Morosetti v. Louisiana Land & Exploration Co. ( 1989 )

OPINION

McDERMOTT, Justice.

The class action plaintiffs in this case were employees of the Hussey Company. The Hussey Company, a wholly owned subsidiary of the appellant, was sold in May 1984. When the sale was consummated, the employees were offered either new positions with the purchasers or up to a maximum of twenty-six weeks severance pay for each year of service. The class plaintiffs chose to accept employment with the purchasing company and now claim that they are entitled to the twenty-six weeks severance pay as well. The appellee contends that while there was indeed a severance pay policy at their company, it was not communicated as an offer or inducement to accept or continue employment with their concern and therefore was not an enforceable contract.

The employees were granted a directed verdict at trial, and were sustained on appeal before the Superior Court. The trial judge directed verdict upon his view that there existed a “handbook” offer by the company for severance pay and therefore the requisite offer and acceptance of contract. We cannot agree that the evidence offered by the employees was sufficient to sustain that view. The company from time to time issued flyers outlining various benefits the company offered to employees such as health and life insurance, tuition credits, vacation, and the like. The company however never made known to their employees the policy for severance pay. They kept their policy in a manual for the use of their personnel manager for guidance as occasion arose. The employees could not say other than they believed the company had a policy. They did not know the policy because they were never told. They based their belief and supposition as to its terms upon what occurred when various employees were, from time to time, given severance pay. The amounts given were ■ different with each employee, some more, some less, some none at all. The company never denied that they had a severance pay policy, but insist that its terms were not an inducement to employment because they did not solidify its terms into an offer for mutual or unilateral contract.

It is basic contract law that one cannot suppose, believe, suspect, imagine or hope that an offer has been made. An offer must be intentional, definite,¹ in its terms and communicated,² otherwise the minds cannot meet.³ Nor can one be bound because they are contemplating making an offer, or that they would or should have or that someday they might. An offer must define its terms, specify the thing offered and be an intention of the present or the future to be bound.

A handbook distributed to employees as inducement for employment may be an offer and its acceptance a contract. The employees here, however, could not show, other than an internal consideration of policy for what might be given, if and when they announced a policy for all employees. It is not sufficient to show only that they had a policy. It must be shown that they intended to offer it as a binding contract. Nor can their intention be proved by bits and pieces of their policy given individual employees at different times under varying circumstances.

The employees in their evidence were able only to show that they believed there was a policy of severance pay. The only evidence was that in a company manual, which unlike other policies that were communicated to employees by flyers, there were procedures for severance the company followed from time to time. The employees materially differed in testimony on its terms. Some testified they felt, heard, expected, or were entitled. They all differed on the amount or term of service required for whatever severance pay might be available. In short, all the evidence offered could prove no more than that each employee had a different view and different expectation. The evidence at best was a general feeling that there was a severance pay policy.

Again, it is basic contract law that there must be more than a general awareness; there must be an intended, definite, specific offer before any offer can be accepted or any enforceable contract created. One cannot suppose that another made an offer, was willing to make an offer or intended sometime to do so. Minds, for contractual obligation, must meet upon definite, specific things.

The learned trial judge fell into error when he equated an uncommunicated personnel manual with a “handbook.” The employees here however, could show no more than an employer’s internal consideration of a policy for what might be given when occasion arose. It is not sufficient to show they had a policy. It must be shown they offered it as binding terms of employment. A company may indeed have a policy upon which they intend to act, given certain circumstances or events, but unless they communicate that policy as part of a definite offer of employment they are free to change as events may require. See Richardson v. Charles Cole Memorial Hospital, 320 Pa.Super. 106, 466 A.2d 1084 (1983).

In reviewing the propriety of a directed verdict we accept as true, as must the trial judge, all facts and inferences tending to support the party against whom the motion has been made, rejecting all testimony and references to the contrary. Jozsa v. Hottenstein, 364 Pa.Super. 469, 528 A.2d 606 (1987). In this case the appellants against whom the verdict was directed are entitled to that consideration. In that light we reverse.

ZAPPALA, J., files a concurring opinion. LARSEN, J., files a dissenting opinion.

1 . Bethlehem Steel Corp. v. Litton Industries, 321 Pa.Super. 357, 468 A.2d 748 (1983), aff'd. 507 Pa. 88, 488 A.2d 581 (1985). Restatement Second Contracts § 33.

2 . Commonwealth v. Prep, 186 Pa.Super. 442, 142 A.2d 460 (1958).

3 . Restatement of Contracts, Second Topics 2-5, §§ 18-70. See also Commonwealth v. Monumental Properties, 459 Pa. 450, 329 A.2d 812 (1974).