Hartnett v. Papa John's Pizza USA, Inc., 912 F. Supp. 2d 1066

Hartnett began employment with Papa John’s in 1998 and was terminated in 2007 for falsifying company expense reports.
Hartnett’s Management Agreement states employment is at-will and may be terminated at any time for any reason.
Hartnett signed a CNC Agreement in 2003 after a coercive discussion with Braafhart; he later contends Braafhart’s assurances affected his understanding of job security.
Hartnett attended five Managing Within the Law workshops, which emphasized due process and termination procedures but did not expressly state at-will status was changed.
Papa John’s Team Member Handbook disclaims contractual rights and at-will status, though Hartnett argues totality of conduct could modify his at-will status.
The court denied Papa John’s motion for summary judgment, finding genuine issues of material fact about whether an implied contract modifying at-will status existed and whether Papa John’s followed procedures in terminating Hartnett.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Did an implied contract modify Hartnett’s at-will status?	Hartnett relied on Braafhart’s assurances, and Managing Within the Law and Woods Memo to show a binding modification.	Management Agreement and Handbook expressly provided at-will status; no definite modification existed.	Genuine issue of material fact exists regarding implied contract modification.
Did Woods Memo and Managing Within the Law create enforceable termination procedures?	These documents established procedural requirements Hartnett relied upon.	Documents were not explicit enough to modify at-will status.	Genuine issue of material fact about implied contract to follow procedures.
Was there sufficient cause and reasonable belief to terminate Hartnett under an implied contract?	Hartnett challenges the reasonableness and the investigation’s thoroughness.	Papa John’s believed Hartnett falsified mileage; investigation aligned with procedures.	Genuine issue of material fact as to whether reasonableness and cause existed.
Did Papa John’s breach an implied covenant by terminating Hartnett without proper procedures?	Hartnett contends incomplete investigation and improper termination verbalized in public setting.	Termination followed perceived policy, with underlying procedures.	Genuine issue of material fact as to breach of implied covenant.

Hartbarger v. Frank Paxton Co., 115 N.M. 665 (N.M. 1993) (at-will rule; improper to infer implied contract from general practices or informal statements)
McGinnis v. Honeywell, Inc., 110 N.M. 1, 791 P.2d 452 (Ct.App.1992) (express contract controls; implied modification limited when contract does not permit it)
Newberry v. Allied Stores, Inc., 108 N.M. 424, 773 P.2d 1231 (N.M. 1989) (policy manual created implied contract when it controlled relationship and was reasonably relied upon)
Kestenbaum v. Pennzoil, Co., 108 N.M. 20, 766 P.2d 280 (N.M. 1988) (oral statements may create implied contract if definite and relied upon in context)
Lukoski v. Sandia Indian Mgmt. Co., 106 N.M. 664, 748 P.2d 507 (N.M. 1988) (employee handbook could modify oral agreement if it controlled relationship and was relied upon)
Newberry v. Allied Stores, Inc., 108 N.M. 424, 773 P.2d 1231 (N.M. 1989) (quoted above; see entry)
Clayton v. Vanguard Car Rental, U.S.A., Inc., 761 F.Supp.2d 1210 (D.N.M.2010) (summary-judgment context; handbook as general guideline, not binding modification)
Cory v. Allstate Ins., 583 F.3d 1240 (10th Cir.2009) (oral statements insufficient to modify express at-will contract when not definite)
Garcia v. Middle Rio Grande Conservancy Dist., 121 N.M. 728, 918 P.2d 7 (N.M.1996) (implied contract via personnel policy when policy governs relationship)