Hinson v. Cameron

KAUGER, Justice

with whom, DOOLIN, Chief Justice, and WILSON, Justice, join concurring in part and dissenting in part.

There are three things which particularly trouble me about the disposition of this case by the affirmance of the entry of summary judgment. The first is the attempt to distinguish Hall v. Farmers Ins. Exchange, 713 P.2d 1027, 1031 (Okla.1986), based on the majority’s status-based approach which characterizes the relationship at issue as “master-servant” as opposed to the “principal-agent” analysis utilized in Hall . Under Oklahoma’s revised at-will doctrine as promulgated in Hall , I see no difference, as a matter of law, between master-servant and principal and agent. 1 The second is that the employee failed to avail herself of the grievance procedures contained in the manual furnished by the hospital before resorting to the courts. 2 The third is that there remains an unresolved question of fact concerning whether an employee may sue an employer for breach of contract on the theory that an employee manual, unilaterally published by the employer, may serve as a basis for altering the terms of an employment otherwise terminable at will.

Courts have followed three theories in resolving the third question. Several have concluded that employee manuals which delineate termination procedures or reasons for termination are not contractually binding on the employer. 3 Others have held that an employee manual which contains termination procedures is a unilateral offer of employment for which continued service by the employee may constitute both acceptance and consideration, thereby creating a contractual relationship. 4 Some have *559 determined that an employee manual may be binding on the employer, not on the theory of contract, either actual or implied, but on the basis of the employee’s reasonable and detrimental reliance on the terms of the manual. 5

The majority opinion has properly disposed of the first, and possibly the second, theory. However, the question of whether the hospital is bound under the doctrine of promissory estoppel — that is the employees’ detrimental reliance on the grounds for termination being restricted to those listed in the manual — leaves a substantial question of material fact to be determined. 6 The issue of whether the manual restricted termination for cause only renders summary judgment premature. 7

It is readily apparent that the resolution of this fact question requires the promulgation of some definitive standards to guide trial courts in resolving an employee’s legal or equitable claim based on an employer’s failure, either to follow the termination procedures delineated in an employee manual unilaterally published by the employer and not expressly made a part of the original employment agreement, or to terminate an employee for reasons other than those set forth therein. 8

An employee who is hired in Oklahoma for an indefinite period of time is an at-will employee whose employment may be terminated by either, party without cause, and without notice, and whose termination does not in and of itself give rise to a cause of action. 9 However, the presumption of at-will employment cannot be considered absolute but is, rather, rebuttable under certain circumstances. I would not adopt a rule which would automatically incorporate an employee manual into the employment contract, and find that an employee may be terminated only in accordance with its terms, any more than I would embrace the opposite rule which would regard employee manuals as no more than gratuitous expressions of general company policies which have no bearing on the employee’s contractual rights.

Here, summary judgment for the employer was sustained even though the employee claimed that the only reasons for termination were set forth in the manual, and that the only reason that she could be fired was for cause. In a similar case, Continental Airlines, Inc., v. Keenan; 731 *560 P.2d 708, 711-12 (Colo.1987), the Colorado Supreme Court reversed a summary judgment and remanded for reconsideration of the employer’s motion for summary judgment, the questions of whether an employee may sue an employer for breach of contract on either the theory that an employee manual, unilaterally published by the employer, may serve as a basis for altering the terms of an employment agreement, or that the employee relied to his detriment on the termination procedures contained in the manual. The Court held that: 1) Because the burden of establishing the nonexistence of a genuine issue of fact was on the moving party, 10 the employer had the initial burden of showing that there was nothing in the record to rebut the presumption that the employee was terminable at will. 2) If the employer makes such a showing, the burden shifts to the employee to show that there is a triable factual issue as to whether the termination procedures constituted an unilateral offer for which the employee's initial or continued employment constituted an acceptance and provided the requisite consideration, or that the listing of grounds for termination constituted a promise upon which the employee reasonably relied to her detriment. 3) If the employee shows there is a material issue of fact in regard to these matters, summary judgment is inappropriate, if the employee does not, summary judgment should be sustained. 11

Employers may be accountable for the promises they make, and the policies they adopt, when those promises and policies induce employee reliance or form part of a contract. 12 This is a delicate and evolving area; therefore, the process of judicial interpretation must be sensitive, yet realistic. It must distinguish between carefully developed employer representations upon which an employee may justifiably rely, and general platitudes, vague assurances, praise, and indefinite promises of permanent continued employment. If employers have offered assurances upon which employees may justifiably rely, the employee may have a basis for recovering damages without regard to the characterization of the claim under classical contract or tort theories. 13 Obviously, difficult issues of construction may arise when courts confront testimony concerning either an employer’s oral statements or ambiguous representations are made by the employer in an employee handbook. Nevertheless, it should be remembered in such instances, the employers do retain actual control over their fate. In most cases, as here, the employer writes and disseminates the handbook or document upon which the employee relied in the wrongful discharge claim. 14 If employers desire to retain the discretion to fire at will, such policies may easily be included in the handbook. 15

*561 The employee began working as a nurse’s assistant for the employer in March of 1968. The Comanche County Memorial Hospital Employee Handbook is dated 1982-1984. The employee was fired on May 17, 1983. In the employee’s deposition, she was asked if it were her understanding that the hospital must have cause before she could be discharged. Her response was, “It’s written in black and white.” Opposing counsel then asked if she were relying on the manual when she made that statement. The employee answered, “Yes.” The employer’s answers in response to the employee’s interrogatories acknowledged that the employer’s termination policy was to act in good faith and in fair dealing. In response to the interrogatory question, “For what other non-listed reasons have employees been terminated?” The employer answered, “Voluntary terminations and retirement initiated by the employee. In addition, we had a reduction in force January 7th, 8th, and 9th 1985.”

Here, we need not extend the Hall doctrine from its mooring in contract theory into the arena of torts. My concern is that there remains a question of fact concerning whether the manual contained the only reasons for which the employee could be fired, and if the employer breached its contractual duty in its termination of the employee. Tort remedies and contract remedies may not be available for any breach of an employer’s promise not to fire except for just cause. It is only after the employee proves that the employer acted for legally intolerable motives that courts should consider remedies beyond compensation for the employee’s reliance and expectation interests. Courts should adhere strictly to proof of bad faith, malice, or public policy breach as a threshold breach for potential tort recovery. 16

The employers’ motion for summary judgment was premised, and apparently sustained, on the fact that the employee had no written or oral contract with the hospital, and that because she was an at-will employee, the hospital had an absolute right to discharge her from its employment. Even when the basic facts are undisputed, motions for summary judgment should be denied, if under the evidence, reasonable persons might reach different inferences or conclusions from the undisputed facts. 17 In my opinion, summary judgment for the employer was improperly granted because the issues of whether the hospital manual was an unilateral offer of employment, or whether the grounds for termination listed in the manual were binding on the employer because of the employee’s reasonable and detrimental reliance thereon, were not considered. Summary judgment is proper only when the pleading, affidavits, depositions, or admissions establish 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. 18 In appraising the sufficiency of a petition, the accepted rule is that a petition should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim which would entitle her to relief. 19 For these reasons, the trial court erred in entering summary judgment in favor of the employer.

. In Hall v. Farmers Ins. Exchange, 713 P.2d 1027, 1031 (Okla.1986), the Court said: "The general rule of damages for breach of employment contracts is that the aggrieved party is entitled to recover an amount which will compensate him for all the detriment proximately caused by such breach, or which will be likely to result therefrom. (Citing 23 O.S.1981 § 21) Specifically, an employee wrongfully discharged may recover damages commensurate with the consequential injury."

. However, this issue was not raised by the parties, and need not be considered on appeal. Peter v. Golden Oil Co., 600 P.2d 330 -31 (Okla.1979).

. LaRocca v. Xerox Corp., 587 F.Supp. 1002, 1004 (S.D.Fla.1984); Beidler v. W.R, Grace, Inc., 461 F.Supp. 1013, 1016 (E.D.Pa.1978), aff'd mem., 609 F.2d 500 (3rd Cir.1979); Sabertay v. Sterling Drug Inc., 114 A.D.2d 6 , 497 N.Y.S.2d 655, 657 (1986); Gates v. Life of Montana Insurance Co., 196 Mont. 178 , 638 P.2d 1063, 1066 (1982); Griffin v. Housing Authority, 62 N.C.App. 556 , 303 S.E.2d 200 -01 (1983); Muller v. Stromberg Carlson Corp., 427 So.2d 266, 270 (Fla.App.1983); Shaw v. S.S. Kresge Co., 167 Ind.App. 1 , 328 N.E.2d 775, 778 (1975).

. Carver v. Sheller-Globe Corp., 636 F.Supp. 368, 371 (W.D.Mich.1986); Mannikko v. Harrah's Reno, Inc., 630 F.Supp. 191, 196 (D.Nev.1986); Duldulao v. Saint Mary of Nazareth Hosp., 115 Ill.2d 482 , 106 Ill.Dec. 8, 12 , 505 N.E.2d 314, 318 (1987); Lewis v. Equitable Life Assur. Soc., 389 N.W.2d 876, 883 (Minn.1986); Wooley v. Hoffman LaRoche, Inc., 99 N.J. 284 , 491 A.2d 1257, 1267 (1985); Southwest Gas Corp. v. Ahmad, 99 Nev. 594 , 668 P.2d 261 (1983); Toussaint v. Blue Cross & Blue Shield, 408 Mich. 579 , 292 N.W.2d 880, 884 (1980); Dahl v. Brunswick Corp., 227 Md. 471 , 356 A.2d 221, 224 (1976); Hercules *559 Powder Co. v. Brook filed, 189 Va. 531 , 53 S.E.2d 804, 808 (1949); Rulon-Miller v. Intern. Bus. Mach. Corp., 162 Cal.App.3d 241, 208 Cal.Rptr. 524, 529 (1984); Langdon v. Saga Corp., 569 P.2d 524, 527 (Okla.App.1976); Carter v. Kaskasia Community Action Agency, 24 Ill.App.3d 1056 , 322 N.E.2d 574, 576 (1974). In Miller v. Ind. Sch. Dist. No. 56, 609 P.2d 756, 759 (Okla.1980), we held that a policy adopted and published by the board of education providing for written notification of reasons for nonrenewal of a teacher’s contract was by implication included in the teacher’s contract of employment, creating a duty on the part of the board. We said: "We hold the policy statement here in question was by implication included in Mrs. Miller’s contract of employment, and conclude that appellee Board had the authority delegated to it to in turn create a duty and it did so create a duty on its part as expressed in the above quoted ‘General Policies’ rule to notify appellant of nonrenewal of her contract, giving reasons and to grant her a public evidentiary hearing upon her having made written request therfor, prior to final Board Action. It appears beyond question that the Board, apparently believing it was not bound by the policy rule here involved, refused to comply with it."

. Continental Air Lines, Inc. v. Keenan, 731 P.2d 708, 711-13 (Colo.1987); Kinoshita v. Canadian Pacific Airlines, 724 P.2d 110, 116-17 (Haw.1986); Thompson v. St. Regis Paper Co., 102 Wash.2d 219 , 685 P.2d 1081, 1088 (1984); Toussaint v. Blue Cross & Blue Shield, note 4, supra; Matthews v. Federal Land Bank, 718 S.W.2d 220, 225 (Mo.App.1986).

. The doctrine of promissory estoppel as discussed in the Restatement (Second) of Contracts § 90 (1970) has been incorporated into Oklahoma common law. See Roxana Petroleum Co. v. Rice, 109 Okl. 161 , 235 P. 502, 506 (1924); and Bickerstaff v. Gregston, 604 P.2d 382, 384 (Okla.App.1979).

. See cases cited in note 5, supra. ' See also Sherman v. Rutland Hosp., Inc., 146 Vt. 204 , 500 A.2d 230, 232 (1985); Tepker, "Oklahoma’s At-Will Rule: Heeding the Warnings of America’s Evolving Employment Law?”, 39 Okla.L.Rev. 373, 414-17 (1986).

. Tepker, note 7, id.

. Singh v. Cities Service Oil Co., 554 P.2d 1367, 1369 (Okla.1976).

. Celotex Corp. v. Catrett, 477 U.S. 317 , -, 106 S.Ct. 2548, 2552 , 91 L.Ed.2d. 265, 273 (1986).

. Continental Air Lines v. Keenan, note 5, supra.

. See note 7, supra.

. Tepker, "Oklahoma’s At-Will Rule", see note 7, supra.

. Employers should review all written materials for any reference that could be construed as limiting the ability to terminate and delete the reference. In addition, employers who want to retain the right to terminate at will should include a conspicuous disclaimer of job security in employee handbooks. The disclaimer also should give the employer a unilateral right to modify policies. Employees should review their performance appraisal system, document job related deficiencies, and establish performance improvement guidelines. These steps will prevent contradictions when the terminated employee challenges the employer’s decision. Employers should have in place a method to review in advance all proposed terminations or layoffs. A review mechanism will prevent arbitrary terminations and ensure uniformity in terminations. In those instances where termination is warranted, employers should standardize their termination methods. At least two people should be involved and the termination should be properly documented. The employee should be told the basis for the termination and be given the opportunity to be heard. R. Tisman, "How to Prevent Employee Suits for Unjust Dismissal,” National Law Journal, Vol. 9, p. 20 (May 11, 1987).

. Liekvold v. Valley View Community Hosp., 141 Ariz. 544, 547 , 688 P.2d 170, 174 (1984); Pine River State Bank v. Mettille, 333 N.W.2d 622, 627 (Minn.1983); Morris v. Lutheran Med. Ctr., 215 Neb. 677 , 340 N.W.2d 388, 391 (1983); Mau v. Omaha Natl. Bank, 207 Neb. 308 , 299 *561 N.W.2d 147, 151 (1980); Tepker, "Oklahoma’s At-Will Rule: Heeding the Warnings of America's Evolving Employment Law?’’, see note 7, supra.

.Tepker, "Oklahoma’s At-Will Rule”, see note 7, supra.

. Wilds v. Universal Resources Corp., 662 P.2d 303, 307 (Okla.1983); Munley v. ISC Financial House, Inc., 584 P.2d 1336, 1338 (Okla.1978).

. Celotex Corp. v. Catrett, see note 10, supra.

. Conley v. Gibson, 355 U.S. 41 , 78 S.Ct. 99 , 2 L.Ed.2d 80, 84 (1957).