Lawrence Cleary (plaintiff) was hired in 1958 and worked for American Airlines, Inc. (American Airlines) (defendant) as an at-will employee for over 18 years. American Airlines had a regulation setting forth procedures for employee grievances and discharges. Specifically, the regulation provided that employees would only be discharged for just cause, and afforded employees an objective hearing to challenge any suspensions or discharges. On December 23, 1976, American Airlines suspended Cleary for allegedly committing theft, leaving his work area, and threatening a fellow employee. American Airlines thereafter terminated Cleary’s employment. Until then, Cleary had been considered a satisfactory employee. American Airlines did not afford Cleary a hearing for his suspension and discharge. Cleary sued American Airlines for breach of his employment contract and the implied covenant of good faith and fair dealing, claiming that American Airlines had actually fired him for his union activities and that this was in breach of American Airline’s regulation on discharges. The trial court sustained American Airline’s demurrers to the claims and dismissed the case. Cleary appealed.