Court Opinion

ID: 9717825
Source: CourtListenerOpinion
Date Created: 2023-08-26 07:10:51.685591+00
Date Added: 2024-06-11T18:23:55.650279
License: Public Domain

SABERS, Justice
(dissenting).
I dissent. In Dare v. Montana Petroleum Marketing Co., 687 P.2d 1015, 1020 (Mont.1984), the Montana Supreme Court stated:
Whether a covenant of good faith and fair dealing is implied in a particular case depends upon objective manifestations by the employer giving rise to the employee’s reasonable belief that he or she has job security and will be treated fairly. Gates [v. Life of Montana Insurance Company, 196 Mont. 178,-, 638 P.2d 1063, 1067 (1982) ]. The presence of such facts indicates that the term of employment has gone beyond the indefinite period contemplated in the at will employment statute, section 39-2-503, MCA, and is founded upon some more secure and objective basis. In such cases, the implied covenant protects the investment of the employee who in good faith accepts and maintains employment reasonably believing their job is secure so long as they perform their duties satisfactori*839ly. Such an employee is protected from bad faith or unfair treatment by the employer to which the employee may be subject due to the inherent inequality of bargaining power present in many employment relationships. The implied covenant seeks to strike a balance between the interests of the employer in controlling the work force and the interests of the employee in job security. Gates, 638 P.2d at 1066-67, 39 St.Rep. at 20.
In his special concurrence, Justice Morrison applauded the majority’s effort to define the parameters of those principles that control the employment relationship and stated:
In my opinion, section 39-2-503, MCA provides for “at will” employment where no specific term is specified. The statute refers to the term of employment but has nothing to do with obligations owed by either party to the other. In other words, even though employment may be terminated at will, if a legal obligation is breached, that breach may give rise to a separate tort action.
... The covenant of good faith and fair dealing is implicit in every employment contract irrespective of a reasonable belief regarding job security. The law imposes an absolute obligation upon employers to deal fairly and in good faith with their employees from the commencement of the employment relationship. Facts that give rise to an inference of job security in the future might help determine whether there was a breach of the covenant to deal fairly and in good faith, but are not necessary to the existence of the covenant itself.
... [T]he obligation recognized by this Court must be reconciled with the “at will” statute. I think this can easily be done. An employer, under the “at will” statute, has the right to terminate. However, if the employer violates the legal obligation to treat the employee fairly and in good faith, then a separate and independent tort action can be instituted by the injured employee against the offending employer. Damages, not reinstatement, is the remedy.
... There is an indication in the majority opinion that the plaintiff can only be terminated “for cause.” Such a determination certainly conflicts with the “at will” statute. We must not confuse the “term of employment” with the right of the employee to be dealt with fairly and in good faith. The breach of the obligation owed by the employer may give rise to a tort action on the part of the employee, but does not convert “at will” employment to employment for a specific term.
Dare, supra at 1021-1022.
This court should adopt the decision in Dare and the analysis utilized by Justice Morrison in his special concurrence. The duty to treat an employee fairly and in good faith arises in every employment relationship. An “at will” employee may be terminated for reasons other than “for cause,” but the duty imposed by the covenant of good faith and fair dealing requires that the employer exercise such good faith and fairness in termination decisions and proceedings. Additionally, objective manifestations by the employer which create a reasonable belief that the employee has job security absent misconduct may give rise to a stricter standard of duty for the employer. In other words, where specific expectations of treatment by the employer are reasonably and objectively based upon words or actions of the employer, these expectations may form more specific parameters of the employer’s duty.
I do not believe it was the intention of the legislature in enacting the “at will” employment statute to allow employers hiring “at will” employees to operate wholly outside the accepted doctrines of contract law. This statute was also never intended to give employers immunity for actions which rise to the level of a tort.
In this case Blote was employed by First on April 1, 1971, and was continuously so employed until April 17, 1985, at which time he was terminated. Blote’s initial annual salary was $9,000 with an annual bonus of $270. By January 1, 1977, Blote was promoted to assistant vice president and manager of the installment loan de*840partment with an annual salary of $19,338 together with an annual bonus of $580.14. On January 1, 1979, he was promoted to vice president and retained the designation of manager in the installment loan department at $22,850 with an annual bonus of $685.50. Blote received annual salary increases each year of his employment. At the time of his termination Blote’s annual salary was $35,000. Throughout the course of Blote’s employment he was neither reprimanded nor disciplined. His personnel file is barren of any admonishments. Certainly, he is entitled to be treated fairly and in good faith.
The employment manual categorizes employees as “regular employees, temporary employees, and probationary employees.” It recognizes “seniority rights” and most importantly it insures employees “fair and equitable treatment in the administration of the association’s policies.”1
The manual clearly committed First to a standard in employee relations which is to be “fair and equitable.” Genuine issues of material fact arise as to whether First adhered to that standard. Osterkamp v. Alkota Manufacturing, Inc., 332 N.W.2d 275 (S.D.1983), is applicable. The instruction given by the trial court to the jury and approved in review by this court is instructive: “The only issue to be resolved by you is whether or not the plaintiff’s discharge from his employment was in violation of defendant’s own rules and regulations, and if so, whether or not plaintiff sustained any damages thereby.” The law of Oster-kamp, forcefully impacts upon this case and requires the finder of fact to determine if First violated its self-imposed standard of treating employees fairly and equitably. First prepared a resolution terminating Blote as an officer and manager, “because of his failure to perform his duties described in his own analysis of his objectives.” This also creates a genuine issue of material fact — whether or not Blote in fact failed to perform his duties.
The first question then is whether an employee with over fourteen years of unblemished employment can be terminated unfairly or in bad faith. If a covenant of good faith and fair dealing is implied in all employment contracts, or is expressed, as in this case, then the answer must be “no.”
The second question is whether that employee can be terminated without cause. If we require employers to abide by the reasonable expectations of job security which they create and foster, then the answer must be “no.”
The third question is whether that employee can be terminated based on a claim of cause but without any consideration of fairness or good faith or any determination by an objective fact-finder as to whether cause exists.
If, and only if, all of these questions can be answered in the affirmative can we affirm summary judgment in favor of this employer. These questions cannot and should not be affirmatively answered.2

. I am not persuaded by the majority’s claim that attempts to create employment rights from independent sources such as personnel manuals are void under the Federal Home Loan Bank Act or that such law preempts state law. Blote is a resident of the State of South Dakota and does not lose his rights just because he happens to be employed by a federally chartered bank or savings and loan association.

. Comment, "The Status of the Wrongful Discharge Cause of Action in South Dakota,” 31 S.D.L.Rev. 689 (1986).