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Full Opinion
John GUZ, Plaintiff and Appellant,
v.
BECHTEL NATIONAL, INC., et al., Defendants and Respondents.
Supreme Court of California.
*357 Bianco & Murphy, Stephen M. Murphy, San Francisco; Quackenbush & Quackenbush and William C. Quackenbush, San Mateo, for Plaintiff and Appellant.
Thomas W. Osborne and Melvin Radowitz, Washington, Dist. of Col., for the American Association of Retired Persons as Amicus Curiae on behalf of Plaintiff and Appellant.
Paul, Hastings, Janofsky & Walker, Paul Grossman, Paul W. Cane, Jr., John C. Oakes, Los Angeles; Thelen, Marrin, Johnson & Bridges, Thelen Reid & Priest, Curtis A. Cole, Janet F. Bentley, Clarice
C. Liu, Michael Hallerud and Thomas M. McInerney, San Francisco, for Defendants and Respondents.
Gibson, Dunn & Crutcher, Pamela L. Hemminger and Kathleen M. Vanderziel, Los Angeles, for California Chamber of Commerce as Amicus Curiae on behalf of Defendants and Respondents.
Law Offices of Steven Drapkin and Steven Drapkin, Los Angeles, for the Employers Group as Amicus Curiae on behalf of Defendants and Respondents.
Lloyd C. Loomis, Los Angeles, for California Employment Law Council as Amicus Curiae on behalf of Defendants and Respondents.
BAXTER, J.
This case presents questions about the law governing claims of wrongful discharge from employment as it applies to an employer's motion for summary judgment. Plaintiff John Guz, a longtime employee of Bechtel National, Inc. (BNI), was released at age 49 when his work unit was eliminated and its tasks were transferred to another Bechtel office. Guz sued BNI and its parent, Bechtel Corporation (hereinafter collectively Bechtel), alleging age discrimination, breach of an implied contract to be terminated only for good cause, and breach of the implied covenant of good faith and fair dealing. The trial court granted Bechtel's motion for summary judgment and dismissed the action. In a split decision, the Court of Appeal reversed. The majority found that Bechtel had demonstrated no grounds to foreclose a trial on any of the claims asserted in the complaint.
Having closely reviewed the Court of Appeal's decision,[1] we reach the following conclusions:
*358 First, the Court of Appeal used erroneous grounds to reverse summary judgment on Guz's implied contract cause of action. The Court of Appeal found triable evidence (1) that Guz had an actual agreement, implied in fact, to be discharged only for good cause, and (2) that the elimination of Guz's work unit lacked good cause because Bechtel's stated reasona "downturn in ... workload"was not justified by the facts, and was, in truth, a pretext to discharge the unit's workers for poor performance without following the company's "progressive discipline" policy. We acknowledge a triable issue that Guz, like other Bechtel workers, had implied contractual rights under specific provisions of Bechtel's written personnel policies. But neither the policies, nor other evidence, suggests any contractual restriction on Bechtel's right to eliminate a work unit as it saw fit, even where dissatisfaction with unit performance was a factor in the decision. The Court of Appeal's ruling on Guz's implied contract claim must therefore be reversed. The Court of Appeal did not reach the additional ground on which Guz claims a contractual breachi.e., that Bechtel failed to follow its fair layoff policies when, during and after the reorganization, it made individual personnel decisions leading to Guz's release. Accordingly, we leave that issue to the Court of Appeal on remand.
Second, the Court of Appeal erred in restoring Guz's separate cause of action for breach of the implied covenant of good faith and fair dealing. Here Guz claims that even if his employment included no express or implied-in-fact agreement limiting Bechtel's right to discharge him, and was thus "at will" (Lab.Code, § 2922), the covenant of good faith and fair dealing, implied by law in every contract, precluded Bechtel from terminating him arbitrarily, as by failing to follow its own policies, or in bad faith. But while the implied covenant requires mutual fairness in applying a contract's actual terms, it cannot substantively alter those terms. If an employment is at will, and thus allows either party to terminate for any or no reason, the implied covenant cannot decree otherwise. Moreover, although any breach of the actual terms of an employment contract also violates the implied covenant, the measure of damages for such a breach remains solely contractual. Hence, where breach of an actual term is alleged, a separate implied covenant claim, based on the same breach, is superfluous. On the other hand, where an implied covenant claim alleges a breach of obligations beyond the agreement's actual terms, it is invalid.
Finally, we disagree with the Court of Appeal that Guz's claim of prohibited age discrimination has triable merit. Bechtel presented evidence, largely undisputed, that the reasons for its personnel decisions leading to Guz's release had nothing to do with his age. In the face of this showing, evidence cited by Guz that certain workers preferred over him were substantially younger is insufficient to permit a rational inference that age played any significant role in his termination.
For the reasons set forth above, we will reverse the judgment of the Court of Appeal and will remand to that court for further proceedings consistent with this opinion.
FACTS
In October 1994, Guz sued Bechtel, challenging the June 1993 termination of his Bechtel employment. The complaint alleged causes of action for breach of an implied employment contract (see Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 254 Cal.Rptr. 211, 765 P.2d 373 (Foley)), breach of the covenant of good faith and fair dealing, and age discrimination in violation of the California Fair Employment *359 and Housing Act (FEHA; Gov.Code, § 12941).
After extensive discovery, Bechtel filed a motion for summary judgment in August 1995. The motion, and Guz's opposition thereto, attached numerous supporting documents, including declarations and deposition excerpts. On the basis of these submissions, the following facts appear to be essentially undisputed:
In 1971, Bechtel hired Guz as an administrative assistant at a salary of $750 per month. Throughout his Bechtel career, Guz worked in "management information," performing, at various times, duties on both the "awarded" and "overhead" sides of this specialty. He received steady raises and promotions. His performance reviews were generally favorable, though his March 1992 evaluation indicated he needed to follow through on ideas and should become "fully computer literate in order to improve his long-term job success."
BNI, a division of Bechtel Corporation, is an engineering, construction, and environmental remediation company that focuses on federal government programs, principally for the Departments of Energy and Defense. Prior to 1993, BNI had its own in-house management information unit, the BNI Management Information Group (BNI-MI). BNI-MI itself represented a 1986 consolidation of two Bechtel management information units, which resulted in the work of these groups being done by fewer people. Between 1986 and 1991, BNI-MI's size was further reduced from 13 to six persons, and its costs were reduced from $748,000 in 1986 to $400,000 in 1991.
Guz had worked for BNI-MI since 1986. In 1992, at age 49, he was employed as a financial reports supervisor, responsible for supervising BNI-MI's overhead section, which included himself and 44-year-old Dee Minoia. At salary grade 27, Guz earned $5,940 per month. BNI-MI's six-member staff also included its manager, Ronald Goldstein (age 50), Goldstein's secretary Pam Fung (age 45), Robert Wraith (age 41), and Christine Siu (age 34). Guz's immediate superior was his longtime friend and colleague Goldstein. Goldstein, in turn, reported to Edward Dewey, BNI's manager of government services.
During this time, Bechtel maintained Personnel Policy 1101, dated June 1991, on the subject of termination of employment (Policy 1101). Policy 1101 stated that "Bechtel employees have no employment agreements guaranteeing continuous service and may resign at their option or be terminated at the option of Bechtel."
Policy 1101 also described several "Categories of Termination," including "Layoff and "Unsatisfactory Performance." With respect to Unsatisfactory Performance, the policy stated that "[e]mployees who fail to perform their jobs in a satisfactory manner may be terminated, provided the employees have been advised of the specific shortcomings and given an opportunity to improve their performance."[2] A layoff was defined as "a Bechtel-initiated termination[ ] of employees caused by a reduction in workload, reorganizations, changes in job requirements, or other circumstances ..." Under the Layoff policy, employees subject to termination for this reason "may be placed on `holding status' if there is a possible Bechtel assignment within the following 3-month period." Guz understood that Policy 1101 applied to him.
In January 1992, Robert Johnstone became president of BNI. While previously running another Bechtel entity, Johnstone had received management information services from the San Francisco Regional Office Management Information Group (SFRO-MI) headed by James Tevis. BNI-MI and SFRO-MI performed similar functions, and John Shaeffer,[3] a veteran *360 Bechtel employee who was several months older than Guz, had overhead reporting duties for SFRO-MI that were similar to Guz's job within BNI-MI.
Johnstone soon became unhappy with the size, cost, and performance of BNMI. In April 1992, he advised Dewey, Goldstein, and Guz that BNI-MI's work could be done by three people. A May 1992 memo from Dewey to Goldstein warned that Dewey and Johnstone had agreed BNI-MI's 1992 overhead budget of $365,000 was a "maximum not to be exceeded" and was "subject to further analysis and review, since the real guideline was far below this level."
Between April and October 1992, Guz and Goldstein discussed how to reduce BNI-MI's work force. In September 1992, Dee Minoia was told to look for another job. In October 1992, on Dewey's recommendation, Goldstein advised Guz to seek another Bechtel position, citing BNMI's reduced budget as the "biggest factor." By that time, as Guz knew, BNMI's overhead costs for 1992 had already run well over its strict budget.
In preparation for his departure, Guz compiled a list of his job tasks, together with his suggestions about who should perform his work once the BNI-MI staff was reduced. Guz recommended that most of his duties go to Shaeffer in SFRO-MI, and that the small remaining portion of his work, involving the government's Defense Contract Audit Agency, be transferred to a unit headed by Ann Dersheimer, BNI's 46-year-old controller, which regularly performed government audit and contract work. In mid-November, Goldstein managed to persuade Dewey, at least temporarily, that Guz was necessary to BNMI's work. With Dewey's consent, Goldstein asked Guz to stay, and Guz accepted.
Meanwhile, however, Dewey and Johnstone were discussing the possibility of involving SFRO-MI more actively in BNI's management information needs. In late November 1992, Goldstein received from Dewey, and discussed with Guz, a memo setting BNI-MI's target overhead budget for 1993 at $250,000. The memo again suggested staff reductions as a means of bringing the unit's overhead within the budget limits.
About the same time, Johnstone asked Tevis to submit a proposal to provide BNI's management information services through SFRO-MI. In early December, Tevis submitted a proposed budget of $200,000, which Johnstone accepted.
On December 9, 1992, Goldstein informed Guz that BNI-MI was being disbanded, that its work would be done by SFRO-MI, and that Guz was being laid off. Goldstein told Guz the reason he had been selected for layoff was to reduce costs. On December 11, 1992, Guz received a confirmatory letter from Dewey, which referred to "the downturn in our workload" and placed Guz on holding status. In a December 17, 1992, memo to BNI managers, Johnstone announced the transfer of BNI-MI to SFRO-MI effective February 1, 1993. During the transition period, as he had earlier recommended, Guz transferred his overhead reporting work to Shaeffer and his government audit work to Dersheimer.
As part of the transition plan, Tevis consulted with Goldstein "about the positions [Tevis] would need that [he] could cover in [his] group and that [he] couldn't cover." According to Tevis's uncontradicted deposition testimony, Goldstein recommended Wraith and Siu as the best additions to SFRO-MI's staff. The reasons, according to Tevis, were that Siu had necessary skills in Bechtel's ORS computer operating system and occupied a salary grade commensurate with the duties Tevis wished her to assume, and that Wraith "knew the project side" of management *361 information. Guz's name came up in the discussion, but Tevis and Goldstein "both decided" Shaeffer and another current SFRO-MI employee, Chris Gee, were sufficient to assume Guz's overhead work.
Wraith and Siu, the two youngest members of BNI-MI, were transferred to SFRO-MI, while all the remaining BNI-MI employees, including Guz, were laid off. Guz was placed on holding status pending possible reassignment to another Bechtel position.
During early 1993, while Guz was on holding status, three other positions became available in SFRO-MI, partly because of that unit's expanded responsibilities for BNI. An existing SFRO-MI employee, 42-year-old John Wallace, was selected for a new SFRO-MI position as supervisor of SFRO-MI's work for BNI. Wallace's former SFRO-MI subordinate, 52-year-old Jan Vreim, was placed in Wallace's old job. The third position, vacated by the transfer of another SFRO-MI member, was filled by 38year-old Barbara Stenho, who also already worked for Bechtel but was a newcomer to SFRO-MI.
Tevis explained that Wallace was selected for his position because it required his computer skills, and because his supervisory and project experience suited him for the responsibility of working directly with BNI president Johnstone, who was project oriented. Vreim was also chosen for her ORS computer ability, her history of working with high-level managers, and her project experience. The SFRO-MI position taken by Stenho required a close working relationship with another Bechtel entity, Bechtel Civil, where Stenho had previously been employed. Stenho was placed in her new job at the specific request of Bechtel Civil's manager.
Though Guz insists he let it be known he wanted to stay at Bechtel, even at a reduced salary, he appears to concede he did not specifically apply for any of the SFRO-MI positions. Tevis never saw Guz's resume before filling them, and he admitted he never considered Guz for these jobs. Tevis variously indicated he did not realize Guz was available, thought Guz "only did overhead," understood from Goldstein that Guz lacked computer skills, and did not know Guz had supervisory experience. Tevis also noted Guz did not have the Bechtel Civil relationship necessary for the Stenho position. After Tevis was asked, at his deposition, to examine Guz's resume, Tevis acknowledged it indicated Guz might have qualified for the positions taken by Wraith and Wallace.
Guz's original three-month holding status was renewed for an additional three months, but he obtained no other position within Bechtel. He was terminated on June 11, 1993.
Guz sought to furnish evidence that the cost reduction and workload downturn reasons given him for the elimination of BNMI, and his own consequent layoff, were arbitrary, false, and pretextual. To rebut the implication that a general business slowdown required BNI to lay off workers, Guz submitted an excerpt from Bechtel Corporation's 1992 Annual Report. There, Bechtel Corporation's president stated that the "Bechtel team had an exceptional year," and that the company as a whole had achieved healthy gains in both revenue from current projects and new work booked. In his own declaration, Goldstein stated that BNI-MI's 1992 and projected 1993 workload was high, that BNI-MI's work volume was not directly related to the overall job hours of BNI, and that because much of BNI-MI's overhead cost was recoverable under BNI's government contracts, the net savings from elimination of BNI-MI were only a small fraction of its budget.
Guz also submitted additional Bechtel documents discussing specific company personnel policies and practices, including those policies pertaining to laid-off employees. These documents included Bechtel's 1989 Reduction-in-Force Guidelines (RIF *362 Guidelines) and Bechtel's Personnel Policy 302 (Policy 302).
Policy 302 described a system of employee ranking (sometimes hereafter called force ranking), which was to be "used alone or in conjunction with other management tools in making personnel decisions in such areas as ... [staffing." Rankings were to be based on the fair, objective, and consistent evaluation of employees' comparative job-relevant skills and performance. However, Policy 302 also provided that "[u]nique situations may occur in which employee ranking may be inapplicable based on the nature of the personnel decision or the limited size of the ranking group." (Italics omitted.)
The RIF Guidelines specified that when choosing among employees to be retained and released during a reduction in force, the formal ranking system set forth in Policy 302 was to be employed. For this purpose, the RIF Guidelines said, employees should "[i]deally" be ranked, by similarity of function or level of work activity, in groups of from 20 to 100. The parties disputed whether Bechtel actually used this force ranking system when eliminating entire units of fewer than 20 employees. Bechtel's manager of human resources declared that force ranking was inappropriate for small units, such as BNI-MI, whose employees had dissimilar duties, grades, and skills. However, both Guz and Goldstein declared their recollection that force ranking was an established Bechtel policy and was used in 1986 when two management information units, containing 13 employees, were consolidated into a six-member unit, BNI-MI.
The RIF Guidelines also explained the term "holding status" and its benefits. According to the RIF Guidelines, this status could be granted upon layoff, for a renewable three-month period, while the employee awaited possible reassignment. The employee would not receive salary, but Bechtel would maintain his medical, dental, voluntary personal accident, and term life insurance. Bechtel should also provide the employee with "[t]ransfer and [placement [assistance." The "releasing organization" should determine if the employee was qualified for other vacant positions within the same unit, and "open requisitions" (i.e., solicitation of outside applicants for available positions) should generally be cancelled during a reduction in force. "Efforts should [also] be made to contact discipline counterparts in other Bechtel entities/services" in hopes of placing the employee, and the employee should be considered for future positions. (Italics added.) In his deposition, BNI president Johnstone agreed that Bechtel's practice was to place an employee on holding status prior to termination, to attempt to reassign the employee during this period, and to "continue to look for positions even after the employee has been laid off."[4]
In their declarations, Goldstein and Guz insisted Guz was qualified for each of the several vacant positions in SFRO-MI, as well as for several other positions that became available within Bechtel. Addressing Tevis's specific qualms about Guz, Guz and Goldstein declared that Guz had supervisorial experience and had worked on both the awarded and overhead sides of management information. Guz further stated that he had taken training for the ORS computer system, "had more than adequate computer skills for [his] position," and was never told his computer skills were deficient.
*363 The trial court granted summary judgment. The court reasoned that "[Guz] was an at-will employee and has not introduced any evidence that he was ever told at any time that he had permanent employment or that he would be retained as long as he was doing a good job.... [¶] Plaintiff is unable to establish a prima facie case of age discrimination.... Plaintiff is also unable to rebut [Bechtel's] legitimate business reason for his termination and/or his failure to obtain another position within Bechtel...."
Over a vigorous dissent by Presiding Justice Anderson, the Court of Appeal, First Appellate District, Division Four, reversed. The majority, Justices Poche and Reardon, reasoned as follows: Under Foley, supra, 47 Cal.3d 654, 254 Cal.Rptr. 211, 765 P.2d 373, Guz's longevity, promotions, raises, and favorable performance reviews, together with Bechtel's written progressive discipline policy and Bechtel officials' statements of company practices, raised a triable issue that Guz had an implied-in-fact contract to be dismissed only for good cause. There was evidence that Bechtel breached this term by eliminating BNI-MI, on the false ground that workload was declining, as a pretext to weed out poor performers without applying the company's progressive discipline procedures. As to Guz's age discrimination claim, Bechtel was required to advance a credible nondiscriminatory reason for Guz's termination, after which the burden shifted to Guz to produce evidence that the proffered reason was discriminatory or pretextual. As already noted, however, whether a downturn in workload was the real reason for Bechtel's action was in legitimate dispute. Hence, summary judgment on the age discrimination claim was improper.
The dissent argued that the trial court properly dismissed all Guz's causes of action. It reasoned as follows: As to the contract claim, Policy 1101 expressly provided that Bechtel employment was at will. The progressive discipline policy did not apply to general reductions in force, and nothing in Bechtel's personnel policies otherwise limited its right to eliminate positions. Guz's mere successful longevity could not prove a contractual right to be terminated only for good cause. Moreover, there was no evidence the elimination of BNI-MI was pretextual, or that Bechtel violated the implied covenant of fair dealing by engaging in intentional, bad faith conduct to deprive Guz of the benefits of his employment. As to age discrimination, Bechtel gave legitimate nondiscriminatory reasons for eliminating BNI-MI, and Guz presented no evidence these reasons were false, let alone excuses for intentional discrimination against Guz on the basis of his age.[5]
We granted review.
DISCUSSION[6]
I. Summary judgment rules.
On appeal after a motion for summary judgment has been granted, we review the record de novo, considering all the evidence set forth in the moving and opposition papers except that to which objections have been made and sustained. (Artiglio v. Coming Inc. (1998) 18 Cal.4th 604, 612, 76 Cal.Rptr.2d 479, 957 P.2d 1313.) Under California's traditional rules, we determine with respect to each cause of action whether the defendant seeking summary judgment has conclusively negated a necessary element of the plaintiffs case, or has demonstrated that under no hypothesis is there a material issue of fact that requires the process of *364 trial, such that the defendant is entitled to judgment as a matter of law. (E.g., Calvillo-Silva v. Home Grocery (1998) 19 Cal.4th 714, 735-736, 80 Cal.Rptr.2d 506, 968 P.2d 65 (Calvillo-Silva); Flatt v. Superior Court (1994) 9 Cal.4th 275, 279, 36 Cal.Rptr.2d 537, 885 P.2d 950; Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 673-674, 25 Cal.Rptr.2d 137, 863 P.2d 207; Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107, 252 Cal. Rptr. 122, 762 P.2d 46.)[7]
II. Implied contract claim.
Labor Code section. 2922 provides that "[a]n employment, having no specified term, may be terminated at the will of either party on notice to the other." An at-will employment may be ended by either party "at any time without cause," for any or no reason, and subject to no procedure except the statutory requirement of notice. (E.g., Foley, supra, 47 Cal.3d 654, 680, 254 Cal.Rptr. 211, 765 P.2d 373; Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1094, 4 Cal.Rptr.2d 874, 824 P.2d 680; Marin v. Jacuzzi (1964) 224 Cal. App.2d 549, 553-554, 36 Cal.Rptr. 880; see Crosier v. United Parcel Service, Inc. (1983) 150 Cal.App.3d 1132, 1137, 198 Cal. Rptr. 361.)[8]
While the statutory presumption of at-will employment is strong, it is subject to several limitations. For instance, as we have observed, "the employment relationship is fundamentally contractual." (Foley, supra, 47 Cal.3d 654, 696, 254 Cal.Rptr. 211, 765 P.2d 373.) Thus, though Labor Code section 2922 prevails where the employer and employee have reached no other understanding, it does not overcome their "fundamental ... freedom of contract" to depart from at-will employment. (47 Cal.3d at p. 677, 254 Cal.Rptr. 21.1, 765 P.2d 373.) The statute does not prevent the parties from agreeing to any limitation, otherwise lawful, on the *365 employer's termination rights. (Id at pp. 677, 680, 254 Cal.Rptr. 211, 765 P.2d 373.)
One example of a contractual departure from at-will status is an agreement that the employee will be terminated only for "good cause" (Foley, supra, 47 Cal.3d 654, 677, 254 Cal.Rptr. 211, 765 P.2d 373) in the sense of "`"a fair and honest cause or reason, regulated by good faith ..."' [citation], as opposed to one that is `trivial, capricious, unrelated to business needs or goals, or pretextual....' [Citations.]" (Scott v. Pacific Gas & Electric Co. (1995) 11 Cal.4th 454, 467, 46 Cal.Rptr.2d 427, 904 P.2d 834 (Scott); see also Cotran v. Rollins Hudig Hall Internal, Inc. (1998) 17 Cal.4th 93, 104-105, 69 Cal.Rptr.2d 900, 948 P.2d 412; Pugh v. See's Candies, Inc. (1981) 116 Cal.App.3d 311, 330, 171 Cal. Rptr. 917 (Pugh).) But the parties are free to define their relationship, including the terms on which it can be ended, as they wish. The parties may reach any contrary understanding, otherwise lawful, "concerning either the term of employment or the grounds or manner of termination." (Foley, supra, 47 Cal.3d at p. 680, 254 Cal.Rptr. 211, 765 P.2d 373, italics added.)
Thus, the employer and employee may enter "`an agreement ... that ... the employment relationship will continue indefinitely, pending the occurrence of some event such as the employer's dissatisfaction with the employee's services or the existence of some "cause" for termination.'" (Foley, supra, 47 Cal.3d 654, 680, 254 Cal.Rptr. 211, 765 P.2d 373, quoting Pugh, supra, 116 Cal.App.3d 311, 324-325, 171 Cal.Rptr. 917, italics added.) Among the many available options, the parties may agree that the employer's termination rights will vary with the particular circumstances. The parties may define for themselves what cause or causes will permit an employee's termination and may specify the procedures under which termination shall occur. The agreement may restrict the employer's termination rights to a greater degree in some situations, while leaving the employer freer to act as it sees fit in others.
The contractual understanding need not be express, but may be implied in fact, arising from the parties' conduct evidencing their actual mutual intent to create such enforceable limitations. (Foley, supra, 47 Cal.3d 654, 680, 254 Cal. Rptr. 211, 765 P.2d 373.) In Foley, we identified several factors, apart from express terms, that may bear upon "the existence and content of an ... [implied-infact] agreement" placing limits on the employer's right to discharge an employee. (Ibid., italics added.) These factors might include "`the personnel policies or practices of the employer, the employee's longevity of service, actions or communications by the employer reflecting assurances of continued employment, and the practices of the industry in which the employee is engaged.'" (Ibid., quoting Pugh, supra, 116 Cal.App.3d 311, 327, 171 Cal.Rptr. 917.)
Foley asserted that "the totality of the circumstances" must be examined to determine whether the parties' conduct, considered in the context of surrounding circumstances, gave rise to an implied-in-fact contract limiting the employer's termination rights. (Foley, supra, 47 Cal.3d 654, 681, 254 Cal.Rptr. 211, 765 P.2d 373.) We did not suggest, however, that every vague combination of Foley factors, shaken together in a bag, necessarily allows a finding that the employee had a right to be discharged only for good cause, as determined in court.
On the contrary, "courts seek to enforce the actual understanding" of the parties to an employment agreement. ((Foley, supra, 47 Cal.3d 654, 677, 254 Cal. Rptr. 211, 765 P.2d 373, italics added.) Whether that understanding arises from express mutual words of agreement, or from the parties' conduct evidencing a similar meeting of minds, the exact terms to which the parties have assented deserve equally precise scrutiny. As Foley indicated, *366 it is the "nature of [an implied-in-fact] contract" that must be determined from the "totality of the circumstances." (Id., at p. 681, 254 Cal.Rptr. 211, 765 P.2d 373.)
Every case thus turns on its own facts. Where there is no express agreement, the issue is whether other evidence of the parties' conduct has a "tendency in reason" (Evid.Code, § 210) to demonstrate the existence of an actual mutual understanding on particular terms and conditions of employment. If such evidence logically permits conflicting inferences, a question of fact is presented. (Foley, supra, 47 Cal.3d at p. 677, 254 Cal.Rptr. 211, 765 P.2d 373.) But where the undisputed facts negate the existence or the breach of the contract claimed, summary judgment is proper.
Guz alleges he had an agreement with Bechtel that he would be employed so long as he was performing satisfactorily and would be discharged only for good cause. Guz claims no express understanding to this effect. However, he asserts that such an agreement can be inferred by combining evidence of several Foley factors, including (1) his long service; (2) assurances of continued employment in the form of raises, promotions, and good performance reviews; (3) Bechtel's written personnel policies, which suggested that termination for poor performance would be preceded by progressive discipline, that layoffs during a work force reduction would be based on objective criteria, including formal ranking, and that persons laid off would receive placement and reassignment assistance; and (4) testimony by a Bechtel executive that company practice was to terminate employees for a good reason and to reassign, if possible, a laid-off employee who was performing satisfactorily.
Guz further urges there is evidence his termination was without good cause in two respects. First, he insists, the evidence suggests Bechtel had no good cause to eliminate BNI-MI, because the cost reduction and workload downturn reasons Bechtel gave for that decision (1) were not justified by the facts, and (2) were a pretext to terminate him and other individual BNI-MI employees for poor performance