McDonald v. Mobile Corp. case brief

McDonald v. Mobile Corp.; (Sup Ct of WY, 1991); Supp 65; Notes 41

• Facts: D accepts job with P Mobil and later signs and accepts employee manual, which states D reserves right to unilaterally alter policies in handbook – same book has avowed, progressive statements including company commitment to working w/ employees in trouble before dismissing them. Rumors spread that D harassed co-worker, and management asks D to resign indicating if he doesn’t he’ll be fired (constructive termination). D argues once he was given handbook, his status changed from employment at will to employee terminable only for good cause.
• Issue: Were the promises in the handbook sufficient to create a contract, and change P’s employment from at will to terminable only for good cause?
• Rule: under the “objective theory” of contract formation, contractual obligation is imposed not on the basis of the subjective intent of the parties, but rather upon the outward manifestations of a party’s assent sufficient to create reasonable reliance by the other party.
• Holding: case remanded to determination of whether the employee handbook and Mobil’s course of dealing with McDonald modified the employment relationship from one terminable at will to one terminable only for cause.
• Rationale: Mobil’s subjective intent to contract is irrelevant, if Mobil’s intentional, objective manifestations to McDonald indicated assent to a contractual relationship