DON D'ANGELO, Appellant, v. SUE GARDNER, GEMCO, a Division of LUCKY STORES, INC., and LUCKY STORES, INC., Respondents; WESTERN STATES MINERALS CORP., a Utah Corporation, Appellant, v. ROBERT C. JONES, and GAIL A. JONES, Husband and Wife, Respondents
D'Angelo v. Gardner
Rose, J., concurs.
DON D’ANGELO, Appellant, v. SUE GARDNER, GEMCO, a Division of LUCKY STORES, INC., and LUCKY STORES, INC., Respondents. WESTERN STATES MINERALS CORP., a Utah Corporation, Appellant, v. ROBERT C. JONES, and GAIL A. JONES, Husband and Wife, Respondents.
DON D’ANGELO, Appellant, v. SUE GARDNER, GEMCO, a Division of LUCKY STORES, INC., and LUCKY STORES, INC., Respondents. WESTERN STATES MINERALS CORP., a Utah Corporation, Appellant, v. ROBERT C. JONES, and GAIL A. JONES, Husband and Wife, Respondents.
No. 20452
No. 19697
October 24, 1991
819 P.2d 206
Eva Garcia, Las Vegas, for Appellant Don D’Angelo.
Smith & Kotchka, Las Vegas, for Respondents Sue Gardner, GEMCO and Lucky Stores, Inc.
E. Pierre Gezelin, Reno; Davis, Graham & Stubbs and Steven J. Merker and Richard A. Westfall, Denver, Colorado, for Appellant Western States Minerals Corporation.
Robert H. Perry and Janet J. Berry, Reno, for Respondents Robert C. Jones and Gail A. Jones.
Lionel Sawyer & Collins and Brian McKay, Las Vegas, for Amici Curiae.
Laxalt & Nomura, Reno, for Amici Curiae.
McDonald, Carano, Wilson, McCune, Bergin, Frankovich <& Hicks, Reno, for Amici Curiae.
Raggio, Wooster & Lindell, Reno, for Amici Curiae.
Vargas & Bartlett, Reno, for Amici Curiae.
Woodburn, Wedge & Jeppson, Reno, for Amici Curiae.
Hamilton & Lynch, Reno, for Amicus Curiae Nevada Trial Lawyers Association.
Jones, Jones, Close & Brown and Charles H. McCrea, Sr., Las Vegas, for Amicus Curiae Southwest Gas Corporation.
Thomdal, Backus, Maupin & Armstrong, Las Vegas, for Amici Curiae REECo, EG&G and EMI.
OPINION
By the Court,
Springer, J.:
Having allowed rehearing and argument in regard to the above-captioned matters, the court now issues the following consolidated opinion and decision with regard thereto.
D'ANGELO v. GARDNER, ET AL., DOCKET NO. 20452
This is a wrongful discharge case. GEMCO claims that D'Angelo is an at-will employee and that he was subject to dismissal at any time without cause. D'Angelo claims that he is not subject to at-will termination but must, rather, be terminated only in accordance with the contract of the parties as evidenced by the handbook and in other ways.
This appeal comes to us on a summary judgment which holds, in effect, that D'Angelo was an at-will employee as a matter of law. Because there are issues of fact that bear on the nature of D'Angelo's employment contract, we reverse the summary judgment.
In Southwest Gas Corp. v. Ahmad, 99 Nev. 594, 668 P.2d 261 (1983), a case very similar to this one, we affirmed a summary judgment while recognizing that contractual obligations can be implicit in employer practices and policies as reflected in an employee handbook. When an employer issues an employee handbook containing termination provisions and the employee has "knowledge of the pertinent provisions therein," this "supports an inference that the handbook formed part of the employment contract of the parties." 99 Nev. at 595, 668 P.2d at 261. In the case before us the employer issued a handbook containing provisions relating to termination of employment for cause, and delivered one of these handbooks to D'Angelo, who read and "acknowledged" its contents. These facts, as they did in Ahmad, support an inference that the termination provisions were part of the employment contract. In the face of such inference summary judgment should not have been granted.
In conformance with Ahmad, we must agree with D'Angelo that he should not be foreclosed by summary judgment from trying to establish what we have recently termed a "contractual obligation of continued employment." The relationship of an employer and employee may be such that the employer has a contractual obligation not to discharge the employee without first abiding by conditions relating to dismissal which are either expressly agreed upon by the parties or inferable from the dealings and practices of the parties. There is evidence to support this kind of employer-employee relationship in this case.
D'Angelo was employed by GEMCO as a salesman. Twelve years after he was hired, D'Angelo had risen to the position of department manager, employed in the East Sahara store in Las Vegas. In May of 1985, an incident occurred in which D'Angelo was accused of selling some film regularly priced at $3.97 a roll for $2.00 a roll. D'Angelo explained that he did this because the film date had expired. The outcome of this incident was that D'Angelo was terminated from his employment.
D'Angelo learned of the grounds for his termination when he saw a copy of GEMCO's letter to the state labor commissioner stating that D'Angelo had been terminated "for violation of work rule number 6, 'accepting or extending unauthorized discounts or credit to anyone.' " GEMCO's letter to the labor commissioner added: "As noted in the Handbook, which Mr. D'Angelo has read and acknowledged understanding of, deviation from this rule is considered most serious by the company and proper cause for discharge."
The foregoing language would lead one to believe that since both GEMCO and D'Angelo "acknowledged understanding" of the employee handbook, they may well have considered themselves, to some extent at least, bound by the terms of the handbook. GEMCO's written specification of charges given to the labor commissioner, although taken from the handbook, does not of itself establish the binding effect of the handbook because, even in the discharge of at-will employees, an employer may, in reporting to the labor commissioner, be called upon to specify the cause for dismissal ; however, GEMCO's reference to the handbook, the proclaimed "understanding" of the parties relative to the handbook, and GEMCO's reference to a rule violation taken from the handbook as being the cause of D'Angelo's dismissal, all tend to lead to the conclusion that the employment relationship was defined by the handbook and that both parties considered themselves bound by the handbook with reference to termination rights and processes.
At the time of his hiring, and as a condition of his being hired, D'Angelo was required to read and acknowledge his understanding of the employee handbook. The handbook deals with the subject of discharge and, in addition to referring to "proper cause" for dismissal, sets out in some detail the "primary reasons which are considered by GEMCO as grounds for discharge''-, and "any discharge based on an employee's failure to perform work as required" must be "preceded by written notice to the employee." (Our emphasis.) A jury could have concluded that both employer and employee intended to be bound by the terms of the handbook; but the jury could, of course, have concluded otherwise and decided in favor of GEMCO. The jury could have seen the handbook (as does the dissent) as a mere convenience to the employee and as a precatory expression of employment "policies intended to benefit employees," which was binding on the employee but not on the employer.
Just as there are cases in which handbooks and employment practices can be found to support an express or implied obligation of continued employment, so are there cases in which such an obligation is absent as a matter of law. This was the situation in our recent case of Vancheri v. GNLV Corp., 105 Nev. 417, 777 P.2d 366 (1989). In Vancheri, although there was an employee handbook, the handbook did not contain employee disciplinary procedures or specification of "proper cause" for dismissal (see Vancheri, 105 Nev. at 422 n.2, 777 P.2d at 369 n.2); thus, Mr. Vancheri could not rely on a handbook to support a claim on his part that his employer owed to him a contractual obligation of continued employment. Absent termination provisions in the handbook, we held in Vancheri that the mere existence of customary or informal procedures employed in cases of employee dismissal would not vitiate an essentially at-will employment.
In Vancheri, there was an established and customary disciplinary procedure that was ordinarily followed by the employer, but this procedure was gratuitous and unilateral and was not reduced to writing or incorporated in a handbook that was delivered to the employee and "acknowledged" by the employee. We said in Vancheri that the mere establishment of such procedures by an employer would not "in and of itself' create an obligation of continued employment. Such procedures, unilaterally installed, do not create the right of continued employment.
Mr. Vancheri failed, as a matter of law, to establish an agreement, express or implied, between his employer and him, that granted to him the right of continued employment. By contrast, as pointed out above, there is in the case before us ample evidence under our ruling in Ahmad "to support an inference" of the existence of an obligation of continued employment; and the granting of summary judgment to the employer in this case was in contravention of our holding in Ahmad. The language relating to termination contained in the employee-accepted GEMCO handbook, taken with the fact that D'Angelo's discharge was based on a handbook rule violation, would support a fact finder's conclusion that the employer was contractually bound to the employee under an obligation of continued employment.
Summary judgment is reversed; and the matter is remanded for trial on the merits of the wrongful discharge claims.
WESTERN STATES MINERALS CORP. v. JONES, DOCKET NO. 19697
This is a wrongful termination of employment case. Respondent Robert C. Jones sued his employer, appellant Western States Minerals Corporation, in contract and tort because of the manner in which Western States terminated Jones's employment. The trial jury awarded Jones by general verdict $62,287.00 in past damages, $98,863.00 in future damages and $100,000.00 in punitive damages. We affirm the judgment of the trial court on the general verdict and hold that the evidence supports an award of contract damages and of tort damages, compensatory and punitive, for tortious discharge. We deny Jones's tort claim for breach of the implied covenant of good faith and fair dealing and decline any consideration of the assignment of error relating to the claim for infliction of emotional distress because it is not necessary to consider this claim to uphold the judgment.
Preliminary Comment Relating to Wrongful Discharge
The law relating to claims by employees against their employers for wrongful discharge is rapidly evolving and is often lacking in the clarity one would expect to find in the more static areas of judicial decision-making. For this reason we thought it useful to give a preliminary overview of the three discrete claims for relief which we consider in this opinion, namely, a claim for breach of contract, a claim for the tortious breach of the implied covenant of good faith and fair dealing which can arise out of certain employer-employee contractual relationships (sometimes called a "bad-faith discharge tort") and tortious discharge (sometimes called a "public policy tort").
1. Breach of Employment Contract. Employment contracts are ordinarily and presumably contracts which are terminable at will; however, an employer may expressly or impliedly agree with an employee that employment is to be for an indefinite term and may be terminated only for cause or only in accordance with established policies or procedures. We have called this a contract of "continued employment" a contract which an employee can enforce in accordance with its terms.
2. Bad Faith Discharge Tort. This tort is committed when an employer, acting in bad faith, discharges an employee who has established contractual rights of continued employment and who has developed a relationship of trust, reliance and dependency with the employer. By its nature this kind of employer-employee relationship cannot develop in an at-will employment; consequently, a bad faith discharge tort cannot be committed against an at-will employee as can a tortious discharge.
3. Tortious Discharge. This tort, the so-called public policy tort, is the simpler of the two subject employment torts. An employer commits a tortious discharge by terminating an employee for reasons which violate public policy. "Although this kind of public policy tort cannot ordinarily be committed absent the employer-employee relationship, the tort, the wrong itself, is not dependent upon or directly related to a contract of continued employment such as that existing in the present case." K Mart Corp. v. Ponsock, 103 Nev. 39, 46, 732 P.2d 1364, 1369 (1987). Discharging an employee for seeking industrial insurance benefits, for performing jury duty or for refusing to violate the law are examples of tortious discharge. See, e.g., NRS 6.190; Hansen v. Harrah's, 100 Nev. 60, 675 P.2d 394 (1984).
Having defined the scope of the opinion, we now proceed to a discussion of the first matter of concern, liability for breach of the employment contract.
Breach of the Contract of Continued Employment
We have concluded that the trial judge, the Honorable Joseph O. McDaniel, properly determined that there was sufficient evi dence for the jury to find that there was a contractual obligation of "continued employment" between employer and employee. Cf. American Bank Stationery v. Farmer, 106 Nev. 698, 799 P.2d 1100 (1990); Sands Regent v. Valgardson, 105 Nev. 436, 777 P.2d 898 (1989). In both of the cited cases we recognized that an employee handbook can become "a part of the oral contract" between the parties. Farmer, 106 Nev. at 701, 799 P.2d at 1102 (emphasis supplied). In the case now at bar, the employment agreement appears to have been entered into when Jones signed a written agreement with Western States. At the time he was employed Jones was required to sign an agreement which said: "I agree that I will abide" by the terms and conditions set out in the company's Employee Handbook which was delivered to him at the time he was hired. Western States's mine manager, John Rice, specifically testified that the company's "employees have a right to rely on what Western States said in its employment manual." This provides evidence of the parties' contractual intent.
Without belaboring the point unduly, there is other sufficient evidence to support the rulings of the trial court and the conclusion of the jury that, in promulgating its handbook, Western States intended to make its employees' employment terminable only for cause. For example, we note that Western States' employment application form in 1980 stated: "I understand that my employment is for no definite period and may . be terminated at any time without previous notice." This "at will" language was removed from Western States' 1984 application form; and, instead of this language, the form merely stated that "any misleading or incorrect statements may render this application void, and if employed would be cause for termination." In addition to deleting the at-will language from its application form, Western States also changed its handbook to include detailed procedures related to discipline and dismissal of its employees. Under the terms of the amended handbook, disciplinary actions must take the following course: (1) oral reminder; (2) written reminder; (3) discharge. The handbook further provided that these procedures could be bypassed only if "the employee commits an offense so serious that immediate discharge without prior warning is appropriate."
On the total record, it appears that Judge McDaniel did not err in upholding the jury's finding of contractual liability in this case, because the changed language in the application form and the language contained in Western States' employee handbook could reasonably be interpreted to have changed the status of Western States' Jones and other employees from that of "at will" to "for cause."
Eight years ago, in Southwest Gas Corp. v. Ahmad, 99 Nev. 594, 668 P.2d 261 (1983), this court recognized that contractual obligations can be implicit in employer practices and policies and as reflected in employee handbooks.
The decision of prestigious courts in other jurisdictions support our holding in Ahmad and the other cases previously cited. For example, in the case of Foley v. Interactive Data Corp., 765 P.2d 373 (Cal. 1988), the California Supreme Court recognized that where no explicit agreement of continued employment is entered into, an agreement can be implied from the circumstances of the employment. Foley recognized that employees may be induced by employers to take employment or remain on the job by the conduct, policy and implied promises of the employer. Such employees may, accordingly, have enforceable rights which can be asserted in the courts. The Foley court observed that "[a] review of other jurisdictions also reveals a strong trend in favor of recognizing implied contract terms that modify the power of an employer to discharge an employee at will," and that this rule "is one that has achieved widespread acceptance in recent years." Id. at 384. The Michigan Supreme Court is in accord. See Toussaint v. Blue Cross & Blue Shield of Michigan, 292 N.W.2d 880 (Mich. 1980).
Jones's position is that he was at no time and in no manner insubordinate or unwilling to submit to his employer's authority. The jury agreed with him, and Judge McDaniel entered judgment on a jury's verdict in favor of Jones which was amply supported by the evidence. Jones admits that he expressed his unwillingness to work in the cyanide leach pit at a time when he was suffering from an unclosed surgical wound. He testified that this unwillingness was prompted by Western States's safety policies and by his own reluctance to place himself in a knowingly dangerous situation. The company, on the other hand, contends that Jones's unwillingness to accept the temporary cyanide assignment was outright insubordination and willful refusal to perform a lawful employment assignment required of him by his superiors. This pivotal factual issue was, of course, decided in favor of Jones by the jury which, by its verdict, necessarily concluded that Jones was not insubordinate and that he was, therefore, impermissibly discharged.
We now turn to a more detailed discussion of the facts surrounding the termination, facts which must be viewed in the light most favorable to Jones. See K Mart, 103 Nev. at 43, 732 P.2d at 1366.
Mine manager Rice defined the principal factual issue in this case at trial when he testified that "the issue here was Mr. Jones's refusal to work around cyanide." The evidence strongly leads to the conclusion that there is nothing in Jones's conduct that even approaches an insubordinate refusal to work around cyanide. Jones's refusal — if it can be called that — was simply his telling immediate superiors that it was unsafe and contrary to company safety policy for him to work in the cyanide area while he had an open surgical wound. Jones had learned of cyanide absorption risk and the need to protect unhealed wounds from cyanide exposure when he attended one of Western States's required safety courses. It was made clear to him during this safety course that anyone with an open wound should avoid contact with cyanide because of the increased danger of cyanide absorption into the body. A witness for Western States testified that Jones was assigned to "work around cyanide" because "the heavy equipment which he usually operated broke down." For this reason Jones temporarily was sent to "lighter" duty in the company's cyanide leach pit. One company witness testified that, upon arrival at the cyanide area Jones very respectfully declined to work in the cyanide area and explained the reason for his refusal. There appears to be no question about the danger presented to Jones by the cyanide leach pit. Specific cautionary language on sodium cyanide is set out in the DuPont manual introduced into evidence by Jones, which states: "Never permit contact with open wounds or skin abrasions." Jones was clearly exercising appropriate safety precautions when he advised his superior at the cyanide leach pit that he should not and would not work in proximity to cyanide while suffering from an unclosed surgical wound.
After indicating his reluctance to work around cyanide, Jones went from the cyanide area to the company office where he offered himself for any temporary assignment which would not put him in the danger that he would be in at the cyanide leach pit. He was told to go home; but it was not suggested in any way that his job was in jeopardy. The next day he was called back to company headquarters and advised that he was being fired for insubordination.
Apparently thinking that the mine manager, the final authority, would not persist in his decision to dismiss him if he knew the true facts about Jones's health and safety reasons for refusing cyanide duty, Jones obtained an explanatory statement from his physician. The doctor wrote that because Jones had "a healing wound in his lower abdomen . he should not be exposed to this substance due to the potential adverse effects this could have on wound healing." Neither the protestations of Jones nor his physi cian's explanation influenced the mine manager to change his decision to terminate Jones, and Jones's employment was permanently terminated.
It is very difficult to understand how, under the handbook's disciplinary system, anyone connected with the company could even suggest that Jones was guilty of "an offense so serious that immediate discharge without prior warning is appropriate." It is very clear from all of the evidence that Jones's working in the cyanide area was not only a risk to him but was also a violation of company policy; but even if Jones were wrong in refusing temporary duty in the cyanide area, and even if the mine manager believed that he had the power to order Jones into the cyanide leach pit, there was no insubordination here. On the day of the incident when Jones declined, with appropriate explanation, to clean cyanide nozzles, there was no talk of insubordination, no threat of termination — he was simply sent home. What makes Jones's discharge even more perplexing is that, before the final discharge decision was made, management had time to review his personnel records and, more importantly, to verify the legitimacy of Jones's refusal to work in the cyanide area. The mine manager knew of the wound and had even seen the bandage on the wound. At trial the mine manager conceded that Jones had the right to refuse the assignment in the leach pit. At the very worst, Jones's unwillingness to go into the cyanide pit was a minor misunderstanding between Jones and his superior concerning the company's right to compel Jones to perform this duty. This is the kind of misunderstanding that could very well have been adjusted by the "written reminders" and other "steps" provided for in the company employee handbook.
We would be unwarranted in saying that Judge McDaniel erred in upholding the jury's conclusion that Jones was not insubordinate, that he had the right to refuse cyanide duty, and that in these circumstances the company violated its contractual obligation to Jones by discharging him without going through the measures prescribed by the company's disciplinary system. In accord with the judgment of the trial court, we think that there is ample evidence to support a jury finding that an employment contract existed, that Western States violated the contract and that Jones suffered contract damages from such breach. Thus, having concluded that the trial judge did not err in this regard, we go now to examine respondent's claim that tort liability exists because of breach of the implied covenant of good faith and fair dealing.
The Tort of Breach of the Implied Covenant of Good Faith and Fair Dealing (Bad Faith Tort)
In K Mart Corp. v. Ponsock, 103 Nev. 39, 51, 732 P.2d 1364, 1372 (1987), we held that the covenant of good faith and fair dealing implied in an employment contract for indefinite future employment could, under certain limited circumstances, be the basis for tort liability in a manner comparable to the tort liability incurred by insurance companies when they deal in bad faith with their policyholders.
In K Mart we made it clear that "mere breach of an employment contract" does not of itself "give rise to tort damages" and that the kind of breach of duty that brings into play the bad faith tort arises only when there are "special relationships between the tort-victim and the tortfeasor . K Mart, 103 Nev. at 49, 732 P.2d at 1370.
Where the employer-employee relationship becomes analogous to or approximates the kind of "special reliance," trust and dependency that is present in insurance cases, we concluded in K Mart that betrayal of this kind of relationship may go "well beyond the bounds of ordinary liability for breach of contract" and may result in the offending party's being held tortiously liable for such perfidy. Id. at 48, 732 P.2d at 1370.
Although Jones relies most heavily on his claim for tortious discharge on Western States's violation of this state's public policy favoring safety in the workplace, he also asserts a right to recovery under a claim of tortious bad faith discharge. Preliminarily we note that the facts of this case are rather far removed from those in K Mart insofar as the relationship of the parties is concerned. In K Mart, the employee, Ponsock, had been a faithful employee for almost ten years with every expectation of continuing his employment for an indefinite period of time and at least until he became eligible for a retirement pension. Ponsock was hired "until retirement," and his contract of continued employment was not only terminated arbitrarily but by artifice and fraud. Id. at 42, 732 P.2d at 1366. The kind of relationship that existed between K Mart and Ponsock does not exist here; neither is there the kind of pretension, misrepresentation and betrayal that was the essence of bad faith tort liability in K Mart.
Jones's employment relationship with Western States presents a strong contrast to that of Ponsock and K Mart. Although Jones had been designated as a "permanent employee" at the time of his dismissal, he had worked less than two years. Ponsock, on the other hand, had been hired on a more permanent basis, that is, "until retirement," id. at 42, 732 P.2d at 1366, and, after almost ten years on the job, had no reason to suspect that he was going to be arbitrarily terminated, much less fraudulently deprived of his employment and retirement rights.
If we use K Mart as the exemplar for that narrow class of cases in which, because of the relationship of employer to employee, the offending conduct "goes well beyond the bounds of ordinary liability for breach of contract," id. at 48, 732 P.2d at 1370, we can see why Jones does not fall within that class. Because the requisite relationship cannot have ripened under the facts of this case, and, more importantly, because the kind of deception and perfidy which was the essence of the bad faith tort in K Mart is not present here, we must reject any claim by Jones for tort damages based on breach of the implied covenant of good faith and fair dealing. Next we consider whether Jones has sustained a tort claim for tortious discharge.
Tortious Discharge: Public Policy Tort
As pointed out in K Mart, 103 Nev. at 46, 732 P.2d at 1369, although "a public policy tort cannot ordinarily be committed absent the employer-employee relationship, the tort, the wrong itself, is not dependent upon or directly related to a contract of continued employment such as that existing in the present case." The "tortious discharge," in other words, stands by itself; and although it arises out of the employer-employee relationship, it is not dependent on a contract of continued employment between the parties. The essence of a tortious discharge is the wrongful, usually retaliatory, interruption of employment by means which are deemed to be contrary to the public policy of this state. The prototypical tortious discharge case is found in Hansen v. Harrah's, 100 Nev. 60, 675 P.2d 394 (1984), in which an employee claimed to have been discharged to penalize him because he had filed a worker's compensation claim. 100 Nev. at 62, 675 P.2d at 396. Comparable tortious discharges may arise when an employer dismisses an employee in retaliation for the employee's doing of acts which are consistent with or supportive of sound public policy and the common good.
If an action for tortious discharge is to lie in the case now before us, it must first be established that Western States has, in its discharge of Jones, violated the public policy of this state. We conclude that it is violative of public policy for an employer to dismiss an employee for refusing to work under conditions unreasonably dangerous to the employee.
The Nevada Occupational Safety and Health Act (NOSHA) states that "[t]he legislature finds that such safety and health in employment is a matter greatly affecting the public interest of this state." NRS 618.015(2). After reviewing provisions in the California Labor Code which are comparable to NOSHA, the California Court of Appeal had this to say about public policy and the termination of employees because of their seeking a safe work place:
It requires little analysis to perceive that the legislative purpose underlying these provisions would be substantially undermined if employers were permitted to discharge employees simply for protesting working conditions which they reasonably believe constitute a hazard to their own health or safety, or the health or safety of others. Achievement of the statutory objective — a safe and healthy working environment for all employees — requires that employees be free to call their employer's attention to such conditions, so that the employer can be made aware of their existence, and given opportunity to correct them if correction is needed. The public policy thus implicated extends beyond the question of fairness to the particular employee; it concerns protection of employees against retaliatory dismissal for conduct which, in light of the statutes, deserves to be encouraged, rather than inhibited. In that respect, the policy at stake is similar to that which informed the court's decision in Petermann v. International Brotherhood of Teamsters (1959) 174 Cal.App.2d 184 [344 P.2d 25], which held that the state's policy of encouraging truthful testimony before legislative bodies would be undermined if an employer could terminate an employee for refusing to commit perjury.
Hentzel v. Singer Co., 138 Cal.App.3d 290, 298 (1982).
NRS 618.375 requires that all employers adopt practices which insure safe employment and that employers do everything reasonably necessary to protect the lives, safety and health of their employees. NRS 618.385(1) expressly prohibits employers from requiring employees "to go or be in any . . . place of employment which is not safe and healthful," a prohibition which the jury certainly could have found to have been violated in this case. There can be no doubt but that the public policy of this state favors safe employment practices and the protection of the health and safety of workers on the job. NRS 618.015(2). This being the case, we hold that dismissal of an employee for seeking a safe and healthy working environment is contrary to the public policy of this state.
Concluding that Western States violated public policy when it dismissed Jones does not end the matter, however. In Sands Regent v. Valgardson, 105 Nev. 436, 439-40, 777 P.2d 898, 899- 900 (1989), we refused to recognize an action for tortious discharge even though the defendant had clearly violated Nevada's public policy against age discrimination. We refused to recognize an independent tort action for violation of the public policy against age-discrimination because the plaintiffs in Valgardson had already recovered tort damages in sums of $69,010.00 and $125,560.00 under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq., and under NRS 613.310 et seq. Id. at 439-40, 777 P.2d at 900. It would not have been fair to the defendant in Valgardson to have allowed an additional tort remedy under the common law Hansen type of tortious discharge.
It is quite obvious that the Valgardson plaintiffs were vindicating much more than a mere contractual right to lost earnings. The recovery in Valgardson of $125,000.00 for wrongful discharge was clearly a tort rather than a breach of contract recovery. This conclusion is supported by the recent case of Rickel v. C.I.R., 900 F.2d 655 (3rd Cir. 1990), a tax case in which the court held that damages in an Age Discrimination in Employment Act suit are not taxable because they are analogous to redress of a tort claim for personal injury, irrespective of non-personal components such as compensation for lost wages. The court stated:
[T]he scope of [the ADEA] goes beyond the mere employer-employee context, protecting individuals from various forms of discrimination even if they are not yet in a contractual relationship . . . [Cjourts in other jurisdictions . . . have characterized an action to redress discrimination in the workplace as a tort claim for personal injuries whether the discrimination was based on race, sex, or age.
Thus, focusing on the nature of the claim, we are convinced that the taxpayer's discrimination suit under the ADEA was analogous to the assertion of a tort type claim to redress a personal injury . The taxpayer merely sought the remedies afforded by the statute as compensation for the personal injury he suffered as a result of the employer's act of discrimination; the requested remedies were not separate claims in themselves to redress the employer's breach of a contract. The non-personal consequences of the discrimination, the loss of wages, does not transform discrimination into a non-personal injury.
900 F.2d at 662-63 (emphasis added; citations omitted).
The dissent expresses the view that this case is indistinguishable from Valgardson, and that Jones's rights are sufficiently vindicated by the remedy provided in NRS Chapter 618. On the contrary, this case is quite clearly distinguishable from Valgard-son. In Valgardson, the statutory remedies at issue allowed discrimination victims to bring suit and, as discussed above, recover tort damages for their injuries. Conversely, in the present case the statutory remedy simply provides for an action by the administrator of the division of occupational safety and health, and then only for reinstatement and past wages and not general damages. The statutory remedy at issue here is far less comprehensive than the one in Valgardson, in which damages of a tort-like nature had been recovered by the plaintiffs.
It is in precisely such cases, i.e., where no comprehensive statutory remedy exists, that courts have been willing to create public policy tort liability. See Wehr v. Burroughs Corp., 438 F.Supp. 1052, 1055 (E.D.Pa. 1977), aff'd, 619 F.2d 276 (3d Cir. 1980). Here, Jones had no comprehensive statutory or other tort remedy available to compensate him for the civil wrong committed against him by Western States. He was, therefore, entitled to pursue an action for tortious discharge against his employer. For this reason, the judgment against Western States is affirmed.
Punitive Damages
The overall impression one gets of this case is that mine manager Rice asserted his authority over Jones simply to "show him who was boss." There is no explanation of why, after he became thoroughly aware of the circumstances of Jones's refusal to go into the cyanide pit until his surgical wound closed, Rice still persisted in terminating Jones. Western States placed Jones in a terrible position: Jones knew that company policy and directives prohibited him from entering the cyanide area; yet his doing exactly the proper thing with respect to Western States's own safety policies resulted in his losing his job. In effect Western States fired Jones for complying with company policy.
The jury in this case awarded tort damages, general and punitive. Judge McDaniel instructed the jury that it could assess punitive damages against the employer in this case if it found "fraud, oppression or malice, express or implied." There is evidence to support a jury finding that Western States was guilty of the intentional public policy tort, tortious discharge. There is evidence to support the conclusion that the charge of "insubordination" was a contrivance and a fraud. There is evidence to support malicious intent and oppressiveness on the part of Western States. Therefore, we may not disturb the trial court's determination that the punitive damage award will be upheld.
Although Jones is not entitled to recover on his claim for tort damages for breach of the implied covenant of good faith and fair dealing, he is entitled to recover contract damages on his claim for breach of the employment contract and to recover tort damages for tortious discharge. We do not perceive any error on the part of Judge McDaniel in his conduct of the trial of this case. The judgment of the trial court is, therefore, alfirmed.
Rose, J., concurs.
Rehearings in the above-captioned appeals were granted pursuant to orders issued April 2, 1991. This opinion is issued on the rehearing.
The trial court granted summary judgment to GEMCO on D'Angelo's claims for defamation. We have concluded that the trial court was correct in granting judgment to GEMCO on these claims and that D'Angelo's appeal on these points is without merit.
The significant facts in this case are most similar to the facts in Ahmad. In Ahmad and in this case we hold only that an employee handbook might under certain circumstances be taken as evidence of an enforceable contract between an employer and employee. In neither of these cases do we say (as stated in the dissent) that "any determination by [an employer] to terminate an employee is contestable before a jury as a final arbiter of 'proper cause.' " "Proper cause" is not an issue before this court in this case. The issue here, as in Ahmad, is simply whether the employee should be denied his day in court and not allowed to present evidence that the parties decided to forego "at-will" status and enter into a contract relative to employment termination. The dissent quite correctly states that "[floday's opinion perpetuates the Ahmad rationale . . . ." Although the dissenting justices apparently are not pleased with the Ahmad "rationale," we could not decide the present case differently without overruling Ahmad.
Of course, the employer can easily prevent this inference from arising by including in its handbook an express disclaimer of implied contractual liability of the type found in Perry v. Sears, Roebuck & Co., 508 So.2d 1086, 1088 (Miss. 1987). In Perry, the pension plan manual at issue stated in bold type, "Employment rights not implied," and further stated that "Participation in the plan does not . . . interfere in any way with the right of the company to discharge or terminate you at any time." In light of these statements, the court correctly found that no inference of implied contractual liability was present; thus, the court held that summary judgment was proper.
Sands Regent v. Valgardson, 105 Nev. 436, 439, 777 P.2d 898, 899 (1989).
GEMCO also acknowledged that D'Angelo had been dismissed for cause in a company bulletin describing the cause of discharge as being for "failure to follow company policies and guidelines."
GEMCO also argues that the procedures for dismissal do not apply to managerial personnel. This position is belied by the statement made by GEMCO in the bulletin mentioned in the body of the opinion, in which reference is made to "a Manager" who was "terminated for failure to follow company policies and guidelines." There is evidence to support a jury finding that the procedures for dismissal were available for managers as well as for other personnel.
In K Mart under a heading of "Tort Liability" we referred to the application of general tort law to employee discharge cases and cited Hansen v. Harrah's, 100 Nev. 60, 675 P.2d 394 (1984) as the prototypical tortious discharge or public policy tort. K Mart, 103 Nev. at 45-47, 732 P.2d at 1368-69. Although we discussed tortious discharge in general terms, we did not hold that K Mart committed a public policy tort when it discharged Ponsock, a long-term, tenured employee, in order to deprive him of his retirement benefits. K Mart is a bad faith discharge case and not a tortious discharge case.
Jones testified that if he had known he was going to lose his job for exercising this caution, he probably would have gone ahead and faced the danger by entering the cyanide leach pit.
In Valgardson, while basing our decision to deny a tort remedy on the availability of a specific statutory remedy, we used some possibly misleading language when we said that we did not "perceive that our public policy against age discrimination is sufficiently strong and compelling to warrant another exception to the 'at-will' employment doctrine." Id. at 439-40, 111 P.2d at 900. Certainly we did not mean to intimate that this state's strong policy against age discrimination was not sufficiently strong to support remedial court action. Employment termination based on age-discrimination does allow for an appropriate statutory remedy, which is in a certain sense an exception to the at-will doctrine, a doctrine which in its purest form allows for termination of employment for any reason. It is not correct, then, to say that age-discrimination is not a legally redressable injury; it can only be said, as is said in the text, that no additional court-created remedies, comparable to the remedy created in Hansen, arise out of age-based wrongful discharge for which tort recovery is available by statute.
The dissent agrees that Jones had a "right not to be forced into an unsafe workplace." The only disagreement is how this right should be enforced. We note that the statutory remedy under NRS 618.445 is permissive and not mandatory. ("Any employee aggrieved by a violation of subsection 1 may file a complaint....") That an employee may ask the administrator to intervene on his behalf and seek reinstatement and back-pay seems to be a very inadequate remedy for the misconduct involved in trying to force a worker into an unsafe place at the risk of being fired. This use of permissive language supports our conclusion that this legislative remedy was intended to be supplemental and not exclusive.
The dissent also acknowledges that Western States' conduct was "wrong," but then takes the position that Jones' exclusive redress is contained in the Nevada occupational safety and health statutes (NOSHA). For several reasons, this cannot be the case. NOSHA, by its very terms, applies only where:
the employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter or has testified or is about to testify in any such proceeding or because of the exercise by the employee on behalf of himself or others of any right afforded by this chapter.
NRS 618.445(1). Thus, in order for this section to apply at all, some kind of action must have been instituted under the statute. Here, Jones filed a common law action, and hence, NRS 618.445 is inapplicable.
A further reason is that the legislature does not declare the remedy to be exclusive as it does in other instances. For example, in NRS 616.370(1), it is stated that worker's compensation remedies "shall be exclusive." The legislature's not making such a declaration here is an indication that the remedy was not intended to be exclusive.
Appellant has raised as an issue on this appeal that Jones's public policy tort action is preempted because all mine safety issues are governed by the Federal Mine Safety and Health Act of 1977, 30 U.S.C. § 801 et seq. (1982). The trial court rejected the claim of federal preemption in these terms:
The plaintiff's cause of action states clearly that because of an unhealed surgical incision from a surgical operation that he was susceptible to cyanide poisoning at that particular time. That the Defendant's agents and employees were aware of the danger to the Plaintiff ROBERT C. JONES and still insisted that he work around cyanide. That he was justified in refusing to so work because of his particular physical condition at that time and place and therefore he was unlawfully discharged.
Thus there is no allegation that the Defendant was violating either the Federal or State Mine Safety Codes by requiring employees to work under unsafe conditions.
We have examined carefully Western States's argument and authorities, particularly the case of Olguin v. Inspiration Consolidated Copper Co., 740 F.2d 1468 (9th Cir. 1984), and have concluded that the trial court was correct in ruling that Western States's abusive treatment of Jones is actionable under state law. Jones, unlike Olguin, has not attempted to use any federal law or redress procedures, nor has he alleged any violation of the Mine Safety and Health Act. Nevada's interest in giving a remedy for such tortious actions is a substantial one; and we agree with the trial court that federal preemption does not prevent Jones from pursuing his state remedy. See Echard v. Devine, 726 F.Supp. 1045, 1049 (N.D.W.Va. 1989) (holding that Federal Mine Safety and Health Act does not preempt common-law claims for tortious discharge; distinguishing Olguin where a state has a strong interest in mine safety).
As indicated above, we find it unnecessary to the disposition of this appeal to consider the assignments of error relative to the tort of intentional infliction of emotional distress.