Loffa v. Intel Corp.

738 P.2d 1146, 153 Ariz. 539, 1987 Ariz. App. LEXIS 426
CourtCourt of Appeals of Arizona
DecidedMay 12, 1987
Docket1 CA-CIV 8810
StatusPublished
Cited by21 cases

This text of 738 P.2d 1146 (Loffa v. Intel Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Loffa v. Intel Corp., 738 P.2d 1146, 153 Ariz. 539, 1987 Ariz. App. LEXIS 426 (Ark. Ct. App. 1987).

Opinion

OPINION

MILTON R. SCHROEDER, Judge Pro Tern.

This is an appeal from a judgment against appellant, Intel corporation, for breach of contract in terminating plaintiffappellee Frank Loffa’s employment with Intel. After the trial court denied Intel’s motions for summary judgment and for a directed verdict, a jury returned a verdict in the amount of $68,400 against Intel. The trial court denied Intel’s motion for a new trial and for judgment notwithstanding the verdict and entered judgment for Loffa in the amount of the verdict. Intel then brought this appeal. We affirm.

Frank Loffa was employed with Intel as an electrician technician from June, 1980, until November 9, 1981, when Intel discharged Loffa from employment. Loffa contends this discharge breached his employment contract with Intel. Intel’s position is that this discharge was justifiable because, first, its employment relationship with Loffa was “at will” and could be terminated at any time for any reason; and second, if an employment relationship other than “at will” existed, Intel correctly observed all the procedures called for in its *541 disciplinary procedures to discharge Loffa for “gross misconduct.” In this appeal, as in its motions described above, Intel contends it was entitled to judgment as a matter of law on both issues. 1

The events that gave rise to Loffa’s dismissal occurred on Wednesday, November 4, 1981. While Loffa was engaged in a work task with another employee, yelling back and forth in a mock-harassing, bantering manner, Jim Corbitt, an assistant supervisor, intervened and directed Loffa to stop telling his co-worker what to do. An argument developed between Loffa and Corbitt during which Loffa suggested that they “go outside.” Corbitt put his hand on Loffa’s shoulder saying they should go see their supervisor, Luther Disney, prompting a response from Loffa that he would “break Corbitt’s head” if he did not take his hand off him. Corbitt reported the incident to Disney, who in turn notified Ann Nelson, a personnel administrator, of the matter. Both Disney and Nelson investigated the circumstances. Later the same day, Disney met with Loffa and suspended him until the investigation was completed. Nelson and Disney continued their consideration of the incident during the remainder of the week and involved other management officers of Intel in discussions about it. Nelson discussed it with her superior, Shirley Kerfoot, who was the personnel administration manager. Disney consulted with his supervisor, Ron Williams, and also spoke with Ed Booth who was Williams’ boss. On Monday, November 9, 1981, Loffa met with Disney and Williams, and Disney told him he was dismissed. At Loffa’s exit interview on Monday, Nelson recorded the reason for the discharge as “unacceptable conduct-threatening assistant supervisor.”

When Loffa began employment with Intel, he signed a one-page form document entitled “Employee Agreement.” This document obligated Loffa to work faithfully for Intel and required him to protect the trade secrets and other property of Intel. The key paragraph for the purposes of this litigation stated:

5. This Agreement (a) survives my employment by INTEL, (b) does not in any way restrict my right or the right of INTEL to terminate my employment, (c) inures to the benefit of successors and assigns of INTEL, and (d) is binding upon my heirs and legal representatives.

The document contained no reference to employee disciplinary procedures. It neither referred to other documents or policies as constituting part of the employment agreement nor excluded other documents or policies from the agreement. As part of the orientation for new employees, however, Loffa received a package of materials that included a document entitled “Our Procedures, Your Responsibility.” This document had a section on “Employee Conduct” that stated:

The company regards certain kinds of conduct as unacceptable. An employee who fails to meet normal work standards, takes extended breaks and lunches, does poor quality work, fails repeatedly to meet time commitments, or is unwilling to perform assigned duties, is performing unsatisfactorily. Supervisors will issue disciplinary warnings to give such an employee an opportunity to meet proper standards. The usual procedure is that an employee receives one oral warning, to be followed by one or two written warnings prior to dismissal; however, alcohol consumption, drug abuse, or engaging in gambling on Intel premises are strictly prohibited and will be cause for immediate termination.
Theft, insubordination, being under the influence of alcohol or drugs, unwillingness to perform assigned duties, gross *542 carelessness, negligence of duties, falsification of work records, failure to observe safety regulations and altercations involving customers or other employees are examples of serious misconduct and are cause for disciplinary action up to and including termination.

The orientation package also included a two-page statement of “Welcome” which said:

We are proud that although Intel operates in many different parts of the world, none of our employees are represented by labor unions. We believe this means that Intel employes feel they get a “fair shake” without any need to involve outsiders.

The orientation for new employees included a verbal review of the company’s disciplinary policy. The policy is stated in a company document entitled “Non Exempt Discipline Policy.” The policy establishes a progressive disciplinary process for most cases that begins with a verbal warning, advances to written warnings, and then in the event of continued problems, can result in termination of the employee with the approval of the department manager and a personnel administrator. In addition, there is a category of conduct in the policy for which Intel may terminate an employee without prior warning. When there is “gross” or “severe” misconduct, the employee may be terminated without warnings, but in such a case the termination must have the approval of both the department manager and the personnel administration manager. The relevant section of the policy is II 4.5.3 which defines “Gross Misconduct” as follows:

In cases of severe misconduct, an employee can be terminated without warnings. Approvals of the department manager and the personnel administration manager are required.

At the time of Loffa’s dismissal, the personnel administration manager was Shirley Kerfoot, to whom Ann Nelson (a personnel administrator) reported. Loffa’s department manager was Ron Williams, to whom Luther Disney reported.

The trial court instructed the jury that the basic contractual relationship between employer and employee was one of “employment-at-will,” which could be terminated “by either party at any time for any reason or for no reason,” but that the jury could find that “personnel manuals, employer policy statements and memoranda, as well as other employer actions can be regarded in fact as incorporated into and made a part of any employment contract.” The court told the jury it was the jury’s task to determine whether anything other than an employment-at-will relationship existed and, if it did, to then decide what constituted the contract of the parties.

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Bluebook (online)
738 P.2d 1146, 153 Ariz. 539, 1987 Ariz. App. LEXIS 426, Counsel Stack Legal Research, https://law.counselstack.com/opinion/loffa-v-intel-corp-arizctapp-1987.