Case Name: In re CERTIFIED QUESTION BANKEY v. STORER BROADCASTING COMPANY
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1989-06-06
Citations: 432 Mich. 438
Docket Number: Docket No. 78200
Parties: In re CERTIFIED QUESTION BANKEY v STORER BROADCASTING COMPANY
Judges: Riley, C.J., and Brickley and Cavanagh, JJ., concurred with Griffin, J.
Reporter: Michigan Reports
Volume: 432
Pages: 438–471

Head Matter:
In re CERTIFIED QUESTION BANKEY v STORER BROADCASTING COMPANY
Docket No. 78200.
Argued March 5, 1987
(Calendar No. 18).
Decided June 6, 1989.
Kenneth Bankey brought an action for breach of contract in the Oakland Circuit Court against Storer Broadcasting Company, challenging the termination of his employment with Storer after thirteen years. Bankey alleged that throughout his employment it was Storer’s policy not to discharge employees except for just cause, and that in reliance on that policy he had remained in Storer’s employ. Storer’s petition for removed of the case to the United States District Court for the Eastern District of Michigan on the basis of diversity jurisdiction was granted.
The trial court found as a matter of law that a 1980 personnel policy digest created a contract of employment providing for discharge for cause and that a 1981 revision of the digest to provide for employment terminable at will, consistent with the holding of Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich 578 (1980), could not be applied unilaterally to alter the employment relationships of existing employees. The jury was instructed that Storer was bound by the 1980 policy with respect to the plaintiff and that the only question of fact was whether Storer had cause to discharge him. The United States District Court, Horace W. Gilmore, J., entered judgment on a verdict by the jury for the plaintiff.
On appeal, the United States Court of Appeals for the Sixth Circuit certified to the Michigan Supreme Court the question:
Once a provision that an employee shall not be discharged except for cause becomes legally enforceable under Toussaint ... as a result of an employee’s legitimate expectations grounded in the employer’s written policy statements, may the employer thereafter unilaterally change those written policy statements by adopting a generally applicable policy and alter the employment relationship of existing employees to one at the will of the employer in the absence of an express notification to the employees from the outset that the employer reserves the right to make such a change?
In an opinion by Justice Griffin, joined by Chief Justice Riley, and Justices Brickley and Cavanagh, the Supreme Court responded:
An employer may, without an express reservation of the right to do so, unilaterally change its written policy from one of discharge for cause to one of termination at will, provided that the employer uniformly gives affected employees reasonable notice of the change.
Justice Boyle, joined by Justice Archer, concurring in the result, agreed that application of contract theory is not appropriate in this situation. Under the circumstances, a discharge-for-cause policy may be changed unilaterally to one of employment at will, and an employer may be required to provide" reasonable notice uniformly to affected employees.
Justice Levin, writing separately, stated that although an employer may change the policies stated in an employee manual, including a discharge-for-cause policy, the employer may do so in respect to an employee who worked under the discharge-for-cause policy only to the extent the change does not defeat the legitimate expectations of the employee. An employee who worked for a significant period of time under a discharge-for-cause policy before the change in policy to one of employment at will, and who is terminated without cause after the change, might be entitled to some relief or remedy in respect to legitimate expectations of job security that arose during the employment under the discharge-for-cause policy. If a court determines that legitimate expectations of job security arose before the change in policy, the court should provide a remedy. The question what relief or remedy may be awarded to such an employee has not been briefed or argued, and thus cannot be decided. Its resolution depends on the facts and circumstances of the particular cases.
It appears there is a substantial question whether the Court has jurisdiction to respond to the certified question in this case. The constitution provides that the judicial power of the state is vested exclusively in one court of justice, and further provides that the Supreme Court shall have general superintending control over all courts; power to issue, hear and determine prerogative and remedial writs; and appellate jurisdiction as provided by rules of the Supreme Court. MCR 7.305(B) provides that a court certifying a question to the Supreme Court shall furnish the Court with a certificate containing a factual statement and the question to be answered. It does not in terms require that the response to the certified question be determinative of the controversy. In responding to a certified question by a federal court, the Supreme Court does not exercise its power of general superintending control over all courts, because the constitution does not confer any authority on the Court to exercise such control over federal courts. Nor does the court exercise its power to issue, hear and determine prerogative and remedial writs. The Court indeed has the power under the constitution to prescribe rules respecting practice and procedure, but it cannot expand its judicial power beyond its rightful scope in the guise of a rule prescribing practice and procedure. It is apparent that the certification question rule and policy is in need of further consideration by the Court.
In this case, the response to the certified question will not determine the controversy: No binding order or judgment will be entered; the response will not be made effective by a final judgment, decree, or process of the Court; no decision of the Court that will be binding on the parties or that will render an issue res judicata will be entered by the Court. The response does not end the controversy, and the Court has no way of enforcing its judgment by appropriate means. The certified question does not ask, nor does the response of the majority state, whether the judgment of the trial court is to be affirmed or reversed; rather, the application of the response to the certified question is left to the judgment of the United States Court of Appeals or the United States District Court on remand. Thus, it would appear that the response to the certified question is not the exercise of judicial power but is closer to an advisory opinion.
Sommers, Schwartz, Silver & Schwartz, P.C. (by Donald J. Gasiorek and Patrick Burkett), for the plaintiff.
Dickinson, Wright, Moon, Van Dusen & Freeman (by John Corbett O'Meara and Theodore R. Opperwall) for the defendant.

Opinion:
Griffin, J.
Pursuant to MCR 7.305(B), the United States Court of Appeals for the Sixth Circuit has certified, and we have agreed to answer, the following question:
Once a provision that an employee shall not be discharged except for cause becomes legally enforceable under Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich 57[9]; [292 NW2d 880] (1980), as a result of an employee's legitimate expectations grounded in the employer's written policy statements, may the employer thereafter unilaterally change those written policy statements by adopting a generally applicable policy and alter the employment relationship of existing employees to one at the will of the employer in the absence of an express notification to the employees from the outset that the employer reserves the right to make such a change?
We answer in the affirmative. An employer may, without an express reservation of the right to do so, unilaterally change its written policy from one of discharge for cause to one of termination at will, provided that the employer gives aifected employees reasonable notice of the policy change.
i
In its order certifying the question, the Court of Appeals for the Sixth Circuit set forth the following facts:
Kenneth Bankey was employed as a salesman for Storer Broadcasting Company for thirteen years until he was discharged on March 23, 1981. The reason given by Storer Broadcasting was poor job performance. On July 15, 1982, Mr. Bankey filed a complaint in the Michigan Circuit Court for the County of Oakland alleging that throughout his employment with Storer, there existed a policy that Storer would not terminate its employees without just cause, and that in reliance upon that policy he remained in Storer's employ for more than twelve years. On August 24, 1982, Storer Broadcasting removed the case from the Circuit Court for Oakland County to the United States District Court for the Eastern District of Michigan on the basis of diversity jurisdiction pursuant to 28 USC 1332. This case is controlled by the substantive law of the State of Michigan.
Mr. Bankey successfully argued in the district court that his employment relationship with Storer was controlled by [a] 1980 Personnel Policy Digest [issued by Storer] which expressly states that "an employee may be . . . discharged for cause." In January, 1981, Storer revised its Digest to eliminate any "for cause" requirement for discharge of its employees. The January 1981 Digest states that "[e]mployment is at the will of the company." The district court found as a matter of law that the 1980 Digest created a "for cause" employment contract and that once such a contract is established under Toussaint, the employer cannot unilaterally alter the employment relationship as to existing employees to permit discharge at will. The court's ruling on this issue was made following the defendant's motion for directed verdict at the close of plaintiffs case.
A jury awarded Mr. Bankey $55,000 in damages on his claim that Storer had breached its obligation not to discharge without cause. Storer's appeal in the United States Court of Appeals for the Sixth Circuit precipitated the certified question.
ii
This Court granted the request to answer the certified question in order to resolve some of the uncertainty concerning the scope of what has come to be known as the Toussaint "handbook excep tion" to the employment-at-will doctrine. Toussaint modified the presumptive rule of employment at will by finding that a written discharge-for-cause employment policy may become legally enforceable in contract.
In Toussaint, the plaintiff-employee testified that in response to his inquiry about job security at the time of hiring, he was given oral assurance that he would be with the company "as long as I did my job," and was handed a manual of the employer's policies. The manual stated that once a probationary period had been completed, it was the company's "policy" to discharge employees "for just cause only."
The Michigan Court of Appeals set aside a jury verdict for Toussaint on the ground that "a contract for permanent employment or employment for life is a contract for an indefinite period and terminable at the will of either party" and "cannot be made other than terminable at will by a provision that states that an employee will not be discharged except for cause." Toussaint v Blue Cross & Blue Shield of Michigan, 79 Mich App 429, 434-435; 262 NW2d 848 (1977).
However, upon appeal this Court reinstated the jury verdict in Toussaint, and held:
1) a provision of an employment contract providing that an employee shall not be discharged except for cause is legally enforceable although the contract is not for a definite term—the term is "indefinite," and
2) such a provision may become part of the contract either by express agreement, oral or written, or as a result of an employee's legitimate expectations grounded in an employer's policy statements.
3) In Toussaint, as in Ebling,[ ] there was sufficient evidence of an express agreement to justify submission to the jury.
4) A jury could also find for Toussaint based on legitimate expectations grounded in his employer's written policy statements set forth in the manual of personnel policies.[ ]
Prior to terminating the employment relationship, the employer in Toussaint had not revoked or altered its written policy statements which indicated that employees would not be discharged except for cause. Thus the Toussaint Court was not required to consider the duration of the legitimacy of an employee's expectations: Do handbook provisions setting forth a personnel policy of termination for cause support only a limited expectation that the employer will adhere to that policy while it is in effect as official company policy? Or, may an employee legitimately expect that discharge for cause has become a permanent feature of his employment contract with the company?
in
This Court indicated in Toussaint, supra, pp 614- 615, that an employer's right to make unilateral policy changes survives Toussaint's holding that employer statements of policy can give rise to contractual rights:
We hold that employer statements of policy . . . can give rise to contractual rights in employees without evidence that the parties mutually agreed that the policy statements would create contractual rights in the employee, and, hence, although the statement of policy is signed by neither party, can be unilaterally amended by the employer without notice to the employee, and contains no reference to a specific employee, his job description or compensation, and although no reference was made to the policy statement in pre-employment interviews and the employee does not learn of its existence until after his hiring. [Emphasis added.]
Subsequent dictum, however, can be read as requiring that employees be given advance notice, directly or indirectly, that the employer reserves the right to make changes in written policies:
An employer who establishes no personnel policies instills no reasonable expectations of performance. Employers can make known to their employees that personnel policies are subject to unilateral changes by the employer. Employees would then have no legitimate expectation that any particular policy will continue to remain in force. [Id., p 619.]
In a brief submitted in connection with our consideration of the certified question, Storer asserts that an employer may unilaterally change or adopt new personnel policies without having explicitly reserved the right to do so because only a unilateral contract is formed when an employee is hired for an indefinite period. Storer reasons that when an employee continues to work following an employer's unilateral change in policy, the employee's continued employment signifies acceptance of, and provides the necessary consideration for, a new unilateral contract.
A unilateral contract is one in which the promisor does not receive a promise in return as consideration. 1 Restatement Contracts, § 12, 52, pp 10-12, 58-59. In simplest terms, a typical employment contract can be described as a unilateral contract in which the employer promises to pay an employee wages in return for the employee's work. In essence, the employer's promise constitutes the terms of the employment agreement; the employee's action or forbearance in reliance upon the employer's promise constitutes sufficient consideration to make the promise legally binding. In such circumstances, there is no contractual requirement that the promisee do more than perform the act upon which the promise is predicated in order to legally obligate the promisor. Toussaint, supra, pp 630-631 (separate opinion of Ryan, J.), citing Adolph v Cookware Co of America, 283 Mich 561; 278 NW 687 (1938).
In a typical situation, where employment is for an indefinite duration, the unilateral contract framework provides no answer to the question: When will the act bargained for by the employer be fully performed? The answer to that question depends on the characterization of the "act" for which the promise is exchanged. If the "act" is simply a day's work (for a day's wage), then Storer's argument makes sense: The employer's offer is renewed each day, and each day's performance by the employee constitutes a new acceptance and a new consideration. But such a characterization can be strikingly artificial. Few employers and employees begin each day contemplating whether to renew or modify the employment contract in effect at the close of work on the previous day.
In his brief, plaintiff Bankey does not clearly state whether he relies on unilateral or a bilateral contract theory. He simply argues that any unilateral attempt by Storer to change an existing discharge-for-cause policy can be no more than a proposal for modification of the contract for which mutual assent would be required. However, Ban-key admonishes us that there must be a "meeting of the minds" upon all essential points to constitute a valid contract, citing, among others, Professional Corporation v Marks, 373 Mich 673; 131 NW2d 60 (1964); Fisk v Fisk, 328 Mich 570; 44 NW2d 184 (1950); Universal Leaseway Systems, Inc v Herrud & Co, 366 Mich 473; 115 NW2d 294 (1962).
The major difficulty with such an argument as applied to the question before us is that the contractual obligation which may not be modified without mutual assent, under Bankey's theory, could have arisen without mutual assent under Toussaint's own terms: "We hold that employer statements of policy . . . can give rise to contractual rights in employees without evidence that the parties mutually agreed that the policy statements would create contractual rights in the employee . . . ." Toussaint, supra, pp 614-615. Under circumstances where "contractual rights" have arisen outside the operation of normal contract principles, the application of strict rules of contractual modification may not be appropriate.
IV
While a majority of jurisdictions now recognize some type of "handbook exception" to the employment-at-will doctrine, there is no clear consensus as to either the legal theory supporting the handbook exception or the scope of the exception. Some of the cases suggest that enforceability of a handbook policy turns on an individual employee's reliance upon its provisions, though the extent to which detrimental reliance or promissory estoppel is a necessary element is not always made clear. Other courts have employed the unilateral contract theory to find an offer and acceptance of handbook provisions as terms of an employment contract.
The issue now before us—whether a written discharge-for-cause policy may be modified by the employer without explicit reservation at the outset of the right to do so—has been addressed by two other courts. In Chambers v Valley Nat'l Bank, 3 IER Cases 1476 (Ariz, 1988); a bank employee hired in 1971 claimed that her layoff in 1987 breached a contractual obligation created by the bank's personnel manual. In 1984, following adoption by the Arizona Supreme Court of a handbook exception to the employment-at-will doctrine, the bank revised its manual and disclaimed any obligation to discharge only for cause. The United States District Court for the District of Arizona held that, given the 1984 disclaimer, the plaintiff could not reasonably have relied thereafter on the handbook as creating a contract guaranteeing discharge only for cause. Chambers, supra, p 1478. The court characterized the disclaimer as an offer of modification of a unilateral contract which the plaintiff accepted by continuing to work for the bank.
In Thompson v Kings Entertainment Co, 653 F Supp 871 (ED Va, 1987), the plaintiff employee painted signs at a Virginia theme park. In 1980, three years after he was hired, the plaintiff was given a personnel manual which included a discharge-for-cause provision. Subsequently, the theme park changed ownership, and in July, 1985, a new manual providing for employment at will was distributed. In August, 1985, the plaintiff was discharged, and he thereafter filed a diversity action in federal court, contending that the 1980 manual and various representations of his employer rebutted the presumption of employment at will. His employer argued that even if the 1980 manual created a discharge-for-cause contract, distribution in 1985 of the new manual served to reinvoke plaintiffs employment-at-will status.
Even though the Virginia Supreme Court had not recognized a handbook exception, the federal district court nevertheless rejected the employer's motion for summary judgment, finding that the effect of the 1985 manual on plaintiffs status turned on whether he had accepted the change of status and received consideration for it. The court held that acceptance could not be inferred merely from plaintiffs continuing to work, and remanded the case for a jury determination of the questions of acceptance and consideration. Thompson, supra, p 876.
In addition, courts in at least five other jurisdictions have commented in dicta on the effect under similar circumstances of an employer's modification of written employment policy statements. Four of these courts have employed unilateral contract theory to analyze the enforceability of handbook provisions. In the earliest of such cases, Langdon v Saga Corp, 569 P2d 524, 528 (Okla Ct App, 1976), an Oklahoma appellate court concluded that a personnel manual's provision could supplant prior contractual terms and become a new contract "which defined the employer-employee relationship during the period the policy was in effect and the employee performed." (Emphasis added.) This conclusion was adopted by the United States Court of Appeals for the Tenth Circuit, applying Oklahoma law, in Vinyard v King, 728 F2d 428, 432 (CA 10, 1984).
The Minnesota Supreme Court, in Pine River State Bank v Mettille, 333 NW2d 622, 627 (Minn, 1983), noted that contractual obligations arising from handbooks are revocable by modification.
In the case of unilateral contracts for employment, where an at-will employee retains employment with knowledge of new or changed conditions, the new or changed conditions may become a contractual obligation. In this manner, an original employment contract may be modified or replaced by a subsequent unilateral contract.
The Supreme Court of New Jersey suggested in a footnoted dictum that contractual obligations arising from handbooks are revocable for legitimate business reasons.
The contract arising from the manual is of indefinite duration. It is not the extraordinary "lifetime" contract explicitly claimed in Savarese [v Pyrene Mfg Co, 9 NJ 595; 89 A2d 237 (1952)]. For example, a contract arising from a manual ordinarily may be terminated when the employee's performance is inadequate; when business circumstances require a general reduction in the employment force, the positions eliminated including that of plaintiff; when those same circumstances require the elimination of employees performing a certain function, for instance, for technological reasons, and plaintiff performed such functions; when business conditions require a general reduction in salary, a reduction that brings plaintiff's pay below that which he is willing to accept; or when any change, including the cessation of business, requires the elimination of plaintiff's position, an elimination made in good faith in pursuit of legitimate business objectives: all of these terminations, long before the expiration of "lifetime" employment, are ordinarily contemplated in a contract arising from a manual, although the list does not purport to be exhaustive. [Woolley v Hoffman-LaRoche, Inc, 99 NJ 284, 301, n 8; 491 A2d 1257, 1266 (1985).]
In addition, the Alabama Supreme Court pointed to the revocability of handbook obligations as support for its conclusion that to enforce such provisions while they are in effect would not be unduly burdensome to employers. Quoting from Perritt, Employee Dismissal Law and Practice, p 150, the court observed that "the unilateral offer made by the employer may be characterized . . . as follows: 'I promise I will not dismiss you without cause (or without exhausting specified procedures) unless I change this policy before you are discharged.' " Hoffman-LaRoche, Inc v Campbell, 512 So 2d 725, 734-735 (Ala, 1987).
Finally, without relying on unilateral contract theory, a Missouri court provided comment concerning the legal ability of an employer to modify such a written policy statement. In Enyeart v Shelter Mutual Ins Co, 693 SW2d 120, 123 (Mo App, 1985), the Missouri Court of Appeals, Western District, after referring to the reasoning of Toussaint, supra, stated that "if an employer elects to establish policies in its relations with employees and publishes those policies in a document distributed to employees, the employer is contractually bound to observe those policies until they are modiñed or withdrawn(Emphasis added.)
v
Without rejecting the applicability of unilateral contract theory in other situations, we find it inadequate as a basis for our answer to the question as worded and certified by the United States Court of Appeals. We look, instead, to the analysis employed in Toussaint which focused upon the benefit that accrues to an employer when it establishes desirable, personnel policies. Under Toussaint, written personnel policies are not enforceable because they have been "offered and accepted" as a unilateral contract; rather, their enforceability arises from the benefit the employer derives by establishing such policies.
While an employer need not establish personnel policies or practices, where an employer chooses to establish such policies and practices and makes them known to its employees, the employment relationship is presumably enhanced. The employer secures an orderly, cooperative and loyal work force, and the employee the peace of mind associated with job security and the conviction that he will be treated fairly. No pre-employment negotiations need take place and the parties' minds need not meet on the subject; nor does it matter that the employee knows nothing of the particulars of the employer's policies and practices or that the employer may change them unilaterally. It is enough that the employer chooses, presumably in its own interest, to create an environment in which the employee believes that, whatever the personnel policies and practices, they are established and official at any given time, purport to be fair, and are applied consistently and uniformly to each employee. The employer has then created a situation "instinct with an obligation." [Toussaint, supra, p 613. Emphasis added.]
Under the Toussaint analysis, an employer who chooses to establish desirable personnel policies, such as a discharge-for-cause employment policy, is not seeking to induce each individual employee to show up for work day after day, but rather is seeking to promote an environment conducive to collective productivity. The benefit to the employer of promoting such an environment, rather than the traditional contract-forming mechanisms of mutual assent or individual detrimental reliance, gives rise to a situation "instinct with an obligation." When, as in the question before us, the employer changes its discharge-for-cause policy to one of employment at will, the employer's benefit is correspondingly extinguished, as is the rationale for the court's enforcement of the discharge-for-cause policy.
Even though a discharge-for-cause policy may be modified or revoked, while such a policy remains in effect, "the employer may not treat its promise as illusory" by refusing to adhere to the policy's terms. Toussaint, p 619. It has been suggested that if such a policy is revocable, it is of no value, and thus is the equivalent of an illusory promise. Of course, a permanent job commitment would be highly prized in the modern work force. However, it does not follow that anything less than a permanent job commitment is without meaning or value. Indeed, the prevalence of job security provisions in collective bargaining agreements that typically expire after only a few years attests to the fact that such commitments need not be permanent to have value.
Furthermore, it is important to recognize that even though an employment policy is revocable, the Toussaint approach to employer obligation promotes stability in employment relations in two significant ways: by holding employers accountable for personnel policies that "are established and official at any given time," and by requiring that such policies be "applied consistently and uniformly to each employee." Toussaint holds that an employee may "legitimately expect" that his employer will uniformly apply personnel policies "in force at any given time." Id.
It is one thing to expect that a discharge-for-cause policy will be uniformly applied while it is in effect; it is quite a different proposition to expect that such a personnel policy, having no fixed duration, will be immutable unless the right to revoke the policy was expressly reserved. The very definition of "policy" negates a legitimate expectation of permanence. "Policy" is defined as "a definite course or method of action selected (as by a government, institution, group, or individual) from among alternatives and in the light of given conditions to guide and usu[ally] determine pres ent and future decisions; . a projected program consisting of desired objectives and the means to achieve them . . . ." Webster's Third New International Dictionary, Unabridged Edition (1964). In other words, a "policy" is commonly understood to be a flexible framework for operational guidance, not a perpetually binding contractual obligation. In the modern economic climate, the operating policies of a business enterprise must be adaptable and responsive to change.
Were we to answer the certified question by holding that once an employer adopted a policy of discharge for cause, such a policy could never be changed short of successful renegotiation with each employee who worked while the policy was in effect, the uniformity stressed in Toussaint, supra, pp 613, 619, 624, would be sacrificed. If an employer had amended its handbook from time to time, as often is the case, the employer could find itself obligated in a variety of different ways to any number of different employees, depending on the modifications which had been adopted and the extent of the work force turnover. Furthermore, were we to answer the certified question as plaintiff Bankey requests, many employers would be tied to anachronistic policies in perpetuity merely because they did not have the foresight to anticipate the Court's Toussaint decision by expressly reserving at the outset the right to make policy changes.
While we hold today that an employer may make changes in a written discharge-for-cause policy applicable to its entire work force or to specific classifications without having reserved in advance the right to do so, we caution against an assumption that our answer would condone changes made in bad faith—for example, the temporary suspension of a discharge-for-cause policy to facilitate the firing of a particular employee in contravention of that policy.
The principles on which Toussaint is based would be undermined if an employer could benefit from the good will generated by a discharge-for-cause policy while unfairly manipulating the way in which it is revoked. Fairness suggests that a discharge-for-cause policy announced with flourishes and fanfare at noonday should not be revoked by a pennywhistle trill at midnight. We hold that for the revocation of a discharge-for-cause policy to become legally effective, reasonable notice of the change must be uniformly given to affected employees.
We emphasize that our answer today is necessarily limited by the wording of the certified question which asks whether an employer under the circumstances set forth may unilaterally change from a discharge-for-cause to an employment-at-will policy.
We answer the certified question in the affirmative. An employer may, consistent with Toussaint, unilaterally change a written discharge-for-cause policy to an employment-at-will policy even though the right to make such a change was not expressly reserved from the outset.
Riley, C.J., and Brickley and Cavanagh, JJ., concurred with Griffin, J.
Boyle and Archer, JJ., concurred in the result.
See 425 Mich 1202 (1986).
We have been provided copies of the briefs and appendix filed with the United States Court of Appeals for the Sixth Circuit. Neither the record nor the issues presented there are before us, except for the certified question.
We use the term "handbook exception" to refer to an employer's written policy statements applicable to the work force in general or to specific classifications of the work force, rather than to an individual employee.
In their joint request for oral argument filed with this Court, the parties stated that "following this Court's decision in Toussaint. . ., uncertainty has existed for both employers and employees as to an employer's right to change its written policy statements. The certified question here presents for this Court an opportunity to clarify an important aspect of Michigan employment contract law, as well as to provide practical guidance and certainty for Michigan employers and employees."
Lynas v Maxwell Farms, 279 Mich 684, 687; 273 NW 315 (1937).
Toussaint, supra, p 598.
Id.
In Ebling v Masco Corp, 408 Mich 579; 292 NW2d 880 (1980), a companion case decided in the same opinion as Toussaint, the employee claimed that his discharge violated an oral employment agreement which permitted discharge only for cause. He testified that Masco told him that if he was "doing the job" he would not be discharged.
Id., pp 598-599.
According to the Reporter's note, definitions of unilateral and bilateral contracts were not included in the Second Restatement of Contracts, "because of doubt as to the utility of the distinction . . . ." Restatement Contracts, 2d, Reporter's Note, § 1, p 8. Nevertheless, as one commentator sees it, unilateral contract theory has not only persisted, its use by appellate courts has increased, particularly in employment dispute cases. See Pettit, Modem unilateral contracts, 63 Bost ULR 551, 560 (1983).
Bankey argues that the provisions of 1941 PA 238, MCL 566.1; MSA 26.978(1), setting out the limitations on contractual modifications of agreements concerning real or personal property, should be applied in this case. While a federal district court has recently found this provision to be applicable to employment contracts, Small v Chemlawn Corp, 584 F Supp 690, 692-693 (WD Mich, 1984), aff'd 765 F2d 146 (CA 6, 1985), we decline to address the question of its general applicability to employment contracts at this time. We find only that the provision is inapplicable to discharge-for-cause obligations arising solely under Toussaint.
Hoffman-LaRoche, Inc v Campbell, 512 So 2d 725 (Ala, 1987); Leikvold v Valley View Community Hosp, 141 Ariz 544; 688 P2d 170 (1984) ; Chambers v Valley Nat'l Bank, 3 IER Cases 1476 (Ariz, 1988); Cleary v American Airlines, 111 Cal App 3d 443; 168 Cal Rptr 722 (1980); Brooks v Trans World Airlines, Inc, 574 F Supp 805 (D Colo, 1983) (applying Colorado law); Continental Air Lines, Inc v Keenan, 731 P2d 708 (Colo, 1987); Lincoln v Sterling Drug, Inc, 622 F Supp 66 (D Conn, 1985) (applying Connecticut law); Green v Howard Univ, 134 US App DC 81; 412 F2d 1128 (1969); Kinoshita v Canadian Pacific Airlines, 724 P2d 110 (Hawaii, 1986); Watson v Idaho Falls Consolidated Hosp, Inc, 111 Idaho 44; 720 P2d 632 (1986); Duldulao v St Mary of Nazareth Hosp Ctr, 115 Ill 2d 482; 505 NE2d 314 (1987); Allegri v Providence-St Margaret Health Ctr, 9 Kan App 2d 659; 684 P2d 1031 (1984); Wyman v Osteopathic Hosp of Maine, Inc, 493 A2d 330 (Me, 1985); Staggs v Blue Cross of Maryland, Inc, 61 Md App 381; 486 A2d 798 (1985), cert den 303 Md 295; 493 A2d 349 (1985); Toussaint, supra; Pine River State Bank v Mettille, 333 NW2d 622 (Minn, 1983); Morris v Lutheran Medical Ctr, 215 Neb 677; 340 NW2d 388 (1983); Southwest Gas Corp v Ahmad, 99 Nev 594; 668 P2d 261 (1983); Woolley v Hoffman-LaRoche, Inc, 99 NJ 284; 491 A2d 1257 (1985), modified on other grounds 101 NJ 10; 499 A2d 515 (1985); Forrester v Parker, 93 NM 781; 606 P2d 191 (1980); Weiner v McGraw-Hill, Inc, 57 NY2d 458; 457 NYS2d 193; 443 NE2d 441 (1982). But see Sabetay v Sterling Drug, Inc, 69 NY2d 329; 514 NYS2d 209; 506 NE2d 919 (1987); Bolling v Clevepak Corp, 20 Ohio App 3d 113; 484 NE2d 1367 (1984); Smith v Teledyne Industries, Inc, 578 F Supp 353 (ED Mich, 1984) (applying Ohio law); Langdon v Saga Corp, 569 P2d 524 (Okla Ct App, 1976) (severance pay); Vinyard v King, 728 F2d 428 (CA 10, 1984) (applying Oklahoma law); Yartzoff v Democrat-Herald Publishing Co, 281 Or 651; 576 P2d 356 (1978); Wolk v Saks Fifth Ave, 728 F2d 221 (CA 3, 1984) (applying Pennsylvania law); Small v Springs Industries, Inc, 292 SC 481; 357 SE2d 452 (1987); Osterkamp v Alkota Mfg, Inc, 332 NW2d 275 (SD, 1983); Hamby v Genesco, Inc, 627 SW2d 373 (Tenn App, 1981). But see Bringle v Methodist Hosp, 701 SW2d 622 (Tenn App, 1985); Smith v Kerrville Bus Co, Inc, 709 F2d 914 (CA 5, 1983) (applying Texas law). But see Reynolds Mfg Co v Mendoza, 644 SW2d 536 (Tex Civ App, 1982); Piacitelli v Southern Utah State College, 636 P2d 1063 (Utah, 1981) (educational institutions); Sherman v Rutland Hosp, 146 Vt 204; 500 A2d 230 (1985); Benoir v Ethan Allen, Inc, 147 Vt 268; 514 A2d 716 (1986); Barger v General Electric Co, 599 F Supp 1154 (WD Va, 1984) (applying Virginia law); Thompson v Kings Entertainment Co, 653 F Supp 871 (ED Va, 1987) (applying Virginia law); Thompson v St Regis Paper Co, 102 Wash 2d 219; 685 P2d 1081 (1984); Ferraro v Koelsch, 124 Wis 2d 154; 368 NW2d 666 (1985); Mobil Coal Producing, Inc v Parks, 704 P2d 702 (Wyo, 1985).
See Leikvold, Wyman, Morris, and Ferraro, n 12 supra, in which the handbook on which the claim was based was handed to or discussed with the plaintiff before or at hiring. See also Wyman, Vinyard, and Sherman, n 12 supra, in which the employee had been required to sign a writing indicating that the employee had read and understood the provisions of the handbook.
See, for example, Chambers, Lincoln, Duldulao, Pine River, Hoffman-LaRoche, Langdon, Vinyard, and Woolley, n 12 supra.
Leikvold, n 12 supra.
Subsequently, the Missouri Supreme Court expressly rejected a handbook exception to the employment-at-will doctrine. Johnson v McDonnel Douglas, 745 SW2d 661 (Mo, 1988).
Our answer might be different, for example, if the employer's change in policy purported to affect employee benefits already accrued or "vested." In such cases, an employee's expectation that changes in policy for the future will not affect entitlements already vested or accrued finds support in our case law. See, for example, Psutka v Michigan Alkali Co, 274 Mich 318; 264 NW 385 (1936) (pensions and death benefits), Gaydos v White Motor Corp, 54 Mich App 143; 220 NW2d 697 (1974) (severance pay), and Clarke v Brunswick Corp, 48 Mich App 667; 211 NW2d 101 (1973) (severance pay). As this Court observed in Ottawa Co v Jaklinski, 423 Mich 1, 26; 377 NW2d 668 (1985), "the concept of 'accrued or vested rights' cannot be stretched to include the right not to be discharged except for just cause."