Gardner et al v. Deseret Mutual Benefit Administrators
Filing
53
MEMORANDUM DECISION AND ORDER dismissing with prejudice Fifth Cause of Action for breach of contract and Seventh Cause of Action for breach of covenant of good faith and fair dealing relating to Yohana Gardner. Signed by Judge David Nuffer on 5/3/16 (alt)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
YOHANA GARDNER, an individual, and
BRYCE GARDNER, an individual,
Plaintiffs,
v.
DESERET MUTUAL BENEFIT
ADMINISTRATORS, a Utah non-profit
corporation,
Defendant.
MEMORANDUM DECISION AND
ORDER DISMISSING PLAINTIFFS’
FIFTH AND SEVENTH CAUSES OF
ACTION RELATING TO YOHANA
GARDNER
Case No. 2:14-CV-00602-DN-EJF
District Judge David Nuffer
An order 1 entered six weeks ago granted summary judgment in favor of Defendant on
Gardners’ Sixth Cause of Action for breach of contract and Seventh Cause of Action for breach
of covenant of good faith and fair dealing relating to Bryce Gardner. After review and
consideration of Plaintiffs Yohana Gardner and Bryce Gardner’s (the “Gardners”) Complaint, 2
the briefing and Memorandum Decision and Order on Defendant Deseret Mutual Benefit
Administrators’s (“Deseret Mutual”) Amended Motion for Partial Summary Judgment relating to
the claims of Bryce Gardner, 3 and the briefing on Deseret Mutual’s Motion for Partial Summary
1
Mem. Decision and Order Granting in Part and Denying in Part [17] Mot. for Partial Summ. J., docket no. 45, filed
Mar. 22, 2016.
2
3
Compl., docket no. 2, filed Aug. 19, 2014.
Am. Mot. and Mem. in Supp. of Partial Summ. J. on Bryce Gardner’s Claims for Breach of Contract, Breach of the
Covenant of Good Faith and Fair Dealing, and Retaliation (“Motion re Bryce Gardner Claims”), docket no. 17, filed
Jan. 28, 2015; Mem. in Opp’n to Def.’s Am. Mot. and Mem. in Supp. of Partial Summ. J. on Bryce Gardner’s
Claims for Breach of Contract, Breach of the Covenant of Good Faith and Fair Dealing, and Retaliation
(“Opposition re Bryce Gardner Claims”), docket no. 20, filed Mar. 23, 2015; Reply Mem. in Supp. of Am. Mot. for
Partial Summ. J. (“Reply re Bryce Gardner Claims”), docket no. 25, filed Apr. 30, 2015; Mem. Decision and Order
Granting in Part and Denying in Part [17] Mot. for Partial Summ. J. (“Order re Bryce Gardner Claims”), docket no.
45, entered Mar. 22, 2016.
Judgment relating to the claims of Yohana Gardner, 4 notice was provided to the parties, pursuant
to Rule 56(f)(3) of the Federal Rules of Civil Procedure, of the court’s intent to summarily
dismiss the Gardners’ Fifth Cause of Action for breach of contract and Seventh Cause of Action
for breach of covenant of good faith and fair dealing relating to Yohana Gardner. 5 Neither party
filed a response to the notice. Accordingly, for the following reasons, the Gardners’ Fifth and
Seventh Causes of Action relating to Yohana Gardner are summarily dismissed.
Table of Contents
Undisputed Material Facts .............................................................................................................. 3
Standard of Review ......................................................................................................................... 7
Discussion ....................................................................................................................................... 8
A.
No Triable Issue of Fact Exists as to the Gardners’ Fifth Cause of Action for Breach
of Contract Relating to Yohana Gardner and the Claim Fails as a Matter of Law ....... 8
B.
The Gardners’ Seventh Cause of Action for Breach of Covenant of Good Faith and
Fair Dealing Relating to Yohana Gardner Fails as a Matter of Law .......................... 15
Order… ......................................................................................................................................... 16
4
Mot. and Mem. in Supp. of Mot. for Partial Summ. J. on Yohana Gardner’s Claims (“Motion re Yohana Gardner
Claims”), docket no. 43, filed Mar. 4, 2016; Mem. in Opp’n to Def.’s Mot. for Partial Summ. J. on Yohana
Gardner’s Claims (“Opposition re Yohana Gardner Claims”), docket no. 47, filed Apr. 1, 2016; Reply in Supp. of
Mot. and Mem. in Supp. of Mot. for Partial Summ. J. on Yohana Gardner’s Claims (“Reply re Yohana Gardner
Claims”), docket no. 49, filed Apr. 8, 2016.
5
Notice from the Court re Plaintiffs’ Fifth and Seventh Causes of Action relating to Yohana Gardner, docket no. 52,
entered Apr. 20, 2016.
2
UNDISPUTED MATERIAL FACTS
The following undisputed material facts are a reconciliation of the statements of material
facts in the briefing and Memorandum Decision and Order on Deseret Mutual’s Amended
Motion for Partial Summary Judgment relating to the claims of Bryce Gardner, 6 and the briefing
on Deseret Mutual’s Motion for Partial Summary Judgment relating to the claims of Yohana
Gardner. 7
1.
Deseret Mutual is a non-profit corporation employing approximately 400
associates in their Salt Lake City office. 8
2.
Deseret Mutual’s primary function is to administer a competitive benefits
program for employees of the Church of Jesus Christ of Latter-day Saints and its affiliated
organizations. 9
3.
Deseret Mutual’s call center associates are divided into specialty teams, such as
customer service and enrollment, and file telephone calls and written requests regarding medical
and dental insurance, life insurance, disability insurance, and retirement plans. 10
4.
Yohana Gardner was hired by Deseret Mutual as a Customer Service
Representative on June 19, 2012. 11
6
Motion re Bryce Gardner Claims at 5-15, ¶¶ 1-52; Opposition re Bryce Gardner Claims at 7-60, ¶¶ 53-202; Reply
re Bryce Gardner Claims at Exhibit A, docket no. 25-1, filed Apr. 30, 2015; Order re Bryce Gardner Claims at 3-22,
¶¶ 1-137.
7
Motion re Yohana Gardner Claims at 3-14, ¶¶ 1-52; Opposition re Yohana Gardner Claims at 4-25, ¶¶ 1-10; Reply
re Yohana Gardner Claims at 6-28.
8
Order re Bryce Gardner Claims at 3, ¶ 1 (citing Motion re Bryce Gardner Claims at 5, ¶ 1; Associate Handbook
§ 1, DMBA00265, docket no. 17-4, filed Jan. 28, 2015); Motion re Yohana Gardner Claims at 3, ¶ 1.
9
Order re Bryce Gardner Claims at 3, ¶ 2 (citing Motion re Bryce Gardner Claims at 5, ¶ 2; Decl. of Scott E.
Eastmond in Supp. of Mot. for Partial Summ. J. (“Eastmond Declaration”) ¶ 5, docket no. 17-1, filed Jan. 28, 2015);
Motion re Yohana Gardner Claims at 3, ¶ 2.
10
Order re Bryce Gardner Claims at 3, ¶ 3 (citing Motion re Bryce Gardner Claims at 5, ¶ 3; Eastmond Declaration
¶¶ 6-7); Motion re Yohana Gardner Claims at 4, ¶ 3.
3
5.
The primary responsibility of a Customer Service Representative at Deseret
Mutual is to:
[P]rovide superior customer service giving accurate and efficient information to
providers, employers and members by phone or on-line chat for multiple benefit
plans. The plans include several Active and Retiree Medical benefits, Student
Health benefits, Dental, Flexible Spending Life and Value Added benefits. In
addition, this position has the responsibility for follow up work including
outbound phone calls to customers and internal coordination with many internal
department[s] of [Deseret Mutual].12
6.
The job duties of a Customer Service Representative at Deseret Mutual include:
Compassionately answer customer service phone calls and/or online chats from
providers, employers and members in a profession[al] manner ensuring all the
needs of the customer are met.
Complete phone calls including follow up work within the service and quality
standards established by Deseret Mutual.
Actively participate in weekly Team Meetings by sharing ideas, strengthening
team members, reviewing procedures, and building relationships.
Be proficient in the various systems and web applications to efficiently and
effectively perform the job duties required in this position. 13
7.
As part of Yohana Gardner’s initial employment paperwork, she received and
signed a Conditional Offer of Employment (“Conditional Offer”) that stated:
I understand and agree that my employment is for no definite period and may,
regardless of the date of payment of wages and salary, be terminated at any time
without prior notice, and without cause. 14
8.
Yohana Gardner also received and signed a Conditions of Employment Statement
on June 14, 2012 (“Employment Statement”). 15
11
Motion re Yohana Gardner Claims at 4, ¶ 4; DMBA Conditional Offer of Employment (“Conditional Offer”),
DMBA 00189, docket no. 43-2, filed Mar. 4, 2016; Dep. Tr. of Yohana Gardner dated Jan. 9, 2015 (“Yohana
Gardner Deposition”) at 9:14-17, docket no. 20-3, filed Mar. 23, 2015.
12
Motion re Yohana Gardner Claims at 4, ¶ 5 (citing Deseret Mutual Job Description (“Job Description”), docket
no. 43-1, filed Mar. 4, 2016).
13
Id. at 4, ¶ 6 (citing Job Description).
14
Id. at 5, ¶ 11 (citing Conditional Offer; Yohana Gardner Deposition at 10:1-11:25).
4
9.
The Employment Statement states:
I agree and understand that the contents of this handbook and all Deseret Mutual
manuals dealing with employment policies are presented as a matter of
information only and are not to be understood or construed as a promise or
contract between Deseret Mutual and its employees. I understand and agree that I
have received no promise from Deseret Mutual regarding potential length of
employment or promotion of any kind. I further understand that I have the right to
terminate my employment at any time and that Deseret Mutual retains a similar
right. 16
10.
Yohana Gardner testified that she understood the Employment Statement to mean
that Deseret Mutual “can terminate you at any time. That they don’t have a contract of how long
you’re there.” 17
11.
Yohana Gardner also testified that she understood that “[i]t’s their company. It’s
just that, they can fire you at any time.” 18
12.
Deseret Mutual’s Human Resources Policy Manual (“HR Manual”), which is a
portion of Deseret Mutual’s employee handbook, states:
It is the policy of Deseret Mutual that its human resources Policies are to be used
as an outline of the basic Human Resources practices and procedures for Deseret
Mutual. They are not intended to alter the employment-at-will relationship in any
way. (See Employment-At-Will, Policy 106.) 19
15
Id. at 5, ¶ 12 (citing Conditions of Employment Statement (“Employment Statement”), DMBA00185, docket no.
43-4, filed Mar. 4, 2016; Yohana Gardner Deposition at 12:1-13:25).
16
Id. at 5, ¶ 13 (citing Employment Statement).
17
Id. at 6, ¶ 14 (citing Yohana Gardner Deposition at 13:8-13).
18
Id. at 6, ¶ 15 (citing Yohana Gardner Deposition at 14:9-10).
19
Id. at 6, ¶ 16 (citing Deseret Mutual Human Resources Policy Manual (“HR Manual”) at 102 – Functions of
Human Resources Policies – 04/06, GNR00188, docket no.43-5, filed Mar. 4, 2016 (emphasis in original)); Order re
Bryce Gardner Claims at 4-5, ¶ 13 (citing Motion re Bryce Gardner Claims at 7, ¶ 13; HR Manual at 102 –
Functions of Human Resources Policies – 04/06, GNR00188 (emphasis in original)).
5
13.
Policy 106 of the HR Manual outlines that:
It is the policy of Deseret Mutual that all associates who do not have a written
employment contract with Deseret Mutual for a specific, fixed term of
employment are employed at the will of Deseret Mutual for an indefinite period. 20
14.
Comment 1 to Policy 106 of the HR Manual states:
Associates who do not have a separate, individual written employment contract
are employed at the will of Deseret Mutual and are subject to termination at any
time, for any reason, with or without cause or notice. 21
15.
Comment 2 to Policy 106 of the HR Manual states:
No Deseret Mutual representative is authorized to modify this policy for any
associate or to enter into any agreement, oral or written, that changes the at-will
relationship. 22
16.
Comment 3 to Policy 106 of the HR Manual further clarifies that:
This policy may not be modified by any statements contained elsewhere in
Deseret Mutual Human Resources policies, or any other associate handbooks,
employment applications, Deseret Mutual recruiting materials, Deseret Mutual
memoranda, or other materials provided to applicants and associates in
connection with their employment. None of these documents, whether singly or
combined, create an express or implied contract of employment for a definite
period, … or an express or implied contract concerning any terms or conditions of
employment. Similarly, Deseret Mutual policies and practices with respect to any
matter are not to be considered as creating any contractual obligation on Deseret
Mutual’s part or as stating in any way that termination will occur only for “just
cause.” Statements of specific grounds for termination set forth in Human
Resources policies or in any other Deseret Mutual documents are examples only,
not all-inclusive lists, and are not intended to restrict Deseret Mutual’s right to
terminate at-will. 23
20
Motion re Yohana Gardner Claims at 6, ¶ 17 (citing HR Manual at 106 – Employment-At-Will – 04/06,
GNR00193); Order re Bryce Gardner Claims at 5, ¶ 14 (citing Motion re Bryce Gardner Claims at 7-8, ¶ 14; HR
Manual at 106 – Employment-At-Will – 04/06, GNR00193).
21
Motion re Yohana Gardner Claims at 6, ¶ 18 (citing HR Manual at 106 – Employment-At-Will – 04/06,
GNR00193); Order re Bryce Gardner Claims at 5, ¶ 15 (citing Motion re Bryce Gardner Claims at 8, ¶ 15; HR
Manual at 106 – Employment-At-Will – 04/06, GNR00193).
22
Motion re Yohana Gardner Claims at 7, ¶ 19 (citing HR Manual at 106 – Employment-At-Will – 04/06,
GNR00194); Order re Bryce Gardner Claims at 5, ¶ 16 (citing Motion re Bryce Gardner Claims at 8, ¶ 16; HR
Manual at 106 – Employment-At-Will – 04/06, GNR00194).
23
Motion re Yohana Gardner Claims at 7, ¶ 20 (citing HR Manual at 106 – Employment-At-Will – 04/06,
GNR00194); Order re Bryce Gardner Claims at 5-6, ¶ 17 (citing Motion re Bryce Gardner Claims at 8, ¶ 17; HR
Manual at 106 – Employment-At-Will – 04/06, GNR00194).
6
17.
Policy 211 of the HR Manual also provides that:
It is the policy of Deseret Mutual to terminate employment because of an
associate’s resignation, discharge, retirement, expiration of an employment
contract, or permanent reduction in the work force. Discharge can be for any
reason not prohibited by law. In the absence of a specific written agreement,
associates are free to resign at any time and for any reason and Deseret Mutual
reserves the right to terminate employment at any time and for any reason. 24
STANDARD OF REVIEW
Summary judgment is appropriate if “there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” 25 A factual dispute is genuine when
“there is sufficient evidence on each side so that a rational trier of fact could resolve the issue
either way.” 26 In determining whether there is a genuine dispute of material fact, the district court
should “view the factual record and draw all reasonable inferences therefrom most favorably to
the nonmovant.” 27
The moving party “bears the initial burden of making a prima facie demonstration of the
absence of a genuine issue of material fact and entitlement to judgment as a matter of law.” 28 For
purposes of applying the summary judgment standard of review in this Memorandum Decision
and Order, Deseret Mutual is considered the movant and the Gardners are considered the
nonmovants. 29
24
Motion re Yohana Gardner Claims at 7, ¶ 21 (citing HR Manual at 211 – Termination of Employment – 04/06,
GNR00220); Order re Bryce Gardner Claims at 6, ¶ 18 (citing Motion re Bryce Gardner Claims at 8-9, ¶ 18; HR
Manual at 211 – Termination of Employment – 04/06, GNR00220).
25
FED. R. CIV. P. 56(a).
26
Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998).
27
Id.
28
Id. at 670-71.
29
FED. R. CIV. P 56(f)(3) (“After giving notice and a reasonable time to respond, the court may… consider summary
judgment on its own after identifying for the parties material facts that may not be genuinely in dispute.”).
7
DISCUSSION
A. No Triable Issue of Fact Exists as to the Gardners’ Fifth Cause of Action for Breach
of Contract Relating to Yohana Gardner and the Claim Fails as a Matter of Law
Resolution of the Gardners’ Fifth Cause of Action for breach of contract relating to
Yohana Gardner turns on Yohana Gardner’s employment relationship with Deseret Mutual. “The
elements of a prima facie case for breach of contract are (1) a contract, (2) performance by the
party seeking recovery, (3) breach of the contract by the other party, and (4) damages.” 30
The Gardners allege that the disciplinary policies and procedures contained in Deseret
Mutual’s employee handbook establish implied-in-fact contract terms precluding termination
unless certain requirements are followed, i.e., a prior verbal warning, followed by a written
warning, and then by discipline short of termination. 31 The Gardners therefore claim that Deseret
Mutual breached Yohana Gardner’s employment contract when it terminated her employment
without following its established disciplinary process. 32
“An employment relationship for an indefinite term gives rise to a presumption that the
employment relationship is at will.” 33 “Such a relationship allows both the employer and the
employee to terminate the employment for any reason and allows the employer to do so without
extending any procedural safeguards to an employee.” 34 However, an employee “may overcome
this presumption by showing that the parties created an implied-in-fact contract, modifying the
employee’s at-will status.” 35
30
Bair v. Axiom Design, L.L.C., 2001 UT 20, ¶ 14, 20 P.3d 388.
31
See Compl. ¶¶ 130-132; Opposition re Bryce Gardner Claims at 85-90.
32
See Compl. ¶¶ 133-134.
33
Tomlinson v. NCR Corp., 2014 UT 55, ¶ 11, 345 P.3d 523.
34
Id. (internal quotations omitted).
35
Id. (internal quotations omitted).
8
“The existence of such an [implied-in-fact] agreement is a question of fact which turns on
the objective manifestations of the parties’ intent and is primarily a jury question.” 36 However,
the district court “may properly determine the existence of an implied contract as a matter of law
if no reasonable jury could find such a contract and if the evidence relied on by the parties
presents no triable issues of fact.” 37 “Evidence of an implied contact must meet the requirements
for an offer of a unilateral contract.” 38 “Accordingly, the employer must communicate a
manifestation of intent to the employee that is sufficiently definite to constitute a contract
provision.” 39 “[T]he manifestation of the employer’s intent must 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.” 40 “Relevant evidence of the parties’ intent may include announced
personnel policies, employment manuals, the course of conduct between the parties, and relevant
oral representations.” 41
The Conditional Offer that Yohana Gardner received and signed when she began working
at Deseret Mutual expressly provides that her employment was at-will:
I understand and agree that my employment is for no definite period and may,
regardless of the date of payment of wages and salary, be terminated at any time
without prior notice, and without cause. 42
The Employment Statement that Yohana Gardner received and signed at the outset of her
employment at Deseret Mutual also expressly provides that her employment was at-will:
36
Id. ¶ 12 (internal quotations and punctuation omitted).
37
Id.
38
Id. ¶ 13 (internal quotations omitted)
39
Id.
40
Johnson v. Morton Thiokol, Inc., 818 P.2d 997, 1002 (Utah 1991).
41
Tomlinson, 2014 UT 55, ¶ 12.
42
Supra, Undisputed Material Facts ¶ 7.
9
I understand and agree that I have received no promise from Deseret Mutual
regarding potential length of employment or promotion of any kind, I further
understand that I have the right to terminate my employment at any time and that
Deseret Mutual retains a similar right. 43
Deseret Mutual’s HR Manual similarly sets forth multiple express statements that Deseret
Mutual’s employees are at-will employees, unless the employee has a separate written
employment contact. 44 Specifically, Policy 106, titled “Employment-At-Will,” provides:
It is the policy of Deseret Mutual that all associates who do not have a written
employment contract with Deseret Mutual for a specific, fixed term of
employment are employed at the will of Deseret Mutual for an indefinite period. 45
Comment 1 to Policy 106 further clarifies the at-will nature of Deseret Mutual’s employees:
Associates who do not have a separate, individual written employment contract
are employed at the will of Deseret Mutual and are subject to termination at any
time, for any reason, with or without cause or notice. 46
Additionally, Policy 211, title “Termination of Employment,” provides:
In the absence of a specific written agreement, associates are free to resign at any
time and for any reason and Deseret Mutual reserves the right to terminate
employment at any time and for any reason. 47
Yohana Gardner admitted in her deposition that she did not have a contract of
employment with Deseret Mutual for a duration other than an indefinite term, and that she
understood Deseret Mutual could terminate her employment at any time. 48 The Gardners,
nevertheless, allege that Deseret Mutual created an implied-in-fact modification to Yohana
Gardner’s at-will employment status by requiring its supervisors to always follow a disciplinary
43
Id. ¶¶ 8-9.
44
See id. ¶¶ 13-14, 17.
45
Id. ¶ 13.
46
Id. ¶ 14.
47
Id. ¶ 17.
48
See id. ¶¶ 10-11.
10
process prior to termination that included a verbal warning, then a written warning and
discipline. 49
There is no direct evidence to support the Gardners’ allegation that the policies within
Deseret Mutual’s employee handbook modified Yohana Gardner’s at-will employment status.
Nor do the undisputed material facts and competent evidence presented support a reasonable
inference that Deseret Mutual somehow altered her at-will employment status. Rather, the clear
and plain language of Yohana Gardner’s Conditional Offer, Employment Statement, and Policies
106 and 211 of Deseret Mutual’s HR Manual demonstrate that in the absence of a separate
written employment contact, Yohana Gardner’s employment with Deseret Mutual was at-will at
the time of her hiring and remained at-will to her termination. 50 There is insufficient competent
evidence of any express or implied statement within Deseret Mutual’s employee handbook
materials, or any oral statement of policy, suggesting that a modification of Yohana Gardner’s atwill employment status occurred. This is particularly true in light of the clear and conspicuous
disclaimer of contract liability within Yohana Gardner’s Employment Statement and Deseret
Mutual’s HR Manual. 51
“An implied-in-fact promise cannot, of course, contradict a written contract term.” 52
Additionally, “Utah law allows employers to disclaim any contractual relationship that might
otherwise arise from employee manuals.” 53 “When an employee handbook contains a clear and
conspicuous disclaimer of contractual liability, any other agreement terms must be construed in
49
See Compl. ¶¶ 130-132; Opposition re Bryce Gardner Claims at 85-90.
50
See supra, Undisputed Material Facts ¶¶ 7, 9, 13-14, 17.
51
See id. ¶¶ 9, 12, 15-16.
52
Berube v. Fashion Ctr., Ltd., 771 P.2d 1033, 1044 (Utah 1989).
53
Tomlinson, 2014 UT 55, ¶ 25
11
the light of the disclaimer.” 54 Therefore, “a clear and conspicuous disclaimer, as a matter of law,
prevents employee manuals or other like material from being considered as implied-in-fact
contract terms.” 55 “The prominence of the text, the placement of the disclaimer, and the language
of the disclaimer are all relevant factors in determining whether a disclaimer is clear and
conspicuous.” 56
Yohana Gardner’s Employment Statement is a one-page document consisting of eight
bulleted paragraphs. 57 The third bulleted paragraph contains a disclaimer of contract liability:
I agree and understand that the contents of this handbook and all Deseret Mutual
manuals dealing with employment policies are presented as a matter of
information only and are not to be understood or construed as a promise or
contract between Deseret Mutual and its employees. 58
It is undisputed that Yohana Gardner received and signed the document. 59
The disclaimer of contract liability is also restated in Policy 102 of Deseret Mutual’s HR
Manual, titled “Functions of Human Resources Policies,” which provides:
It is the policy of Deseret Mutual that its human resources Policies are to be used
as an outline of the basic Human Resources practices and procedures for Deseret
Mutual. They are not intended to alter the employment-at-will relationship in any
way. (See Employment-At-Will, Policy 106.) 60
Comment 2 of Policy 106 then clarifies that the disclaimer of contract liability cannot be
modified orally or in writing by a Deseret Mutual representative:
54
Id. (internal quotations omitted).
55
Id. (internal quotations omitted).
56
Id. ¶ 26.
57
See Employment Statement.
58
Supra, Undisputed Material Facts ¶ 9.
59
See id. ¶ 8.
60
Id. ¶ 12 (emphasis in original).
12
No Deseret Mutual representative is authorized to modify this policy for any
associate or to enter into any agreement, oral or written, that changes the at-will
relationship. 61
Comments 3 of Policy 106 further clarifies that Deseret Mutual’s policies may not, collectively
or individually, be construed as creating an express or implied contract that modifies the at-will
employment status of its employees:
This policy may not be modified by any statements contained elsewhere in
Deseret Mutual Human Resources policies, or any other associate handbooks,
employment applications, Deseret Mutual recruiting materials, Deseret Mutual
memoranda, or other materials provided to applicants and associates in
connection with their employment. None of these documents, whether singly or
combined, create an express or implied contract of employment for a definite
period, … or an express or implied contract concerning any terms or conditions of
employment. Similarly, Deseret Mutual policies and practices with respect to any
matter are not to be considered as creating any contractual obligation on Deseret
Mutual’s part or as stating in any way that termination will occur only for “just
cause.” Statements of specific grounds for termination set forth in Human
Resources policies or in any other Deseret Mutual documents are examples only,
not all-inclusive lists, and are not intended to restrict Deseret Mutual’s right to
terminate at will. 62
There is no evidence suggesting that Yohana Gardner was unaware of or did not understand
these policies. Rather, the undisputed material facts demonstrate that Yohana Gardner
understood that she did not have a contract of employment with Deseret Mutual for a duration
other than an indefinite term, and that she understood Deseret Mutual could terminate her
employment at any time. 63
The actual text of Deseret Mutual’s disclaimer of contract liability in Yohana Gardner’s
Employment Statement was no more or less prominent then the text of other provisions in the
Employment Statement. 64 Similarly, the actual text of disclaimer of contract liability in Deseret
61
Id. ¶ 15.
62
Id. ¶ 16.
63
See id. ¶¶ 10-11.
64
See Employment Statement.
13
Mutual’s HR Manual was no more or less prominent then the text of other policies and
comments within the HR Manual. 65 However, the headings of Policy 102, “Functions of Human
Resources Policies,” and Policy 106, “Employment-At-Will,” where the restatement of the
disclaimer of contract liability is found and discussed in the HR Policy Manual, are prominently
displayed in bolded, large size font. 66 The reference to the heading of Policy 106 within the text
of Policy 102 is also prominently displayed with underlining. 67
The multiple placements of Deseret Mutual’s disclaimer of contract liability in Yohana
Gardner’s Employment Statement and the HR Manual further add to the disclaimer’s
conspicuous nature. Moreover, the plain language of the disclaimer of contract liability in each
placement is clear, consistent, and unambiguous. Accordingly, Deseret Mutual’s disclaimer of
contract liability prevents its employee handbook materials from creating implied-in-fact
contract terms that modified Yohana Gardner’s at-will employment status as a matter of law. 68
Because there is no competent evidence of an express, written employment contract for a
duration other than an indefinite term between Yohana Gardner and Deseret Mutual and no
competent evidence suggesting a manifestation of Deseret Mutual’s intent to create an impliedin-fact contract for a duration other than an indefinite term regarding Yohana Gardner’s
employment, there is no triable issue of fact that Yohana Gardner’s employment was anything
other than at-will. Given the undisputed material facts and the competent evidence presented, no
reasonable jury could find the existence of an implied-in-fact contract between Yohana Gardner
and Deseret Mutual for a duration other than an indefinite term. As such, Yohana Gardner’s
65
See HR Manual.
66
See id.
67
See id.
68
See Tomlinson, 2014 UT 55, ¶ 25.
14
employment at Deseret Mutual was at-will and Deseret Mutual could terminate her employment
at any time, for any reason, with or without cause or notice. 69 The Gardners’ Fifth Cause of
Action for breach of contract relating to Yohana Gardner therefore fails as a matter of law.
B. The Gardners’ Seventh Cause of Action for Breach of Covenant of Good Faith and
Fair Dealing Relating to Yohana Gardner Fails as a Matter of Law
Under Utah law, “[a]n implied covenant of good faith and fair dealing inheres in every
contact.” 70 “Under the covenant of good faith and fair dealing, both parties to a contract
impliedly promise not to intentionally do anything to injure the other party’s right to receive the
benefits of the contact.” 71 “Such a covenant cannot be construed, however, to establish new,
independent rights or duties not agreed upon by the parties.” 72 “Nor can a covenant of good faith
be used to nullify a right granted by a contract to one of the parties or to require a party vested
with a contract right to exercise that right in a manner contrary to that party’s legitimate selfinterest.” 73
In the employment contract context,
in the absence of express terms limiting the right of an employer to discharge for
any or no reason and in the absence of provisions establishing procedures by
which a discharge should be effectuated, it would be inconsistent to hold that an
employer, on the basis of the implied covenant of good faith, is bound to a
substantive limitation on the employer’s right to discharge. 74
69
See id. ¶ 11.
70
Eggett v. Wasatch Energy Corp., 2004 UT 28, ¶ 14, 94 P.3d 193.
71
Id.
72
Brehany v. Nordstrom, Inc., 812 P.2d 49, 55 (Utah 1991).
73
Id.
74
Id.
15
In other words, the implied covenant of good faith and fair dealing “cannot be construed to
change an indefinite-term, at-will employment contract into a contract that requires an employer
to have good cause to justify a discharge.” 75
The undisputed material facts establish as a matter of law that no express or implied-infact employment contract for a duration other than an indefinite term existed between Yohana
Gardner and Deseret Mutual. Yohana Gardner’s employment at Deseret Mutual was therefore atwill and Deseret Mutual had the right to terminate her employment at any time, for any reason,
with or without cause or notice. 76 Accordingly, because the implied covenant of good faith and
fair dealing cannot be construed to alter Deseret Mutual’s right to terminate Yohaha Gardner atwill, 77 the Gardners’ Seventh Cause of Action for breach of covenant of good faith and fair
dealing relating to Yohana Gardner fails as a matter of law.
ORDER
IT IS HEREBY ORDERED that the Gardners’ Fifth Cause of Action for breach of
contract and Seventh Cause of Action for breach of covenant of good faith and fair dealing
relating to Yohana Gardner are DISMISSED WITH PREJUDICE.
Dated May 3, 2016.
BY THE COURT:
____________________________
David Nuffer
United States District Judge
75
Id.
76
See Tomlinson, 2014 UT 55, ¶ 11.
77
See Brehany, 812 P.2d at 55.
16
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