Nancy J. Johnson, Appellant, vs. U.S. Bancorp, d/b/a U.S. Bank, Respondent.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2002).

 

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C0-03-308

 

Nancy J. Johnson,

Appellant,

 

vs.

 

U.S. Bancorp,

d/b/a U.S. Bank,

Respondent.

 

Filed August 26, 2003

Affirmed

Hudson, Judge

 

Ramsey County District Court

File No. C902010403

 

John J. Curi, 2249 East 38th Street, Minneapolis, Minnesota 55407 (for appellant)

 

David L. Hashmall, Felhaber, Larson, Fenlon & Vogt, P.A., 225 South Sixth Street, Suite 4200, Minneapolis, Minnesota 55402 (for respondent)

 

Considered and decided by Hudson, Presiding Judge; Minge, Judge; and Forsberg, Judge.*

UNPUBLISHED OPINION

HUDSON, Judge

Appellant Nancy Johnson was dismissed from her employment with respondent U.S. Bancorp (d/b/a U.S. Bank) for violating company policy by accessing confidential information on a shared network drive.  Johnson sued U.S. Bank, alleging promissory estoppel, breach of an express covenant of good faith, and breach of employment contract.  The district court dismissed all claims.  On appeal, Johnson argues that (1) her complaint sufficiently states a claim for promissory estoppel because it alleges that she accessed the shared drive in reliance on the computer security policies in U.S. Bank's employee handbook and (2) the employee handbook creates an express covenant of good faith.  Because the language in the employee handbook is insufficient to modify the at-will employment relationship of the parties, we affirm.

Facts

Appellant Nancy Johnson was employed as a manager by respondent U.S. Bancorp d/b/a U.S. Bank (the bank).  In April 2002 bank senior manager Kathy Ashcraft overheard Johnson discussing sensitive, confidential company organizational plans.  These plans were not within the scope of information Johnson had permission to access as part of her duties.  Upon investigation, the bank discovered that Johnson had improperly accessed senior management files, located on a shared network drive in Ashcraft's sub-directory labeled "personnel."  The sub-directory included Ashcraft's direct reports, confidential future organizational changes, and personal information regarding Ashcraft's upcoming wedding.  Johnson did not deny accessing the confidential information and admitted that she had no business purpose for accessing the files.  The bank terminated Johnson's employment, asserting that Johnson had engaged in unethical conduct in violation of the bank's code of conduct by accessing confidential supervisory and personnel data.

Johnson was an at-will employee.  The bank's employee handbook contains the following statement regarding the at-will status of bank employees:

These programs, policies and procedures do not constitute a contractual obligation to employees or a contract of employment.  Your employment with the company is an "at will" relationship.  This means that we recognize your right to resign at any time for any reason; similarly, U.S. Bancorp may terminate any employee, at any time, for any reason.

(Emphasis added.)  In addition, Johnson signed the handbook acknowledgement, which states the following:

I understand that the Handbook does not constitute a contract of employment and that changes to the handbook may be made without notice to me.

I understand that I have the right to terminate my employment at any time and that the Company has the same right.

(Emphasis added.)

The employee handbook states that employees are to "[u]se resources and data only for authorized purposes," and shall not "attempt to access data that [employees] are not authorized to access."  Employees are to "[e]nsure that all of your computer access is on a need-to-know basis and is limited to the information required to perform your job."  The handbook states that these policies set forth the company's "steadfast expectations . . . of every employee in the workplace."

Johnson sued the bank on theories of promissory estoppel and breach of an express covenant of good faith, basing those claims upon statements in the employee handbook.  The bank moved to dismiss the action for failure to state a claim upon which relief may be granted.  Johnson filed a cross-motion to compel discovery, arguing that discovery would produce evidence consistent with her theory.  The district court dismissed Johnson's claims, concluding that Johnson was an at-will employee and the employment relationship could be terminated at any time, for any reason, or for no reason.  This appeal followed.

D e c i s i o n

The first issue we address is the precise nature of the district court's order.  The district court labeled its order as a grant of summary judgment, although the bank's motion was in fact a rule 12.02 motion to dismiss.  Significantly, the district court applied a rule 12 analysis in its order.  When a court examines documents and evidence outside of the pleadings, a motion to dismiss under rule 12.02 becomes one for summary judgment.  Minn. R. Civ. P. 12.03; Raygor v. Univ. of Minnesota, 604 N.W.2d 128, 131 (Minn. App. 2000), rev'd on other grounds, 620 N.W.2d 680 (Minn. 2001).  But when considering a motion to dismiss, a court may consider the whole of a document that is central to the claims alleged and to which the complaint refers.  In re Hennepin County 1986 Recycling Bond Litig., 540 N.W.2d 494, 497 (Minn. 1995).  Here, the district court limited its documentary analysis to the employee handbook and change-of-control policy, both of which were central to the claims alleged in the complaint.  For these reasons, we will review the district court's order under the standard of review applicable to motions to dismiss.

When an appellate court reviews cases dismissed for failure to state a claim upon which relief can be granted, the only question before a reviewing court is "whether the complaint sets forth a legally sufficient claim for relief."  Barton v. Moore, 558 N.W.2d 746, 749 (Minn. 1997).  Under a rule 12.02(e) motion to dismiss, "a pleading will be dismissed only if it appears to a certainty that no facts, which could be introduced consistent with the pleading, exist which would support granting the relief demanded."  Doyle v. Kuch, 611 N.W.2d 28, 31 (Minn. App. 2000) (quotation omitted).  Courts may consider all evidence referred or attached to the complaint.  Martens v. Minnesota Mining & Mfg. Co., 616 N.W.2d 732, 740 (Minn. 2000).

I.          Promissory Estoppel

In Minnesota, an employer may terminate an at-will employee, with or without cause, unless otherwise provided by an employment contract between the parties.  Ruud v. Great Plains Supply, Inc., 526 N.W.2d 369, 371 (Minn. 1995).  Johnson does not dispute that her employment was at-will, but she instead argues that she has a viable claim of promissory estoppel based upon various statements in the bank's employee handbook.  Specifically, Johnson claims that the employee handbook made numerous statements regarding the use of technology and the bank's requirements for storing, protecting and accessing confidential information.  She contends that by placing Ashcraft's confidential information on a "shared" access drive with no restrictions or warnings concerning access, the bank and Ashcraft violated the bank's information security policies by not securing Ashcraft's data from unauthorized access.  Therefore, Johnson argues, she could not be terminated for accessing Ashcraft's personnel file.  We disagree.

Promissory estoppel implies a contract in law where no contract exists in fact.  See Frey v. Ramsey County Cmty. Human Servs., 517 N.W.2d 591, 601-02 (Minn. App. 1994) (holding that presence of a "contract" between employer and employee precludes promissory estoppel claim).  Whether an implied contract exists is a question of law appropriate for a court to decide.  Hunt v. IBM Mid Am. Employees Fed. Credit Union, 384 N.W.2d 853, 856 (Minn. 1986).  To state an actionable claim for promissory estoppel, a plaintiff must establish that (1) a clear and definite promise exists; (2) the promisor intended to induce reliance, and the promisee in fact relied to her detriment; and (3) the promise must be enforced to prevent injustice.  Martens, 616 N.W.2d at 746.

Johnson argues that all three Martens factors have been met because she was entitled to rely on the bank's promises that restricted information would be encrypted or otherwise protected so as to preclude her from accessing it.  But Johnson ignores the fact that the bank's statements regarding information securitywhile laudable goalswere nevertheless general policies and programs.  To state an actionable claim for promissory estoppel, Johnson had to establish the existence of a clear and definite promise.  Martens, 616 N.W.2d at 746.  The bank's general statements about information security fall far short of being clear and definite promises.

Equally important, Johnson minimizes the fact that the employee handbook expressly states both that "employment with the company is an ‘at will' relationship," and that in some cases, the bank "may determine immediate termination is warranted."  The employee handbook also states that the bank may terminate an employee "at any time, for any reason."  Minnesota courts have consistently held that if an employee handbook clearly states that its language is not intended to create a contract, the handbook does not alter the status of at-will employees.  See, e.g., Snow v. Ridgeview Med. Ctr., 128 F.3d 1201, 1209 (8th Cir. 1997) (the law is hesitant to impose on an employer the burdensome obligation of providing permanent employment in the absence of an explicit promise to that effect); Audette v. Northeast State Bank of Minneapolis, 436 N.W.2d 125, 127 (Minn. App. 1989) (no contract where handbook expressly disclaims such an intention).

Additionally, the bank's severance-pay program did not create a right to continued employment.  The plan specifically states that its terms "shall not give any employee the right to be retained in the employment of the Employer."  Furthermore, the plan language implicitly acknowledges that an employee may be terminated for cause by noting that, to be eligible for the plan, the employee must "quit for Good Reason or be terminated for reasons other than Cause."  Thus, the district court correctly found that the severance-pay program did not create a right to continued employment and appropriately dismissed Johnson's promissory estoppel claim.

II.        Covenant of Good Faith

Johnson next argues that the bank violated a covenant of good faith that was established by the policies in its employee handbook.  Minnesota law "does not recognize such an implied covenant [of good faith and fair dealing] as a viable cause of action."  Lindgren v. Harmon Glass Co., 489 N.W.2d 804, 810 (Minn. App. 1992) (citing Hunt, 384 N.W.2d at 858) (emphasis added), review denied (Minn. Oct. 20, 1992).  Johnson instead alleges that the bank breached an express covenant of good faith and fair dealing.  See Poff v. W. Nat'l Mut. Ins. Co., 13 F.3d 1189, 1191 (8th Cir. 1994) (stating that Minnesota recognizes actions for breach of express covenants).  But "general policy statements do not create such a covenant."  Id. (quoting Stowman v. Carlson Cos., 430 N.W.2d 490, 494 (Minn. App. 1988), review denied (Minn. Jan. 13, 1989)); Pine River State Bank v. Mettille, 333 N.W.2d 622, 626 (Minn. 1983) (a handbook's general statements of policy do not modify an at-will relationship).

Here, the handbook's statements that the bank will protect information from unauthorized disclosure and that the bank will ensure that computer access is on a need-to-know basis do not rise to the level of specificity required to modify an at-will relationship.  Further, it is well established that no contract is formed where an employer clearly states that it does not intend its handbook to be a contract.  Audette, 436 N.W.2d at 127.  Moreover, Johnson signed the handbook acknowledgment which clearly states that the employee understands that the handbook "does not constitute a contract of employment."

When an employer reserves the right to discharge an employee for any reason, contract formation through an employee handbook is limited.  See Simonson v. Meader Distrib. Co., 413 N.W.2d 146, 147-48 (Minn. App. 1987) (affirming summary judgment and holding that a handbook's language may reserve an employer's discretion not to follow its policy manual).  Here, the employee handbook plainly disclaimed any intent to offer a unilateral employment contract and expressly reserved the right to terminate employees "at any time, for any reason."

Finally, Johnson argues that the bank violated a covenant of good faith by declining to provide her with progressive counseling even though the employee handbook provides for such counseling.  The employee handbook does provide for progressive counseling, but it also provides that "[i]n some cases, U.S. Bancorp may determine immediate termination is warranted."  See Hunt, 384 N.W.2d at 857 (holding no contractual right where handbook reserved right to terminate employee immediately).  This statement, taken with the numerous others disclaiming the handbook as a contract and confirming the at-will relationship, defeats Johnson's claim for breach of covenant of good faith.

Because Johnson was employed at-will, and nothing in the employee handbook or any other document altered that relationship, the district court did not err by dismissing Johnson's claims.

Affirmed.

 

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.