PUBLISH
UNITED STATES COURT OF APPEALS
Filed 10/8/96
TENTH CIRCUIT
CATHY ORBACK, ALLEN ORBACK,
MATILDA VILLARREAL, CAROL
SANCHEZ,
Plaintiffs-Appellants,
v. No. 96-1001
HEWLETT-PACKARD COMPANY,
Defendant-Appellee.
Appeal from United States District Court
for the District of Colorado
(D.C. No. 93-K-1376)
Lee T. Judd, of Andrew T. Brake, P.C., of Denver, Colorado, for the appellants.
Dennis A. Gladwell (Jessica Lee with him on the brief), of Gibson, Dunn & Crutcher, of
Denver, Colorado, for the appellee.
Before EBEL, KELLY, and BRISCOE, Circuit Judges.
BRISCOE, Circuit Judge.
Plaintiffs, all former Colorado employees of Hewlett-Packard Company, appeal
from summary judgment entered for Hewlett-Packard in four consolidated wrongful
discharge actions. Although the circumstances surrounding each plaintiff's termination of
employment differ, all plaintiffs argue implied contract and promissory estoppel theories
give them the right to enforce the discipline/involuntary termination provisions of
Hewlett-Packard's personnel policies contained in its manual, as well as statements of
corporate philosophy contained in "The HP Way."
I.
Plaintiff Cathy Orback left Hewlett-Packard through the company's Voluntary
Severance Incentive (VSI) program, after another manager had been placed in her
position while she was on extended sick leave recuperating from surgery. Plaintiff Allen
Orback resigned in the midst of a disciplinary process that he viewed as unfair. Plaintiff
Carol Sanchez took advantage of the VSI program to avoid the stress of returning to an
uncomfortable relationship with her manager after she had taken an extended leave.
Plaintiff Matilda Villarreal was involuntarily terminated at the end of a disciplinary
process that included a verbal warning, a written warning, and probation.
Hewlett-Packard's statement of corporate philosophy, "The HP Way," provides in
part:
BELIEF IN OUR PEOPLE
Confidence in, and respect for, our people, instead of depending upon
extensive rules and procedures.
Trust people to do their jobs right (individual freedom) without constant
directives.
Opportunity for meaningful participation (job dignity).
Appellants' append. I at 143. The company's corporate objectives provide in part:
OUR PEOPLE--To help HP people share in the company's success which
they make possible; to provide job security based on their performance; to insure a
safe and pleasant work environment; to recognize their individual achievements;
and to help them gain a sense of satisfaction and accomplishment from their work.
Id. at 145. Hewlett-Packard also developed a "Personnel Policies and Guidelines"
manual. The first page of the manual contains a disclaimer that the policies and
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guidelines contained in the manual do not represent a contract, and states: "This manual
is distributed for the use of managers having responsibility for decision making based on
its contents. Nevertheless, any employee may review this manual if a better
understanding or appreciation of our policies and guidelines will result." Appellee's
append. at 26. The manual explains that the guidelines and policies allow managers
flexibility, although that freedom is more restricted in implementing "policies" than in
implementing "guidelines." Section 5 of the training and development section of the
manual deals with the corrective action process:
The following process is a guide to managers in dealing with unacceptable
performance. Although most situations will generally follow the process described
below, it is recognized that exceptions may be appropriate. Exceptions include but
are not limited to new employees and employees who have been the subject of
prior corrective action efforts.
Appellants' append. I at 130. The manual then goes on to describe the corrective action
process that includes verbal discussion, written warning, probation, and termination.
Only Cathy Orback was able to establish that she received a copy of the manual.
She did not have a copy until she became a manager and did not remember looking at a
manual before that. Allen Orback did not remember receiving a copy of the manual and
had not read the provisions dealing with termination or progressive discipline. Carol
Sanchez did not recall having a copy of the manual or having access to one, but she
thought she might have seen portions of the manual. Matilda Villareal testified she may
have seen a copy of the manual once and had been told she could look at the manual. She
did not recall reading the manual or any sections of the manual dealing with termination
or progressive discipline.
John Hsu, a production associate, testified in his deposition that he was given
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access to the manual when he had a question about procedures. He had not heard about
the manual through management, but became aware of it through rumors from other
employees. Carolyn Tuttle, personnel liaison, testified in her deposition that the company
has a progressive disciplinary process in which an employee is given coaching, a verbal
warning, a written warning, and probation before discharge for disciplinary reasons, and
that this corrective action process is generally followed, although there are exceptions.
She also testified "The HP Way" reflects the company's "core values." Richard Spangler,
a manager with Hewlett-Packard, testified in his deposition that the corrective action
process was routinely followed. Although he was aware of the disciplinary guidelines
from his training as a manager, he could not remember employees ever being informed of
the process. He testified that the company "tries to outline the guidelines and the
boundaries within which the supervisors are allowed to operate" and that managers
"would use that book as their first guideline as to what normal policy would be in a
certain situation." Appellants' append. I at 127. He testified that most managers seek
advice from their managers or personnel liaisons when they deviate from the manual.
II.
In granting summary judgment to Hewlett-Packard, the district court concluded no
reasonable trier of fact could find that Hewlett-Packard's policies manifested an intent on
the part of the company to form a contract or that the company reasonably should have
expected employees to consider the manual as a commitment by the company to follow
the policies contained therein.
Summary judgment should be granted where, taking the facts in the light most
favorable to the non-moving party, there is no genuine issue of material fact and the
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moving party is entitled to judgment as a matter of law. The non-moving party must
present enough evidence to allow a reasonable jury to find for the non-moving party, and
cannot rest upon mere allegations or denials of the pleadings. Wilson v. Meeks, 52 F.3d
1547, 1551-52 (10th Cir. 1995). On appeal, we apply the same standard. Martin v. Board
of County Com'rs of County of Pueblo, 909 F.2d 402, 404 (10th Cir. 1990).
An employee who is hired in Colorado for an indefinite period is an "at will
employee" whose employment may be terminated by either party without cause or notice,
and whose termination of employment does not give rise to a cause of action. Continental
Air Lines v. Keenan, 731 P.2d 708, 711 (Colo. 1987). Therefore, summary judgment in
favor of Hewlett-Packard is proper unless plaintiffs present evidence sufficient to rebut
the presumption of at-will employment. See Schur v. Storage Technology Corp., 878
P.2d 51, 54 (Colo. App. 1994). Plaintiffs attempt to rebut the presumption through
alternative theories of implied contract and promissory estoppel based on employee
handbooks, as recognized in Continental. Plaintiffs rely on the provisions of Hewlett-
Packard's manual and "The HP Way."
Plaintiffs' reliance on "The HP Way" clearly fails. Such general indefinite policy
statements do not abrogate employment at will. Any promises to be found in this
philosophical statement "do not address any specific term of employment, and . . . do not
diminish the employer's right to terminate plaintiff's contract with or without cause. As a
result, these promises would not support the finding of an implied contract." Mariani v.
Rocky Mountain Hosp. and Medical Service, 902 P.2d 429, 434 (Colo. App. 1994). In
addition, the documents a plaintiff relies upon to overcome the presumption of
employment at will must be sufficiently definite to enable the court to determine whether
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the contract has been performed. Vasey v. Martin Marietta Corp., 29 F.3d 1460, 1464
(10th Cir. 1994). The statement of corporate philosophy contains, at most, vague
assurances too indefinite to constitute a contract offer which would enable the court to
determine whether a contract had been performed.
The question then becomes whether the manual rebuts the presumption of
employment at will, either by creating an implied contract or providing a basis for
promissory estoppel. The underlying principle behind the implied contract theory is that
the employer has made an offer to the employee showing a willingness to be bound to
some specific restrictions when terminating employment. Adams County School Dist.
No. 50 v. Dicky, 791 P.2d 688, 693 (Colo. 1990). The document relied on to establish the
implied contract must show the employer's willingness to enter into a bargain and "justify
the employee in understanding that his assent to the bargain was invited by the employer
and that the employee's assent would conclude the bargain." Id.
While the minds of the parties need not meet on the subject, the termination
procedures may be altered unilaterally, and an employee need not know the details of the
procedure, the employer must choose to make the procedures known to its employees
before an implied contract can arise. See Adams County, 761 P.2d at 693. "[A]n
employee must show that the employer's promulgation of termination procedures was an
offer and that the employee's initial or continued employment constituted acceptance of
that offer." Churchey v. Adolph Coors Co., 759 P.2d 1336, 1348 (Colo. 1988). Thus,
materials furnished directly to the employee, such as employee manuals and policy
statements, can potentially show an employer's offer to the employee. In the present case,
plaintiffs do not rely on material furnished to employees as the basis for such an "offer"
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regarding termination procedures. Plaintiffs rely on an internal policy guidelines manual
that was only furnished to managers. Because this manual was not provided to plaintiffs,
it cannot operate as a contractual offer to them and cannot reasonably justify an
understanding that assent of employees was invited. See Vasey, 29 F. 3d at 1464.
In addition to a theory of implied contract, a theory of promissory estoppel can
entitle an employee to enforce the employer's termination procedures in an appropriate
case. Plaintiff must "demonstrate that the employer should reasonably have expected the
employee to consider the employee manual as a commitment from the employer to follow
the termination procedures, that the employee reasonably relied on the termination
procedures to his detriment, and that injustice can be avoided only by enforcement of the
termination procedures." Adams County, 791 P.2d at 693.
Under the promissory estoppel theory, "the promise must be one which the
employer should reasonably have expected the employee to consider as a commitment
from the employer." Ferrera v. A.C. Nielsen, 799 P.2d 458, 461 (Colo. App. 1990).
Again, the promise relied on must be made to the employee who relies on it. The alleged
source of the promises relied on by plaintiffs here is a manual that was not provided to
employees. The manual's deliberately limited distribution, its clear and conspicuous
disclaimer, its lack of any mandatory termination procedures, and the discretion left to
individual managers prevent the manual from serving as a basis for any promises
Hewlett-Packard should reasonably have expected any of the plaintiffs to consider as a
commitment.
Even if the manual were construed to give rise to enforceable duties, plaintiffs
have failed to produce sufficient evidence of another aspect of a valid claim--that any
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alleged implied contract regarding disciplinary procedures prior to involuntary
termination was in fact breached. Cathy Orback, Allen Orback, and Carol Sanchez left
voluntarily, availing themselves of the benefit of a severance package in exchange for
their resignations. As regards these three plaintiffs, there was no evidence to support an
inference of constructive discharge. See Christie v. San Miguel County School Dist. R-
2(J), 759 P.2d 779, 782-83 (Colo. App. 1988) (proving constructive discharge requires
evidence establishing deliberate employer action which makes or allows employee's
working conditions to become so objectively difficult or intolerable that employee has no
option but to resign). As regards Matilda Villarreal, there is no evidence of any breach of
the disciplinary procedures described in the manual. Even if she were entitled to enforce
the termination provisions of the manual, she has failed to produce any evidence that
those provisions were not followed in the termination of her employment.
AFFIRMED.
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