Submitted: March 13, 2018
from United States District Court for the District of
Minnesota - Minneapolis
GRUENDER, BEAM, and KELLY, Circuit Judges.
GRUENDER, CIRCUIT JUDGE.
case concerns a written agreement between Daniel Ayala and
his former employer CyberPower Systems. CyberPower, a
manufacturer and seller of power-supply products, hired Ayala
in 2006 to serve as a vice president.
2012, Ayala drafted an agreement, entitled "Compensation
Agreement, " that purports to describe the
"compensation plan for Dan Ayala" for his new
position as Executive Vice President and General Manager for
Latin America. The agreement details his salary and bonus
structure. It states that the "plan will remain in place
until sales reach $150 million USD, " and under the
heading "Employment terms, " it says: "The
above-mentioned agreement outlines the new salary and bonus
structure to remain in place until $150 million USD is
reached. It is not a multiyear commitment or employment
contract for either party." CyberPower President Bob
Lovett, General Manager Brent Lovett, and Ayala signed the
Compensation Agreement. The parties agree that before the
agreement, Ayala was an at-will employee.
was terminated before sales reached $150 million, and in
2015, he brought suit against CyberPower for breach of
contract, fraud, and unpaid wages. He argued that the
Compensation Agreement secured his employment until the $150
million sales threshold was met. CyberPower filed a motion to
dismiss, arguing that the Compensation Agreement
unambiguously did not modify Ayala's status as
an at-will employee. The district court, adopting a
magistrate judge's recommendation, denied the motion. In
2017, a different district court judge granted summary
judgment to CyberPower. The district court agreed with
CyberPower that the Compensation Agreement unambiguously did
not modify Ayala's at-will status, and it found further
that even if ambiguity existed, the parol evidence
sufficiently refuted Ayala's claim so as to warrant
summary judgment for CyberPower. Ayala appealed.
judgment is appropriate when no genuine issue of material
fact remains and the movant is entitled to judgment as a
matter of law." Rifkin v. McDonnell Douglas
Corp., 78 F.3d 1277, 1279 (8th Cir. 1996). "We
review a district court's grant of summary judgment
de novo, viewing the evidence and drawing all
reasonable inferences in the light most favorable to the
nonmoving party." Foster v. BNSF Ry. Co., 866
F.3d 962, 966 (8th Cir. 2017). The parties agree that
Minnesota law governs the dispute.
primary claim is for breach of contract. "To establish a
breach-of-contract claim, a plaintiff must show that (1) a
contract was formed; (2) the plaintiff performed any
conditions precedent; and (3) the defendant breached the
contract." Commercial Assocs., Inc. v. Work
Connection, Inc., 712 N.W.2d 772, 782 (Minn.Ct.App.
2006). Juries typically resolve ambiguities in
contracts, and ambiguity exists when the contract's
language is "reasonably susceptible to more than one
interpretation." Baker v. Best Buy Stores, LP,
812 N.W.2d 177, 180 (Minn.Ct.App. 2012). But
"when the intention of the parties to a contract is
ascertainable from the writing, construction is for the
court." Cherne Contracting Corp. v. Marathon
Petroleum Co., 578 F.3d 735, 740 (8th Cir.
2009). To alter Ayala's status as an at-will
employee, the parties agree that CyberPower must have
"clearly intended" to do so by entering the
Compensation Agreement. See Gunderson v. All. of Comput.
Prof'ls, Inc., 628 N.W.2d 173, 181-82 (Minn.Ct.App.
is no ambiguity on the question whether CyberPower
"clearly intended" to modify Ayala's at-will
status with the Compensation Agreement. See id. The
text of the agreement indicates that it governs only
compensation. The agreement is entitled "Compensation
Agreement." It describes the "compensation plan for
Dan Ayala." It states that the "plan will remain in
place until sales reach $150 million USD, " but the
agreement later reiterates that, rather than guaranteeing
Ayala's employment, it sets out only his compensation
until the sales threshold is met. It says that the
"above-mentioned agreement outlines the new salary and
bonus structure to remain in place until $150 million USD is
reached. It is not a multiyear commitment or employment
contract for either party."
the prior sentence supports CyberPower's contention that
the agreement is not an "employment contract, "
Ayala argues that if one reads "multiyear" to
modify "employment contract" in addition to
"commitment, " then the sentence merely states that
the employment term ends on a condition (reaching $150
million in sales), rather than after a term of years. This
reading makes little sense in context. The sentence preceding
the one at issue and the title of the document, among other
provisions, indicate that the agreement covers
compensation-not the employment term. Reading
"multiyear" to modify "employment
contract" also makes the phrase largely superfluous.
See Econ. Premier Assur. Co. v. W. Nat. Mut. Ins.
Co., 839 N.W.2d 749, 756 (Minn.Ct.App. 2013).
The Compensation Agreement already says that it does not
create a "multiyear commitment, " and the agreement
was obviously not an employment contract for a term of years.
There would be no need to say that the agreement was not a
multiyear employment contract. But, as this case illustrates,
there was a need to attempt to clarify that the agreement
covered only compensation.
one accepts Ayala's stilted reading, however, the
Compensation Agreement still does not have the requisite
"clear" language to modify Ayala's status as an
at-will employee. See Gunderson, 628 N.W.2d at
181-82 ("Typically, an employee must establish clear and
unequivocal language by the employer evidencing an intent to
provide job security."). The agreement's language,
in other words, does not overcome the "strong
presumption" of at-will employment under Minnesota law.
See Fox v. T-H Cont'l Ltd. P'ship, 78 F.3d
409, 413 (8th Cir. 1996). Ayala cites Kvidera v. Rotation
Engineering & Manufacturing Co., 705 N.W.2d 416
(Minn.Ct.App. 2005), to support his reading of the agreement.
He emphasizes that, like here, the employer and employee in
Kvidera both signed the agreement that the Minnesota
Court of Appeals found to modify an at-will relationship.
Id. at 421. But the contract in Kvidera was
entitled "Employment Agreement, " specified a date
that the agreement terminated, and addressed employment terms
other than compensation. Id. It also lacked
provisions, like those in Ayala's agreement, confining
its scope to compensation.
other arguments on the breach-of-contract claim are worth
briefly addressing. First, Ayala argues that because
the parties had already agreed to the compensation terms
described in the agreement, the agreement would serve no
purpose if it did not guarantee a term of employment. Ayala
relies here on a faulty premise. In fact, he concedes that
the agreement set out his bonus compensation for the first
time. Second, Ayala and the dissent note that the
agreement does not explicitly say that the relationship
remains at will. But Minnesota law does not require a clear
statement to continue at-will employment-it presumes such
employment. See Fox, 78 F.3d at 413. What requires
clarity is a modification to at-will employment, see
Gunderson, 628 N.W.2d at 181-82, and the absence of an
at-will provision and presence of "almost inscrutable
terminology, " post at 8, does not provide it.
Third, Ayala emphasizes that the agreement complied
with internal CyberPower procedures for modifying at-will
employment. The agreement was in writing and included the
signatures of Bob and Brent Lovett. The mere fact that the
agreement contains those elements, however, does not mean
that it modifies Ayala's at-will status. Those elements
might be necessary, but they are not
short, we conclude that because the Compensation Agreement
unambiguously did not modify Ayala's status as an at-will
employee, CyberPower did not breach the agreement by
terminating his employment. As a result, the district court
did not err ...