McDonald v. Mobil Coal Producing, Inc.

Supreme Court of Wyoming, 1991.

820 P.2d 986.

Dawson, pp. 334-341


Facts: McDonald worked for Mobil.  He got fired, or was supposedly forced to resign, due to rumors of sexual harassment.  McDonald sued Mobil, claiming that his employee handbook constituted a contract and that Mobil was in breach.  The trial court granted summary judgment to Mobil, and McDonald appealed.  The Wyoming Supreme Court reversed and remanded to see if promissory estoppel applied to the situation.  Then Mobil made a motion for rehearing and that’s how the case came before the court this time.


Issue: Did the employee handbook, along with the course of conduct between Mobil and McDonald modify the at-will nature of McDonald’s employment?


Rule: Disclaimers must be conspicuous in order to be effective against employees.


Analysis: The court looks at the disclaimers that McDonald got, and finds that they are 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.  The disclaimers are held to not be binding on McDonald.


Then the court talks about the objective versus subjective interpretation issue.  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.  So 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.


The court finds that McDonald was led to believe that Mobil would be bound by its own employee handbook procedures in dealing with the harassment allegations.  Instead, Mobil thought it had retained the right to fire McDonald at any time for any reason.


There is a concurring opinion and two dissents.  The concurring opinion says 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.


One dissent says 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.  This dissent says that the court’s decision could conceivably outlaw at-will employment, and that this is bad from a policy standpoint.


The other dissent says that in the previous hearing of the case, the issue was whether promissory estoppel could apply, but now the issue is whether the employee handbook is a binding contract.  This dissent says that there is no contract.  I think this dissent kind of rejects Restatement § 90 for some reason.  Well, actually § 90 doesn’t use the word “contract”.  I guess what this dissent is saying is that the majority is getting mixed up between the meaning of “contract” and the meaning of “promise”.


Conclusion: The court reverses summary judgment and remands to find out whether the at-will employment of McDonald got modified.


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