BOLGER, Justice.
Fred Becker V, a loss prevention manager employed by Fred Meyer Stores, Inc., was terminated in January 2012. He sued his former employer, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and wrongful termination. The superior court granted summary judgment in favor of Fred Meyer, concluding (1) that Fred Meyer's loss prevention policy manual did not create a contract between Becker and Fred Meyer and Becker's employment was terminable at will and (2) that Becker had presented no evidence that he was treated differently from similarly situated employees with respect to the good faith and fair dealing claim. But because the record presents genuine issues of material fact regarding both claims, we reverse the superior court's summary judgment ruling.
Becker was employed by Fred Meyer as a loss prevention manager for 17 years. From July 2011 until January 13, 2012, Becker was assigned to the Northern Lights Fred Meyer store in Anchorage.
On January 3, 2012, Becker was on duty when he observed a man enter the store. Becker watched him enter the photo electronics department. Becker then went to the loss prevention office and continued to observe the man through a security camera. When Becker saw him remove a stereo system from the shelf, Becker returned to the sales floor and went to the photoelectronics department. There Becker watched the man carry the stereo system to the back aisle and remove its security wrap. The man then picked up the stereo system, left the department, and proceeded toward the store exit. As the man passed the last point of sale and the electronic security devices, Becker identified himself as a loss prevention employee and told the man to stop. The man dropped the stereo system
While the man was running, he tripped and fell in the Fred Meyer parking lot, dropping his cell phone. Becker, thinking he could use the phone for identification purposes, picked it up. The man got up and "came at" Becker, demanding that he return the phone. Becker then turned and threw the phone onto the roof of the Fred Meyer building. He later testified that he threw the phone "instinctively," out of fear of the man.
His phone now out of reach, the man ran into the parking lot and got into his car. Becker stepped off the sidewalk and followed him, noting the vehicle's license plate number as the man drove away.
Becker called the police, telling them about the theft and attempted arrest and providing descriptions of the man and his vehicle. Becker then went up to the store's roof, recovered the phone, and found photographs of the man on the phone. An Anchorage Police Department officer later arrived and made a report of the incident. The man was charged in connection with the theft later that month.
On January 13 Becker met with his supervisor, Devin Lilly, to discuss the January 3 incident. Lilly told Becker that he "should have handed the phone back to [the man]" rather than throwing it on the roof. He also claimed Becker had violated company policy by using a security camera to observe the man, by running on the sales floor, and by stepping off the sidewalk to pursue him. Lilly explained that, because of these violations and other past policy violations Becker had committed, Becker's employment was terminated effective immediately. According to Becker, he never received a verbal or written warning concerning any policy violation before he was terminated.
Becker appealed the termination decision to Scott Bringhurst, Fred Meyer's Director of Loss Prevention. Bringhurst considered Becker's appeal but concluded that "[t]he incident as a whole demonstrated extremely poor judgment on [Becker's] part" and "termination was ... appropriate given the totality of the circumstances."
Becker filed a complaint in the Anchorage superior court, claiming breach of contract, breach of the implied covenant of good faith and fair dealing, and wrongful termination.
Fred Meyer moved for summary judgment. The company argued that its loss prevention policy manual was not a binding contract and that, even if it were, Fred Meyer's actions did not violate company policy. As to Becker's claim based on the covenant of good faith, Fred Meyer argued that Becker "cannot point to a single employee who... committed so many policy violations in a single stop, who was not immediately terminated."
The superior court agreed that Fred Meyer's policy manual was not a contract, and that Becker's employment was, therefore, terminable at will. The court also concluded that Becker had failed to "raise a genuine issue of material fact whether he was treated in a disparate manner than other similarly situated employees," and, therefore, could not maintain a claim under the implied covenant of good faith and fair dealing. Accordingly, the court granted the motion for summary judgment and dismissed Becker's claims. Becker now appeals from this ruling.
We review a grant of summary judgment de novo.
"[E]mployee policy manuals may modify at-will employment agreements...."
Becker argues that the Fred Meyer loss prevention manual altered his at-will employment relationship. In particular, he argues that a reasonable person would believe that a loss prevention employee could be terminated without notice only for engaging in one of the six types of misconduct listed in the manual as a cause for immediate termination. Fred Meyer responds that because the manual contains hedging language suggesting that the listed grounds for termination without notice are non-exclusive, the manual does not create any expectation that an employee will be terminated only for the reasons listed in the manual.
Section 201 of the loss prevention manual provides, in relevant part:
Section 201 also lists 11 "causes for disciplinary action resulting in either suspension without pay, or termination." (Emphasis omitted.)
The manual also includes "Disciplinary Guidelines" for "Non-Arrest and Non-Policy Stops." These guidelines define two categories of stops that do not comply with Fred Meyer policy: "non-arrest apprehensions" and "non-policy stops." A non-arrest apprehension occurs when a customer is stopped but the customer does not have stolen merchandise. The manual distinguishes between non-arrest apprehensions that occur because of a failure to follow department procedures ("errors in judgment") and apprehensions that occur "due to circumstances that [the employee was] not aware of at the time of the apprehension" ("errors in fact"), and sets out a different progressive disciplinary procedure for each type of non-arrest apprehension. For example, an employee's first non-arrest apprehension resulting from an error in judgment will result in a "[w]ritten warning including suspension of employment without pay"; a second violation within 24 months will result in discipline "[u]p to and including termination of employment."
A non-policy stop occurs when a stop does lead to an arrest and the recovery of stolen merchandise, but the loss prevention employee making the stop did not follow all applicable loss prevention apprehension procedures. In particular, the manual requires the loss prevention employee to ensure that five criteria are met before apprehending a suspect:
Non-policy stops are, according to the manual, less serious than either type of non-arrest apprehension. Accordingly, a non-policy stop "will be reviewed by the District Loss Prevention Manager ... and will result in a verbal or written warning." However, all "[n]on-policy apprehensions must be verbally reported to [the] District Loss Prevention Manager immediately after the arrest[;] failure to report can and will result in termination."
The disciplinary guidelines further provide that:
Fred Meyer argues that, notwithstanding the detailed procedures described above, "no
In Hoendermis v. Advanced Physical Therapy, Inc., we concluded that a policy manual did not give an employee a right to progressive discipline where the manual explicitly provided that the employer retained discretion not to follow the manual's discipline procedures.
In contrast, we held in Jones v. Central Peninsula General Hospital that a policy manual setting out "fifteen non-exclusive categories of acts or omissions that may result in termination for cause" was, as a matter of law, incorporated into an employment contract.
This case falls somewhere between these precedents. Fred Meyer's policy manual does not include language indicating that it may decline to follow its disciplinary procedures as it pleases. Although it is true that the manual provides that "termination of employment is always an option when the judgment of the individuals involved and their actions are so grievous and severe, that it places Fred Meyer at increased risk [of] civil liability," that language merely creates an exception to progressive discipline in cases where an employee's actions have exposed Fred Meyer to a risk of liability; it does not render the disciplinary procedures discretionary in all instances. And given the sheer level of detail contained in the manual, any language suggesting that Fred Meyer policy is not legally binding would need to be very prominent to be effective.
It is also true, as Fred Meyer points out, that the list of "causes for immediate termination without prior warning" is "in addition to the `Fred Meyer Employee Responsibilities' form." (Emphasis omitted.) But that language does not suggest that Fred Meyer may terminate employment without notice for any reason.
Therefore, there is a triable question of fact whether a reasonable person would believe that the provisions of the loss prevention policy manual are binding.
Fred Meyer argues that, even if the policy manual does give Becker enforceable contract rights, its decision to terminate Becker's employment without notice was justified by Becker's alleged misconduct. But the superior court did not reach this question in its order granting summary judgment.
All employment contracts — even those terminable at will — are subject to an implied covenant of good faith and fair dealing.
Becker argues that Fred Meyer violated the objective component of the covenant. He alleges that several employees who committed similar or more serious violations of the loss prevention manual were not terminated without notice but received less severe discipline. Fred Meyer responds that Becker presented "no evidence of any employee ... who did anything remotely like what Becker did on January 3."
To support his allegation that Fred Meyer treated him differently from other, similarly situated employees, Becker notes that during discovery he identified 29 Fred Meyer employees who committed similar violations but were not terminated. He also notes that he testified about some of those employees during his deposition and that Devin Lilly maintained in an affidavit that "on numerous occasions there have been Loss Prevention employees committing non-apprehension arrests, which are considered far more egregious than non-policy stops, who were not terminated without prior notice."
The superior court concluded that this evidence was not sufficient to defeat summary judgment. Although the court acknowledged that Becker had identified other employees who, he alleged, were similarly situated, "he did not describe in any detail how these other employees' conduct correlated to his own alleged conduct or that there was any disparate treatment between Fred Meyer's disciplinary action against him and these other employees."
In Hoendermis, an employee "was terminated for allegedly failing to get along with other employees."
The superior court concluded that Becker's case was distinguishable from Hoendermis because Becker did not describe in detail the misconduct committed by the other employees or identify an employee who "committed a non-policy stop approaching the sheer number of violations that he is alleged to have committed." But in Hoendermis, we did not suggest that a certain level of detail about other employees' misconduct was required to defeat summary judgment.
Moreover, Becker did describe in detail misconduct committed by two other loss prevention employees, and the discipline to which each of them was subjected. Becker alleged that one employee was not terminated after a non-arrest apprehension, which, according to the policy manual, is more serious than a non-policy stop. And Becker alleged that a second employee was not terminated after committing a non-arrest apprehension; rather, the employee was suspended and transferred out of the loss prevention department. Therefore, the record reflects that Becker did provide evidence about the specific circumstances of some of the other employees he identified.
Nor does Hoendermis require, as Fred Meyer suggests, that an employee claiming disparate treatment show that another employee with exactly the same job description was treated differently after committing exactly the same misconduct.
And while it is true that Fred Meyer presented evidence indicating that some employees were terminated for committing policy violations, that evidence merely points to the existence of a factual dispute; it does not establish that summary judgment was warranted.
For these reasons, we conclude that Becker has raised a material question of fact whether Fred Meyer breached the objective component of the implied covenant of good faith and fair dealing.
The judgment of the superior court is REVERSED and REMANDED for further proceedings consistent with this opinion.
MAASSEN, Justice, not participating.
