McDonald v. Mobil Coal Producing, Inc.
820 P.2d 986 (Wyo. 1991)
McDonald worked for Mobil. He
got fired due to rumors of sexual harassment. McDonald sued Mobil,
claiming that his employee handbook constituted a contract and that Mobil
was in breach.
The employee handbook gave
specific procedures for deal with sexual harassment complaints, and Mobil
had not followed those procedures.
On the other hand, the
employee handbook explicitly said that it was "not a comprehensive
policy and procedures manual, nor an employment contract."
The Trial Court granted
summary judgment to Mobil, and McDonald appealed.
McDonald claimed he was led
to believe that Mobil would be bound by its own employee handbook
procedures in dealing with the harassment complaints.
Mobil argued that it had
retained the right to fire McDonald at any time for any reason, and the
employee handbook was only a guide, not a requirement.
The Wyoming Supreme Court
reversed and remanded to see if promissory estoppel applied to the situation.
The Wyoming Supreme Court
looked at the disclaimers in the handbook, and found that they were
inadequate to prevent confusion.
The handbook itself didn't
say that it wasn't binding on the employer, and a reasonable person
could get confused and think that it was.
Therefore the disclaimers
were held to not be binding on McDonald.
The Court chose to follow
the objective theory of contract
formation (as opposed to the subjective theory).
It doesn't matter if Mobil
didn't subjectively intent to
make a contract with McDonald if a reasonable person in McDonald's shoes would think that Mobil
did make a contract, this is the objective theory.
Under the objective
theory the court has to decide
whether there's any possibility that a reasonable person could think
such a thing. If there is, then the question should be allowed to go
to a jury.
In a concurring opinion it was
argued that the Court should say as a matter of law that Mobil's employee
handbook constituted a legally binding promise from Mobil to McDonald and
that the only issue for the trial court should be Mobil should have been forbidden
from firing McDonald without cause.
In a dissent it was argued
that there's nothing more that Mobil could have done to make the employee
know that they didn't intend to enter an employment contract.
The dissent argued that the
Court's decision could conceivably outlaw at-will employment, and that
this is bad from a policy standpoint.