Appeal from Superior Court of Skagit County. Docket No: 93-2-01364-0. Date filed: 10/24/94. Judge signing: Hon. Stanley K. Bruhn.
Authored by Ann L. Ellington. Concurring: William W. Baker, H. Joseph Coleman
The opinion of the court was delivered by: Ellington
ELLINGTON, J. -- Sherry Parker had a contract with Skagit/Island Head Start to work for one school year. Despite the contract, she claimed that Head Start's policy manual created an implied contract obligating Head Start to renew her contract each year unless Head Start lost its funding or had just cause not to renew the contract. Therefore, when Head Start declined to renew her contract, Parker appealed the decision to a hearing examiner, who concluded that Parker's contract should have been renewed because Head Start did not have just cause to refuse to rehire her. The Superior Court reversed. We affirm the Superior Court because, even if the unambiguous contract for a specific term could have been modified by the policy manual, the manual did not promise that Parker would be rehired from year to year.
The Head Start Program is a federally funded program that provides comprehensive child development services. 45 CFR sec. 1301.2. In Skagit County, the Head Start Program is operated by Skagit Valley College.
Sherry Parker began working for Skagit/Island Head Start in 1981 as a home care teacher. She was promoted over the years and, by the 1991-92 school year, was employed as a family service coordinator.
Margy Miller became director of Skagit/Island Head Start in June of 1992. Because of funding difficulties, Miller decided to eliminate Parker's position. Although Parker was upset, she agreed to work as a Center Lead Teacher, a position she had held in the past, "for the period beginning September 8, 1992 and continuing through June 8, 1993." Her contract stated it was a contract for a specified period of time in a position funded by special purpose moneys of a non-permanent nature with no expectancy of continued employment. The position is a nontenurable appointment funded by federal funds, or "special funds." This appointment may be terminated prior to the expiration of this contract if for any reason the special funding or special purpose moneys or federal funds used to finance the position are eliminated or reduced.
Miller felt that Parker exhibited negative behavior during the 1992-93 school year, which Miller believed was attributable to Parker's anger about her coordinator position having been eliminated. When Parker's behavior had not improved by the end of the year, Miller decided that Parker's contract should not be renewed.
Parker received a letter in June 1993, stating that Miller and the Personnel Committee had made a decision not to renew her contract for the 1993-94 program year. Parker appealed the decision and filed a grievance.
The Personnel Committee found the grievance lacked merit and upheld the decision. Parker then appealed the Committee's decision to a hearing examiner. *fn1 The hearing examiner found that Head Start workers, including Parker, were hired under a series of year-to-year contracts; Parker's contract was for a specific period with no expectancy of continued employment; all of the employees at the Head Start program believed their contracts would be renewed from year to year if funding was available and their performance was satisfactory; Sherry Parker's performance in the 1992/93 school year did not justify failing to offer her a new contract; Head Start's employee manual contemplated continued renewal of employees' contracts from year to year; employees did not seek other employment in reliance upon the employee policy manual; and Head Start teachers had a reasonable expectation of being rehired each year absent a showing of cause, based upon the fact that they accumulated sick time, accrued pension benefits, and their wages increased from year to year.
Based upon his findings, the hearing examiner concluded that an implied contract existed between Head Start and its teachers, which required Head Start to rehire Parker unless it had just cause to terminate her. Further, he concluded there was no just cause not to renew Sherry Parker's contract for the 1993/94 school year, so she should have been rehired.
Head Start petitioned for judicial review in Skagit County Superior Court. The court reversed the decision of the hearing examiner and affirmed Head Start's decision to not renew Parker's contract. The court concluded that Head Start did not have the authority under statutes governing community colleges to extend implied contract rights to Parker, and that "having policies which address rights to appeal suspensions and dismissals during the course of a contract does not create rights to be only terminable for cause after the completion of the contract." This appeal followed.
The parties agree that this court must review the record before the administrative agency, as did the Superior Court. See Tapper v. Employment Security Dept., 122 Wash. 2d 397, 402, 858 P.2d 494 (1993). The parties also agree that this court may grant relief from the hearing examiner's order only if it determines that the hearing examiner lacked the statutory authority or jurisdiction to enter the order, erroneously interpreted or applied the law, or the order was arbitrary or capricious. See RCW 34.05.570(3).
Parker argues the hearing examiner correctly concluded that an implied contract existed, which prevented Head Start from failing to renew her contract without just cause. Employers in Washington may generally discharge employees, with or without cause, at any time, unless an employee has a contract to be employed for a specific term. Greaves v. Medical Imaging Systems, Inc., 124 Wash. 2d 389, 393, 879 P.2d 276 (1994). Employers' rights to terminate at will employees may, however, be contractually modified by statements in employee policy manuals. Thompson v. St. Regis Paper Co., 102 Wash. 2d 219, 228, 685 P.2d 1081 (1984). Under this exception to the general terminable at will rule, to establish that policies in an employee manual are part of the employee's original contract, or part of the contract as modified by the parties, the requisites of contract formation--offer, acceptance, and consideration--are required. Thompson, 102 Wash. 2d at 228. A second ...