## Facts

- Richard M. Woolley was hired by Hoffmann-La Roche, Inc. in 1969 as an engineering management employee without an individual written employment contract.
- In December 1969, Woolley received a personnel manual distributed generally to employees.
- The manual included job-security and termination provisions indicating discharge would occur only for cause and after specified disciplinary and “rehabilitation” procedures.
- Woolley was promoted within the company, most recently in 1977 to a leadership role over multiple engineering sections.
- In 1978, after workplace disputes culminating in criticism of Woolley’s work on a requested report, management stated it had “lost confidence” in him and repeatedly demanded his resignation.
- Woolley refused to resign and was discharged in July 1978.
- Woolley sued for breach of contract, claiming the manual’s promises limited the employer’s ability to terminate him at will; other tort claims were dismissed.
- The trial court granted summary judgment to the employer on the ground that the manual did not create contractual rights; the appellate court affirmed.

## Issues

1. Whether terms in an employer’s personnel manual may create enforceable contractual obligations limiting the employer’s right to discharge an employee whose employment is otherwise of indefinite duration and at will.
2. Whether an implied manual promise of discharge only for cause, with specified procedures, can be enforced absent individualized bargaining or separate consideration.
3. What role a disclaimer plays in preventing a personnel manual from being construed as contractually binding.

## Decision

- The New Jersey Supreme Court reversed the summary judgment for the employer and remanded for trial on the contract claim.
- The court held that, absent a clear and prominent disclaimer, an implied promise in an employment manual that discharge will occur only for cause may be enforceable even in an otherwise at-will, indefinite-term employment relationship.
- The court declined to apply stringent rules developed for “lifetime” or “permanent” employment contracts to employer manuals distributed broadly to employees.
- The court concluded that the manual could reasonably be viewed as an offer of a unilateral contract, accepted by employees through continued work.
- On rehearing, the court modified aspects of its discussion of disclaimers but reaffirmed the core rule requiring a clear and prominent disclaimer to avoid contractual effect.

## Legal Principles

- An employer-issued personnel manual containing job-security and termination procedures can constitute an offer of a unilateral contract regarding discharge standards.
- Continued employment may serve as acceptance and consideration for manual-based promises when employees reasonably understand the manual as defining employment terms.
- An implied promise that employees will be discharged only for cause may be enforceable even when the employment is otherwise at will.
- An employer can avoid contractual obligations arising from a manual by using a disclaimer that is clear and prominent and effectively communicates noncontractual intent.
- Where a manual’s language could reasonably create contractual limitations and no clear, prominent disclaimer negates that inference, formation and breach are fact questions inappropriate for summary judgment.

## Conclusion

The court held that personnel manual provisions promising discharge only for cause and specifying termination procedures may be enforceable against an employer unless negated by a clear and prominent disclaimer, and it remanded for trial to determine whether such contractual limitations applied and were breached.


Woolley v. Hoffmann-La Roche, Inc., 99 N.J. 284, 491 A.2d 1257 (N.J. 1985)