Appeal from the United States District Court for the District of Arizona. D.C. No. CV-91-01510-RCB. Robert C. Broomfield, District Judge, Presiding.
Before: Warren J. Ferguson and Michael Daly Hawkins, Circuit Judges, and Wm. Fremming Nielsen, District Judge.*fn* Opinion by Judge Ferguson.
Plaintiffs, John M. Huey and Cheryl Huey, appeal the district court's grant of summary judgment for defendant, Honeywell Inc., with respect to plaintiffs' breach of employment contract and intentional infliction of emotional distress claims.
We have jurisdiction pursuant to 28 U.S.C. § 1291. We reverse the district court's grant of summary judgment on the breach of employment contract claim and affirm the district court's grant of summary judgment on the intentional infliction of emotional distress claim.
A grant of summary judgment is reviewed de novo. Jesinger v. Nevada Fed. Credit Union, 24 F.3d 1127, 1130 (9th Cir. 1994). We must determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law. Id. An appellate court reviews a district court's determination of state law de novo. Salve Regina College v. Russell, 499 U.S. 225, 231, 113 L. Ed. 2d 190, 111 S. Ct. 1217 (1991).
II. Factual and Procedural Background
The facts of this case as presented to the district court, viewed in the light most favorable to the plaintiffs, are as follows. Honeywell hired John Huey in 1989 to work part-time in its Shipping and Receiving department. Huey became a full-time employee in January 1990. Since that time, he consistently received high job performance ratings and letters of recommendation from Honeywell in recognition of his outstanding job performance.
Honeywell's standards of employee conduct and disciplinary procedures for violations of those standards are set out in written policies and in the company's personnel manual. However, these written policies and the personnel manual are not distributed to Honeywell employees. Rather, Honeywell relies on its supervisors to inform its employees of the company's disciplinary procedures. This company practice is reflected in one of Honeywell's written policies which provides: "all Honeywell employees work under the direction of a supervisor . . . . The supervisor is also your link to management and is responsible for informing you about Company events and policies that may effect you or your work."
Honeywell's disciplinary procedures, relayed to Honeywell employees through their supervisors, provide that Honeywell will give all employees a series of verbal and written warnings, along with opportunities to be heard and to improve, before they are terminated. The disciplinary procedures further provide that: employees will be given the benefit of any doubts during the investigation of disciplinary charges; there must be documentation to support any termination for violation of a company policy; and discipline will be mitigated when an employee violates a company policy in reliance on a supervisor's representation of that policy.
One provision in the personnel manual which routinely is not relayed to Honeywell's employees by their supervisors is the following disclaimer: "Employment at Honeywell, Inc. is voluntarily entered into and employees are free to resign at any time. Similarly, Honeywell may terminate the employment relationship where it believes it is in the Company's best interests. The policy statements contained in this manual do not intend to negate this principle." Acting in accordance with company practice, Huey's supervisor, Ray Goodman did not communicate this disclaimer to Huey.
While the record before us does not indicate if Goodman specifically advised Huey of Honeywell's progressive discipline policy, it does show that the company so advised its supervisors and did so in a manner that constituted an announcement of policy that was sufficient for employees like Huey to rely upon.
Honeywell's hourly employees, such as Huey, were supposed to turn in time cards only if they worked more or less than forty hours per week. However, under what Huey's supervisor, Ray Goodman, called his "flextime" policy, employees in Goodman's department were instructed that they could work more than forty hours in one week, not submit a time card for overtime, and then work fewer than forty hours in a subsequent week to make up the difference. Goodman also allowed his employees to take time off work without reporting it if they made it up at a later date. Goodman's supervisors and the Human Resources representative for Goodman's department were aware of his flextime policy.
Huey was one of many Honeywell employees in the Shipping and Receiving department to utilize Goodman's flextime policy. In doing so, Huey never claimed or received payment for any hours which he did not actually work. In March 1991, two of Huey's co-workers informed Honeywell's personnel department that they suspected Huey of falsely reporting his time. In response, Honeywell's security division conducted an investigation of Shipping and Receiving. In the course of this investigation, the security division compared Huey's time entries with data collected at Honeywell's entrance and exit gates. The gates at Honeywell always record the ...