Business 8th Edition by Marianne Jennings

Exercise 40

John Guz, 49, first hired in 1971, had worked for Bechtel Corporation for 22 years. In 1986, he was assigned to BNI, a division specializing in engineering, construction, and environmental remediation that focuses on federal government programs, principally for the Departments of Energy and Defense (BNI-MI). Mr. Guz worked his way up through Bechtel and BNI both, going from administrative assistant, beginning at a salary of $750 per month, to financial reports supervisor, earning $70,000 per year. During his time with Bechtel and BNI, Mr. Guz had been given generally favorable performance evaluations, steady pay increases, and a continuing series of promotions.
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."
Between 1986 and 1991, BNI-MI's size was reduced from 13 to 6 persons, and its costs were reduced from $748,000 in 1986 to $400,000 in 1991. Bechtel eventually eliminated Mr. Guz's division. Mr. Guz was discharged, as were all the employees in the division. Mr. Guz brought suit against Bechtel alleging that he had an "implied-in-fact contract" with Bechtel that prevented the company from terminating him as long as the company was performing well financially.
The trial court granted Bechtel's motion for summary judgment and dismissed the action. In a split decision, the Court of Appeal reversed. Bechtel appealed. Who should prevail on appeal? [ Guz v Bechtel, 8 P3d 1089 (Cal. 2000)]