McDonald v. Mobil Coal Producing, Inc.

Craig McDonald (plaintiff) was an employee of Mobil Coal Producing, Inc. (Mobil) (defendant). When he applied and was hired, McDonald signed a statement on his application indicating that he was an at-will employee. McDonald met with his supervisor about rumors that McDonald had sexually harassed a female coworker. Mobil gave McDonald the option of either resigning or being fired. McDonald chose to resign and brought suit, claiming breach of contract based on his employee handbook. The handbook stated that it was a guide to Mobil’s policies and procedures but contained a disclaimer that it was not an employment contract. The handbook also outlined procedures for resolving differences between employees and supervisors, which encouraged open communication and allowed for informal resolution of any dispute. The handbook also contained a disciplinary procedure with multiple steps prior to termination. McDonald alleged that the handbook modified his employee-at-will status and created an employment relationship under which McDonald could only be fired for cause. He alleged that he relied on the handbook in discussing the harassment rumors. Mobil argued that McDonald’s employment was at will and that the handbook did not modify that relationship. The trial court granted summary judgment in favor of Mobil, finding that the handbook was not part of McDonald’s employment contract. McDonald appealed.