Drugs, evidence, misconduct, safety, policy and procedure, off-duty conduct, disparate treatment, breach of contract.

Guy Kinoshita and Ronald Nakashima, former employees of Canadian Pacific Airlines, appeal a lower court's ruling their suit against the company. Airline officials terminated Kinoshita and Nakashima after local authorities arrested them on cocaine charges. An internal review of the case concluded the two workers violated airline drug policy. Kinoshita and Nakashima subsequently filed suit, claiming wrongful discharge and breach of contract. Kinoshita and Nakashima claimed the airline's employee handbook stated the document constituted an enforceable employment contract. The airline argued the handbook lacked the fundamental elements necessary for a binding contract.

A U.S. District Court ruled for the company. The court ruled the airline's action did not constitute a breach of contract. The court ruled the two workers were terminated based on their drug arrests. Kinoshita and Nakashima now appeal.

A split decision. The U.S. Court of Appeals for the Ninth Circuit affirmed the lower court's decision regarding the wrongful discharge complaint. However, the court remanded the case for a new trial on the breach of contract issue.