Plaintiff Russell W. Sanderson appeals from summary judgment in favor of defendant First Security Leasing Company (“First Security”). Sanderson sued his former employer, First Security, claiming that First Security’s discharge of him violated an implied-in-fact employment contract and breached an implied-in-law covеnant of good faith and fair dealing. We affirm in part and reverse in part.
In reviewing a grant of summary judgment, we view the facts and all reasonable inferences drawn therefrom in a light most favorable to the nonmoving party.
Smith v. Batchelor,
In October of 1980, First Security hired Sanderson to collect delinquent accounts. Throughout his first eight years at' First Security, Sanderson received favorable performance evaluations and regular increases in salary and responsibility, becoming manager of First Security’s equipment services division аnd account services department in 1984. He later served as a vice president of the company and as one of five members of the senior management committee, positions he held until his termination.
In December of 1988, First Security relieved Sanderson of his duties in the account services department but stressed that the change was not due to any fault on his part. X memo from C.S. “Bud” Cummings, president of First Security and then Sanderson’s immediate supervisor, said, “Russ [Sanderson] has done an excellent job in managing both areas,” but noted that in light of the increased responsibility of managing equipment services, “it is not fair to spread his talents so thin.”
Around the time Cummings instructed him to devote all his efforts to equipment services, Sanderson became ill. His illness continued until his termination. Although *305 the precise nature of his ailment is unclear, it apparently involved both unexplainеd chest pains requiring the attention of a physician and depression or stress requiring the attention of a social worker and a psychiatrist. In his deposition, Sanderson estimated that he took approximately twenty-seven days of sick leave during his illness and that he was hospitalizеd at least six times. 1
Because he was concerned about his job, Sanderson kept in touch with Cummings. In his deposition, Sanderson testified that on several occasions, Cummings told him to “take all the time ... needed, do what needed to - [be] done. When [Sanderson] was ready to come baсk the job would be there.” Sanderson also testified in his deposition that Cummings instructed him to entrust his major responsibilities to Sander-son’s assistant vice presidents until he felt he could return to work. Sanderson cannot, however, remember the dates or particulars of these conversations.
Four months after Sanderson became ill, First Security placed Gary Judd as an intermediate supervisor between Sanderson and Cummings, so that Sanderson no longer reported directly to the president of the company. Sanderson testified in his deposition that Judd “was out to get [him]” because of past disagreements. During his first month as Sanderson’s intermediate supervisor, Judd ordered an audit of equipment services, an audit that revealed numerous problems in Sanderson’s department.
On May 19, 1989, Cummings told Sander-son that he was disappointed in him and that Sanderson must either accept a demotion or be terminated. Because Cummings refused to specify the level or salary of the position to which he would be demoted, Sanderson chose termination. Before our court, First Security attempts to characterize this choice as a voluntary resignation, but the company’s own termination form, signed by Judd, identifies the action as an “involuntary termination[ ]” for “[unsatisfactory performance.”
In the nine years Sanderson worked at First Security, the company issued three separate handbooks containing statements on termination. The first two, “Benеfits and Policy Overview” (“benefits handbook”) and “First Security Standards for Employee Conduct” (“standards handbook”), explicitly provided that employment with First Security was at-will, so that employees could quit or be fired at any time for any reason. First Security distributed these two handbooks to each employee and required its employees to sign an annual statement indicating that they understood and would follow the policies outlined in the standards handbook. Sanderson complied with this requirement. First Security distributed the third handbook, “First Security Banks [sic] Operating Procedures” (“the procеdures handbook”), only to managers, including Sanderson. The procedures handbook set forth detailed guidelines for firing employees, requiring a series of informal and formal evaluations, warnings, and opportunities to improve performance or cease violating comрany policies. It is undisputed that Cummings did not provide Sanderson with such evaluations, warnings, and opportunities when he fired him. However, the procedures handbook also included the following paragraph (“paragraph six”):
In situations where employee behavior warrants immediatе termination the stages of this process do not need to be followed. Termination in these cases must be approved by the appropriate Division/Subsidiary Head Office.
On September 28, 1989, Sanderson sued First Security for wrongful termination, claiming that First Security breached an employment contract implied from its procedures handbook and Cummings’ oral assurances and violated the implied covenant of good faith and fair dealing. The trial *306 judge granted summary judgment for First Security, and Sanderson appealed. We affirm in part and reverse in part.
Before turning to the merits of this case, we state the applicable standard of review. Summary judgment is appropriate only when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Utah R.Civ.P. 56(c);
Sandy City,
This appeal requires us to revisit the evolving doctrine of employment at will. In 1989, this court converted the common law rule stating that absent an express agreement, employment was at-will into a mere presumption. We stated that a plaintiff could rebut this presumption by proving the existence of an implied-in-fact employment contract.
Berube v. Fashion Centre, Ltd.,
With this standard in mind, we review Sanderson’s arguments for the existence of an implied-in-fact contract. We begin with Sanderson’s contention that First Security’s procedures handbook created an implied contract to fire employees only in accordance with the termination guidelines set forth in that manual. In past cases, we have recognized that employee handbooks may create such contractual rights.
See, e.g., Arnold v. B.J. Titan Servs. Co.,
We do need not decide whether or under what circumstances the procedures for termination set out in the supervisors’ manual became part of the terms of Sanderson’s employment or of the employment of all other employees. Even if we assume that the termination procedures did become part of Sanderson’s employment contract, the entry of summary judgment was appropriate because paragraph six of those procedures granted First Security unbounded discretiоn to discharge employees without following the guidelines:
In situations where employee behavior warrants immediate termination the stages of this process do not need to be followed.
The only procedure applicable to such a termination is approval by the “approрriate Division/Subsidiary Head of Office.” It is undisputed that First Security satisfied this requirement. Consequently, we affirm the summary judgment on this issue and do not reach the issues of guidelines and disclaimers urged by First Security.
Cf. Brehany,
Having disposed of Sanderson’s handbook claim, we turn to his alternative basis for alleging an implied-in-fact contract. Sanderson argues that Cummings’ oral assurances that “the job” would be there when he was ready to return to work re *307 butted the at-will presumption and prevented his dismissal. First Security responds that even if Cummings made the statements, they amounted only to encouragement and optimism and were “too fragile a base on which to rest such a heavy obligation inherent in such a contract.”
First Security’s argument assumes that oral statements can rebut the at-will presumption only if they specify a period of employment or create a just-cause standard for dismissal. We disagree. At-will employment is a bundle of different privileges, any or all of which an employer can surrender through an oral agreement. In addition to a promise for a specified employment term or a for-cause requirement for termination, an employer can, for example, agree to use a certain procedure for firing employees or promise not to fire employees for a certain reason, thereby modifying the employee’s at-will status.
The latter example — a promise not to fire for a certain reаson — illustrates the situation in the present case. Taking the facts in the light most favorable to Sanderson, as we must,
Smith,
Notwithstanding this holding, we stress the narrowness of the implied-in-fact contract term that Sanderson’s allegations would support. Even if his statements are interpreted in the light most favorable to Sanderson, Cummings did not promise that he would fire Sanderson only for cause or only for good cause. He promised merely that he would not fire Sanderson for being unable to work because of his current illness. He retained his at-will prerogative to fire Sanderson at any time for any
other
reason. In order to ascertain whether Cummings breached this alleged implied-in-fact contract and fired Sanderson for being unable to return to work, the finder of fact must first determine the reason for Sander-son’s termination. On Sanderson’s terminatiоn form, First Security identified “[unsatisfactory performance” as the reason for the firing, which implies that Cummings was dissatisfied with Sanderson’s management of his department. If Cummings' dissatisfaction was unrelated to Sanderson’s illness-induced absence from work, his discharge was not barred by the implied-in-fact cоntract term Sanderson alleges. However, a factual question exists as to whether Sanderson’s absenteeism prevented him from effectively managing his department. If so, Cummings may have fired Sanderson for absenteeism, in breach of his implied-in-fact employment contract, and Sаnderson may be entitled to contract damages computed under the standard set forth in
Beck v. Farmers Insurance Exchange,
As a final matter, we address Sand-erson’s argument that First Security breached an implied covenant of good faith
*308
and fair dealing when it fired him. Three times in the past three years, we have refused to recognize an implied-in-law covenant of good faith and fair dealing that creates a for-cause standard for dismissal.
See Heslop v. Bank of Utah,
In sum, we affirm the summary judgment on Sanderson’s handbook and implied covenant of good faith and fair dealing claims, reverse on his claim of oral contractual terms, and remand for proceedings consistent with this оpinion.
Notes
. Sanderson argues that this court should not consider his deposition because in its motion for summary judgment, First Security cited to but did not attach the relevant pages of the deposition. Sanderson is mistaken. Under the Utah Code of Judicial Administration, First Security had the option of either citing to or attaching the deposition pages on which it relied. See Utah RJud.Admin. 4-501(l)(a).