Thank you for sharing!

Your article was successfully shared with the contacts you provided.
The full case caption appears at the end of this opinion. KELLY, Circuit Judge. This appeal involves the application of Colorado law to disciplinary procedures and an internal grievance process containedin an employee handbook. Appellant Continental Airlines, Inc. (Continental) appeals from a jury verdict in favor of appelleeKevin McGuire for $200,000 damages on alternative theories of breach of implied contract/promissory estoppel. Ourjurisdiction arises under 28 U.S.C. � 1291, and we reverse. Background Mr. McGuire began working for Continental as a machinist on July 21, 1987. He remained at the same job, with theexception of one short transfer to another position, until his termination on March 28, 1994 for violation of Continental’sattendance policy. The job of machinist was covered by various rules laid out in an employee handbook � Continental’sTechnical Operations Employment Policy for Technical Operations, Facilities Maintenance and GSE Hourly Employees(“handbook”). Appendix D of the handbook, entitled “Attendance Policy,” was designed to “ensure that each employee isaware and understands what the Company considers an acceptable level of attendance, and to establish the disciplinaryaction imposed on the employee when appropriate.” III Aplee. Supp. App. at 542. When an employee began to reach “anunacceptable level” of absences, the handbook required that a supervisor meet with the employee and counsel them “toassure that the employee is aware of the consequences.” Id. at 543. If counseling failed to correct the problem, a four stepdisciplinary process was required. This process consisted of: (1) a verbal warning after the fourth incident of absence in atwelve calendar month period; (2) a written warning after the fifth incident; (3) a termination warning after the sixth incident;and (4) termination after the seventh incident. Id. at 543-44. [FOOTNOTE 1] It is uncontested that Continental followed the form of these procedures. On December 15, 1993, Merle Toavs, McGuire’ssupervisor, counseled plaintiff regarding his absenteeism. See Aplt. App. at 31. A verbal warning was then given on January19, 1994; followed by a written warning on February 8; a written termination warning on March 4; and finally a writtennotice of termination on March 28. See id. at 40-41; see also Aplt. Supp. App. at 565-67 (testimony of McGuire that hereceived the warnings of the four step corrective process). Mr. McGuire asserted, however, that Mr. Toavs incorrectly counted the number of incidents of absence he had accrued.While Continental listed eight incidents on the notice of termination, Mr. McGuire contested at least two of these. The firstinvolved a lateness of twelve minutes for a meeting which Mr. McGuire asserted was non-mandatory. The second involvedtwo absences from work (January 5 thru 18 and January 31 thru February 7) which Mr. McGuire claimed should becounted as a single incident under the Company’s “Premature Attempt to Return to Work” policy. [FOOTNOTE 2] If these absences wereremoved, only six would remain and Mr. McGuire could not be terminated. After his termination, Mr. McGuire’s first step in challenging the number of incidents was to appeal using Continental’s internalappeal procedure. Chapter 20 of the handbook established a grievance procedure that employees could use as follows: It is usually best for an employee to discuss any problem or disagreement regarding the proper application of Companypolicies and disciplinary action with his/her immediate supervisor. Between the employee and the supervisor, nearly allproblems and misunderstandings can be resolved quickly. . . . If a matter involving the proper application of Company policy or disciplinary action (including dismissal) is not resolved tothe employee’s satisfaction, the employee may file a formal appeal using Continental’s Appeal Procedure. Id. at 537. The Appeal Procedure consisted of a four step process, whereby the disciplinary action would be reviewed inturn by the employee’s supervisor (Step One), a local management representative (Step Two), senior managementrepresentatives (Step Three), and finally a certified arbitrator whose decision “will be final and binding on both parties” (StepFour). Id. at 539. Representation was available for the appellant at every stage in the person of employee representatives elected solely byContinental’s employees, i.e. the Employee Representative (Step One); the Local Appeal Committee (LAC) (Step Two);and the System Council Appeal Committee (SAC) (Steps Three and Four). With the exception of Step One appeals, the policy required the representative, rather than the employee, to initiate the nextlevel of the appeal. Randall Gebben was the Employee Representative responsible for Mr. McGuire’s Step One appeal. II Aplee. Supp. App. at475-76. However, Section E of the Appeal Procedure provided that in all cases involving termination, the appeal wouldproceed on an expedited basis and would begin at the Step Two level. See III Aplee. Supp. App. at 541. Therefore, Mr.Gebben, as the representative, initiated a Step Two appeal on behalf of Mr. McGuire to challenge the grounds fortermination. II Aplee. Supp. App. at 476. At the Step Two appeal, Mr. Gebben’s representation ended, see II Aplt. Supp.App. at 706, and Mr. McGuire was represented by the LAC, primarily by its chairman, Dave Conley. Id. at 703, 725.Although the Appeal Procedure guaranteed him the right to attend the Step Two hearing in person, Mr. McGuire chose notto attend. Id. at 584-85. [FOOTNOTE 3] After the presentation of evidence by both sides, the hearing officer, Marc Bradell determined that Continental had properlycounted the incidents of absence and upheld the termination. Aplt. App. at 47-48. Under the terms of the Appeal Procedure,a Step Three appeal could only be brought “[i]f in the opinion of the Local Appeal Committee (LAC), the answer received atthe Step Two Level is not satisfactory.” III Aplee. Supp. App. at 539 (emphasis added). Mr. McGuire never requested theLAC to initiate a Step Three appeal, see II Aplt. Supp. App. at 704-05, and the internal grievance process ended at thispoint. [FOOTNOTE 4] Subsequently, Mr. McGuire filed a complaint against Continental in federal district court, alleging unlawful discrimination inviolation of Title VII, breach of implied contract and promissory estoppel. The case went to the jury, which held in favor ofContinental on the Title VII claim, [FOOTNOTE 5] but awarded Mr. McGuire $200,000 in damages on the alternative claims of impliedcontract/promissory estoppel. Defendant’s post-trial motion for judgment as a matter of law was denied and Continentalappeals, claiming that the district court erred in submitting either the breach of contract claim or the promissory estoppelclaim to the jury. Breach of Implied Contract We review de novo the denial of a motion for judgment as a matter of law, viewing the evidence in the light most favorable tothe non-moving party. [FOOTNOTE 6] See Baker v. Barnard Constr. Co., Inc., 146 F.3d 1214, 1220 (10th Cir. 1998). Under thisstandard, we assume that Continental incorrectly counted the number of incidents when terminating Mr. McGuire. This wasthe ground on which the district court denied Continental’s motion for partial summary judgment. See I Aplee. Supp. App. at51 (“[A] genuine issue of material fact exists as to whether defendant properly counted plaintiff’s absences. If the plaintiff’sabsences were not properly counted in accordance with the T.O.P. handbook, then a jury could find a breach of an impliedcontract.”). Continental contends, however, that Mr. McGuire received every procedural step required by both theAttendance Policy and the Appeal Procedure, and is therefore barred from relitigating his claim in federal court. Colorado follows the doctrine of employment at-will: employment “may be terminated by either party without cause andwithout notice, and [] termination does not give rise to a cause of action.” Crawford Rehabilitation Servs. v. Weissman, 938P.2d 540, 546 (Colo. 1997). This doctrine functions in the absence of an employment contract between the parties. Anemployer can bind itself by distributing an employee handbook detailing a system of progressive disciplinary procedures tobe followed prior to termination. “An employee originally hired under a contract terminable at-will may be able to enforcesuch termination procedures under a theory of breach of implied contract or promissory estoppel.” Id. at 547. Mr. McGuire does not contest the fact that he was originally hired as an at-will employee. Rather, he claims thatContinental’s handbook created an implied contract that the Attendance Policy would be correctly applied. From the time ofits initial answer until the close of evidence at trial, Continental denied that any implied contract of employment had beenformed by the handbook, although apparently never disputing the application of the appeal procedures. It is apparent that theparties were somewhat obscure in framing the issues for trial. On appeal, Continental admits that an implied contract existed,at least insofar as the appeal procedures are concerned, and we accept that admission for purposes of this opinion. [FOOTNOTE 7] Assuming, as we do, that a contract existed, the pivotal question in this case is what remedies were available to Mr. McGuirefor an alleged breach of that contract. Ordinarily, an employee must seek to exhaust an employer’s exclusive internalgrievance process before seeking judicial relief. See Jefferson County Sch. Dist. v. Shorey, 826 P.2d 830, 844 (Colo. 1992)(grievance procedure of a collective bargaining agreement); see also Albertson’s, Inc. v. Rhoads, 582 P.2d 1049, 1050(Colo. 1978) (“[I]f the grievance procedure is the exclusive remedy then it must be exhausted.”); but see Musgrave v. EbenEzer Lutheran Institute, 731 P.2d 142 (Colo. 1986) (employee need not exhaust grievance procedures in order to recoverunemployment compensation benefits). Although Continental’s Appeal Procedure speaks in somewhat permissive terms (i.e.an employee “may” submit an appeal), the Colorado Supreme Court has held in cases involving similar grievance procedures”that use of the term ‘may’ was not intended to allow individual employee suits as an alternative to the grievance procedure.”Albertson’s, 582 P.2d at 1050. Any doubt as to the application of the procedure is to be resolved in favor of exclusivity. Seeid. (quoting Republic Steel Corp. v. Maddox, 379 U.S. 650, 658 (1965)). Applying this standard, we hold that Continental’sgrievance procedure was the exclusive remedy for challenging a breach of the Attendance Policy. Mr. McGuire availed himself of this procedure to challenge the number of incidents upon which his termination was based.Continental’s Attendance Policy defines an incident as “[a]ny single specific period of continuous absence for a single reason.”III Aplee. Supp. App. at 542. Tardiness/Lateness is listed as an example of an incident. Nowhere does the handbook statethat lateness for a non-mandatory meeting will not be counted as an incident. Nor does the handbook specify what proof isnecessary to show that an illness is the “same illness” for purposes of the “Premature Attempt to Return to Work” clause. [FOOTNOTE 8]Id. at 543. The Appeal Procedure was the proper mechanism for raising these claims. Mr. McGuire argued both of theseissues on his Step Two appeal. The hearing officer determined that “the termination was accomplished in accordance with theTechnical Operations attendance policy.” Aplt. App. at 48. Mr. McGuire did not attempt a Step Three appeal on this claim,the internal appeal process ended, and so did all claims as to the actual number of incidents involved in the terminationdecision. An “employee may not accept those portions of the policy that are deemed to be favorable and reject those that may beconsidered unfavorable.” Floyd v. Coors Brewing Co., 952 P.2d 797, 806 (Colo. Ct. App. 1997), reversed on othergrounds, 978 P.2d 663 (Colo. 1999). Mr. McGuire’s sole remedy as to whether or not an absence should properly becounted as an incident lay with Continental’s internal grievance process. The case of Allsup v. Mount Carmel Med. Ctr., 922 P.2d 1097 (Kan. Ct. App. 1996) (relied upon in Floyd, 952 P.2d at806) is particularly instructive on this point. The plaintiff employee sued Mount Carmel for breach of an implied employmentcontract. Mount Carmel had a policy which provided a four step grievance procedure for disgruntled employees, whichculminated in review by the Director of Personnel and the company Administrator whose decision “is final.” Id. at 1099. Theemployee did not pursue the grievance process past the first step but filed suit in Kansas state court. In affirming summaryjudgment for Mount Carmel, the Kansas Court of Appeals held: The Mount Carmel grievance procedure . . . provided that ‘[t]he decision of the Administrator is final.’ As such, the terms ofthe grievance procedure limited the employee’s recourse to the procedure provided. Filing a grievance was optional, butunder the terms of the policy, it was the only option. Id. at 1101. Mr. McGuire raised his challenge to the number of incidents in the Appeal Procedure. This issue was decided against himand the same argument is not available to him in court. See Floyd, 952 P.2d at 806. Therefore, “the only possible contractbreach that plaintiff could assert would be one grounded upon allegations that the [hearing officer's] decision resulted from aviolation of the procedures adopted by that policy.” Id. Mr. McGuire does not argue that he was denied any of the steps ofthe disciplinary process or somehow kept from fully pursuing Continental’s Appeal Procedure. Therefore, his claim of breachof implied contract must fail. See Bellairs v. Coors Brewing Co., 907 F. Supp. 1448, 1455 (D. Colo. 1995), aff’d, No.95-1486, 1997 WL 107767 (10th Cir. March 12, 1997). Moreover, his claim of promissory estoppel must fail for the same reason. Mr. McGuire asserts that he relied upon theprovisions of the employee handbook to his detriment. Without an assertion that Continental failed to follow theseprocedures, the promissory estoppel claim lacks any foundation and must be dismissed. In granting judgment in favor of Continental, we note the limited nature of our holding. An employee should not be given twobites at the same apple. Mr. McGuire had his opportunity to contest whether an absence was an incident or not when hebrought his Step Two appeal. He did not show up at the hearing, lost, and did not attempt to go on to Step Three.Continental was bound by the decision of the Step Two hearing officer and so was Mr. McGuire. See III Aplee. Supp. App.at 537 (stating that Continental had the right to file an appeal beginning at Step Three). An employee must accept both thebenefits and the responsibilities of an employee handbook which creates an implied contract. REVERSED. :::FOOTNOTES::: FN1 The handbook defined incident as “[a]ny single specific period of continuous absence for a single reason.” III Aplee. Supp.App. at 542. Absences, for purposes of discipline, included sick leave, tardiness/lateness, and unapproved personalabsences. Id. FN2 This section was part of Continental’s Attendance Policy and stated: If an employee is absent and attempts prematurely to return to work but finds it necessary to again be absent because of thesame illness, both absences will be considered as a single incident. The second absence must have occurred within fourteencalendar days of the first absence in order to have both absences count as a single incident. Aplee. Supp. App. at 543. FN3 Mr. Gebben testified that Mr. McGuire could not attend the hearing because of a personal conflict. He requested apostponement of the hearing so that Mr. McGuire could attend personally, but the postponement was denied. II Aplee.Supp. App. at 477, 479. This testimony is contradicted by both Dave Conley and Marc Bradell, the hearing officer, whotestified that nobody ever asked for a postponement of the hearing. Id. at 705, 723-24. We need not decide this issue,however, because the Appeal Procedure did not give a right to postpone a hearing and Mr. McGuire does not challenge histermination on this ground. FN4 Mr. Gebben, who sat in on the Step Two appeal, informed Mr. Conley, immediately following the hearing, that he felt thedecision should be appealed to Step Three. II Aplt. Supp. App. at 706. However, there is no indication that this wasanything other than Mr. Gebben’s personal opinion. See id. at 707. There is no evidence in the record that Mr. McGuireeither desired or sought a Step Three appeal or requested Mr. Gebben to seek one on his behalf. In fact, there is someindication that it was Mr. Conley’s practice to intitiate a Step Three appeal for any employee who requested one. See IAplee. Supp. App. at 51-52 (trial court referring to an affidavit by Mr. Conley to this effect � unfortunately, this affidavit isnot part of the record on appeal). Regardless, Mr. Conley, after discussing the merits of the case with the other twomembers of the LAC, decided not to seek a Step Three appeal. Id. FN5 Mr. McGuire does not appeal the judgment against him on his Title VII claim. FN6 Mr. McGuire attempts to characterize the issue on appeal as a challenge to the sufficiency of the evidence, and fails tocontest � or even mention � the legal authority raised in Continental’s briefs. We reject this mischaracterization and addressthe appeal solely as a question of law. FN7 Mr. McGuire contends that Continental should be judicially estopped from arguing a position on appeal contrary to itsposition at trial. Continental denied the existence of any implied contract up until the close of evidence. Then, for the firsttime, during a final jury instruction conference, Continental attempted to stipulate that a contract existed. The stipulation wasoffered in an attempt to eliminate that part of Jury Instruction 13 which dealt with McGuire’s claim of promissory estoppel.See Aplt. Second Supp. App. at 19-20 (counsel admitting to a contract so that “the estoppel issue goes by the wayside.”).The trial court rejected the stipulation as untimely. While we empathize with Mr. McGuire’s frustration at Continental’s apparent last minute flip-flopping in an attempt to gaintactical advantage, it is well established that judicial estoppel does not exist in the Tenth Circuit. See Webb v. ABF FreightSystem, Inc., 155 F.3d 1230, 1242 (10th Cir. 1998). Moreover, our decision in this case is not in any way affected byContinental’s admission on appeal. Under our standard of viewing the evidence in the light most favorable to Mr. McGuire,we would assume that an implied contract existed. FN8 We note, as did Mr. Bradell, that Mr. McGuire never challenged the incidents at the time they were counted in thedisciplinary procedure. See Aplt. App. at 48. Mr. McGuire received a written warning on February 8, 1994 regarding thetwo periods which he alleged should have been counted as one, and received a March 4, 1994 written termination warningletter for the latenesses which he claims were for non-mandatory meetings. FN9 The appellee elected not to present oral argument. FN10 The Honorable Arthur L. Alarcon, Senior Circuit Judge, United States Court of Appeals for the Ninth Circuit, sitting bydesignation.
Kevin McGuire v. Continental Airlines, Inc. UNITED STATES COURT OF APPEALS TENTH CIRCUIT KEVIN MCGUIRE, Plaintiff – Appellee, vs. CONTINENTAL AIRLINES, INC., Defendant – Appellant. No. 98-1388 APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO (D.C. No. 95-WY-1813-WD) Diane MacArthur Brown, Olsen & Brown, L.L.C., Niwot, Colorado, on the brief for Plaintiff – Appellee. [FOOTNOTE 9] Mary H. Stuart, Holme Roberts & Owen, L.L.P., (Daniel R. Satriana, Jr., Alan Epstein and Marianne E. Pierce, Hall &Evans, L.L.C., on the briefs), Denver, Colorado, for Defendant – Appellant. Before KELLY, ALARCON, [FOOTNOTE 10] and HENRY, Circuit Judges.
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

Premium Subscription

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now

Team Accounts

Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now

Bundle Subscriptions

Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now

GlobeSt. Healthcare Real Estate 2023

December 11, 2023 - December 12, 2023
Scottsdale, AZ

Join the industry's top owners, investors, developers, brokers and financiers for the real estate healthcare event of the year!

Learn More

Legalweek Leaders in Tech Law Awards 2024

January 29, 2024
New York, NY

Recognizing innovation in the legal technology sector for working on precedent-setting, game-changing projects and initiatives.

Learn More

Legalweek New York 2024

January 29, 2024 - February 01, 2024
New York, NY

Legalweek New York explores Business and Regulatory Trends, Technology and Talent drivers impacting law firms.

Learn More

FINANCE & REAL ESTATE ASSOCIATES - Connecticut Preferred; Remote will be considered

Shipman & Goodwin LLP is seeking two associates to expand our national commercial real estate lending practice. Candidates should have ...

Apply Now ›

Labor and Employment Junior Associate

Duane Morris LLP seeks a highly motivated junior associate to join its dynamic and growing Labor and Employment Class Action group in Chicag...

Apply Now ›

San Francisco Labor and Employment Associate

Duane Morris LLP has an immediate opening for a mid-level, highly motivated associate to join its dynamic and growing Employment, Labor, Ben...

Apply Now ›

Shapiro, Croland, Reiser, Apfel, & Di Iorio, LLP

New Jersey Law Journal

ShapiroCroland Attorneys at Law Take Pleasure in Announcing that VALERIE A. VLADYKA HAS JOINED THE FIRM AS COUNSEL Valerie concentrates her practice in Insurance coverage, Commercial Litigation and Probate Matters 411 Hackensack Avenue, Hackensack, New Jersey 07601 Telephone: (201) 488-3900 | Telecopier: (201) 488-9481 |www.shapiro-croland.com November 2023

View Announcement ›

Rottenstreich Farley Bronstein Fisher Potter Hodas LLP

Daily Business Review

Congratulations to our Partner Richard Segal on becoming Chairman of the Miami Beach Chamber of Commerce

View Announcement ›

Krupnick Campbell Malone, et al, P.A.

Daily Business Review

WE'RE MOVING! November 30, 2023

View Announcement ›