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Woolley v. Hoffmann-La Roche - 99 N.J. 284, 491 A.2d 1257 (1985)

Rule:

Absent a clear and prominent disclaimer, an implied promise contained in an employment manual that an employee will be fired only for cause may be enforceable against an employer even when the employment is for an indefinite term and would otherwise be terminable at will.

Facts:

Plaintiff Richard Woolley was hired by defendant, Hoffmann-La Roche, Inc., in October 1969. There was no written employment contract between plaintiff and defendant. Some time in December, plaintiff received and read the personnel manual on which his claims are based. Throughout the years, Woolley was promoted to different positions.  In March 1978, plaintiff was directed to write a report to his supervisors about piping problems in one of defendant's buildings, which was written and submitted to plaintiff's immediate supervisor in April 1978. About a month later, Woolley's supervisors formally asked for his resignation.  Woolley refused to resign. Two weeks later defendant again requested plaintiff's resignation, and told him he would be fired if he did not resign. Plaintiff again declined, and he was fired in July without cause.

Plaintiff brought a breach of contract action, alleging that express and implied promises in defendant's employment manual created a contract under which he could not be fired at will. The trial court granted defendant's motion for summary judgment, which held that the employment manual was not contractually binding on defendant, thus allowing defendant to terminate plaintiff's employment at will. The Appellate Division affirmed. The Supreme Court of New Jersey granted certification.

Issue:

Was defendant employer bound by its implied promise in its employment manual that an employee can be fired only for cause?

Answer:

Yes.

Conclusion:

On review, the Supreme Court of New Jersey agreed with both the trial court and the Appellate Division that New Jersey did not recognize long-term employment unless two distinct requirements are satisfied: clear and convincing proof of the precise agreement and the long-term undertaking by the employer must be supported by consideration in addition to the employee's continued work. However, the supreme court reviewed Hoffmann-LaRoche's employment handbook, which had been distributed to every employee, and laid out its commitment to its employees to follow a procedure before an employee was terminated. The state supreme court reversed and remanded the summary judgment, holding that absent a clear and prominent disclaimer, the implied promise contained in Hoffmann-LaRoche's employment manual that an employee will be fired only for cause was enforceable against defendant. The court looked at reasonable expectations of the employees, and also concluded that the manual was an offer that sought formation of unilateral contract. Plaintiff's continued work when he had no obligation to continue made the offer binding.

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