## Facts

- Charles Toussaint worked in a middle-management position for Blue Cross & Blue Shield of Michigan and was discharged after about five years.
- Toussaint offered evidence that, when hired, he was told he would be retained as long as he did his job.
- Blue Cross maintained and disseminated a written personnel policy stating employees would be discharged only for just cause, with review procedures.
- Walter Ebling worked in a middle-management position for Masco Corporation and was discharged after about two years.
- Ebling testified he specifically bargained for an assurance that he would not be discharged as long as he performed satisfactorily.
- Ebling’s discharge caused him to lose a valuable stock option, forming a substantial portion of his claimed damages.
- Juries found for both plaintiffs; the Michigan Court of Appeals reversed in Toussaint but affirmed in Ebling; the Michigan Supreme Court consolidated the cases for review.

## Issues

1. Whether oral assurances and/or written personnel policies providing for discharge only for cause can create enforceable contractual limits on termination in employment of indefinite duration.
2. Whether Michigan’s traditional employment-at-will doctrine bars enforcement of such just-cause promises absent a fixed term or additional consideration.

## Decision

- The Michigan Supreme Court reversed the Court of Appeals in Toussaint and reinstated the jury verdict for Toussaint.
- The Court affirmed the judgment for Ebling, leaving the jury verdict intact.
- The Court held that a provision—created by oral assurances, written policy, or both—that an employee will be discharged only for cause is enforceable even when employment is for an indefinite term.
- The Court rejected any requirement that the employee provide consideration beyond performing the job to enforce a just-cause limitation.

## Legal Principles

- The “indefinite hiring is terminable at will” doctrine operates as a default rule of contract construction when the parties have not agreed on duration or termination limits; it is not a substantive bar to enforcing agreed limitations.
- An employer’s communicated personnel policies and representations may become terms of the employment contract and may create enforceable expectations that discharge will occur only for just cause and under stated procedures.
- A just-cause discharge term may be formed through the employer’s unilateral offer of job-security terms, accepted by the employee’s continued performance.
- No separate or additional consideration is required to enforce a just-cause provision in an otherwise indefinite employment relationship.

## Conclusion

The court enforced just-cause job-security commitments arising from employer assurances and personnel policies, treating employment-at-will as a default rule that yields to contract terms—express or implied—limiting discharge to just cause, even without a definite term or additional consideration.


Toussaint v. Blue Cross & Blue Shield of Mich., 408 Mich. 579, 292 N.W.2d 880 (Mich. 1980)