F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
APR 4 2001
FOR THE TENTH CIRCUIT
PATRICK FISHER
Clerk
THOMAS L. KERSTIEN,
Plaintiff-Appellant,
v. No. 99-1095
(D.C. No. 96-Z-1087)
MCGRAW-HILL COMPANIES, INC., (D. Colo.)
a New York corporation; PAUL E.
CLECKNER; HOWARD W. SMITH,
Defendants-Appellees.
ORDER AND JUDGMENT *
Before BRISCOE , ANDERSON , and MURPHY , Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination
of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
Plaintiff initiated this action against the defendant corporation and two of
its management employees following his termination as a vice president of
North American sales for Compustat, a division of defendant McGraw-Hill.
In his amended complaint, he alleged that his discharge constituted a breach of
contract based on language in the employee handbook; that the discharge was
wrongful based on the doctrine of promissory estoppel, also based on the
handbook; that defendants breached an express covenant of good faith and fair
dealing; that defendants breached certain assurances made to him, violated the
Colorado Wage Claim Act, and intentionally interfered with contractual relations;
that the individual defendants conspired to terminate plaintiff’s employment; that
all defendants caused plaintiff emotional distress by action constituting extreme
and outrageous conduct; and that defendants violated both state and federal age
discrimination statutes.
The majority of the state law claims (wrongful discharge, intentional
interference with contractual relations, civil conspiracy, and outrageous conduct),
were dismissed on defendants’ motion for summary judgment. The Colorado
Wage Claims Act claim was resolved by the parties and subsequently dismissed
with prejudice. Plaintiff voluntarily dismissed his state age discrimination claim,
and, following a jury trial on the federal age discrimination claim, a verdict was
entered in favor of defendants.
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In this appeal, plaintiff contends there were genuine issues of material fact
with respect to his claims of breach of contract and promissory estoppel, tortious
interference with contractual relations, civil conspiracy, and outrageous conduct.
See Appellant’s Br. at 1-2. He does not challenge the jury verdict on the federal
age discrimination claim.
Briefly, the underlying facts are as follows. Plaintiff was the vice president
of North American sales with McGraw-Hill’s Compustat Division, a high-level
executive position. Defendant Cleckner was the head of Compustat and defendant
Smith was the vice president of sales and marketing. Smith was plaintiff’s
immediate superior. In mid-1995, a Compustat sales employee, who reported to
plaintiff, booked a sale to a sister company, an arrangement subsequently undone
by either Cleckner or Smith, apparently because it violated company policies.
The employee later contacted plaintiff asking why he was not receiving his
anticipated sales commission and plaintiff made inquiry of Smith. Smith returned
an explanation by voice mail.
Plaintiff prepared a voice mail response to the sales employee, which also
forwarded Smith’s voice mail to the employee. The comments plaintiff added to
Smith’s voice mail (which plaintiff admitted were intemperate and defendants
claimed were insubordinate and divisive) were also forwarded (no doubt
inadvertently) to Smith.
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Smith and Cleckner decided the comments made by plaintiff to the sales
employee were insubordinate, undermined Smith’s authority, and had
misrepresented the events in question. They met with Diane Gunter of the
human resources department and a representative of the legal department.
Smith, Cleckner, and Gunter discussed the matter with corporate headquarters.
Termination was discussed as an option.
Plaintiff was called into Smith’s office at 9 a.m., Monday, August 21, 1995,
at which time the voice mail message was played for plaintiff. Gunter was
present at the time. Plaintiff apologized and admitted he had made a mistake.
According to plaintiff, he was given the choice of resigning immediately or being
placed on “final warning,” which stated in part that any further action “such as
attempting to undermine management, displaying a condescending attitude,
making negative statements or behaving in a manner detrimental to McGraw-Hill
as determined by [Smith ]” would result in immediate dismissal. Appellees’ Supp.
App. at 23 (emphasis added). Plaintiff was told to leave the office and to stay
home to consider his decision.
Plaintiff admits to being told by both Gunter and Cleckner that he could not
take a previously scheduled trip to Chicago. Although he had decided by the
following day that he would accept the final warning, he knew he needed Smith’s
and Cleckner’s permission to be reinstated and left a message telling Smith and
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Cleckner of his decision. Cleckner later responded, accepting plaintiff’s decision
to remain on the job under the final warning and stating he wished to meet with
plaintiff the following Monday, August 28. Plaintiff subsequently admitted that
the only reference to the Chicago trip he had ever heard from Cleckner was on
August 21 and that the communication was not to go.
Nevertheless, plaintiff went to Chicago on Wednesday, August 23, and
returned August 24. While there he “met with a Compustat salesperson and made
several calls on Compustat business.” Appellant’s Opening Br. at 12. Plaintiff
subsequently informed Smith and Cleckner he had been in Chicago, although
Gunter apparently already knew. Cleckner sent plaintiff a voice mail expressing
incredulity at plaintiff’s decision to make the trip and calling the action “blatant
insubordination.” Appellant’s App. at 210. The message further advised plaintiff
that he had disobeyed a direct order of his boss (Smith), the general manager
(Cleckner), and human resources (Gunter). Id. Following a meeting on
Monday, August 28, prior to which Cleckner, Smith, and Gunter had again
discussed the situation with corporate headquarters, plaintiff was terminated
for insubordination.
We review the district court’s grant of summary judgment de novo, using
the same standard as did the district court. See Scull v. New Mexico , 236 F.3d
588, 595 (10th Cir. 2000). Summary judgment is appropriate if the movant
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establishes 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).
Under this standard, “we examine the factual record and reasonable inferences
therefrom in the light most favorable to the party opposing summary judgment.”
Kaul v. Stephan , 83 F.3d 1208, 1212 (10th Cir. 1996) (further quotation omitted).
A fact is material if, under the substantive law, it could affect the outcome of the
action, and an issue is genuine if a rational juror could, on the evidence presented,
find in favor of the nonmoving party. See Adams v. Am. Guarantee & Liab. Ins.
Co. , 233 F.3d 1242, 1246 (10th Cir. 2000) (citation omitted).
The district court held as a matter of law that McGraw-Hill’s procedures
manual contained a clear disclaimer barring claims based on the manual. 1
The third paragraph of the second page of the manual reads as follows:
This manual is given to you for your information and guidance.
It does not represent a contract with employees, and it is not meant
to impose any legal obligation upon them or McGraw-Hill.
McGraw-Hill may amend or terminate at any time the policies, plans,
and benefits described in this manual as our business needs and
experience dictate. Any changes will supersede the contents of this
manual. Updates to this manual will be issued when necessary to
describe any changes in the policies or plans.
Appellant’s App. at 213.
1
These claims included the wrongful discharge issues of breach of contract
and promissory estoppel.
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The district court was correct in its ruling that “[w]hether a contract
disclaimer in a handbook is conspicuous is a matter of law.” Durtsche v. Am.
Colloid Co. , 958 F.2d 1007, 1010 (10th Cir. 1992). In addition, “[s]ummary
judgment denying claims based on a handbook is appropriate if the employer
has clearly and conspicuously disclaimed intent to enter a contract limiting
the right to discharge employees.” Ferrera v. Nielsen , 799 P.2d 458, 461
(Colo. App. 1990).
The cases relied on by plaintiff for his contract and promissory estoppel
claims are inapposite. In Cronk v. Intermountain Rural Electric Ass’n , 765 P.2d
619, 623 (Colo. App. 1988), although the employment manual had a disclaimer,
it not only set forth express events which might be cause for termination, but also
listed other reasons as grounds for termination “‘as long as such legitimate
reasons constitute just cause.’” Moreover, the disclaimer itself was added after
the plaintiff had commenced employment. 2
See id. In Allabashi v. Lincoln
National Sales Corp. of Colorado-Wyoming , 824 P.2d 1, 2-3 (Colo. App. 1991),
notwithstanding a handbook disclaimer providing that employees were hired
“‘for no fixed period of time’ and that employment ‘may by terminated by the
2
We further note that a subsequent unpublished opinion recited that the
disclaimer conflicted with the just cause provisions, see Cronk v. Intermountain
Rural Elec. Ass’n , No. 90CA0666, 1992 WL 161811, at *2 (Colo. App. Apr. 2,
1992), and that the Cronk disclaimer was “inconspicuously placed in appendix to
the handbook.” Ferrera , 799 P. 2d at 461.
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employee or the Company at will,’” the other documents given to employees
contained procedures and policies requiring just cause for termination and
providing for specific procedures to be followed in the event of a dismissal.
Finally, in Evenson v. Colorado Farm Bureau Mutual Insurance Co. ,
879 P.2d 402, 409 (Colo. App. 1993), the court found that a question of fact
existed as to whether the company’s disciplinary procedures were treated as
mandatory and binding, thus supporting plaintiff’s claim of breach of an implied
employment contract. The court also held that the disclaimer provisions, which
stated that the employee handbook was not intended to create or be construed as
a contract, were not conspicuous. Id. However, unlike Evenson , in which the
court held that “an employer may nevertheless be found to have manifested an
intent to be bound by its terms if the manual contains mandatory termination
procedures or requires ‘just cause’ for termination,” id. , the manual in question
here states only that the company’s basic policy is to resort to dismissal only
where there is reasonable cause. Appellant’s App. at 187. Nonetheless,
a statement that is merely a description of policy does not constitute a promise
or commitment by an employer. See George v. Ute Water Conservancy Dist. ,
950 P.2d 1195, 1199 (Colo. App. 1997). Thus as noted by the district court,
these cases are all factually distinguishable.
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Plaintiff’s theory of promissory estoppel based on the manual must also
fail. To establish such a theory, he must show
that (1) the employer should reasonably have expected the employee
to consider the employee manual as a commitment from the employer
to follow policies contained in the manual, (2) the employee
reasonably relied on the termination procedures to his detriment,
and (3) that injustice can be avoided only by enforcement of the
termination procedures.
Vasey v. Martin Marietta Corp. , 29 F.3d 1460, 1466 (10th Cir. 1994) (citing
Continental Air Lines, Inc. v. Keenan , 731 P.2d 708, 712 (Colo. 1987)).
The manual provisions covering termination provided that McGraw-Hill’s
basic policy is to dismiss or demote an employee “ only where there is reasonable
cause , as determined in the judgment of management and Human Resources.”
Appellant’s App. at 187 (emphasis in original). This language, however, clearly
establishes the right of management to terminate an employee under the
circumstances presented here, particularly in view of the express provision in the
final warning that any further action as determined by defendant Smith to be
detrimental to McGraw-Hill, as determined by defendant Smith, would result
in plaintiff’s immediate dismissal. Plaintiff has failed to demonstrate that
McGraw-Hill should have reasonably expected him to consider the policy as
a commitment, that he relied on the manual’s statement to his detriment or that
injustice can be avoided only by enforcement of the policy. See Bullington v.
United Air Lines, Inc. , 186 F.3d 1301, 1322 (10th Cir. 1999).
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Plaintiff also relies on the “assurances” he claims he received on August 21
that he was suspended pending the resolution of whether he would resign or
accept the final warning as a condition of continued employment. He further
states that he relied on Gunter’s alleged statement--that if he accepted the final
warning he would be back on the job--for his decision to travel to Chicago.
Assuming for purposes of the summary judgment motion that these statements
were made, they do not alter the at-will nature of plaintiff’s employment.
Plaintiff admitted he knew he needed permission to go to Chicago and that
permission had been expressly denied on three different occasions. Nothing in
the alleged assurances altered that denial or his ultimate termination for traveling
to Chicago in contravention of the final warning.
Also as part of his breach of contract claim, plaintiff claims defendants
breached an express covenant of good faith and fair dealing, relying on Decker v.
Browning-Ferris Industries of Colorado, Inc. , 931 P.2d 436 (Colo. 1997).
In Decker , the Colorado Supreme Court recognized that such a covenant could
become a term of an employment agreement. Id. at 443. Insofar as plaintiff
alleges that such a covenant is stated in the company’s policy manual, we have
previously determined that the manual did not create a contractual obligation.
Where “the evidence discloses only a ‘vague assurance,’ rather than
a legally enforceable promise, then the court must determine the issue as a matter
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of law.” Soderlun v. Public Serv. Co. of Colo. , 944 P.2d 616, 621 (Colo. App.
1997) (quoting Vasey , 29 F.3d at 1465). Moreover, a covenant of good faith and
fair dealing does not “inject new substantive terms into a contract or change its
existing terms.” Id. at 623. “Such a covenant, therefore, cannot limit an
employer’s right to discharge without cause, unless there is an express or implied
promise, independent of the covenant of good faith itself, restricting that right.”
Id. The oral assurances made by Gunter (that if he accepted the final warning he
would be “back on the job”) and the deposition testimony of Smith (that he had
told those who reported to him it was his policy to treat people fairly) and
Cleckner (“we say we want to treat people fairly”) are not sufficiently definite as
a matter of law to support the breach of contract claims. See Vasey , 29 F.3d
at 1465; Dupree v. United Parcel Serv., Inc. , 956 F.2d 219, 222-23 (10th Cir.
1992) (statement that “‘We Treat our People Fairly and Without Favoritism’”
not specific enough to create implied contract; likewise oral assurances too
vague to create implied contract); see also Valdez v. Cantor , 994 P.2d 483, 487
(Colo. App. 1999) (questioning whether general statement by employer that
employee will be treated fairly would be sufficient to support judicially
enforceable obligation); Hoyt v. Target Stores , 981 P.2d 188, 194 (Colo. App.
1998) (trial court erred in denying motion for directed verdict on good faith and
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fair dealing claim where basis was vague assurance of fair and consistent
treatment). The district court correctly determined that this claim must fail.
Next, plaintiff contends genuine issues of material fact exist as to his claim
against Smith and Cleckner for tortious interference with his contract with
McGraw-Hill. We disagree. Under Colorado law
One who intentionally and improperly interferes with the
performance of a contract (except a contract to marry) between
another and a third person by inducing or otherwise causing the third
person not to perform the contract, is subject to liability to the other
for the pecuniary loss resulting to the other from the failure of the
third person to perform the contract.
Trimble v. City & County of Denver , 697 P.2d 716, 726 (Colo. 1985) (citations
omitted).
As we have earlier stated, plaintiff did not have a contract with
McGraw-Hill. “To defeat the presumption of ‘at will’ employment in Colorado,
[a plaintiff] must demonstrate an express stipulation as to the duration of
employment in exchange for consideration over and above [his] existing
performance.” Davies v. Philip Morris, USA , 863 F. Supp. 1430, 1440 (D. Colo.
1994) (further quotation omitted). Because the employment manual did not create
a contract, plaintiff remained at all times an at will employee. “In Colorado,
employment is generally at-will and an employer may terminate an employee
without cause and without notice.” Decker v. Browning-Ferris Indus. of Colo.,
Inc. , 947 P.2d 937, 939 (Colo. 1997) (further quotation omitted).
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Moreover, this claim required employer interference with a contractual
relationship. There is simply no showing that Smith and Cleckner were motivated
solely by a desire to induce McGraw-Hill to breach any contract with plaintiff or
to interfere in any contractual relationship between McGraw-Hill and plaintiff.
See Meehan v. Amax Oil & Gas, Inc. , 796 F. Supp. 461, 465 (D. Colo. 1992).
Plaintiff concedes he was told that the basis for his termination was his
insubordination. Appellant’s Br. at 23. His argument that the termination
“was so unreasonable that the only possible motivation was personal malice,”
see id. at 24, is pure speculation.
Plaintiff’s claim for civil conspiracy is also without a legal basis. In order
to establish a case of civil conspiracy, Colorado law requires “(1) action of two or
more persons; (2) common object to be accomplished; (3) meeting of the minds
on the object or course of action; (4) one or more unlawful acts; and (5) damages
as a proximate result thereof.” White v. Lincoln Plating Co. , 955 F. Supp. 98,
101 (D. Colo. 1997) (citing Pittman v. Larson Distrib. Co. , 724 P.2d 1379,
1389-90 (Colo. App. 1986)). However, a corporation and its employees do
not constitute the requisite two or more persons if the employees are acting
“on behalf of the corporation and not as individuals for their individual
advantage.” Pittman , 724 P.2d at 1390. Plaintiff has failed to establish that
Smith and Cleckner acted for their individual advantage as alleged in his amended
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complaint. The district court correctly entered summary judgment for defendants
on this claim.
Finally, the district court granted summary judgment on plaintiff’s claim of
outrageous conduct. Plaintiff has failed to demonstrate any facts showing that
defendants’ conduct was outrageous. To be liable for the intentional infliction of
emotional distress (outrageous conduct under Colorado common law), defendants’
conduct “must be more than unreasonable, unkind or unfair; it must truly offend
community notions of acceptable conduct.” Grandchamp v. United Air Lines,
Inc. , 854 F.2d 381, 383 (10th Cir. 1988). There is simply no evidence that the
actions taken by defendants rose to the level of “‘atrocious and utterly intolerable’
conduct required for an outrageous conduct claim.” Wilcott v. Matlack, Inc. , 64
F.3d 1458, 1465 (10th Cir. 1995) (quoting Rugg v. McCarty , 476 P.2d 753, 756
(Colo. 1970)).
AFFIRMED.
Entered for the Court
Mary Beck Briscoe
Circuit Judge
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