## Facts

- Gordon Martin worked for Mann Merchandising, Inc. for more than 11 years as an at-will employee and later became a regional manager.
- Martin asserted Mann had a termination policy providing (1) one week of severance pay for each year of service and (2) two weeks of vacation pay upon termination.
- Martin claimed he learned of the policy after becoming a regional manager, including through a company memorandum and accounts of other departing managers.
- In an affidavit, Martin stated he knew other sales managers received severance and vacation pay consistent with the alleged policy.
- Martin conceded no officer expressly promised him the specific benefits and testified the policy was not why he accepted or stayed in the regional-manager role, though he stated he relied on the policy as part of the employment relationship.
- After his employment ended, Mann paid Martin only about half of what he claimed was owed under the policy.
- Martin sued for the alleged unpaid balance, contending the policy formed a contract implied in fact.
- The trial court granted Mann summary judgment; Martin appealed.

## Issues

1. Whether evidence of an employer’s communicated severance/vacation-pay policy and prior payments to other employees, combined with the employee’s continued employment, can support a contract implied in fact requiring payment upon termination.
2. Whether the employer, as summary-judgment movant, conclusively negated any genuine issue of material fact on the existence of an implied contractual obligation.

## Decision

- The appellate court reversed the summary judgment and remanded.
- Martin’s affidavit and evidence of a written policy and prior consistent payments to other managers raised a genuine issue of material fact on whether an implied-in-fact contract existed.
- Martin’s at-will status did not, as a matter of law, bar a separate contractual obligation to pay severance and vacation benefits if termination occurred.
- Martin’s testimony that he did not take or keep the job because of the policy did not conclusively defeat reliance for purposes of summary judgment.

## Legal Principles

- Summary judgment is improper if the nonmovant’s evidence raises a genuine issue of material fact; the movant must establish entitlement to judgment as a matter of law.
- An employer’s announced and communicated severance/termination-benefit policy may constitute an offer for a unilateral contract.
- An employee may accept such an offer by continuing to work with knowledge of the policy; the continued service may supply consideration supporting an implied-in-fact agreement.
- At-will employment does not preclude an enforceable obligation to pay specified termination benefits if the factfinder determines the employer intended to be bound and the employee continued employment with awareness of the policy.

## Conclusion

The court held that evidence of a written severance/vacation policy and a course of paying other managers under that policy created a triable fact question on an implied-in-fact contract, so the employer was not entitled to summary judgment.


Martin v. Mann Merch. Inc., 570 S.W.2d 208 (Tex. Civ. App.—Houston [1st Dist.] 1978)