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Southwest Gas v. Vargas8/24/1995
neurial risks that form a significant basis of every state's economy, would be empowered to impose substantial monetary consequences on employers whose employee termination decisions are found wanting. On the other hand, in the absence of an unequivocal at-will termination, an employer's discretion to declare the presence of good cause for termination cannot be immune to challenge; otherwise, an employee's contractual entitlements to continuing employment would be without substance or effect.
We believe that a qualified Simpson approach strikes the proper balance between a recognition of the legitimate business judgment of employers and the contractual rights of employees impliedly or expressly grounded in employee handbooks and other forms of evidence of continuing employment. Therefore, absent substantial evidence of an express or implied agreement contracting away its fact-finding prerogatives to some other arbiter, the employer is the ultimate finder of facts constituting good cause for termination. We emphasize, however, that the employer's decision to terminate must be consistent with its contractual prerogatives; the employment contract may subject an employer's termination authority to relevant policy provisions defining or limiting the term "good cause," or to defined procedures that the employer must follow prior to termination. See K Mart Corp. v. Ponsock, 103 Nev. 39, 42, 732 P.2d 1364, 1366 (1987) (employer that summarily fired employee for alleged good cause breached contract stating that if there were any deficiencies in employee's performance, employer would provide assistance and would release employee only after a
[111 Nev. 1064, Page 1076]
series of correction notices and a determination that the performance remained unacceptable); Rulon-Miller v. Intern. Bus. Mach. Corp., 208 Cal. Rptr. 524, 531-32 (Ct. App. 1984) (employee wrongfully terminated for romantic involvement with manager of rival firm where "the right to be free of inquiries concerning her personal life was based on substantive direct contract rights she had flowing to her from [company] policies"). Moreover, we reaffirm our implicit prior rulings expressly enunciated in the case law of many other jurisdictions, that employers are obligated to act in good faith and upon a reasonable belief that good cause for terminating a for-cause employee exists. Genuine issues of material fact casting a strong doubt on the purported good-faith of the employer are ripe for a jury's consideration. On past occasions, for example, we have affirmed judgments in cases similar to the one now before us, wherein an implied contract for continuing employment has been proved to the satisfaction of the trier of fact by a preponderance of the evidence. In doing so, we have deferred to jury findings that employers, in breach of contract, have terminated employees for reasons not rising to the level of "good cause." In one case, the record disclosed evidence that an employer saved a substantial amount of money by terminating an employee (employee forced to withdraw retirement funds at a loss, and replacement employee paid significantly lower salary), and we held that "ample evidence was presented from which the jury could conclude that . . . Beales was terminated for reasons other than those specifically stated." Beales v. Hillhaven, Inc., 108 Nev. 96, 103, 825 P.2d 212, 216 (1992). In another case, the record contained evidence that a supervisor entertained personal animosity for an otherwise dedicated employee, and we perceived no basis on which to set aside the jury's finding that good cause for the employee's termination was not present. American Bank Stationery v. Farmer, 106 Nev. 698, 700, 799 P.2d 1100, 1101 (1990). Several j
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