*1 FLAHERTY, NIX, C.J., LARSEN, and Before zappala jj. papadakos, McDermott, and
ORDER PER CURIAM: affirmed.
Order
v. COMPANY, AND LAND EXPLORATION LOUISIANA Metals, Inc., Inc., Copper, formerly and H.M. Appellants at No. 65. Supreme Pennsylvania. Court
Argued March 1989. Sept. Decided *2 McKenna, & Strassburger, Strassburger, Gutnick E.J. Gleason, Potter, Hough, Hough & Pittsburgh, Thomas H.M. P.C., appellants. for Poughkeepsie, Pasek, Business and Indus- Pa. I. Chamber
Jeffrey Curiae. try Amicus FLAHERTY, C.J., LARSEN, NIX, and
Before jj. zappala papadakos, McDermott, OPINION McDERMOTT, Justice. employees case were plaintiffs this
The class action Company, wholly The Hussey Hussey Company. the in May 1984. appellant, was sold subsidiary owned consummated, were of- employees sale was When the up or to a positions purchasers with the fered either new year for each pay weeks severance twenty-six maximum of employment accept chose to of service. The class they claim that are and now company the purchasing with The as well. weeks severance twenty-six entitled to the indeed a severance while there was contends that appellee policy company, at their it was not communicated as an accept employment offer inducement to or continue their concern and therefore not an con- enforceable tract. trial, a directed employees granted were verdict sustained on appeal Superior before Court. judge upon
The trial directed verdict his that there view company existed a “handbook” offer for severance requisite acceptance and therefore the offer and contract. cannot that the agree We evidence offered employees was sufficient to sustain that view. The compa- from time to time ny flyers outlining issued various benefits offered to such as and life employees health insurance, credits, vacation, tuition and the like. The com- pany however never made known to their pay. for severance their They kept policy *3 personnel manager manual for the use of their for guidance as arose. employees occasion The could not other than say the had a they company policy. They believed did not know policy the were they They because never told. based their and supposition upon belief to its terms what occurred were, time, employees when various from time to given n The amounts pay. given severance were different with more, employee, less, each some some some none at all. The company never denied that had a they severance policy, but insist that its terms were not an inducement to employment because did not its terms into they solidify an offer for mutual or unilateral contract.
It is basic contract
that one cannot suppose,
law
believe, suspect, imagine
hope
or
that an offer has been
intentional, definite,1
An offer
made.
must be
in its terms
communicated,2
and
otherwise
minds cannot meet.3 Nor
357,
Industries,
Corp.
Pa.Super.
1. Bethlehem Steel
v. Litton
321
468
(1983),
(1985).
A.2d 748
aff'd. 507 Pa.
A.2d
488
581
Restatement
Second Contracts
§
(1958).
Prep,
Pa.Super.
2. Commonwealth v.
186
A
handbook distributed
acceptance a
may
an offer and its
employment
ment for
be
show,
here, however,
not
could
employees
The
contract.
of policy
consideration
for what
other than an internal
for all
given,
they
policy
if
announced a
might be
and when
had a
only
they
to show
that
It is not sufficient
employees.
offer it as a
they
It
intended to
must be shown that
policy.
proved by
can
intention be
bits
binding contract. Nor
their
employees
individual
policy given
of their
pieces
varying
times under
circumstances.
different
show
only
able
The
in their evidence were
employees
The
pay.
a
they
believed there was
severance
that
manual,
which unlike
company
was that
only evidence
communicated to
policies
other
were
flyers,
procedures
there were
materially
The employees
from time to time.
followed
felt,
they
its
on
terms. Some testified
testimony
differed
all differed on
heard, expected,
They
or
entitled.
required
for whatever severance
amount
term service
short,
offered
might
available.
all
evidence
be
each
had a differ-
prove
could
no more than that
best
expectation.
evidence at
ent view and different
policy.
general feeling
that there was a severance
*4
more
there must be
Again, it is basic contract law that
intended,
awareness;
an
general
there must be
than
or
definite,
any
accepted
offer can be
specific offer before
suppose
cannot
that
contract created. One
any enforceable
offer,
an
willing to make
offer
another made an
Minds,
do
for contractual obli-
intended sometime to
so.
definite,
things.
meet
gation,
upon
specific
must
an
equated
fell into error when he
The learned trial judge
a “handbook.”
personnel manual with
uncommunicated
however,
more
could show no
than
here
employer’s internal consideration of a policy might
what
given
be
when occasion arose.
It is not sufficient to show
they had a policy.
It must be shown they offered it as
binding terms of
A
employment.
company may indeed have
a policy upon which they
act,
intend to
given certain circum-
events,
stances or
but unless they communicate that policy
as part of a definite offer of employment they are free to
change as events may require. See Richardson v. Charles
Cole Memorial Hospital,
320 Pa.Super.
In reviewing the
of a
propriety
directed verdict we accept
true,
as must the trial judge, all facts and inferences
tending to support the party against whom the motion has
made,
been
rejecting all testimony and references to the
contrary.
Hottenstein,
Jozsa v.
ZAPPALA, J., files a concurring opinion.
LARSEN, J., files a dissenting opinion.
ZAPPALA, Justice, concurring.
I join the holding of the majority opinion that uncommunicated policy of severance pay was not contractu- ally binding upon the employer. I perceive an important distinction between the policy and an employer’s handbook that is disseminated to the employees. Because this Court has yet not addressed the issue as to whether an employee handbook unilaterally issued by an employer constitutes part of an employee’s contract of employment, the dicta in the majority’s opinion may be construed prematurely as controlling.
The majority states that “A handbook distributed to employees as inducement for employment may be an offer and its acceptance a contract.” (Majority slip opinion at 152). Having concluded that the uncommunicated person- nel manual could not be equated with a handbook,
497 I no value. write precedential is of statement majority’s of the of the effect that the issue emphasize only then by has not been resolved handbook distribution I discussion until would reserve Court and that this us. squarely matter is before LARSEN, Justice, dissenting. found the trial of this case as
I The facts dissent. (CRC)was a Range Copper Company as court are follows. Explo- Land and subsidiary of Louisiana wholly-owned (LLE) refining in engaged mining Company ration products. copper and sale of production and the copper, of Division) an unincor- was (Hussey Metals Division Hussey operated plant Hussey of Division division CRC. porated Eminence, Leetsdale, Ken- Pennsylvania in facilities in Pennsylva- well as offices and warehouses tucky as sales York, Ohio, Illinois, Jersey, New New (Philadelphia) nia North Missouri and Carolina. (of LLE was Mineral Division of which CRC
Although the for salaried benefits provided company-wide certain part) a it not have for severance policy did a employees, non-union policy or about instituted a CRC benefits. for one week of base August provided of 1970 which service, twenty-six of year up of to maximum for each to Hussey revised as it related This was weeks. 1982, Allen, R.D. its President on September Division of allow one base Manager, to week and General Sever- up of to a maximum of weeks. year each service in 1982 the 1982 revision paid ance accordance with was and 1983. incorporated of Division Hussey December LLE the name wholly-owned subsidiary under time, Inc.) LLE Metals, At this at- (Hussey Inc.
Hussey concern, ongoing but was Inc. as an tempted sell 14, 1984, representatives of May several unsuccessful. On to announce the facility at the Leetsdale appeared LLE operation would be plant day last closing —its pre- day, a memorandum May 1984. On Friday, LLE pared by was distributed to all salaried non-un- *6 of employees Hussey ion Inc. stating the formula and timing for severance be would communicated to them 1, on or before June Between Leetsdale plant closing May 18, 1984, on through May 27, 1984, a few employees remained the office to phone answer the and a provided skeletal crew security. plant The Eminence con- tinued operations interruption. without
During 19-20, Allen, the weekend of May R.D. was able put together group to a of purchase investors to the assets of Leetsdale and Eminence The facilities. new company was named Ltd. Hussey Copper This company, headed (himself Mr. Allen Inc.) a former official of began Hussey to hire employees former of the facility Leetsdale on May 30, Allen, 1984. May On Mr. upon the of request LLE, sent that a list of all former of employees Hussey Inc. who not employed Copper Ltd. Hussey 1, 1984, June (post-severance) On LLE announced a change in its policy. severance change provided: This to our
Pursuant earlier memo to you, the has following as been established for salaried employees a result of the closing of the Leetsdale facility:
Severance
One week of base for each full of year service awith minimum two weeks and maximum payment of twenty-six weeks paid lump sum to all former em- (with ployees (6) service) at six least months who were not employed made an offer of employment as of June 1, 1984.
Your severance check is attached. Reproduced p. Record at The Exhibit [Plaintiffs 13]. memorandum, together with a severance check was sent all on employees provided (those the list to LLE who did not Hussey Ltd.). obtain employment Copper with former Inc., employees Hussey employed at Leets- facility by Hussey Ltd., dale Copper those who continued employment with personnel the Eminence facility at not receive the warehouses did offices and various sales pay. memorandum or severance non- herein, of all salaried consisting The class Inc., accepted employment who employees union and, thus, not receive sever- Ltd. did Hussey Copper A brought jury for breach of contract. a suit pay, ance evidence the trial of all was held and at close trial plaintiffs. The in favor of the class directed a verdict judge a contract offer severance bene- found that judge trial non-union to all salaried made and communicated fits was containing 1) handbook since: employees Inc. people Hussey several staff same was distributed concerning for reference available to and was *7 benefits; 2) employ- non-union the salaried employment policy by severance pay of the 1982 revised ees were aware in providing Inc.’s conduct by Hussey word of mouth and non-union employees. to other salaried severance benefits freely subject that this offer was The trial court determined of during the term any to or revocation at time modification irrevocable once severance occurred. employment but Thus, on modify LLE’s June attempt occurred, who had to exclude after severance Ltd., no was of employment Hussey Copper accepted sever- The trial court awarded class effect. for every year in the amount one week base ance weeks. up to a maximum twelve service lower court. parties post filed trial motions with the Both formula the severance plaintiffs disputed The class severance to a maximum the trial court that limited used right any LLE disputed employees’ twelve weeks. re- post-verdict judge The trial denied severance benefits. affirmed. Both Superior and the Court parties lief to both petitioned Superior this court for review parties appeals. the cross granted Court order. We is in impression presented of first important question An set benefits appeal: provision this whether an in “handbook” creates enforceable forth contractual obligation between employer and former “at will” employees. majority opinion its would
. reverse order of the Superior Court, upholding the trial court’s directed verdict class, favor of the because there was not sufficient evidence to sustain the view that there was “handbook” offer of severance benefits made and communicated to the employees. The majority claims that the “learned trial fell judge into error when he equated an uncommunicable personnel manual with a “handbook”. Majority op. p. Instead, it insists that “the from time to time issued flyers outlining various benefits the company offered to employees such as insurance, health and life tuition credits, vacation, and the like” but that severance benefits were not included. Majority op. at p. 494. case, this although LLE characterizes its severance
pay policy as a mere “gratuity” which it ormay may not bestow upon particular employee, the trial judge stated I what preferred believe is the position regarding “hand- book” offers:
Where an employer unilaterally establishes a written policy as to benefits which employees receive, will those employees are not covered a by contract of employ- ment either individually by virtue of a collective bar- gaining agreement, the employer, although free to unilat- erally alter or eliminate the benefits at anytime during *8 the term of employment, not, may once an event occurs triggering the employee’s right to benefit, receive the unilaterally alter the terms or condition of the benefit. is entitled to the benefit as it existed at the time of the triggering event as the right thereto, vested at that time. (N.T.)
Notes of Testimony
p.
4/2/86 at
305. See Banas v.
Matthew
International
348
Corp.,
Pa.Super.
502 A.2d
(1985) (Beck, J.,
637
concurring and dissenting).
also,
See
Toussaint v. Blue Cross and Blue Shield
408
Michigan,
of
Mich.
(1980).
Comment: the only are not words. Words other than
a. Conduct may convey often as Conduct expression. medium of proposed or assent to a a clearly promise as words is of form particular requirement no Where promise____ validity of or a condition the enforceabili- by made the law in contract, the effect of the a there is no distinction of ty writing, orally, or or in expressed it whether is promise ACTS, AND PARTLYIN OTHERS. IN OF THESEWAYS PARTLY ONE
[******]
Illustration: B services to over a
1. A in B’s home and renders lives B’s claims the value of after death years, and period A to to incompetent testify is By the services. statute is no evidence verbal B, and there transactions to determination factors relevant Among the promise. following: are the gratuitous services were whether the services, B A render the relation request that B, B, to A and the value of the services between A, foregone suffered hardship alternatives of the parties, financial circumstances ... (1981) (Second) 19 Comment a. of Contracts
Restatement § added) (emphasis it is case clear
Applying present this illustration the trial support sufficient evidence there was for severance benefits finding binding of a contract court’s employees. Inc. and its former “at-will” between First, the 1982 severance the handbook contained which offer. written Sec- provided proof revision benefits “at-will” em- ond, the conduct other company’s paying proof its offer and intent to ployees Third, parties relationship employ- bound. be *9 er and proof is that the employees employees’ continued services, and the employer’s payment benefits, of severance gratuitous. were not Finally, fact that the foregone had other employment, while the employer concur- rently of a enjoyed loyal, staff, benefit consistent are relevant to the determination that a contract for severance existed. benefits
The majority places significance inordinate on the fact that the certain, terms of the offer were not stating that although Inc. paid severance to other salaried non- union employees time, “from time to given amounts different more, with each employee, less, some some some none at all”. Majority op. p. However, at again by reference to contract ordinary principles, the terms of an offer need only be “reasonably provide certain” to the basis for a contract. The provides: Restatement
(2) The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving appropriate remedy. (Second)
Restatement 33(2) (1981). of Contracts § although this case the employees’ recollections as to the details of their severance differed, benefits may have they were aware that the had a severance Therefore, effect. a basis for if determining and when a breach occurred exists. Additionally, because there is a formula for severance pay benefits set forth in employ- ee handbook and made reference to in various memoranda of LLE Hussey Inc., a basis exists for devising an appropriate remedy.
Finally, the majority implies that because the class of. plaintiffs were employed by the successor company that there was no severance:
“The plaintiffs class chose to accept employment purchasing company and now claim are they entitled to the twenty-six weeks as well”. Majority op. p. at 493. There is no question that the class Leetsdale, remained working Eminence and However, other facilities. Hussey Copper Ltd. awas com-
503 the em- Although concern. independent new pletely the same new for by company this employed were ployees levels, fringe benefits their salary the same at positions, the new em- specifically, More altered. significantly severance. right the employees’ not preserve did ployer Inc. Indeed, specified agreement of sale responsible payment would be employer the former that the In this case the fact of all severance benefits. in the were hired the successor will not relieve jobs same same levels former employer obligation.1 from its therefore, would,
I affirm.2
564 157 A.2d Ferko, wife, Appellants, Joseph and Ann his FERKO
v. wife, Spisak, A. his and the L. and Patricia Michael SPISAR East, Pennsylvania, Dinah Borough Rocco J. and Jo of North Haslett, Morse, Tomasino, B. Daniel R. and Elinor and Robert Tenney. of the Estate Lochner Executor Pennsylvania. Supreme Court 25, Argued Sept. 1989. 6,
Decided Oct.
1989.
30,
Nov.
Reargument Denied
Co.,
Anthony
Jersey
Light
N.J.Super.
Power &
51
1. Accord:
v.
Central
Co.,
139,
(1958); Hinkeldey v.
762
Cities Service Oil
470
143 A.2d
(Mo.1971); Chapin v. Fairchild Camera & Instrument
S.W.2d 494
(1973);
Corp.,
Cal.App.3d
Cal.Rptr.
v.
107
111
Mace
Conde
Publications, Inc.,
(1967);