Woolley claims that he was not fired for good cause, and that his firing was a breach of contract. He claims express and implied promises in H-L’s employment manual created a contract under which he could not be fired at will, but rather only for cause, and then only after the procedures outlined in the manual were followed.
Absent a clear and prominent disclaimer, an implied promise contained in an employment manual that an employee will be fired only for cause may be enforceable against an employer even when the employment is for an indefinite term and would otherwise be terminable at will.
Court criticizes the traditional notion of an employment contract (definite terms and consideration in addition to work and salary). The court says that a policy manual can create a contract. Factors to consider as to whether or not the manual forms a contract include: TOTALITY OF CIRSUMSTANCES (Want to show the reasonable expectation of the employees; Is it specific enough to show an actual offer rather than a general statement of policy):
– Terms (A lack of definiteness does not render the job security provision unenforceable).
– How many employees is it distributed to?
– Environment surrounding the manual’s existence.
The manual implies that a for cause termination is needed even though employment is for an indefinite term and at-will. The implied provision will be enforceable. With an employment contract for life, the employer has no control over when he can terminate because a breach is needed. The court did not like this restraint.
The court goes beyond traditional notions of a contract to find one in that it says one can presume reliance on the manual.
Employers issue manuals to keep employees happy, to create incentives that the ER intended to follow. The ER does not intend to bind himself. In fact, he can DISCLAIM that the manual forms a contract through language that is conspicuous and plainly worded.
The manual can be changed at any time according to the court. Failing to have such a reservation clause will hurt the ER. If revocation, continuing to work constitutes acceptance of the new manual. If modification of the manual offer, once there is performance begins, the offer is irrevocable despite the language in it. There is generally a reasonableness and good faith standard for modifications. Promissory estoppel may also make employer modifications binding once employees have relied on the modification.
Some courts require “additional consideration” or “convincing specificity” for a manual to be a K because of the informality and the fear of binding the ER.
Employees with individual employment Ks are barred from also relying on employment manuals.
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