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McCabe v. Wal-Mart Associates, Inc.

Court of Appeals of Arkansas, DIVISIONS I, II, III

December 4, 2019

JESSICA MCCABE AND AMY PURDY APPELLANTS
v.
WAL-MART ASSOCIATES, INC. APPELLEE

          APPEAL FROM THE BENTON COUNTY CIRCUIT COURT [NO. 04CV-18-421] HONORABLE JOHN R. SCOTT, JUDGE.

          Pinnacle Law Group, by: Matthew A. Kezhaya, for appellants.

          Kutak Rock LLP, by: Scott Jackson and Bailey Knapp, for appellee.

          BRANDON J. HARRISON, JUDGE.

         The first issue is whether Jessica McCabe and Amy Purdy can bridge the moat that is the at-will employment doctrine and go forward on their complaint against Wal-Mart Associates, Inc. McCabe and Purdy sued their former employer under two legal theories while alleging that their employment was terminated for an improper reason-meaning they were wrongfully discharged. The Benton County Circuit Court dismissed the complaint against Walmart under Arkansas Rule of Civil Procedure 12(b)(6) (2019). The court accepted the company's argument that McCabe and Purdy had failed to state viable claims for relief given the specific allegations and the contours of the at-will employment doctrine.

         The dismissal segues to the second point on appeal. After the dismissal, on Walmart's motion and in the face of the plaintiffs' written opposition, the circuit court ordered McCabe and Purdy to pay Walmart a $13, 685 attorney fee.

         On de novo review, we affirm the dismissal of the entire complaint with prejudice.[1]But we reverse and remand on the fee issue because the court abused its discretion by awarding a substantial fee given the record and the law.

         Next, the details.

         I. McCabe and Purdy's Complaint

         A. Walmart's Policies [2]

         McCabe and Purdy alleged in the circuit court that they had an employment contract with Walmart whose terms were stated in the company's employment policies. They also alleged, among other things, that Walmart violated its open-door policy when it terminated their employment and thereby breached the company's promise to refrain from retaliating against an employee who used the policy.

         Pursuant to Arkansas Rule of Civil Procedure 10(c), Walmart attached copies of the policies at issue to its motion to dismiss. Each policy contains this language:

This information does not create an express or implied contract of employment or any other contractual commitment. Walmart may modify this information at its sole discretion without notice, at any time, consistent with applicable law. Employment with Walmart is on an at-will basis, which means that either Walmart or the associate is free to terminate the employment relationship at any time for any or no reason, consistent with applicable law.

         Walmart's written open-door policy-which also contains the language just quoted- encourages employees to report "ideas, suggestions, and concerns" to anyone in the company. The open-door policy also states:

Retaliation for initiating an open door communication or cooperating in a review relating to any open door communication, is strictly prohibited. Any associate who retaliates against another associate for initiating or cooperating in an open door review will be subject to disciplinary action, up to and including termination.

         There is more. Walmart's Global Statement of Ethics contains a statement to "Speak up for good" and encourages employees to "[u]se the Open Door Communications process." "It's important for each of us to create a work environment where everyone can raise concerns of ethics issues without fear of retaliation." Walmart also states the following in its Global Statement of Ethics:

Walmart will not terminate, demote or otherwise discriminate against associates for raising concerns. Also, it is important for co-workers not to isolate associates who have raised concerns-such associates should be treated with respect. Any change in treatment toward an associate who has raised a concern could be seen as a form of retaliation.

         And the Global Statement contains this at-will language:

This Statement of Ethics provides an introduction to the responsibilities of all associates, along with an overview of certain important policies. It's an important part of your employment with Walmart; however, it's not intended to create an express or implied contract of employment in and of itself. It is also not inclusive of all applicable company policies. . . . Employment with Walmart is on an at-will basis-where permitted by law-meaning associates are free to resign at any time for any or no reason. Violations of this Statement of Ethics may result in disciplinary action up to and including termination.

         With these policies in mind, we turn to McCabe and Purdy's complaint, whose allegations are presumed true at the Rule 12(b)(6) stage. Ark. Dep't of Envtl. Quality v. Brighton Corp., 352 Ark. 396, 102 S.W.3d 458 (2003).

         B. Jessica McCabe's Case

         Having viewed the facts alleged in her complaint as true, we nonetheless hold that McCabe's two claims, one for promissory estoppel (detrimental reliance) and ...


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