Kreimeyer v. Hercules, Inc.

892 F. Supp. 1374, 10 I.E.R. Cas. (BNA) 1017, 1994 U.S. Dist. LEXIS 20688, 1994 WL 824509
District Court, D. Utah·Decided September 27, 1994·No. No. 92-NC-088S·Published·Cited by 1 cases

Opinion

ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT ON CONTRACT CLAIMS OF ALL PLAINTIFFS

SAM, District Judge.

This matter came before the court on the defendants’ motion for summary judgment on all plaintiffs’ claims for breach of an implied contract (Second Cause of Action). For reasons discussed more fully below, the motion is granted.

I.Background

The plaintiffs’ employment with the defendant Hercules, Inc. was terminated during a reduction in force (RIF). In their Second Cause of Action, they allege that the defendants breached a contract implied from Hercules’ Management Manual that seniority would be taken into account in determining which employees would be terminated during a RIF.

The defendants argue that the Second Cause of Action should be dismissed because: (1) the plaintiffs were employed “at will”; (2) they were notified by a disclaimer in the employee handbook that their employment could be terminated “at any time”; (3) the Management Manual was not directed to salaried employees like the plaintiffs but was intended solely as a management tool; and (4) the RIF procedures in the management manual were too indefinite to create contract rights. Alternatively, the defendants argue that the claims of certain plaintiffs should be dismissed because their deposition testimonies showed that they were insufficiently aware of the RIF policies for an implied contract to be formed or were not asserting a claim for breach of an implied contract.

II.Standards for summary judgment

Summary judgment is proper where the pleadings and other documents of record “show that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). In applying this standard, the court must construe all facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986).

A party seeking summary judgment always bears the initial burden of identifying the evidence which it believes demonstrates the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). However, once the moving party has carried its burden, “the non-moving party must come forward with ‘specific facts showing that there is a genuine issue for trial.’” Id. at 324 (quoting Fed. R.Civ.P. 56(e)). The nonmoving party may not merely rely on the pleadings but must “make a sufficient showing to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Id. at 322, 106 S.Ct. at 2552 (emphasis added).

III.Discussion

Under Utah law, there is a presumption that “any employment contract which has no specified term of duration is an at-will relationship.” Berube v. Fashion Centre, Ltd., 771 P.2d 1033, 1044 (Utah 1989). An at-will relationship can be terminated by either the employer or the employee at any time and “for any or no reason.” Brehany v. Nordstrom, Inc., 812 P.2d 49, 53 (Utah 1991). See also Evans v. GTE Health Sys. Inc., 857 P.2d 974, 976 (Utah App.1993), aff'd, 878 P.2d 1153 (Utah 1994). Moreover, an at-will employee has “no right of action against his employer for breach of the employment contract upon being discharged.” Brehany, 812 P.2d at 53 (quoting Bihlmaier v. Carson, 603 P.2d 790, 792 (Utah 1979)).

A discharged employee may rebut the at-will presumption by showing that “the [1377]*1377parties expressly or impliedly intended a specified term [of employment] or agreed to terminate the relationship for cause alone.” Berube, 771 P.2d at 1044. Evidence of this intent can take the form of “employment manuals, oral agreements, and all circumstances of the relationship.” Id.

Although the existence of an implied-in-fact contract is generally a question of fact, the court may decide the issue as a matter of law if the evidence is such that “no reasonable jury could conclude that the parties agreed to limit the employer’s right to terminate the employee.” Id.; James v. Sears, Roebuck & Co., Inc., 21 F.3d 989, 998 (10th Cir.1994) (applying Utah law). The court can also construe the terms of an employee manual as a matter of law unless the terms are ambiguous. Brehany, 812 P.2d at 56.

The burden of establishing the existence of any implied-in-fact contract provision is on the employee. Johnson v. Morton Thiokol, Inc., 818 P.2d 997, 1001 (Utah 1991). “[F]or an implied in fact contract term to exist, it must meet the requirements for an offer of a unilateral contract.” Id. at 1002. In other words, the employee must show “a manifestation of the employer’s intent that is communicated to the employee and sufficiently definite to operate as a contract provision.” Id. The manifestation of the employer’s intent must also be “of such a nature that the employee can reasonably believe that the employer is making an offer of employment other than employment at will.” Id.

Of course, an implied-in-fact promise cannot contradict a written contract term. Berube, 771 P.2d 1033, 1044 (Utah 1989). If the employer has expressed an intent to preserve the at-will relationship with its employees by a “clear and conspicuous” disclaimer in an employee handbook, any other evidence must be construed in light of the disclaimer. Johnson, 818 P.2d at 1000; Kirberg v. West One Bank, 872 P.2d 39, 41 (Utah App.1994). Indeed, such a disclaimer “effectively preserves the at-will employment.” James, 21 F.3d at 998 (citing Johnson, 818 P.2d at 1003).

In Johnson, the employer had published and distributed an employee handbook which outlined certain termination procedures. However, the introduction to the handbook contained the following disclaimer:

Your employment is for no set period and may be terminated without notice and at will at any time by you or the company.

818 P.2d at 1003 (emphasis added). The Utah Supreme Court affirmed the trial court’s grant of summary judgment for the employer on the employee’s claim for breach of an implied contract. The Court explained:

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Kreimeyer v. Hercules, Inc., 892 F. Supp. 1374, 10 I.E.R. Cas. (BNA) 1017, 1994 U.S. Dist. LEXIS 20688, 1994 WL 824509 (D. Utah 1994).

892 F. Supp. 1374 (Kreimeyer v. Hercules, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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