Rushing v. Saif Corp.

196 P.3d 115

223 Or. App. 665

Harold (Gene) RUSHING, Plaintiff-Appellant, v. SAIF CORPORATION, an Oregon public benefit corporation, and Yvette Baker, an individual, Defendants-Respondents, and Judi Janzen and David Jordan, Defendants.

CV05070838.

A134652.

Court of Appeals of Oregon.

Argued and Submitted June 5, 2008.

Decided November 12, 2008.

Eric J. Fjelstad argued the cause for appellant. With him on the briefs was Smith & Fjelstad.

Karla H. Alderman, Assistant Attorney General, argued the cause for respondents. With her on the brief were Hardy Myers, Attorney General, and Mary H. Williams, Solicitor General.

Before LANDAU, Presiding Judge, and SCHUMAN, Judge, and ORTEGA, Judge.

LANDAU, P.J.

Plaintiff initiated this action against SAIF Corporation¹ for breach of contract and denial of due process under 42 U.S.C. section 1983, arising out of SAIF's rescission of an offer of employment. The parties filed cross-motions for summary judgment; plaintiff argued that he had a constitutionally protected expectation of employment, while SAIF argued that it is an at-will employer that may withdraw employment offers at any time. The trial court agreed with SAIF and entered judgment dismissing the claims. Plaintiff appeals, and we affirm.

The relevant facts are undisputed. For 27 years, plaintiff worked for the State of Oregon in a variety of different positions and for a variety of different agencies. Most recently, he worked for the Department of Environmental Quality (DEQ) in Portland. In November 2004, he applied for a position with SAIF.

On January 5, 2005, a SAIF employee called plaintiff and offered him a job as a loss control consultant at SAIF's southern regional office in Roseburg. Plaintiff called back five days later and accepted the offer. Plaintiff and SAIF agreed on a starting date of March 1, 2005. On January 12, 2005, SAIF sent plaintiff a letter confirming the job offer, setting forth plaintiff's salary, and confirming the starting date of March 1. The letter also stated:

"You will be considered a trial service employee for the first 180 calendar days of your new assignment. Your continued employment will be contingent upon a favorable performance review at the conclusion of the trial service period. Thereafter your performance will be evaluated informally on an ongoing basis, and once per year you will receive a formal performance review. Continued employment is dependent on meeting the performance expectations of your job."

The letter also enclosed an "Employee Relocation Memorandum of Agreement." SAIF asked plaintiff to complete the agreement, sign it, and return it "at your earliest convenience."

On February 1, 2005, the supervisor of SAIF's Roseburg office sent plaintiff an e-mail inquiring about his status, plaintiff not having returned the executed relocation agreement. On February 11, the supervisor called plaintiff, and plaintiff advised him that he was preparing the appropriate paperwork.

On February 24, 2005, plaintiff resigned from his position at DEQ. On the same day as his resignation, plaintiff received from SAIF a letter notifying him that it was withdrawing its offer of employment. The letter stated that the offer was being withdrawn because of plaintiff's failure to keep SAIF informed about his status and intentions with respect to the starting date. Plaintiff then filed his complaint in this proceeding, as we have noted, seeking damages for breach of contract and denial of his right to due process under section 1983.

The parties filed cross-motions for summary judgment. They agreed that there are no disputed issues of fact and sought a determination of the legal issue that they agree is central to plaintiff's claims—whether SAIF's offer to plaintiff was for at-will employment. In plaintiff's view, his long tenure as a permanent employee with the state—most recently with DEQ—essentially followed him to SAIF, creating a protected property interest in his continued employment that could not be withdrawn without due process. Central to plaintiff's contention is his assumption that SAIF is a part of state government and that his "transfer" of employment to SAIF was simply a continuation of his state service. He also contended that SAIF's offer was for a specific duration of at least 180 days and, further, that SAIF's own internal policies show that plaintiff's employment with SAIF was not to be at-will.

SAIF contended that, under ORS 656.753, it is not subject to state personnel statutes or rules. Consequently, SAIF argued, any seniority rights that plaintiff might have acquired by virtue of his work for the state were lost when he voluntarily resigned from his state job to work for SAIF. SAIF asserted that the offer it made to plaintiff and its own personnel policies make clear that plaintiff was to begin his work at SAIF as a trial service employee for 180 days, during which time it could terminate plaintiff's employment without cause.

The trial court denied plaintiff's motion and granted SAIF's motion for summary judgment. The court explained that, based on the undisputed facts, "plaintiff's job at SAIF was at will and, therefore, SAIF could withdraw the job offer."

On appeal, plaintiff argues that the trial court erred in granting SAIF's motion for summary judgment and denying his motion. In support of his argument on appeal, he renews essentially the same arguments concerning the source of his expectation of employment with SAIF that he advanced to the trial court. As we have noted, there are no disputed facts and the issues are exclusively legal. Accordingly, we review the trial court's entry of summary judgment for SAIF to determine whether the record establishes that SAIF was entitled to judgment as a matter of law. ORCP 47 C; Jones v. General Motors Corp., 325 Or. 404, 420, 939 P.2d 608 (1997).

The rule in Oregon is that, unless otherwise specified by agreement or statute, employment is "at-will" and terminable by either party. Washburn v. Columbia Forest Products, Inc., 340 Or. 469, 475, 134 P.3d 161 (2006); Lewis v. Oregon Beauty Supply Co., 302 Or. 616, 620, 733 P.2d 430 (1987); Maddox v. Clac. Co. Sch. Dist. No. 25, 293 Or. 27, 31, 643 P.2d 1253 (1982). At-will employment may be terminated for any reason, or for no reason at all, and at any time-even, as here, before the job has begun. Slate v. Saxon, Marquoit, Bertoni & Todd, 166 Or. App. 1, 6, 999 P.2d 1152, rev. den., 330 Or. 375, 6 P.3d 1105 (2000).

State personnel statutes provide that, after a successful period of trial service, state employees "who have acquired regular status will not be subject to separation except for cause * * * or lack of work, curtailment of funds, or reorganization requiring a reduction in force." ORS 240.316(2). Employees subject to that statute, in other words, are not at-will employees. SAIF, however, is exempt from that statute. ORS 656.753(1) expressly provides that the provisions of ORS chapter 240, among a number of others "do not apply to the State Accident Insurance Fund Corporation."

Plaintiff acknowledges that SAIF is not subject to the state's personnel rules; those are not the sources of his contention that he was not hired on an at-will basis. In plaintiff's view, there are three independent bases for his contention that he was not hired on an at-will basis: (1) SAIF's offer of employment demonstrated an expectation that plaintiff would be a long-term employee of SAIF; (2) SAIF's internal policies show that plaintiff was entitled to "regular employee" status; and (3) by virtue of his 27 years in state service plaintiff had a legitimate expectation of continued employment by the same governmental employer, in this case, the State of Oregon, of which, he contends, SAIF is a component part. We consider each argument, in turn.

Plaintiff's first contention is that SAIF's offer of employment manifested an intention to create a long-term employment position. In particular, plaintiff relies on SAIF's January 12, 2005, letter confirming its job offer and stating, "You will be considered a trial service employee for the first 180 calendar days of your new assignment," followed by a performance review. In plaintiff's view, that can only mean that he was guaranteed 180 days of employment as a trial service employee. That is simply not what the letter says, however. Nothing in the quoted portion suggested that the period of trial service was itself one of guaranteed employment. It simply stated that, during plaintiff's first 180 days of employment, he would be considered a trial service employee.

Plaintiff's second contention is that certain internal SAIF documents show that SAIF regarded him as a "regular" employee who was not subject to termination on an at-will basis. Plaintiff relies on two documents, in particular, SAIF's "Corporate Standards Manual" and its "Manager's Loss Control Guide."

The Corporate Standards Manual, he argues, makes clear that SAIF distinguishes between "trial" and "regular" service employees. The former may be terminated at-will, while the latter may be terminated only after notice and a hearing. According to plaintiff, because SAIF said nothing to him about being a trial service employee, it necessarily follows that he was hired as a regular service employee who was not terminable at-will.

Even a cursory examination of the manual, however, demonstrates that there is no basis for plaintiff's contention. The document does indeed distinguish between trial service and regular service employees. A "trial service" employee is one who "[m]ay resign or may be terminated with or without cause at any time during, or at the end of, the trial service period." A "regular" service employee is "one who has satisfied the initial trial service period for his or her first job assignment with SAIF Corporation." (Emphasis added.)...