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PREHODKA v. HYUNDAI MOTOR AMERICA, G042430. (2011)

Court: Court of Appeals of California Number: incaco20110316073 Visitors: 8
Filed: Mar. 16, 2011
Latest Update: Mar. 16, 2011
Summary: NOT TO BE PUBLISHED IN OFFICIAL REPORTS OPINION FYBEL, J. INTRODUCTION Plaintiff Theodore H. Prehodka sued his former employer defendant Hyundai Motor America after a female vendor complained about plaintiff's "advances" and defendant terminated plaintiff's employment. At the time of trial, only three of the 12 claims alleged against defendant in plaintiff's second amended complaint remained—breach of an implied contract not to terminate his employment but for good cause and his concomitant
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NOT TO BE PUBLISHED IN OFFICIAL REPORTS

OPINION

FYBEL, J.

INTRODUCTION

Plaintiff Theodore H. Prehodka sued his former employer defendant Hyundai Motor America after a female vendor complained about plaintiff's "advances" and defendant terminated plaintiff's employment. At the time of trial, only three of the 12 claims alleged against defendant in plaintiff's second amended complaint remained—breach of an implied contract not to terminate his employment but for good cause and his concomitant claims of failure to investigate and breach of the implied covenant of good faith and fair dealing.

Plaintiff's breach of an implied contract claim was based on evidence of defendant's progressive discipline policy, plaintiff's length of performance, and industry standards. Before trial began, the court expressed concern that plaintiff's evidence would be irrelevant to prove the existence of an implied contract in light of undisputed evidence of the parties' unambiguous and express written agreements that plaintiff's employment was on an at-will basis. Following briefing by the parties on the issue, including a summary of the evidence the parties intended to present during plaintiff's case-in-chief, the trial court ruled that plaintiff would be precluded from introducing any evidence on the issue of an implied contract and the progressive discipline policy at trial.

The parties stipulated to dismissal of the action for the purpose of expediting an appeal of the trial court's ruling, and judgment was entered accordingly. The parties further stipulated that for purposes of this appeal, the trial court's ruling may be construed as an order granting a motion for nonsuit after plaintiff had rested his case-in-chief.

We affirm. The parties stipulated that during plaintiff's case-in-chief, defendant would have produced evidence plaintiff signed an employment application, an offer letter, and two acknowledgements of receipt of the employee handbook. All four documents unambiguously and expressly stated that plaintiff's employment with defendant was on an at-will basis. The most recent of those documents, plaintiff's acknowledgement of receipt of the 2004 version of the employee handbook, stated the at-will employment policy may only be modified by defendant's chief executive officer or human resources department head in a written agreement, signed by that representative and plaintiff, and there may not be any implied or oral agreements that in any way modify the at-will employment policy.

Plaintiff does not challenge the validity or authenticity of any of the at-will employment agreements. He also does not argue the existence of any signed written agreement modifying the at-will employment policy. Although plaintiff's evidence would have been relevant to prove the existence of an implied contract in the absence of an express at-will employment contract, it is irrelevant here, as a matter of law, in light of the parties' unambiguous, express, and unmodified written at-will employment agreements, all of which were signed by plaintiff.

SUMMARY OF EVIDENCE

Plaintiff was hired by defendant in 1998 as a district sales manager. Plaintiff signed an application for employment with defendant, which stated in part: "I understand that my employment and compensation is At Will and can be terminated without cause or notice at any time at the option of myself or Hyundai. I understand that no official of Hyundai Motor America/Hyundai Motor Finance Company, other than the President, has any authority to authorize an agreement for employment for any specified period of time, or to make any agreement contrary to the foregoing." In an offer letter dated May 18, 1998, defendant informed plaintiff: "This letter is an offer for employment-at-will. This means that either party may end the employment relationship at any time." The offer letter further stated, "[p]lease acknowledge your understanding and acceptance of the offer by signing the original of this letter and returning it to Human Resources." Plaintiff signed the offer letter.

In December 2000, plaintiff signed a document, entitled "ACKNOWLEDGMENT OF RECEIPT OF HANDBOOK AND AT WILL EMPLOYMENT AGREEMENT," which stated in pertinent part: "I acknowledge that I have received a copy of the November 2000 edition of Hyundai's employee handbook. I acknowledge that I am expected to read, understand, and adhere to the policies in the handbook, and that my employment with Hyundai is governed by the contents of the handbook. I also agree to conform to the rules and standards of Hyundai. [¶] I agree that my employment can be terminated at will, with or without cause, and with or without notice, at any time, either at my option or at the option of Hyundai. I agree that no employee or representative of Hyundai has the authority to modify the at will employment policy, except for the President of Hyundai, and that any modification to the at will employment policy must be in a written agreement signed by both the employee and the President of Hyundai. I agree that this constitutes an integrated agreement with respect to the at will nature of the employment relationship, and that there may not be any implied or oral agreements that in any way modify the at will employment policy."

In a declaration, plaintiff stated that during his employment with defendant, he received regular salary increases, bonuses, and promotions. In July 2001, however, plaintiff was provided an official letter of reprimand based on violations of defendant's expense report policy. Plaintiff was placed on formal probation for one year and warned that violations would result in further disciplinary actions up to and including employment termination. Plaintiff's target bonus was reduced and he was required to pay restitution to defendant.

In October 2004, plaintiff signed an acknowledgement form which stated in part: "By signing this document, I agree that I have received a copy of the September 2004 edition of Hyundai's Employee Handbook (the `Handbook'). I am expected to read and comply with all the policies in the Handbook, including but not limited to the following polices: [¶] At Will Employment." The acknowledgement form further stated: "I agree that if I violate any of the policies in the Handbook, including but not limited to the policies set forth above on this acknowledgment form, I may be subject to discipline, up to and including termination. [¶] I agree that my employment with Hyundai can be terminated at will, with or without cause, and with or without notice, at any time, either at my option or at the option of Hyundai. I agree that no employee or representative of Hyundai has the authority to modify the at will employment policy except for the Chief Executive Officer or Human Resources Department Head, that any modification to the at will employment policy must be in a written agreement signed by both the employee and the Chief Executive Officer or Human Resources Department Head, and that there may not be any implied or oral agreements that in any way modify the at will employment policy." (Some capitalization omitted.)

The introduction of the 2004 version of defendant's employee handbook contains the following paragraph: "With the sole exception of the at will employment policies contained herein, the contents of this Hyundai employee handbook do not create an employment contract, and should not be viewed as the basis of any contractual obligations of Hyundai." (Some capitalization omitted.) Defendant's at-will employment policy follows the introduction, and states: "Hyundai hopes that every employee will find the employment relationship satisfying and rewarding in all respects. However, Hyundai realizes that employment relationships are not always mutually satisfactory. [¶] As such, employment with Hyundai is at will. Accordingly, employment can be terminated at will, with or without cause and with or without notice, at any time, either at the option of the employee or Hyundai. [¶] No employee or representative of Hyundai has the authority to modify this at will employment policy except for the Chief Executive Officer of Hyundai and/or the Human Resources Department Head, and any such modification to this at will employment policy must be in a written agreement signed by both the employee and the Chief Executive Officer of Hyundai and/or the Human Resources Department Head. [¶] This constitutes an integrated agreement with respect to the at will nature of the employment relationship, and there may be no implied or oral agreements that in any way modify this at will employment policy." (Some capitalization omitted.)

The 2004 version of the handbook also contains a policy entitled "DISCIPLINE AND TERMINATION," which states: "Hyundai maintains a progressive discipline procedure to ensure a fair method of disciplining employees. The progressive discipline system is intended to give employees advance notice whenever possible of problems with their conduct or performance in order to provide them an opportunity to correct any problems. [¶] Normally, progressive discipline involves verbal counseling and one or more written warnings before an employee is terminated. However, exceptions or deviations from the normal procedure may occur whenever Hyundai deems that circumstances warrant that one or more steps in the process be eliminated. Accordingly, circumstances may sometimes warrant immediate termination. [¶] It should be remembered that employment at Hyundai is at will. Thus, Hyundai reserves the right to terminate the employment relationship at will." (Italics added.)

In his declaration, plaintiff stated he attended a management human resources seminar in 2003 for defendant's personnel at which he was taught that the term "circumstance[s]" as used in the discipline and termination section of the employee handbook referred to specific instances of "serious misconduct" such as bringing a firearm to work. Plaintiff also stated, "[b]ased upon my experience, employers in the automotive industry implement `progressive discipline' procedures for their employees. I am unaware of any individual ever terminated for no `reason.'"

According to a memorandum prepared by defendant, plaintiff's employment was terminated on December 1, 2004. The memorandum stated, "a senior female vendor providing services to [defendant]" expressed concern that "she was unable to control the advances of [plaintiff] after being advised by her that she was happily married and was willing only to have a business relationship with him." The memorandum also stated plaintiff "was advised that his solicitation of female employees for dates or drinks after work was inappropriate because of his management position with the company." It also referenced plaintiff's inappropriate use of e-mail at work and his comments in e-mails to other employees about methods to "distort the relocation practices of the company in order to financially benefit himself."

PROCEDURAL HISTORY

I.

The Second Amended Complaint; Temporary Judge Denies Summary Adjudication of Implied Contract and Implied Covenant Claims.

Plaintiff filed a second amended complaint alleging claims against defendant for breach of an implied contract to terminate his employment only for good cause, breach of the implied covenant of good faith and fair dealing, intentional infliction of emotional distress, slander, libel, failure to investigate, marital status discrimination, age discrimination, gender discrimination, failure to pay overtime wages, unfair competition, and invasion of privacy.1

Defendant moved for summary judgment, or, in the alternative, for summary adjudication of the claims. The parties stipulated to a temporary judge who denied defendant's motion for summary judgment, but granted summary adjudication as to all but plaintiff's claims for breach of an implied contract not to terminate employment but for good cause, breach of the implied covenant of good faith and fair dealing, failure to investigate (which was dependent upon the viability of the implied contract claim), failure to pay overtime wages, and unfair competition. As to the implied contract and implied covenant claims, the court's minute order stated: "Both parties rely upon the `discipline and termination' provision within the employee handbook, which is characterized as ensuring a fair method of disciplining employees. The paragraph first explains the progressive discipline procedure, which involves verbal counseling and one or more written warnings before an employee is terminated. The provision then negates any obligation on defendant's part to follow this procedure, with no guidance to the employee as to what `circumstances may sometimes warrant immediate termination.' Defendant points to this section to support its termination of plaintiff, without the use of any progressive discipline as it sees fit. Defendant also asserts that the repeated at-will notifications also absolve it of any liability. Plaintiff maintains that defendant breached its promise to follow the progressive discipline procedure and therefore also breached the implied covenant of good faith and fair dealing inherent in all contracts."

The minute order further stated: "[T]he Court finds that the express contradictory provisions within the discipline and termination provision create an ambiguity. Before it can be determined whether any other inferences result, the ambiguity must be resolved. Relying on Guz v. Bechtel (2000) 24 Cal.4th 317, defendant urges that any inferred promise in the provision is overcome by plaintiff's written acknowledgment that he is an `at will' employee. That court, however, expressly refrained from ruling on the issue of whether the defendant's failure to follow its fair layoff policy constituted a breach of contract. Accordingly, defendant has not met its burden. Even had defendant met its burden, plaintiff has offered evidence of the policy's previous application, which differed from the application resulting in his termination. He has also demonstrated that, not only did defendant fail to provide any warnings or opportunity for him to address any problems, all arrangements for his termination had been made prior to his meeting with management personnel. The question of whether defendant breached a contractual obligation is legally distinct from whether plaintiff should or should not have been terminated. Summary adjudication is denied." (Italics added.) The temporary judge also ruled on the defendant's evidentiary objections filed in connection with the motion.

II.

The Trial Court Expresses Concern About the Relevance of Plaintiff's Evidence in Proving the Existence of an Implied Contract.

Plaintiff voluntarily dismissed with prejudice the failure to pay overtime wages and unfair competition claims before the trial date. On the date set for trial, the court expressed its "fundamental concern" about how plaintiff's evidence would be relevant to prove the existence of an implied contract given the parties' at-will employment agreements. The court stated it was "not inclined" to allow any evidence regarding the existence of an implied contract or the progressive discipline policy at trial. The parties submitted briefs which discussed the evidence that would be presented and its relevance to proving plaintiff's remaining claims.

After reviewing the parties' briefs, the trial court stated its previous ruling to exclude evidence of an implied contract or progressive discipline policy was its final ruling. The court scheduled a review hearing to determine whether the parties' attorneys might be able to "work[] anything out short of a trial."

III.

Plaintiff and Defendant Stipulate to Dismiss the Case to Expedite Appeal, Judgment Is Entered, and Plaintiff Appeals.

Plaintiff and defendant thereafter entered into the following stipulation:

"PURSUANT to this Honorable Court's Order of March 25, 2009, the Parties, by and through their counsel of record, have `met and conferred' and hereby submit the following Stipulation re: Consent to Dismissal and Appeal and [Proposed] Order for consideration by this Honorable Court: "Plaintiff Theodore H. Prehodka and Defendant Hyundai Motor America hereby agree and stipulate as follows: "1. On February 26, 2008, the Court issued a ruling that Defendants' motion for summary judgment was denied. Summary adjudication was granted [as to certain claims and defendants]. . . . "2. On February 2, 2009, the Parties appeared in Department C25 of the above-entitled court and reported ready for jury trial. Before ruling on any pre-trial motions in limine, the Court announced a tentative evidentiary ruling that precludes Plaintiff from introducing any evidence concerning implied contract or progressive discipline on the grounds that it would not be relevant. The Court granted the parties leave to file briefs making offers of proof in light of the tentative ruling. "3. On February 26, Plaintiff filed an Exception to the Court's `Tentative' Evidentiary Ruling Re: Implied Contract and Progressive Discipline, Memorandum of Points and Authorities, and Declaration of Andrea L. Cook with Exhibits. On March 10, 2009, Defendants filed a response to Plaintiff's offer of proof including evidence thereof. "4. On March 25, 2009, at a hearing on the offers of proof, the Court stated that the tentative evidentiary ruling was the Court's final ruling and ordered the Parties to `meet and confer' about how they wished to proceed. The Parties were further ordered to file a declaration, no later than April 13, 2009, setting forth the results of the `meet and confer' and a Review Conference was set for April 15, 2009. [¶] . . . [¶] "7. Therefore, in light of the Court's evidentiary ruling excluding any and all evidence concerning an implied contract and progressive discipline, which are Plaintiff's only remaining claims insofar as the breach of the covenant of good faith and fair dealing is dependent upon proof of an implied contract, Plaintiff acknowledges that, under these circumstances, it is futile for him to proceed to trial. Therefore, Plaintiff has no alternative, and the Parties agree to stipulate to the dismissal of this action solely for the purposes of an expedited appeal. "8. Plaintiff iterates his desire to have his `day in court' and consents to this stipulation in light of the Court's evidentiary ruling. "9. Plaintiff contends that had the matter proceeded to trial, Plaintiff would have presented the evidence summarized in Plaintiff's Exception to the Court's `Tentative' Evidentiary Ruling Re: Implied Contract and Progressive Discipline and Exhibits, Plaintiff's Opposition to Defendant's Motion for Summary Judgment, and all of the pre-trial pleadings. Additionally, Plaintiff also contends that he, upon proper foundation, would have elicited testimony from the Plaintiff, as well as [several individual witnesses]. Also, at trial, upon proper foundation, Plaintiff would have sought the admission of most, if not all, of the 364 exhibits identified on the Joint Exhibit List submitted before the trial date. "10. Defendant contends that had the matter proceeded to trial, Defendant would have presented the evidence stated in its response to the offer of proof filed on March 10[,] 2009, during Plaintiff's case in chief as well as evidence submitted in connection with the motion for summary judgment and testimony from Plaintiff's witnesses called at the trial in his case in chief and all the pre-trial pleadings. "11. The Parties and the Court agree that the Court of Appeal may treat this case as if the Court had granted a motion for nonsuit after the Plaintiff rested his case-in-chief having presented the evidence outlined in paragraph 9 above and Defendant had presented the evidence identified in paragraph 10 above. "12. The Parties and the Court agree that Plaintiff has not waived the right to appeal the Court's evidentiary ruling by stipulating/consenting to dismissal as the stipulation to dismiss is solely to expedite the appeal." (Boldface omitted.)

The court signed an order stating: "Having reviewed the pleadings in this case, the briefs of the Parties, and the argument of counsel, the Court has already ruled that Plaintiff is precluded f[rom] introducing any and all evidence on the issue of an implied contract and progressive discipline at trial." [¶] Further, the Court finds that Plaintiff's consent to dismissal of this action is done solely for the purpose of expediting an appeal in this case."

Judgment was entered based on the stipulation dismissing the action. Plaintiff appealed.

DISCUSSION

I.

Standard of Review

Pursuant to the parties' stipulation, we review the trial court's ruling as if it were an order granting a motion for nonsuit following plaintiff's case-in-chief. "A defendant is entitled to a nonsuit if the trial court determines that, as a matter of law, the evidence presented by plaintiff is insufficient to permit a jury to find in his favor. [Citation.] `In determining whether plaintiff's evidence is sufficient, the court may not weigh the evidence or consider the credibility of witnesses. Instead, the evidence most favorable to plaintiff must be accepted as true and conflicting evidence must be disregarded. The court must give "to the plaintiff['s] evidence all the value to which it is legally entitled, . . . indulging every legitimate inference which may be drawn from the evidence in plaintiff['s] favor."' [Citation.] A mere `scintilla of evidence' does not create a conflict for the jury's resolution; `there must be substantial evidence to create the necessary conflict.' [Citation.] [¶] In reviewing a grant of nonsuit, we are `guided by the same rule requiring evaluation of the evidence in the light most favorable to the plaintiff.' [Citation.] We will not sustain the judgment `"unless interpreting the evidence most favorably to plaintiff's case and most strongly against the defendant and resolving all presumptions, inferences and doubts in favor of the plaintiff a judgment for the defendant is required as a matter of law."' [Citation.]" (Nally v. Grace Community Church (1988) 47 Cal.3d 278, 291.) "We may not, however, consider the supporting evidence in isolation, and disregard any contradictory evidence; rather, we must review the entire record." (Piedra v. Dugan (2004) 123 Cal.App.4th 1483, 1495.)

II.

IN THE ABSENCE OF AN EXPRESS AGREEMENT, EVIDENCE OF THE PARTIES' CONDUCT MAY BE CONSIDERED TO DETERMINE WHETHER THE STATUTORY PRESUMPTION OF AT-WILL EMPLOYMENT WAS REBUTTED AND AN IMPLIED CONTRACT TO TERMINATE EMPLOYMENT ONLY FOR GOOD CAUSE EXISTED.

The statutory presumption of at-will employment is codified in Labor Code section 2922 which provides in part: "An employment, having no specified term, may be terminated at the will of either party on notice to the other." In Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 335 (Guz), the California Supreme Court stated, "[a]n at-will employment may be ended by either party `at any time without cause,' for any or no reason, and subject to no procedure except the statutory requirement of notice."

The California Supreme Court further stated: "While the statutory presumption of at-will employment is strong, it is subject to several limitations. For instance, as we have observed, `the employment relationship is fundamentally contractual.' [Citation.] Thus, though Labor Code section 2922 prevails where the employer and employee have reached no other understanding, it does not overcome their `fundamental . . . freedom of contract' to depart from at-will employment. [Citation.] The statute does not prevent the parties from agreeing to any limitation, otherwise lawful, on the employer's termination rights. [Citation.] [¶] One example of a contractual departure from at-will status is an agreement that the employee will be terminated only for `good cause' [citation] in the sense of `"`a fair and honest cause or reason, regulated by good faith . . .'" [citation], as opposed to one that is "trivial, capricious, unrelated to business needs or goals, or pretextual . . . ." [Citations.]' [Citations.] But the parties are free to define their relationship, including the terms on which it can be ended, as they wish. The parties may reach any contrary understanding, otherwise lawful, `concerning either the term of employment or the grounds or manner of termination.' [Citation.]" (Guz, supra, 24 Cal.4th at pp. 335-336, some italics added.)

In Guz, supra, 24 Cal.4th at pages 336-337, the California Supreme Court explained: "The contractual understanding need not be express, but may be implied in fact, arising from the parties' conduct evidencing their actual mutual intent to create such enforceable limitations. [Citation.] In Foley [v. Interactive Data Corp. (1988) 47 Cal.3d 654 (Foley)], we identified several factors, apart from express terms, that may bear upon `the existence and content of an . . . [implied-in-fact] agreement' placing limits on the employer's right to discharge an employee. [Citation.] These factors might include `"the personnel policies or practices of the employer, the employee's longevity of service, actions or communications by the employer reflecting assurances of continued employment, and the practices of the industry in which the employee is engaged."' [Citation.] [¶] Foley asserted that `the totality of the circumstances' must be examined to determine whether the parties' conduct, considered in the context of surrounding circumstances, gave rise to an implied-in-fact contract limiting the employer's termination rights. [Citation.] We did not suggest, however, that every vague combination of Foley factors, shaken together in a bag, necessarily allows a finding that the employee had a right to be discharged only for good cause, as determined in court. [¶] On the contrary, `courts seek to enforce the actual understanding' of the parties to an employment agreement. [Citation.] Whether that understanding arises from express mutual words of agreement, or from the parties' conduct evidencing a similar meeting of minds, the exact terms to which the parties have assented deserve equally precise scrutiny. As Foley indicated, it is the `nature of [an implied-in-fact] contract' that must be determined from the `totality of the circumstances.' [Citation.] [¶] Every case thus turns on its own facts. Where there is no express agreement, the issue is whether other evidence of the parties' conduct has a `tendency in reason' [citation] to demonstrate the existence of an actual mutual understanding on particular terms and conditions of employment. If such evidence logically permits conflicting inferences, a question of fact is presented. [Citation.] But where the undisputed facts negate the existence or the breach of the contract claimed, summary judgment is proper." (Some italics added.)

III.

California Courts Will Not Recognize an Implied Agreement to Terminate Employment Only for Good Cause, When Doing So Necessarily Varies the Terms of an Express At-will Employment Agreement Signed by the Parties.

In Guz, supra, 24 Cal.4th 317, the parties had not entered into an express written agreement on the subject of whether the plaintiff's employment could be terminated at will or only for good cause. Thus, as discussed ante, the Supreme Court analyzed whether the statutory presumption of at-will employment had been rebutted by evidence showing the parties had impliedly agreed the plaintiff's employment could only be terminated for good cause. The Guz court nevertheless noted that "most cases applying California law, both pre- and post-Foley, have held that an at-will provision in an express written agreement, signed by the employee, cannot be overcome by proof of an implied contrary understanding." (Id. at p. 340, fn. 10.)

In Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389, the California Supreme Court observed that "a clear and unambiguous at-will provision in a written employment contract, signed by the employee, cannot be overcome by evidence of a prior or contemporaneous implied-in-fact contract requiring good cause for termination."

Furthermore, "the courts will not imply an agreement if doing so necessarily varies the terms of an express at-will employment agreement signed by the employee." (Tomlinson v. Qualcomm, Inc. (2002) 97 Cal.App.4th 934, 944 (Tomlinson).) In Tomlinson, the plaintiff signed an employment application and an employment agreement, each of which expressly stated that the plaintiff's employment was on an at-will basis. (Ibid.) The plaintiff argued that "statements on family leave contained in [the defendant]'s personnel handbooks created an implied agreement that her employment was not terminable at will." (Id. at pp. 944-945.) The appellate court rejected the plaintiff's argument, stating: "Even assuming the statements cited by [the plaintiff] contradicted the express agreement by guaranteeing her continued employment . . ., under well-established case law, `"[t]here cannot be a valid express contract and an implied contract, each embracing the same subject, but requiring different results." [Citation.] The express term is controlling even if it is not contained in an integrated employment contract. [Citation.] Thus, the . . . express at-will agreement precluded the existence of an implied contract requiring good cause for termination.'" (Id. at p. 945.)

The appellate court in Tomlinson, supra, 97 Cal.App.4th at pages 945-946, also rejected the plaintiff's argument that a termination of employment policy, which was adopted after the parties entered their express at-will agreement, modified the parties' at-will agreement by eliminating the at-will employment relationship and replacing it with a guarantee of employment under certain circumstances. The court stated: "[T]his contention is contrary to the express provisions of the employment agreement that . . . employment `will be at-will . . . [and] this supersedes all other agreements on this subject and can be modified only in writing and signed by the Chairman of the Board'; there is no evidence that the termination of employment policy satisfied the requirements for altering the contractually agreed-upon at-will employment agreement." (Id. at p. 946.)

The Tomlinson court cited Slivinsky v. Watkins-Johnson Co. (1990) 221 Cal.App.3d 799, 802-804, in which the plaintiff argued the termination of her employment violated an implied agreement created by, inter alia, the defendant's written personnel policies, notwithstanding her signed job application form and employment agreement, each confirming her employment with the defendant was on an at-will basis. The appellate court rejected her argument, stating: "[T]he parties intended the application and employee agreement to memorialize their understanding with respect to grounds for termination. Consequently, `evidence of an implied agreement [which] contradicts the terms of the written agreement is not admissible. "There cannot be a valid express contract and an implied contract, each embracing the same subject, but requiring different results." [Citation.]' [Citations.] [¶] Because we hold that the contract is a contract for employment terminable at will, we do not reach the issues regarding whether good cause existed for [the plaintiff]'s termination based on [the defendant]'s decision to reduce its work force." (Id. at pp. 805-806; see Tomlinson, supra, 97 Cal.App.4th at p. 944.) The Tomlinson court stated, "the courts have rejected . . . arguments by employees who asserted that, notwithstanding an express at-will agreement, they were entitled to rely on subsequent oral and written representations by their employers and employers' agents contrary to the express at-will agreement." (Tomlinson, supra, at p. 946; see also Stillwell v. The Salvation Army (2008) 167 Cal.App.4th 360, 363-364, 376 [appellate court remanded matter with directions to order a new trial on the ground the jury inconsistently found the parties' at-will agreement valid and the employer violated an implied contract to terminate employment only for cause, noting "evidence of an implied agreement that is inconsistent with the [at-will] Agreement would have been inadmissible under Dore[v. Arnold Worldwide, Inc. ], supra, 39 Cal.4th 384, if the [at-will] Agreement were enforceable as a matter o[f] law"].)

IV.

Because Plaintiff Signed Four Unambiguous Express Written At-will Employment Agreements and Did Not Present Evidence of a Signed Written Modification of Any of Those Agreements, His Breach of an Implied Contract and Breach of the Covenant of Good Faith and Fair Dealing Claims Fail.

Plaintiff does not challenge the validity or authenticity of the following four at-will agreements he signed: (1) the employment application stating his employment with defendant is at will and only defendant's president had the authority to authorize a contrary agreement; (2) the offer letter which stated, "[t]his letter is an offer for employment-at-will"; (3) the December 2000 acknowledgement of receipt of the employee handbook and at-will employment agreement, which reiterated plaintiff's agreement his employment can be terminated at will, with or without cause, that no one other than defendant's president may modify the at-will employment policy, that any such modification must be in a written agreement signed by both plaintiff and defendant's president;2 and (4) the October 2004 acknowledgement form which stated plaintiff agreed his employment with defendant can be terminated at will, with or without cause, and only the chief executive officer or human resources department head can modify the at-will employment policy and any such modification must be in a written agreement signed by that individual and plaintiff.

Plaintiff does not argue the existence of any written modification to the at-will employment agreements he signed. Instead, as in Tomlinson, supra, 97 Cal.App.4th 934, and Slivinsky v. Watkins-Johnson Co., supra, 221 Cal.App.3d 799, plaintiff here argues an implied agreement to only terminate his employment for good cause was created as a result of defendant's progressive discipline policy contained in the employee handbook in concert with factors discussed in Guz, supra, 24 Cal.4th 317, including the length of plaintiff's employment, defendant's assurances of continued employment, his receipt of raises and promotions, and industry standards. The existence of such an implied contract would be directly contrary to the express provisions of plaintiff's at-will employment agreements and the requirement that any modification be in writing signed by plaintiff and defendant's chief executive officer or head of the human resources department. Without evidence of such a signed and written modification, plaintiff's breach of an implied contract claim fails as a matter of law. (See Starzynski v. Capital Public Radio, Inc. (2001) 88 Cal.App.4th 33, 39 [because written employment agreement "clearly specified that the at-will nature of plaintiff's employment could be changed only by `affirmative action' of the board of directors" and the plaintiff failed to show oral assurances by his supervisor constituted affirmative action of the board, such "oral assurances were ineffective to modify plaintiff's written at-will employment agreement"].)

In any event, defendant's discipline and termination policy contained in the 2004 version of its employee handbook does not create any ambiguity on the subject. Although the policy asserts defendant's maintenance of a progressive discipline procedure, it also states that defendant "reserves the right to terminate the employment relationship at will." Furthermore, the introduction to the handbook states that the policies contained in the handbook, with the sole exception of the at-will employment policy, "do not create an employment contract, and should not be viewed as the basis of any contractual obligations of [defendant]." (Capitalization omitted.) Hence, nothing in the discipline and termination policy can be reasonably construed as purporting to modify the at-will employment agreement in any way.

As "[t]he covenant of good faith and fair dealing cannot impose substantive terms and conditions beyond those to which the parities actually agreed," that claim fails for the same reasons. (Starzynski v. Capital Public Radio, Inc., supra, 88 Cal.App.4th at p. 39; see Guz, supra, 24 Cal.4th at p. 350.) As the parties stipulated that the failure to investigate claim was dependent upon the implied contract claim, the former fails for the same reasons.

Plaintiff argues the trial court's ruling excluding evidence of an implied contract "was in direct contradiction of the prior ruling of [the temporary judge] on [defendant]'s Motion for Summary Judgment/Summary Adjudication" and there was no proper request for reconsideration of that ruling. Nevertheless, plaintiff's argument continues, the trial court in effect reversed that ruling when it made its evidentiary ruling. The trial court's ruling did not purport to overrule the temporary judge's order regarding the motion for summary adjudication.

Pursuant to the parties' stipulation, we consider the trial court's evidentiary ruling as though it was an order granting nonsuit following plaintiff's case-in-chief. We note, however, that a motion for nonsuit may be granted following the completion of a plaintiff's opening statement in a jury trial. (Code Civ. Proc., § 581c, subd. (a).) At oral argument, plaintiff's counsel acknowledged that after the trial court had announced its evidentiary ruling, the parties had the opportunity to brief the issue and present evidence as to plaintiff's claims to the court. After the court considered the parties' arguments and evidence, it concluded plaintiff's claims were not supported by sufficient evidence as a matter of law and the parties stipulated to judgment. After review of the record, for the reasons discussed ante, we agree plaintiffs' claims were without evidentiary support as a matter of law. The trial court was not precluded from granting such a motion because a judge had previously denied the summary adjudication motion on the same issue.

We agree with plaintiff that the trial court's sua sponte evidentiary ruling was procedurally improper. The right to challenge that procedural error on appeal was forfeited by the parties' stipulation agreeing to dismiss the case and to request that this court construe the evidentiary ruling as an order granting nonsuit. We observe, however, that even if the error was not forfeited, it did not constitute prejudicial error because an order granting nonsuit following plaintiff's opening statement or case-in-chief would certainly and inevitably have been granted based on the evidence presented, for the many reasons discussed ante. (See Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 748, 757-758 [although trial court's grant of nonsuit in favor of respondent on court's own motion was "irregular," appellate court found no prejudice because the plaintiff's claims would not have survived nonsuit].)

DISPOSITION

The judgment is affirmed. Respondent shall recover costs on appeal.

WE CONCUR:

ARONSON, ACTING P. J.

IKOLA, J.

FootNotes


1. The second amended complaint also alleged claims against several individual defendants. Those claims are not relevant to the issues presented in this appeal and none of the individual defendants is a party to this appeal. We therefore do not further address those claims or individual defendants.
2. The December 200 acknowledgement of receipt of the employee handbook stated in part: "[T]his constitutes an integrated agreement with respect to the at will nature of the employment relationship, and that there may not be any implied or oral agreements that in any way modify the at will employment policy."
Source:  Leagle

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