Angelo Gianaculas Ernest Buck and James Gregg v. Trans World Airlines, Inc., a Corporation, AKA Twa, Defendants

761 F.2d 1391, 1 I.E.R. Cas. (BNA) 938, 119 L.R.R.M. (BNA) 3246, 1985 U.S. App. LEXIS 31173
CourtCourt of Appeals for the Ninth Circuit
DecidedMay 24, 1985
Docket84-1589
StatusPublished
Cited by57 cases

This text of 761 F.2d 1391 (Angelo Gianaculas Ernest Buck and James Gregg v. Trans World Airlines, Inc., a Corporation, AKA Twa, Defendants) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Angelo Gianaculas Ernest Buck and James Gregg v. Trans World Airlines, Inc., a Corporation, AKA Twa, Defendants, 761 F.2d 1391, 1 I.E.R. Cas. (BNA) 938, 119 L.R.R.M. (BNA) 3246, 1985 U.S. App. LEXIS 31173 (9th Cir. 1985).

Opinions

MERRILL, Circuit Judge:

Angelo Gianaculus, James Gregg, and Ernest Buck, discharged employees of Trans World Airlines (TWA), appeal pursuant to 28 U.S.C. § 1291 from a grant of summary judgment in their suit against TWA for breach of contract and breach of an implied covenant of good faith and fair dealing. Appellants claim that as management employees they were protected by TWA’s Management Policy and Procedure Manual (MP & P) from discharge without the opportunity to displace into certain other positions.

I

TWA is an interstate and international air carrier with its executive offices in New York. Angelo Gianaculus was hired by TWA on April 17, 1956 at San Francisco. Ernest Buck was hired by TWA on March 2, 1967 at St. Louis, Missouri. James Gregg was hired by TWA on June 8, 1964 at Dayton, Ohio. Each appellant completed [1393]*1393an employment application which set forth several conditions of employment. The fourth condition stated, “[i]f given employment, I hereby agree that such employment may be terminated by the company at any time without advance notice and without liability to me for wages or salary____” Other than the conditions stated in the employment application, there was no written employment contract.

In November 1981, appellants, then employed by TWA in management capacities in California, were notified that due to economic circumstances and reductions in operations and staffing levels, their positions would be abolished. Each appellant was offered continued employment in a specified non-management position. Appellants declined the positions offered and were furloughed in December 1981.

On September 20, 1982, appellants brought suit against TWA in Santa Clara County Superior Court. TWA was alleged to have breached its employment agreement with the appellants by failing to follow the terms of the MP & P. In particur\ lar, the appellants contended that section 10.49C4(a) of the MP & P permitted the use { of seniority to displace to jobs reporting. directly or functionally to the management I position held at the time of furlough, that i section 10.49C4(c) of the MP & P prevented the arbitrary and capricious choice of employees to be furloughed and that section 10.49D permitted the use of seniority to displace junior employees systemwide. . The complaint asserted that the failure to follow these procedures constituted breach of the employment agreements and breach of the implied covenant of good faith and fair dealing existing in the employment agreements.

Pursuant to the diversity of citizenship provisions of 28 U.S.C. § 1441(b), TWA re-' moved the action to the United States District Court for the Northern District of California and, following discovery, TWA moved for summary judgment.

The district court granted TWA’s motion as to each of the claims made by Gianacu-lus, Buck and Gregg. The court found that New York law governed the contract under California conflict of laws principles and that New York did not provide for recovery in this case. The court added that the appellants were also barred from recovery under California law.-

We need not decide whether the case is governed by New York or California láw, because recovery is precluded by the laws of both states. See Comment, False Conflicts, 55 CaliLL.Rev. 74, 76-77 (1967); Cavers, The Choice of Law Process (1965), p. 89 (where the laws of two states yield identical results, at most a “false conflict” is presented).

II

The New York Court of Appeals has explicitly rejected the existence of implied covenants of good faith and fair dealing in at-will employment contracts. Murphy v. American Home Products, 58 N.Y.2d 293, 304-305, 461 N.Y.S.2d 232, 237, 448 N.E.2d 86, 91 (1983). In Murphy, the court of appeals stated:

[Ujnder New York law as it now stands, absent a constitutionally impermissible purpose, a statutory proscription, or an express limitation in the individual' contract of employment, an employer’s right at any time to terminate an employment at will remains unimpaired.

]/d.

The court noted, however, that an employment handbook might constitute an express, limitation which would be given effect even though the employment contract was of indefinite duration. Murphy, 58 N.Y.2d at 304-305, 461 N.Y.S.2d at 237, 448 N.E.2d at 91. Whether a handbook could constitute such an express limitation depended, the court continued, upon the ability of the plaintiff to make the “appropriate evidentiary showing” required by Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458, 457 N.Y.S.2d 193, 443 N.E.2d 441 (1982). Id.

Weiner rests upon equitable principles of estoppel and includes the following elements: (1) Weiner was induced to leave his prior employer with the assurance that [1394]*1394McGraw-Hill would not discharge him without cause; (2) the employment application referred to the personnel handbook, which included the assurance that discharge would be for cause; (3) Weiner rejected other offers of employment in reliance on the assurance; and (4) Weiner alleged that he had been instructed not to dismiss his own subordinates except in strict compliance with the handbook. Weiner, 457 N.Y.S.2d at 197, 443 N.E.2d at 445.

These four factors are largely absent from this case. Appellants have failed to allege any reliance, either in joining TWA or in rejecting other offers, on the limitations on discharge in the handbook. They have failed to allege that the policies of the handbook were explicitly incorporated in their applications or contracts. Indeed, the employment application expressly provided that employment was to be at will.

Ill

California courts, motivated by the idea that the right to job security is necessary to ensure social stability, have greatly circumscribed the traditional notion of at-will employment. A right of action for wrongful termination has emerged from sources in both contract and tort law. See Tameny v. Atlantic Richfield Co., 27 Cal.3d 167, 174-76, 164 Cal.Rptr. 839, 843, 610 P.2d 1330, 1334-35 (1980); Shapiro v. Wells Fargo Realty Advisors, 152 Cal.App.3d 467, 199 Cal.Rptr. 613 (1984).

In a case such as this, California courts have recognized two theories of recovery. First, the employer’s conduct, often as evidenced by an employment manual, may give rise “to an implied promise that it would not act arbitrarily in dealing with its employees.” Pugh v. See’s Candies, Inc., 116 Cal.App.3d 311, 329, 171 Cal.Rptr. 917, 927 (1981). See Shapiro, 152 Cal.App.3d at 480, 199 Cal.Rptr. at 622. The emphasis in this approach is, in traditional contract terms, see Pugh, 116 Cal.App.3d at 329, 171 Cal.Rptr. at 927, on whether the parties have reached an implied meeting of the minds regarding certain aspects of their employment relationship. Here, however, the MP & P cannot be viewed as a manifestation of the intent of the parties.

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761 F.2d 1391, 1 I.E.R. Cas. (BNA) 938, 119 L.R.R.M. (BNA) 3246, 1985 U.S. App. LEXIS 31173, Counsel Stack Legal Research, https://law.counselstack.com/opinion/angelo-gianaculas-ernest-buck-and-james-gregg-v-trans-world-airlines-ca9-1985.