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Southwest Gas v. Vargas8/24/1995
ony of Southwest's employees who claimed to have been harassed by Vargas, the jury properly found that Southwest could not have reasonably believed that Vargas had engaged in sexual harassment. In view of the mutually agreeable jury instruction on this issue, 2 there is no apparent controversy as to the applicable rule of law.
[111 Nev. 1064, Page 1074]
However, despite Vargas's superficial agreement with the "reasonable belief' standard, his arguments on appeal interpreting that standard tend to advocate a rule that would allow for de novo factual review of the issue of good cause by a jury. In order to fully and fairly resolve the legal dispute between Southwest and Vargas, we must address the legal rule contained in the instruction. We begin our analysis with Simpson v. Western Graphics Corp., 643 P.2d 1276 (Or. 1982), an opinion by the Oregon Supreme Court that qualified Yartzoff v. Democrat-Herald Publishing Co., 567 P.2d 356 (Or. 1978), the primary authority upon which this court relied in recognizing the prospect of an implied contract of continuing employment in Nevada. See Southwest Gas Corp. v. Ahmad, 99 Nev. 594, 595, 668 P.2d 261, 261 (1983). In Simpson, Western Graphics Corp. accused two employees of threatening violence against a co-employee and later terminated them. The two employees subsequently filed suit, alleging breach of their contract of continuing employment, and, in opposition to Western Graphics Corp.'s motion for summary judgment, contended that the trier of fact should be allowed to determine whether they committed the act upon which their termination was based. Summary judgment was entered in favor of Western Graphics Corp., and the Oregon Supreme Court affirmed with the following ruling:
Although an employer's statement of employment policy has a degree of contractual effect, see Yartzoff v. Democrat-Herald Publishing Co., . . . . n the absence of any evidence of express or implied agreement whereby the employer contracted away its fact-finding prerogative to some other arbiter, we shall not infer it. . . . Here, . . . the employer agreed to the substantive standard embodied in the term "just cause," but did not agree to a secondary level of fact-finding authority.
Id. at 1279. In comparatively recent years, Oregon and many other jurisdictions including Nevada, have crafted exceptions to the common law at-will doctrine in order to give contractual effect to company termination policies upon which employees rely. Unfortunately, such exceptions have spawned the additional task of defining the extent to which employees
[111 Nev. 1064, Page 1075]
should be afforded traditional contract rights in connection with that reliance. There are obvious policy concerns implicated in treating an employment contract implied from an employee manual in the same manner as a negotiated contract. For example, allowing a jury to trump the factual findings of an employer that an employee has engaged in misconduct rising to the level of "good cause" for discharge, made in good faith and in pursuit of legitimate business objectives, is a highly undesirable prospect. In effect, such a system would create the equivalent of a preeminent fact-finding board unconnected to the challenged employer, that would have the ultimate right to determine anew whether the employer's decision to terminate an employee was based upon an accurate finding of misconduct, and whether any such misconduct was qualitatively and quantitatively sufficient to constitute good cause for discharge. This ex officio "fact-finding board," unattuned to the practical aspects of employee suitability over which it would exercise consummate power, and unexposed to the entrepre
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