How Do Handbook Promises Become Employment Contracts?
There are at least two theories of contract formation when an employer has promised job security in an employer handbook or other policy statement: • The first is the unilateral contract theory, first proposed by a state supreme court in 1983 in Pine River State Bank v. Mettille, 333 N.W.2d 622, 115 L.R.R.M. 4493 (Minn. 1983), a seminal opinion not only for Minnesota but for the entire country. See, e.g., Ex parte Graham, 702 So. 2d 1215 (Ala. 1997) (unilateral contract analysis made personnel policies manual an enforceable contract, where there was an offer which provided specific disciplinary actions and the manual contained no disclaimers); • The second is the “instinct with obligation” theory set forth by the Michigan Supreme Court in In re Certified Question ( Bankey v. Storer Broadcasting Co.), 443 N.W. 2d 112 (Mich. 1989). The idea is that the employer gains benefits from issuing the handbook in the form of a more loyal and productive workforce, thereby justifying legal enforcem
