## Facts

- Sharon Holland worked for Earl G. Graves Publishing Co. (Graves), which issued employees a written compensation package at the start of each fiscal year.
- Holland’s compensation package included base pay and the opportunity to earn a year-end bonus if she generated a stated amount of advertising revenue during the fiscal year.
- Holland contended the written package set a specific revenue goal and that she performed during the year in reliance on that goal.
- During the fiscal year, Graves increased Holland’s revenue goal above the figure stated in the written compensation package.
- Graves asserted the revenue goal was increased midway through the fiscal year and that Holland had notice of the change while the year was still in progress.
- Holland asserted the goal was increased retroactively after the fiscal year ended, after she had already completed the revenue-generating work.
- Holland sued in federal court, arguing that the compensation package was an offer for a unilateral contract and that Graves could not change the revenue target after she began performance.

## Issues

1. Whether a written annual compensation package offering a bonus upon meeting a stated revenue goal can constitute an offer for a unilateral contract accepted by the employee’s performance.
2. Whether Graves could raise Holland’s bonus-eligibility revenue goal after Holland began performance, and whether the timing and notice of the change affected enforceability.
3. Whether summary judgment was proper given the parties’ dispute over when the revenue goal was increased.

## Decision

- The court treated the bonus portion of the written compensation package as capable of forming a unilateral contract when it set definite performance conditions and a promised bonus.
- The court recognized that, under unilateral-contract principles, an employer generally may not use a retroactive change in performance conditions to defeat compensation allegedly earned under the original terms.
- The court concluded that the parties’ competing accounts about when the revenue goal was increased (mid-year with notice versus retroactively after year-end) created a genuine dispute of material fact.
- Because the timing and notice of the change were contested and material to whether Holland was entitled to the bonus under the original or revised goal, the court declined to resolve the breach claim as a matter of law at the summary-judgment stage.

## Legal Principles

- A written bonus plan with definite conditions and a defined payout can constitute an offer for a unilateral contract, even in an at-will employment setting.
- A unilateral contract is generally accepted by performance; once the offeree begins performance, the offeror’s ability to change the terms to the offeree’s detriment is limited.
- An employer may not retroactively alter a bonus threshold in order to avoid paying compensation claimed to have been earned under the original written terms.
- When the parties dispute material facts about notice, timing, and whether a change applied prospectively or retroactively, summary judgment on breach of contract is improper.

## Conclusion

Holland framed Graves’s written compensation package as a unilateral contract that she accepted by generating revenue during the fiscal year, and she argued Graves breached by increasing her revenue goal after performance began; the court recognized the unilateral-contract framework but held that factual disputes about when and how the goal was changed prevented summary judgment.


Holland v. Earl G. Graves Publishing Co., 46 F.Supp. 2d 681 (1998)