McDonald v. Mobil Coal Producing, Inc.

Brief Fact Summary.

This case was before the court a second time regarding whether the dismissal of McDonald (Plaintiff-Appellant) from his employment as a technician by Mobil Coal Producing (Defendant-Appellee) was a breach of contract based upon the terms of the employee handbook.  

Synopsis of Rule of Law.

.  Disclaimers must be conspicuous to be effective against employees and conspicuousness is a matter of law. 

Facts.

The Plaintiff-Appellant “resigned” following allegations that he had sexually harassed a female coworker and a meeting with three company officials who told him either to resign or be fired. 

The trial court granted summary judgment for the Defendant, and a plurality of this court reversed summary judgment and remanded for a determination of whether promissory estoppel applied to the facts of this case.

Issue.

Did the employee handbook and Defendant’s course of dealing with the Plaintiff-Appellant modify the terms of the at-will employment?

Held.

The court reaffirmed its earlier decision reversing summary judgment and remanded the case to the trial court for determination whether the employee handbook and Mobil’s course of dealing modified the employment relationship from one terminable at will to one terminable only for cause.

The trial court erred in its statement that there was no requirement that disclaimers be conspicuous.  The disclaimer was not set off by border or larger print, was in the opening paragraph, and had an unclear effect on the employment relationship. 
There was no explanation was given in the disclaimer that the Defendant did not consider itself bound by the terms of the handbook, and McDonald proceeded to use it as a guide to the terms of his employment. 
The attempted disclaimers in the employee handbook and in the employment application were insufficiently conspicuous to be binding on McDonald. 

Dissent.

Justice Thomas:  This was employment at will, not modified by the handbook.
Justice Cardozo:  It is clear from the disclaimer that Mobil never intended to make a contract.  There was never a meeting of the minds, nor consideration.  There was no contract.  The trial court’s decision should be affirmed. 

Concurrence.

The only question on remand should be whether Mobil should have been estopped from firing McDonald without cause.

Discussion.

The plurality focused on the fact that the disclaimer was insufficient (and therefore invalid) in finding that a factual determination existed as to whether promissory estoppel could be claimed by McDonald.