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Salazar v. Monaco Enterprises, Inc.

United States District Court, E.D. Washington

May 15, 2014

MAXIMILLIAN SALAZAR III, Plaintiff,
v.
MONACO ENTERPRISES, INC.; and GENE MONACO and MARTI MONACO, Husband and wife and the marital community thereof; and ROGER BARNO and NOELLE BARNO, Husband and wife and the marital community thereof; and STRATEGIC ADVANTAGE, LLC; and STEVE CESARE and JANE DOE CESARE, Husband and wife and the marital community thereof, Defendants.

ORDER RE DEFENDANTS' MOTION FOR RECONSIDERATION

LONNY R. SUKO, Senior District Judge.

BEFORE THE COURT, is Defendants' Motion For Reconsideration of Order Re: Summary Judgment Motions Hearing (ECF No. 206), noted without oral argument for April 30, 2014 and opposed by Plaintiff on the hearing date. Defendants objected to Plaintiff's untimely filed response and requested that any such submission be stricken pursuant to the Eastern District of Washington local rules, LR 7.1(b). Defendants ask for the Court to reconsider a discrete component of its Order Re Summary Judgment Motions Hearing (ECF No. 206) which requires the Court to consider whether the handbook promised specific treatment in specific situations, and, to the extent such promises exist, whether there is evidence that such promises were relied upon and subsequently breached.

A. Defendants' Request to Reconsider Ruling on Handbook Claim

Defendants request that the Court reconsider its oral ruling that a question of fact existed as to whether the language of the Monaco handbook created a promise of future treatment. Defendants challenged Salazar to come forward with admissible evidence of all three components of a prima facie handbook claim. Defendants argue Salazar failed to show he relied upon the alleged promises contained in the handbook. Defendants assert that their motion for partial summary judgment was filed months prior to the hearing and Plaintiff has failed to timely file an affidavit or make a factual showing that Salazar relied on a specific promise or provision. Additionally, Defendants assert, even if specific promises of treatment did exist, they were expressly and clearly disclaimed within the contents of the handbook.

Defendants rely on Francom v. Costco Wholesale Corp., 98 Wash.App. 845 (2000), which case they argue precludes Salazar's claim based on Monaco's alleged handbook promises for two primary reasons. First, Salazar cannot enforce an employer policy because it overlaps with an employer's legal obligations. And second, an employer is not bound by statements in employment manuals if they specifically state in a conspicuous manner that nothing contained therein is intended to be part of the employment relationship but rather are general statements of company policy. Id at 867. Defendants conclude that the policy Salazar seeks to enforce simply does not promise any specific treatment of employees in specific situations, and did not create any obligation by Monaco to do anything other than comply with the law prohibiting retaliation under 31 U.S.C. ยง3730(h). Defendants add that even if the Court finds that any promise(s) do exist, it was expressly and clearly communicated to Plaintiff that none of the handbook contents constituted terms of an employment contract or created a promise or assurance of continued employment in the future.

Therefore, as a matter of law, Defendants conclude that Monaco is not liable to Salazar under a "handbook" theory. With its motion for reconsideration, Defendants attach the Affidavit of Molly McLaughlin (ECF No. 219)[1] to provide additional clarity of Salazar's acknowledgment of his "At-Will Employment Status" and his agreement that "the Handbook is for informational purposes only, and that it is not a contract for, or a guarantee of, employment or continuing employment." ECF No. 219-1.

B. Plaintiff's Opposition

Plaintiff opposes the motion for reconsideration and requests the Affidavit of Molly McLaughlin be stricken, or in the alternative, to consider the Affidavits of Max Salazar (ECF No. 197) and Eric Wesselman (ECF No. 198), which were filed with the Court to supplement Plaintiff's summary judgment response the night before the hearing date on February 19, 2014.[2] Plaintiff asserts that promises of specific treatment in specific situations found in an employee manual or handbook issued to Plaintiff obligated Defendant Monaco to act in accord with those promises. Plaintiff argues, at a minimum, the Court is unable to determine at the summary judgment stage, the effect of the employee handbooks or manuals issued by Monaco and whether any statements therein amounted to promises of specific treatment in specific situations. And if so, whether Plaintiff justifiably relied on any of those promises. Finally, Plaintiff argues, material fact issues exist whether any promises of specific treatment were breached by Defendants making summary judgment improper.

To support his arguments, Plaintiff relies on the Thompson [3] case and various quotations made in one or more employee handbooks that Plaintiff purportedly relied upon. Plaintiff argues that the handbook makes specific promises that an employee will not suffer adverse employment action for raising questions "that concern his/her employment in any way". ECF No. 162 at 21. Plaintiff further argues that the handbook(s) specifically promise that an employee is encouraged to come forward "without fear of ridicule, retaliation, or reprisal", and he "should feel confident that in no event will he or she be penalized for his or her beliefs...". Id. Plaintiff then argues that these phrases/quotations, combined with the preamble statement: "Monaco retains its management right to terminate an employee at its will, within the confines of our judicial system, " is evidence that MEI made promises of specific treatment in specific situations. Id . Plaintiff asserts he justifiably relied on the promise(s) and MEI breached the promises of specific treatment when it terminated him in retaliation for his speaking out about fraud and corruption. Id. Plaintiff asserts that under Thompson, whether an employment policy manual issued by an employer contains a promise of specific treatment in specific situations, whether the employee justifiably relied on the promise, and whether the promise was breached are questions of fact.

Plaintiff's counsel also states, at the February 20, 2014 dispositive motions hearing, that discovery issues in this case have prevented him from knowing what Defendant Monaco and its Human Resources representatives would say about the handbook claim until a week before the hearing. ECF No. 205 at 48. Counsel further notes that Plaintiff Salazar was not deposed prior to the hearing. Id. Therefore, Plaintiff concludes, summary judgment is improper based on the discovery status and factual nature of the elements to be determined for Plaintiff's claim that Defendant Monaco breached promises of specific treatment in specific situations.

C. Analysis

Motions for reconsideration serve a limited function. Under the Federal Rules of Civil Procedure, motions for reconsideration may be made pursuant to Rule 59(e). The major grounds for granting a motion to reconsider a judgment are: (1) intervening change of controlling law; (2) availability of new evidence; and (3) the need to correct clear error or prevent manifest injustice. School District No. 1J, Multnomah County Oregon v. AcandS, Inc., 5 F.3d 1255, 1263 (9th Cir.1993). A motion for reconsideration is not appropriately brought to present arguments already considered by the Court. Backlund v. Barnhart, 778 F.2d 1386, 1388 (9th Cir.1985). Defendants do not argue that there has been a change of controlling law, or that new evidence is available, but rather suggests that the Court committed error of law or fact and reconsideration is necessary to prevent a manifest injustice. ECF No. 217 at 2-3.

Generally, employment contracts that are indefinite as to duration may be terminated by either the employer or the employee at any time, with or without cause. Thompson v. St. Regis Paper Co., 102 Wash.2d 219, 223 (1984). A terminable at will relationship can, however, be contractually modified by an employee policy manual. Id. at 229-30; Swanson v. Liquid Air Corp., 118 Wash.2d 512, 520, 826 P.2d 664 (1992). A promise contained in an employee manual of specific treatment in specific situations may be enforceable if an employee relies thereon. Thompson, 102 Wash.2d at 223; Swanson, 118 Wash.2d at 520; Toussaint v. Blue Cross & Blue Shield, 408 Mich. 579, 292 N.W.2d 880 (1980).

An employee handbook or manual may modify the terminable-at-will relationship if it creates an atmosphere of job security and fair treatment by promising specific treatment in specific situations, thereby inducing the employee to remain on the job and not seek other employment. Thompson, 102 Wash.2d at 230, 685 P.2d 1081; Gaglidari v. Denny's Restaurants, Inc., 117 Wash.2d 426, 433, 815 P.2d 1362 (1991). Where an employee handbook promises specific treatment in specific situations, an employer may disclaim any intent to be bound by the handbook, and if such a disclaimer is effectively communicated, employees may not justifiably rely upon the handbook provisions. Birge v. Fred Meyer, Inc., 73 Wash.App. 895, 900-01 (1994), review denied, 124 Wash.2d 1020 (1994). Therefore, the Court will consider in its analysis whether Monaco's disclaimer effectively communicated that Monaco did not intend to be bound by its handbook.

The Washington Supreme Court in Burnside v. Simpson Paper Co. noted that whether an employment policy manual issued by an employer contains a promise of specific treatment in specific situations, whether the employee justifiably relied on the promise, and whether the promise was breached are questions of fact. Burnside v. Simpson Paper Co., 123 Wash.2d 93, 104-05 (1994). "Only if reasonable minds could not differ in resolving these questions, is it proper for the trial court to decide them as a matter of law. Id. ( citing Swanson, 118 Wash.2d at 522).

The Washington Supreme Court in Korslund v. DynCorp Tri-Cities Services, Inc., 156 Wash.2d 168, 184-85 (2005) explained that the Thompson specific treatment claim is not an implied or express contract claim, but is independent of a contractual analysis and instead rests on a justifiable reliance theory. DePhillips v. Zolt Constr. Co., 136 Wash.2d 26, 34-36, 959 P.2d 1104 (1998); Swanson, 118 Wash.2d at 525; Gaglidari v. Denny's Restaurants, Inc., 117 Wash.2d 426, 433 (1991); Thompson, 102 Wash.2d at 229-30. Korslund sets forth a three-step test that applies when the parties have not agreed that the provisions in an employee handbook constitute a contract, as is the situation here. The employee must prove these three elements of the cause of action [for breach of a promise of specific treatment]: (1) that a statement (or statements) in an employee manual or handbook or ...


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