## Facts

- Westinghouse operated an employee suggestion program inviting cost-saving ideas and stating that cash awards would be paid for adopted suggestions within a specified range.
- Employees submitted ideas on a standard form stating that the local Suggestion Committee’s decisions on eligibility and award amount would be final, with limited rights to reopen or resubmit rejected suggestions.
- Harry Schott, a Westinghouse employee, submitted a suggestion in 1962 to use fabricated heavy-gauge steel instead of cast aluminum for certain circuit breaker panels.
- The Suggestion Committee rejected the suggestion, citing anticipated redesign and testing costs that would outweigh savings, while stating the idea could be considered if a redesign occurred for other reasons.
- Schott resubmitted the same suggestion in 1963; it was again rejected in 1964 for similar reasons and additional design considerations.
- Schott alleged that later in 1964 Westinghouse redesigned the panels, adopted his basic idea, and realized substantial savings, but refused to grant him an award.
- Schott sued for breach of contract and, alternatively, unjust enrichment seeking an accounting and a share of the alleged savings.
- The trial court sustained demurrers dismissing both counts; the Superior Court affirmed dismissal of the contract claim but reinstated unjust enrichment; the Supreme Court of Pennsylvania reviewed on preliminary objections (demurrer), accepting well-pleaded facts and reasonable inferences as true for that stage.

## Issues

1. Whether the suggestion program and submission form created an enforceable contract requiring payment if the employer implemented the employee’s idea.
2. Whether the employee stated a claim for unjust enrichment where the employer allegedly used the rejected idea and obtained cost savings.

## Decision

- Affirmed dismissal of the breach of contract claim.
- Reversed dismissal of the unjust enrichment claim.
- Remanded for further proceedings on the unjust enrichment theory.
- Held that, on demurrer, the court must assume the truth of well-pleaded allegations, including that the employer used the employee’s idea and benefitted from it.

## Legal Principles

- A demurrer admits all well-pleaded material facts and reasonable inferences for purposes of testing legal sufficiency.
- A discretionary suggestion-plan award structure, coupled with an express clause making the committee’s decision final as to eligibility and award amount, does not create an enforceable contractual promise to pay merely because an idea is later implemented.
- Unjust enrichment (quasi-contract/contract implied-in-law) is a restitutionary obligation imposed to prevent retention of a benefit under circumstances that may be unjust; it does not require mutual assent or an express promise.
- The absence of an enforceable contract does not bar a restitution claim where the plaintiff plausibly alleges that the defendant used the plaintiff’s idea and obtained a benefit.
- A “finality” clause governing internal award decisions may defeat contract-based recovery but does not necessarily foreclose restitution if the employer allegedly retained benefits from the employee’s idea without payment; whether enrichment is unjust is generally factual.

## Conclusion

The court held that the employer’s suggestion program, which reserved final discretion to the suggestion committee, did not form an enforceable contract for payment, but the employee’s allegations that the employer used his rejected idea and realized savings were sufficient to proceed on unjust enrichment and required factual development on remand.


Schott v. Westinghouse Elec. Corp., 436 Pa. 279, 259 A.2d 443 (Pa. 1969)