Court Opinion

ID: 9582925
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:32:49.976289+00
Date Added: 2024-06-11T13:38:45.569544
License: Public Domain

Dolliver, J.
(concurring) — I agree with the majority that summary disposition of this case would be premature on the record before us. I concur separately, however, for two reasons. First, I disagree that an employer must ensure that each employee is personally aware of a disclaimer in an employee handbook in order for it to be effective. Second, since Thompson v. St. Regis Paper Co., 102 Wn.2d 219, 685 P.2d 1081 (1984), we have had occasion to implement the exceptions to the at will rule. I believe it is time to evaluate their efficacy and draw reasonable limitations to maintain the balance between the interests of employers and employees.
Tb begin, the rule in Washington continues to be that employment contracts, indefinite as to duration, are terminable at the will of either the employer or the employee. Gaglidari v. Denny’s Restaurants, Inc., 117 Wn.2d 426, 432, 815 P.2d 1362 (1991); Thompson, 102 Wn.2d at 225 (citing *542H. Wood, Master and Servant 134 (2d ed. 1886)). The common law at will rule was criticized because it "gives the employer unfettered control of the workplace and, thus, allows the employer to take unfair advantage of its employees." Thompson, 102 Wn.2d at 226. In order to ameliorate the harshness of the at will rule, we addressed the varying legal theories advanced to allow employees a cause of action for wrongful termination. Thompson, 102 Wn.2d at 227-33. Our goal was to balance "[a]n employer's interest in running his business as he sees fit" and an employee's interest "in maintaining his employment". See Thompson, 102 Wn.2d at 227.
Tb strike this balance we utilized two legal theories. First, we held that statements in employee handbooks could modify an employee's at will status if the requisites for a unilateral contract were present. Thompson, 102 Wn.2d at 228 (citing Pine River State Bank v. Mettille, 333 N.W.2d 622 (Minn. 1983)). Second, we held that employee handbook statements may give rise to employer obligations if they create "an atmosphere of job security and fair treatment with promises of specific treatment in specific situations". Thompson, 102 Wn.2d at 230. We also established a cause of action in tort for wrongful discharge if a termination violates a clear mandate of public policy. Thompson, 102 Wn.2d at 232.
In light of these exceptions, we provided that employers could avoid creating obligations from statements made in employee handbooks by
specifically stat[ing] in a conspicuous manner that nothing contained [in the handbook was] intended to be part of the employment relationship and are simply general statements of company policy.
Thompson, 102 Wn.2d at 230.
In this case, Liquid Air Corporation did just that. Page 6 of its revised employee manual was devoted exclusively to a disclaimer statement, which provided:
*543DISCLAIMER STATEMENT
The Company may revise or discontinue policies, procedures or benefits described in this handbook, and/or institute new policies, procedures or benefits. Neither this handbook nor any other Company policies, procedures or practices (whether verbal or written) or the acceptance or continuance of employment is to be construed as a contract of employment (which can only be authorized by the President or Executive Vice President), a promise of continued employment, or as creating an implied or contractual duty between an employee and the Company. To the contrary, all employment can be terminated by the employee or by the Company for reasons which either the employee or the Company, as the case may be, considers sufficient.
(Italics mine.) The construction and legal effect of a disclaimer is a question of law. See Messerly v. Asamera Minerals, (U.S.) Inc., 55 Wn. App. 811, 816, 780 P.2d 1327 (1989); see also Berg v. Hudesman, 115 Wn.2d 657, 663, 801 P.2d 222 (1990) (construction determining legal effect of a contract is a question of law).
Here, the language of the disclaimer met the requirements we set forth in Thompson, and the majority does not contend otherwise. Instead, the majority rejects the disclaimer because it was not "effectively communicated" and because it was placed in a "benefits manual". Majority, at 529-31.
The meaning of "reasonable notice" from which the majority derives the requirement of "effective communication" originates in Bankey v. Storer Broadcasting Co., 432 Mich. 438, 457, 443 N.W.2d 112 (1989). See Gaglidari, 117 Wn.2d at 434. In Bankey, the court held an employer could unilaterally change from a discharge for cause to an at will policy if the employee was given reasonable notice of the change. The context of Bankey indicates that notice is reasonable if employees are given advance notice of the change.
While we hold today that an employer may make changes in a written discharge-for-cause policy. . ., we caution against an assumption that our answer would condone changes made in bad faith — for example, the temporary suspension of a *544discharge-for-cause policy to facilitate the firing of a particular employee in contravention of that policy.
The principles on which Tussaint [v. Blue Cross & Blue Shield, 408 Mich. 579, 292 N.W.2d 880 (1980)] is based would be undermined if an employer could benefit from the good will generated by a discharge-for-cause policy while unfairly manipulating the way in which it is revoked. Fairness suggests that a discharge-for-cause policy announced with flourishes and fanfare at noonday should not be revoked by a pennywhistle trill at midnight. We hold that for the revocation ... to become legally effective, reasonable notice of the change must be uniformly given to affected employees.
(Italics mine.) Bankey, 432 Mich, at 456-57; see also Hacht v. Ford Motor Co., 186 Mich. App. 517, 522-23, 465 N.W.2d 331 (1990); Carlson v. Hutzel Corp., 183 Mich. App. 508, 514-15, 455 N.W.2d 335 (1990).
As long as employees are notified of specific modifications a reasonable length of time prior to their taking effect, the modifications become part of the employment contract. Uniform notification takes place by disseminating the changes to the employees, just as notification occurs as to other provisions in an employee handbook. While some courts might require employers to ensure every employee is personally aware of the change, see Crain Indus., Inc. v. Cass, 305 Ark. 566, 810 S.W.2d 910 (1991), such a requirement would reward employees who failed to read the handbook or its modifications. Reasonable notice should be established when an employer uniformly disseminates specific modifications to affected employees a reasonable length of time prior to their taking effect.
The majority's citations to Crain Indus., Inc. v. Cass, supra, and Morriss v. Coleman Co., 241 Kan. 501, 738 P.2d 841 (1987) do not support its position that a disclaimer is ineffective if not "effectively communicated".
In Crain, the court did state that in order for changes "to be effective [they] must be communicated". However, the court reserved judgment "on the question whether, and under what conditions an employer may effectively modify a handbook with notice to affected employees." Crain, 810 S.W.2d at 915.
*545The issue in Morriss was whether there was an implied in fact contract that the employee would be treated fairly and in good faith and would not be discharged except for good cause. Morriss, 241 Kan. at 513-14. Thus, whether the employee had actual knowledge of the disclaimer was relevant to that issue. Washington is in accord that all of the surrounding circumstances are relevant in determining whether there is an implied contract not to discharge except for cause. See Roberts v. ARCO, 88 Wn.2d 887, 894, 568 P.2d 764 (1977). However, that is not the issue before us here.
The majority also offers no supportable reason why a disclaimer appearing in a manual entitled "Your Employee Benefits" is suspect. The Memorandum of Working Conditions, which sets forth the discharge procedure at issue, also speaks to benefits in its first sentence:
Liquid Air Corp. wishes to maintain an economic structure of benefits for its employees equivalent to its competitors in the industry and comparable to similar jobs in the area in which they work.
(Italics mine.) Moreover, the disclaimer specifically refers to "policies" and "procedures" in addition to benefits. The disclaimer was part of the revised employment manual which was disseminated to employees, including the plaintiff. The disclaimer specifically and conspicuously stated:
Neither this handbook nor any other Company policies, procedures or practices ... is to be construed as . . . creating an implied or contractual duty between an employee and the Company.
Further, a disclaimer is not rendered ineffective if the employee handbook in which it is contained is not distributed until after an employee begins work. See Pine River State Bank v. Mettille, 333 N.W.2d 622, 625-27 (Minn. 1983).
I would hold that because the disclaimer was specific, conspicuous, included in the revised handbook, and disseminated to the plaintiff, it was effective as a matter of law.
The issue then becomes whether the Memorandum of Working Conditions modified the at will policy of Liquid Air *546as to the discharge procedures for drivers. The discharge provision states:
Dishonesty, drinking or use of drugs on duty, recklessness resulting in an accident, or the carrying of unauthorized passengers shall be deemed sufficient and proper cause for discharge without prior notice. In all other instances of misconduct, at least one warning, shall be given. A new employee shall be on a ninety (90) day trial basis, during which period he may be discharged without prior notice.
The answer is determined hy whether this discharge provision is an enforceable obligation under the exceptions in Thompson v. St. Regis Paper Co., 102 Wn.2d 219, 685 P.2d 1081 (1984).
The unilateral contract theory would answer this question by ascertaining if the discharge language was sufficiently definite to constitute an offer and whether the parties manifested an intent to be bound. The theory in Toussaint v. Blue Cross & Blue Shield, 408 Mich. 579, 292 N.W.2d 880 (1980) ascertains whether the promise was specific and whether the employee justifiably relied on the promise. Both theories attempt to provide a remedy in situations in which the employer creates an atmosphere wherein an employee reasonably believes a specific procedure or policy is an employer obligation. As was noted by the Michigan Supreme Court, however, "there is no clear consensus as to either the legal theoiy supporting the handbook exception or the scope of the exception." Bankey, 432 Mich, at 448-49.
In Washington, there has been some difficulty applying general contract principles under the unilateral contract theory. For instance, we have not strictly applied contract rules governing the need for a separate consideration to enforce modifications to policies stated in employment manuals, although the majority appears to reinstate such a requirement. Majority, at 524; see Gaglidari v. Denny's Restaurants, Inc., 117 Wn.2d 426, 433, 435, 815 P.2d 1362 (1991). In addition, there appears to be some confusion as to whether mutual assent is required. The majority asserts *547mutual assent is necessary, citing Thompson. Majority, at 524. In Thompson, we stated:
Furthermore, we note that on this record material issues of fact exist as to whether, under traditional contract analysis, any provisions of the employment manual are part of the appellant's employment contract. For example, the parties may have contractually agreed that statements which are general statements of policy, were to be part of their employment contract. While we have determined that there is no implied contract for termination only for cause, we cannot determine on this record that the parties did not enter into an express contract.
Thompson, 102 Wn.2d at 233-34. It is arguable whether this language even refers to the unilateral contract exception. Moreover, in Gaglidari, at 434-35, we held that "employee[s] [are] bound by unilateral acts of the employer" as long as the employees are given reasonable notice of those actions. There was no issue in Gaglidari as to whether the employer and employee intended for the policies to be part of their employment contract. Rather,
the handbook language constitutes the offer; the offer is communicated by the dissemination of the handbook to the employee; the employee's retention of employment constitutes acceptance; and by continuing to stay on the job, although free to leave, the employee supplies the necessary consideration.
Gaglidari, 117 Wn.2d at 433 (citing Pine River State Bank v. Mettille, 333 N.W.2d 622 (Minn. 1983)).
Given these questions and others which will undoubtedly arise in the future if the court attempts to apply strict contract rules to a cause of action that arises outside the normal operation of general contract principles, I would not rely on the unilateral contract theory. Rather, I would allow a cause of action if the employee justifiably relied on a promise of specific treatment in a specific situation.
The majority concludes that every issue presented by this exception involves a question of fact. However, I would hold that whether handbook language is sufficiently definite to constitute a promise of specific treatment in a specific situation is a question of law.
*548Concededly, our cases have been inconsistent on this point. For example, in Thompson we stated:
On this record we are unable to determine . . . whether any statements [in the policy handbook] amounted to promises of specific treatment in specific situations . . . [This] questionf] presents a] material [issue] of fact. . . .
Thompson, 102 Wn.2d at 233. However, in Stewart v. Chevron Chem. Co., 111 Wn.2d 609, 613, 762 P.2d 1143 (1988), we stated, "The interpretation of a writing [language in a policy handbook] is a question of law for the court." The majority characterizes Stewart as holding only that reasonable minds could not differ as to whether the handbook language created a specific promise. Majority, at 521-22. That characterization, however, is contrary to the analysis of that issue in Stewart.
The interpretation of a writing is a question of law for the court. . . . The Restatement (Second) of Contracts defines a promise as
a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promisee in understanding that a commitment has been made.
(Italics ours.) Restatement (Second) of Contracts § 2 (1981). ...
Chevron's layoff policy states only that management "should" consider performance, experience and length of service in determining the sequence of layoffs. This does not create an obligation that Chevron will or must consider all three factors. "Should" may be interpreted as discretionary, indicating merely a recommendation or preference. . . .
Furthermore, Chevron was only required to "consider" these factors; no relative weight or value is assigned to any of the criteria. . . . Thus the wording of § 380 [of Chevron's policy manual] does not set forth the specificity necessary to create a binding promise. . . .
(Citations omitted.) Stewart, 111 Wn.2d at 613-14. The court was deciding this issue as a matter of law. It was not, as asserted by the majority, holding that reasonable minds could not differ as to the meaning. If the issue was a question of fact, why did we not let the jury decide if the term "should consider" was sufficient to create a promise of specific treatment? Or, if the language in Stewart was sufficient for the court to make its determination as a matter of *549law, why is the discharge provision language, which is more definite, not also able to be decided as a matter of law?
Whether a specific promise was made should be a question of law unless there is some dispute as to the content of the promise. If a specific promise was made, it would then be a question of fact whether the employee justifiably relied on the promise under the circumstances. This maintains the balance of interests between employers and employees because it does not encourage eveiy discharged employee to stampede to the courtroom. Employers would not be forced to trial on every wrongful discharge claim, and employees could be certain of trial if specific promises were made.
In this case, I would affirm the Court of Appeals and hold that the discharge provision was sufficiently definite to constitute a promise of specific treatment in a specific situation as a matter of law, and remand for trial to determine whether plaintiff justifiably relied on the discharge provision in light of the disclaimer and other surrounding circumstances.
Durham, J., concurs with Dolliver, J.