This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1998).






Charles J. Kotera,


Natrogas, Inc.,


Filed August 22, 2000


Davies, Judge


Hennepin County District Court

File No. 9810469



James P. Paciotti, Andresen, Haag, Paciotti & Butterworth, P.A., 1000 Alworth Building, P.O. Box 745, Duluth, MN 55801 (for respondent)


Scott A. Neilson, Stanley Efron, Henson & Efron, P.A., 1200 Title Insurance Building, 400 Second Avenue South, Minneapolis, MN 55401 (for appellant)


            Considered and decided by Schumacher, Presiding Judge, Klaphake, Judge, and Davies, Judge.

U N P U B L I S H E D   O P I N I O N


            Natrogas, Inc., appeals from the trial court order denying its motion for judgment notwithstanding the verdict or a new trial, contending that, as a matter of law, its employee handbook did not constitute an offer for a contract and that the verdict was not justified by the evidence.  We affirm.


            In August 1997, Natrogas, a propane gas supplier, hired Charles Kotera to deliver propane to residences and businesses.  Kotera received an employee handbook, which he read and signed.  The handbook provided for a graduated system of discipline, ranging from discharge to informal discussion with a supervisor, depending on the seriousness of the incident.

            During a delivery in January 1998, Kotera was rude to a customer and Natrogas promptly fired him.  He sued, contending that his discharge had been contrary to the graduated disciplinary provisions in the handbook.

            At trial, the parties presented sharply differing versions of the incident that led to Kotera’s dismissal (as well as conflicting evidence about whether he had previously been rude to others on the job and whether he had received an oral reprimand).  The incident occurred when Kotera arrived at a customer’s business and found equipment blocking access to the tanks he was to fill.  Kotera admitted he made a rude comment when he was talking to the customer’s manager.  He testified that, in response, the manager “exploded,” swore at him, told him to leave immediately, and threatened to call the police.  Kotera, who reported the incident to his employer afterwards, denied using any profanity himself.

            Natrogas presented testimony from the customer’s plant manager contradicting Kotera.  The manager described Kotera as angrily barging into a meeting room, swearing and acting in a loud, angry, rude, and disruptive manner.  The manager asserted that three or four times he asked Kotera to leave and confirmed that he threatened to call the police.  The manager explained that he swore at Kotera only in response to the language Kotera had used first.

            After the evidence was presented, Natrogas moved for a directed verdict, which the trial court denied.  The matter was submitted to the jury and the jury found, on a special-verdict form, that Natrogas had made an offer of an employment contract to Kotera through the employee handbook, and that it had breached the resulting employment contract when it terminated him.  After the trial court denied its posttrial motions, Natrogas brought this appeal from the judgment.


            We first address the argument by Natrogas that the trial court should have granted a directed verdict or judgment notwithstanding the verdict (JNOV) because, as a matter of law, the handbook did not constitute an offer of an employment contract.  Natrogas argues that the trial court should have reviewed the handbook and decided whether it constituted a contract without submitting the issue to the jury.

An appellate court reviews de novo a district court's decision on a motion for a directed verdict or JNOV.  Pouliot v. Fitzsimmons, 582 N.W.2d 221, 224 (Minn. 1998) (JNOV); Nemanic v. Gopher Heating & Sheet Metal, Inc., 337 N.W.2d 667, 669 (Minn. 1983) (directed verdict).

            In reviewing an order denying a directed verdict, an appellate court will consider whether the evidence was sufficient to present a fact question to the jury.  Nemanic, 337 N.W.2d at 669.  Such a motion should be granted only

when it would clearly be its duty to set aside a contrary verdict as manifestly against the evidence or when such a verdict would not comply with the applicable law.


Midland Nat’l Bank v. Perranoski, 299 N.W.2d 404, 409 (Minn. 1980).  Similarly, the appellate court must affirm denial of a motion for JNOV “if there is any competent evidence reasonably tending to sustain the verdict.”  Rettman v. City of Litchfield, 354 N.W.2d 426, 429 (Minn. 1984).  The appellate court must consider the evidence in the light most favorable to the nonmoving party.  See Pouliot, 582 N.W.2d at 224 (JNOV); Midland Nat’l Bank, 299 N.W.2d at 409 (directed verdict).

            An employee handbook may constitute an offer for a unilateral contract between the employee and employer.  Pine River State Bank v. Mettille, 333 N.W.2d 622, 626-30 (Minn. 1983).  A contract may be formed if

(1) the terms are definite in form; (2) the terms are communicated to the employee; (3) the offer is accepted by the employee; and (4) consideration is given.


Feges v. Perkins Restaurants, Inc., 483 N.W.2d 701, 707 (Minn. 1992) (citing Pine River, 333 N.W.2d at 626-27)).  Here, Natrogas claims that the handbook terms are not definite enough to create a contract as a matter of law.  “Whether the language rises to the level of a binding contract is a legal determination for the court.”  Ward v. Employee Dev. Corp., 516 N.W.2d 198, 203 (Minn. App. 1994), review denied (Minn. July 8, 1994).  But if the language limits the ability of the employer to dismiss employees at will, even if it does not cover every contingency, “the language is definite enough to permit a jury to conclude that plaintiffs received certain contractual rights.  Lewis v. Equitable Life Assurance Soc’y, 389 N.W.2d 876, 883 (Minn. 1986).

            For a fact-finder to determine whether a contract has been breached, the terms of the contract must be definite enough so that the fact-finder can interpret and apply them.  Hunt v. IBM Mid America Employees Fed. Credit Union, 384 N.W.2d 853, 857 (Minn. 1986).  In deciding the contract issue, this court is not limited to the language of the handbook, but, in this procedural posture, may consider all of the evidence presented at trial.  DLH, Inc. v. Russ, 566 N.W.2d 60, 70 (Minn. 1997).

            At issue is whether the handbook is sufficiently definite to constitute an offer.  Natrogas contends that its handbook cannot be interpreted as an offer, as a matter of law, because it uses permissive, not mandatory, language.  Further, while the handbook twice warns that an employee may be terminated immediately for a serious violation, Natrogas contends it does not sufficiently define what such an offense would be.  Natrogas argues that, as in Hunt, the language in the handbook is, as a matter of law, too vague to create an offer.  See Hunt, 384 N.W.2d at 857.

            Unlike Hunt, however, the language of the handbook here shows a graduated form of disciplinary action, depending on the seriousness of the incident.[1]  This is similar to the provisions of Pine River, in which the handbook set out the procedures to be followed for job termination.  Pine River, 333 N.W.2d at 626 n.3, 630.  The handbook here provides for separation from the company “[i]n the event of continued offenses after warning, or an extremely serious violation.”  It specifies that violation of state or federal drug-abuse laws is one offense that would lead to immediate termination.

This is more definite than the handbook found to be a contract offer in Lewis v. Equitable Life Assurance Soc’y, 389 N.W.2d 876, 880 n.1, 883 (Minn. 1986).  In Lewis, the handbook did not identify any instances of serious misconduct that could lead to immediate dismissal.  Further, the Natrogas handbook does not contain any limiting language showing that the company did not intend to be bound by its provisions.  See Kulkay v. Allied Central Stores, Inc., 398 N.W.2d 573, 578 (Minn. App. 1986) (absence of limiting language supports conclusion employer intended manual to constitute offer), review denied (Minn. Feb. 13, 1987).

The trial court chose to submit the contract issue to the jury, as she was free to do.  In doing so, the trial court instructed the jury as follows:

                                    In considering whether the language of an employee handbook is definite enough to form a contract you may consider several factors as follows:  Does the handbook use mandatory as opposed to permissive language.  Does the handbook have a disclaimer, indicating the handbook is not intended to be a contractual offer.  Does the handbook specifically itemize reasons for discipline.  Does the handbook define cause for immediate dismissal.


This was a proper instruction and Natrogas does not challenge its accuracy.  Thus, the trial court, using an accurate instruction, properly submitted to the jury the question whether Natrogas offered its employees certain contractual rights and limiting its right to dismiss its employees freely.

            We next address Natrogas's argument that the trial court should have ordered a new trial because the evidence did not support the jury’s verdict.  When an appellate court considers an appeal from the denial of a motion for a new trial,

the verdict must stand unless it is manifestly and palpably contrary to the evidence, viewed in a light most favorable to the verdict.


ZumBerge v. Northern States Power Co., 481 N.W.2d 103, 110 (Minn. App. 1992), review denied (Minn. Apr. 29, 1992).

            Each side presented evidence to the jury supporting its theory and discrediting the opponent's version of events.  Considering the evidence in the light most favorable

to Kotera, the jury was justified in determining that Natrogas had an employment contract with Kotera, which it breached by dismissing him without prior warning.


[1] The manual provides:


                        For your own protection and that of your fellow employees, as well as the company, it is necessary to enforce certain working rules to maintain a safe workplace and an efficient organization.  Depending upon the degree of seriousness in each incident, violators may be given either written warning notice, final written warning notice, time off without pay, or written notice of discharge.


Twenty-three examples of activities that could lead to disciplinary action are listed.  Only the prohibition against the violation of drug laws is specifically listed as warranting immediate dismissal.


The disciplinary action provision provides that it


                        is intended to help an employee improve his or her relationship with other employees, improve job performance and to protect the interest of other employees and the interest of the company.  The most frequently used measure for minor infractions is an informal discussion with the supervisor.  Normally, no formal record of such discussion is placed in the employee’s personnel file.  For more serious or repetitive occurrences an oral reprimand will be issued, and a report of the incident will be documented.  When the incident is serious, and could, if repeated, lead to suspension or discharge, a written warning will be issued, and the employee will be asked to sign the reprimand, which will be entered in the personnel file.  In the event of continued offenses after warning, or an extremely serious violation, there will be occasions when separation from the company may be necessary.  Responsible attention to the effective performance of your job assignment will minimize the possibility of this occurring.