Human Resources

Generalist at AOL, investigated these allegations and confirmed several of the

complaints in his conversations with consultants and coaches. The responses

were not unanimous, however, and several employees did not corroborate the

allegations. At some point, M s. Sullivan informed her supervisor she felt she was

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being harassed at work. On M ay 28, 2002, AOL terminated M s. Sullivan’s

employment.

      In this action, M s. Sullivan asserted claims of retaliatory discharge,

defamation, intentional infliction of emotional distress, prima facie tort, punitive

damages, and breach of implied and express contracts. The district court

dismissed all but the breach of contract claims for failure to state a claim. The

court subsequently granted AOL’s motion for summary judgment on the contract

claims. M s. Sullivan appeals the dismissal and the grant of summary judgment.

      M s. Sullivan contends on appeal that whether an implied contract was

formed presents a genuine issue of material fact precluding the court’s grant of

summary judgment. “W e review the grant of summary judgment de novo,

examining the record and the reasonable inferences to be drawn therefrom in the

light most favorable to the nonmoving party.” Templeton v. Neodata Servs. Inc.,

162 F.3d 617, 618 (10th Cir. 1998). Summary judgment is appropriate only when

the evidence shows no genuine issue of material fact and the moving party is

entitled to judgment as a matter of law. Hardy v. S.F. Phosphates Ltd., 185 F.3d

1076, 1079 (10th Cir 1999).

      M s. Sullivan maintains that several actions by her employer led her to

believe an implied contract was created. Specifically, she contends statements

made by her supervisors and AOL’s prior commitment to progressive discipline

established, at minimum, that the existence of an implied contract was an

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unsettled factual question. Under New M exico law, whether an implied contract

was created is generally a question of fact. See Hartbarger v. Frank Paxton Co.,

857 P.2d 776, 780 (N.M . 1993). Thus, only if the evidence is insufficient to

create a “genuine issue” of “material fact” regarding whether an implied contract

was established is summary judgment appropriate. F ED . R. C IV . P. 56(c). See

Shull v. New M exico Potash Corp., 802 P.2d 641 (N.M . 1990) (affirming

summary judgment in favor of employer that there was no implied contract).

      In New M exico, employment is terminable at will absent an express

contract to the contrary. See Lopez v. Kline, 953 P.2d 304, 306 (N .M . 1998).

However, an implied contract will override the presumption of at-will

employment. See Hartbarger, 857 P.2d at 780. “An implied contract is created

only where an employer creates a reasonable expectation” of continued

employment. Id. at 783. “The reasonableness of expectations is measured by just

how definite, specific, or explicit has been the representation or conduct relied

upon.” Id. “[I]t is not any single act, phrase or expression, but the totality of all

of these, given the circumstances and the parties' situation and objectives, which

will control.” Kestenbaum v. Pennzoil Co., 766 P.2d 280, 286 (N .M . 1988).

      An employer creates an implied contact where the employer’s action

“was intended, or reasonably could be interpreted by [the employee] to be

confirmation of an implied contract or a modification of the employment

relationship.” Hartbarger, 857 P.2d at 785. In this case, AOL provided M s.

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Sullivan with at least four separate documents, three of w hich were signed by M s.

Sullivan, expressly affirming her at-will employment status. First, M s. Sullivan

signed an “Application Form” attesting to her understanding that she would be

hired on an “at will basis” and that the conditions of her employment were

modifiable “only by means of signed written document.” Aplt. A pp. at 174.

Second, in her signed offer letter, M s. Sullivan acknowledged her “employment at

America Online is at will and [she] or the company is free to terminate the

employment at any time with or without cause.” Id. at 175. Third, she signed a

form entitled “Business and Personal Conduct” apprising her that “[d]isrespectful

or discourteous conduct to . . . other personnel,” among other actions, “will be

considered grounds for immediate disciplinary action up to and including

immediate termination of employment.” Id. at 176 (emphasis added). And, last,

the AOL Employment Handbook stated “both the employee and AOL have the

right to terminate employment at will, with or without cause, at any time.” Id. at

177. In light of these repeated unequivocal written declarations of M s. Sullivan’s

at-will status, one of which explicitly precluded oral modifications, we conclude

M s. Sullivan could not have reasonably expected her supervisors’ statements

regarding progressive discipline modified her employment terms as a coach. 1 See

      1
        Ms. Sullivan asserts that she “thought at all times the Defendant’s company
policy was committed to progressive discipline,” and that she expected this stepwise
disciplinary procedure would be applied prior to her termination. Aplt. Br. at 22. She
asserts supervisors told her the “only two ways you can get fired from AOL [are] to
have an attendance issue or just be plain stupid,” and that “you’re not fired just

                                          -5-
Hartbarger, 857 P.2d at 787 (reversing jury finding of an implied contract

because totality of evidence was insufficient to support that conclusion).

       M s. Sullivan also argues “she had an implied contract” that was violated

because AOL’s “policy of harassment was not followed” after she reported to her

supervisor that she was the subject of harassment and the company failed to

investigate. Aplt. Br. at 24. However, the AOL Employee Handbook containing

the company’s harassment policy also contained the following disclaimer: “Since

em ploym ent w ith A O L is based on mutual consent, both the employee and AOL

have the right to terminate employment at will, with or without cause, at any

time.” Aplt. App. at 177. Under New M exico law a policy manual which also

expressly states employment is terminable at will does not create an expectation

of an implied contract. See Paca v. K-Mart Corp., 775 P.2d 245, 247 (N .M .

randomly, you’re not ever slammed without cause.” Aplt. App. at 169. However, these
comments appear to have been addressed to Ms. Sullivan either when she “began
working at AOL” as a consultant, id, or in the context of addressing how she, in her
later position as a coach, should discipline consultants. See id. at 170 (“when I was a
coach . . . it’s always been said to me that if – if I had a consultant and I had an issue
with them, . . . ‘you’ve got to do everything in you power to try to work this through
with them . . .’”). In regards to the termination of coaches, Ms. Audra Sedillo, a Senior
Human Resources Manager at AOL, stated in an affidavit that the “steps of progressive
discipline are rarely used for higher-level supervisory positions, including coaches,”
and even when applied to consultants “the use of progressive discipline is” ultimately
“discretionary.” Id. at 146-45. Furthermore, at a deposition, Ms. Sullivan agreed with
her questioner that there “could be circumstances” where “AOL could move to
immediate termination in their discretion based on the totality of the circumstances.”
Id. at 171. These statements and AOL’s non-exclusive use of progressive discipline, in
light of the four unambiguous writings, could not have reasonably led Ms. Sullivan to
believe that AOL had modified her employment status.

                                            -6-
1989) (“[T]he handbook clearly stated that . . . employees were terminable ‘at

will.’ Personnel manuals containing such a statement do not create an implied

contract altering the parties ‘at will’ relationship.”) (emphasis in original);

Lukoski v. Sandia Indian M gmt. Co., 748 P.2d 507, 509-10 (N.M . 1988)

(“Employers are certainly free . . . to issue a personnel manual that clearly and

conspicuously tells their employees that the manual is not part of the employment

contract and that their jobs are terminable at the will of the employer with or

without reason. Such actions instill no reasonable expectations of jobs security

and do not give employees any reason to rely on representations in the manual.”)

(em phasis added) (citation and quotation omitted). Thus, even assuming AOL

failed to follow its written harassment policy, AOL’s employee handbook read as

a whole undermines any claim that M s. Sullivan reasonably understood her at-will

status was impliedly altered by the harassment policy.

      Nor are we persuaded by any of the other issues appealed by M s. Sullivan.

W e affirm those for substantially the reasons set forth by the district court in its

well-reasoned decision.

      The judgment of the district court is AFFIRM ED.

                                         ENTERED FOR THE COURT

                                         Stephanie K. Seymour
                                         Circuit Judge

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