Weiner v. McGraw-Hill, Inc., 57 N.Y.2d 458 (1982)
An employer’s promise of job security in a personnel handbook, coupled with an employee’s reliance on that promise by leaving a prior job and rejecting other offers, can create an enforceable contract requiring just cause for termination, even in the absence of a fixed employment term.
Summary
Walton Weiner left his previous employment at Prentice-Hall to work for McGraw-Hill after being assured that McGraw-Hill’s policy was to terminate employees only for “just cause,” as stated in its personnel handbook. Weiner signed an application referencing the handbook. He alleged he relied on this assurance, forfeiting benefits and a raise at Prentice-Hall. After eight years, McGraw-Hill fired Weiner for “lack of application.” Weiner sued for breach of contract. The Court of Appeals held that Weiner stated a cause of action because the promise of job security, combined with Weiner’s reliance, could create an enforceable contract modifying the at-will employment presumption.
Facts
In 1969, McGraw-Hill recruited Walton Weiner from Prentice-Hall. McGraw-Hill’s representative assured Weiner that the company’s policy was to terminate employees only for “just cause,” as detailed in its personnel handbook. The handbook stated dismissal would occur “for just and sufficient cause only, and only after all practical steps toward rehabilitation or salvage of the employee have been taken and failed.” Weiner signed an employment application referencing the handbook. Weiner alleges he relied on these assurances, leaving Prentice-Hall, forfeiting accrued fringe benefits, and turning down a salary increase offered by Prentice-Hall to stay. After eight years of employment, Weiner was fired in February 1977 for “lack of application.”
Procedural History
Weiner sued McGraw-Hill for breach of contract. The Supreme Court (Special Term) upheld the complaint. The Appellate Division reversed, holding that because Weiner was an at-will employee, he could be terminated arbitrarily. Justice Kupferman dissented. The Court of Appeals reversed the Appellate Division, reinstating the Special Term order.
Issue(s)
Whether an employer’s promise of job security in a personnel handbook, coupled with an employee’s reliance on that promise, can create an enforceable contract requiring just cause for termination, despite the employee not being hired for a fixed term.
Holding
Yes, because the promise of job security, incorporated in the employment application and relied upon by the employee in leaving prior employment and rejecting other offers, presents a question for trial as to whether the employer was bound not to discharge the employee without just and sufficient cause and an opportunity for rehabilitation.
Court’s Reasoning
The Court of Appeals reasoned that the traditional at-will employment rule is a rebuttable presumption, not an absolute bar to contractual obligations. The court emphasized that “mutuality” (coextensive promises) is not always necessary for a binding contract; consideration, which can be a benefit to the promisor or a detriment to the promisee, is the key. Here, Weiner’s leaving his prior employment and rejecting other offers in reliance on McGraw-Hill’s promise of job security constituted sufficient consideration. The court stated, “[i]t is enough that something is promised, done, forborne or suffered by the party to whom the promise is made as consideration for the promise made to him.” The court found sufficient evidence of a contract and breach based on four factors: (1) inducement to leave prior employment with assurances of discharge only for cause, (2) incorporation of those assurances into the employment application, (3) rejection of other job offers in reliance, and (4) internal enforcement of handbook procedures for subordinate dismissals. The court also noted that the trier of fact should consider the parties’ course of conduct, writings, and negotiations to determine if the at-will presumption was overcome. As the court stated, it is “the totality of all of these, given the attendant circumstances, the situation of the parties, and the objectives they were striving to attain”, which will control.