Unpublished Disposition, 940 F.2d 1534 (9th Cir. 1991)

No. 89-55688.

United States Court of Appeals, Ninth Circuit.

Before JAMES R. BROWNING and PREGERSON, Circuit Judges, and GEORGE, District Judge.^* 

MEMORANDUM^** 

The district court erred in granting summary judgment to defendant on plaintiffs' implied contract claims. The court erroneously held plaintiffs had failed as a matter of law to establish sufficient longevity of employment. Longevity is a relevant but not a necessary condition of an implied contract claim. Giles' service of four and a half years and Fleming's service of six and a half years were not too short to bar an implied contract claim as a matter of law. See Foley v. Interactive Data Corp., 765 P.2d 373, 387-88 (Cal.1988) ("Length of employment is a relevant consideration but six years and nine months is sufficient time for conduct to occur on which a trier of fact could find the existence of an implied contract.").¹ 

The court also erred in relying on section 3.11 of Southwest's corporate handbook. This express disclaimer is not a controlling factor in determining the existence of an implied-in-fact employment contract since it was inserted unilaterally by Southwest shortly before plaintiffs were discharged and was never incorporated into an agreement signed by plaintiffs. See, e.g., Wilkerson v. Wells Fargo Bank, 261 Cal. Rptr. 185, 189-91 (Ct.App.1989).

Defendant's assertion plaintiffs failed to identify facts that would establish a prima facie case in support of an implied agreement is incorrect. Both plaintiffs relied upon defendant's repeated commendations of their work, four and a half to six and a half years of employment, defendant's disciplinary policies and limited probation provisions as stated in its employee handbook, and defendant's alleged failure to inform them of the theft problem. Giles also relied upon defendant's assurances of different career opportunities in the company, and Fleming upon defendant's failure to warn him of impending termination. These circumstances were sufficient to establish a prima facie showing of an implied contract under the standard set out in Foley.² 

The district court also erred in holding that Foley precluded recovery on plaintiffs' claims that defendant breached the covenant of good faith and fair dealing. Foley held that "tort remedies are not available for breach of the implied covenant," 765 P.2d at 401, but "did not change the nature of an employer's obligation under the contract, including adherence to the implied covenant of good faith and fair dealing.... Foley simply changed the nature of the remedy available for the breach." Newman, 772 P.2d at 1071 (emphasis in original). On remand, plaintiffs may amend their complaints to seek contract damages on the breach of good faith and fair dealing claims.

However, we affirm summary judgment in favor of defendant on plaintiffs' claims of intentional infliction of emotional distress. Outrageous conduct is an essential element of a cause of action for intentional infliction of emotional distress. See Agarwal v. Johnson, 603 P.2d 58, 66 (Cal.1979). Plaintiffs failed to establish actions by defendants that fell outside the wide range of conduct that is a normal part of an employer's business. Such actions do not constitute outrageous conduct sufficient to form the basis for a tort claim, even though they necessarily cause emotional distress. Cole v. Fair Oaks Fire Protection Dist., 729 P.2d 743, 750-51 (Cal.1987). Accord Buscemi v. McDonnell Douglas Corp., 736 F.2d 1348, 1352 (9th Cir. 1984) (allegation of "callous and insensitive manner of ... termination" insufficient as a matter of law). Plaintiffs complain Southwest abused its power relationship over them by coercing their resignations with threats they would otherwise be fired and have difficulty finding new jobs. This conduct falls squarely within the holding of Cole and Buscemi, and therefore cannot form the basis for plaintiffs' tort claims. Moreover, Southwest's alleged statement that plaintiffs' job prospects would be better if they resigned rather than being fired is simply a statement of fact. See Deaile v. General Tel. Co., 115 Cal. Rptr. 582, 587-88 (Ct.App.1974) (factual statement to interested third parties that plaintiff had falsified company records privileged).

We lack jurisdiction to entertain plaintiffs' appeal from the imposition of sanctions. Plaintiffs failed to file the notice of appeal from the decision and order imposing sanctions. An intent to appeal the sanctions order cannot be inferred from plaintiffs' notice of appeal filed three months before the sanctions order was entered. See Meehan v. County of Los Angeles, 856 F.2d 102, 105 (9th Cir. 1988). On remand the district court may wish to consider whether to vacate the sanctions order in view of our disposition of plaintiffs' implied contract claims.

Summary judgment on plaintiffs' claims for breach of implied contract and breach of the covenant of good faith and fair dealing is REVERSED and REMANDED for further proceedings. Summary judgment on plaintiffs' claims for intentional infliction of emotional distress is AFFIRMED. Plaintiffs' appeal from the imposition of sanctions is DISMISSED for lack of jurisdiction. Parties to bear their own costs.

So ordered.