Mickshaw v. Coca Cola Bottling Co., Inc.
166 Pa.Super. 148, 70 A.2d 467, 1950 Pa. Super. LEXIS 334 (1949)
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Rule of Law:
An employer's promise to provide a future benefit to an employee is an enforceable unilateral contract if the employee, in reliance on that promise, provides consideration by forbearing from exercising a legal right, such as seeking alternative employment.
Facts:
- On October 1, 1940, the Coca-Cola Bottling Co., Inc. of Sharon (defendant) publicly announced in the Sharon Herald that it would pay any employee called to military service the difference between their government wages and their company wages for the duration of their service.
- William Feinberg, the defendant's manager, personally showed the article to the plaintiff and other employees, stating he would 'take care of' them if they went into the service.
- The plaintiff continued to work for the defendant for two years following this promise, during a period when war industries were offering new and well-paid jobs.
- In October 1942, after receiving a notice to report for a physical examination for the draft, the plaintiff enlisted in the Coast Guard.
- The plaintiff served in the military for approximately 37 months.
- After returning from service in December 1945, the plaintiff resumed working for the defendant until May 1947.
- In September 1947, the plaintiff made his first demand for the pay difference promised by the defendant.
Procedural Posture:
- The plaintiff brought an action in assumpsit against the Coca-Cola Bottling Co. in a trial court to recover the promised pay difference.
- A jury at the trial court returned a verdict in favor of the plaintiff for $1,000.
- The defendant (appellant) filed motions for a new trial and for judgment non obstante veredicto (n.o.v.).
- The trial court denied the defendant's motions.
- The defendant appealed the trial court's judgment to this intermediate appellate court.
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Issue:
Is an employer's promise to pay an employee the difference between their salary and military pay an enforceable unilateral contract supported by consideration when the employee remains with the company in reliance on that promise before enlisting in the armed forces?
Opinions:
Majority - Dithrich, J.
Yes, the employer's promise is an enforceable unilateral contract. A unilateral contract is formed when a promise is exchanged for performance or forbearance. In this case, the plaintiff provided consideration by forbearing from seeking other, potentially more lucrative, employment in the growing war industries in reliance on the defendant's promise of supplementary compensation during military service. The defendant benefited from this arrangement through increased employee morale, loyalty, and public goodwill. The court also found that the manager, Feinberg, had authority to bind the corporation because a majority of the board of directors knew of the promise and acquiesced to it, thereby ratifying his actions. Therefore, the promise was supported by consideration and was a valid, binding contract.
Analysis:
This case serves as a key illustration of how forbearance can constitute valid consideration for a unilateral contract. The court's willingness to infer a 'bargained-for exchange' from the context of the wartime labor market demonstrates a flexible approach to consideration doctrine. It establishes that a public promise made by an employer to its workforce can become a binding contract with an individual employee who performs the requested act or forbearance. The decision also highlights that in closely-held corporations, formal board resolutions are not always necessary to establish corporate authority; ratification can occur through the knowing acquiescence of the directors.
