This section contains the nature of the case and procedural background.

In 1971, D hired P as an administrative assistant at a salary of $750 per month. P worked in “management information.” P 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.” P had worked for BNI-MI at D 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). P's immediate superior was his longtime friend and colleague Goldstein. Goldstein, in turn, reported to Edward Dewey, BNI's manager of government services. D's Policy 1101 stated that “D employees have no employment agreements guaranteeing continuous service and may resign at their option or be terminated at the option of D.” “Employees 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.” A layoff was defined as “a D-initiated termination[] of employees caused by a reduction in workload, reorganizations, changes in job requirements, or other circumstances . . . .” Management became unhappy with the size, cost, and performance of BNI-MI. Between April and October 1992, P and Goldstein discussed how to reduce BNI-MI's work force. In October 1992, on Dewey's recommendation, Goldstein advised P to seek another D position, citing BNI-MI's reduced budget as the “biggest factor.” On December 9, 1992, Goldstein informed P that BNI-MI was being disbanded. Wraith and Siu, the two youngest members of BNI-MI, were transferred to SFRO-MI, while all the remaining BNI-MI employees, including P, were laid off. P was placed on holding status pending possible reassignment to another Bechtel position. During early 1993, while P was on holding status, three other positions became available in SFRO-MI, partly because of that unit's expanded responsibilities for BNI. P did not specifically apply for any of the SFRO-MI positions. P'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. P claimed the elimination of BNI-MI, and his own consequent layoff, were arbitrary, false, and pretextual. D's president stated that D 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. In their declarations, Goldstein and P insisted P was qualified for each of the several vacant positions in SFRO-MI, as well as for several other positions that became available within D. The trial court granted summary judgment to D. “P 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. P was also unable to rebut D's legitimate business reason for his termination and/or his failure to obtain another position within D.” P appealed. The majority ruled that P's longevity, promotions, raises, and favorable performance reviews, together with D's written progressive discipline policy and its officials' statements of company practices, raised a triable issue that P had an implied-in-fact contract to be dismissed only for good cause. There was evidence that D 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 P's age discrimination claim, D was required to advance a credible nondiscriminatory reason for P's termination, after which the burden shifted to P to produce evidence that the proffered reason was discriminatory or pretextual. Whether a downturn in workload was the real reason for D's action was in legitimate dispute. Hence, summary judgment on the age discrimination claim was improper. D appealed.

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