The Minnesota Court of Appeals held that a personnel-manual meal-allowance provision never distributed to employees was not communicated as an offer and therefore did not become part of the employment contract.
Outcome: Reversed for appellant.
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(as of 9/30/2026)
Last cited by a Minnesota appellate court in 1992, among the opinions in this site’s citation index.
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What happened
The facts of the case, in plain language.
The Tobiases and Koch were management employees in Montgomery Ward stores from 1977 to 1981, and their duties on two nights of the week required working until the store closed at 9 P.M.
Wards' Personnel Manual provided that management and supervision employees who did not receive extra compensation for night overtime would receive either cash allowances for meals or meals without charge.
The Personnel Manual containing the meal-allowance provision was not distributed to employees, whether managers or hourly employees; beginning employees received only a 'Fact Book' handbook, along with other handbooks and brochures specific to particular duties.
At least two Personnel Manuals were maintained in every store, and the Tobiases served as personnel managers at times during the period involved and were thus familiar with the manual.
Respondents conceded the evening work was mandatory and scheduled two nights per week, so their scheduled quitting time extended to at least 9 P.M., while the manual conditioned meal allowances on work beyond 'normal quitting time,' explained only as 'at least past 6 P.M.'
What the court decided
Three former Montgomery Ward managers sued for unpaid overtime meal allowances under a Personnel Manual provision promising cash or free meals to management employees working past normal quitting time on two evenings a week when they stayed until the store closed at 9 P.M. The claims were tried in conciliation court, and judgments for the employees were entered after Montgomery Ward appealed to district court and a court trial was held. The court of appeals reversed. Under Pine River State Bank v. Mettille, a handbook term becomes part of an employment contract only if it is an offer communicated to the employee, accepted, and supported by consideration. Because Montgomery Ward never distributed the Personnel Manual or otherwise disseminated the meal-allowance provision to employees, the required communication was missing, and the provision never became part of the employment contract.
- A provision in an employer's personnel handbook or manual becomes part of the employment contract only if the requirements for formation of a unilateral contract are met: an offer communicated to the offeree, acceptance by the offeree, and consideration; a manual provision never distributed to employees or otherwise disseminated to them is not communicated as an offer and does not become contractual. (*382)
- Mere employee access to a personnel manual — such as copies maintained in the workplace and consultation by managerial employees — does not satisfy the communication requirement for incorporating manual terms into the employment contract. (*382)
How the court reached its decision
The court's reasoning, step by step.
Whether a Personnel Manual meal-allowance provision that was never distributed to employees became part of their employment contracts. The meal-allowance provision was not in the Fact Book or other handbooks distributed to employees and was not otherwise disseminated to them. Unlike the disciplinary provision held contractual in Pine River, which appeared in the handbook distributed to employees, this provision reached employees only through manuals kept in the store. The supreme court's decision in Cederstrand, where an undistributed personnel manual did not become part of the employment contract, and out-of-state decisions requiring more than employee access confirm that distribution or dissemination is essential to communication. Because the overtime meals allowance provision was not communicated to Wards' management employees, it did not become part of respondents' employment contract, and the judgments awarding meal allowances were reversed.
Whether the employees' access to and familiarity with the Personnel Manual satisfied the communication requirement. Although at least two Personnel Manuals were maintained in every store and the Tobiases, as personnel managers, regularly consulted the manual, the manual was never distributed. In Hinkeldey, communication was found where the company directed that its manual's provisions be disseminated to employees, and in Brooks the employee was promised the manual would govern his employment terms; neither dissemination nor any promise that the manual would govern occurred here. Access to and intended use of the undistributed manual did not communicate the meal-allowance provision as an offer, so the trial court's contrary determination could not stand.
Key quotes from the opinion
Notable passages from the opinion, in the court's own words.
Cases the court relied on
Earlier decisions the court cited as authority for its ruling.
Cases that cite this one
15 later published cases cite this decision.
- Skramstad v. Otter Tail County (Minn. Ct. App. 1987)
- Feges v. Perkins Restaurants, Inc. (Minn. 1992)
- Koch v. Illinois Power Co. (Ill. App. Ct. 1988)
- Grenier v. Air Express International Corp. (D. Minn. 2001)
- Radie v. Konica Business Machines USA Inc., No. Cv95 548110s (Nov. 9, 1995) (Connecticut Superior Court 1995)
- Dacosta v. Aetna Life Insurance Company, No. Cv92-0507749 (Jan. 5, 1995) (Connecticut Superior Court 1995)
- Paris v. Northeast Savings F.A., No. Cv 910398144 (Jun. 1, 1994) (Connecticut Superior Court 1994)
- Piekarski v. Home Owners Savings Bank (8th Cir. 1992)
- Piekarski v. Home Owners Savings Bank, F.S.B. (8th Cir. 1992)
- Holman v. CPT CORP. (Minn. Ct. App. 1990)
- Steinbach v. Northwestern National Life Insurance (D. Minn. 1989)
- Goodkind v. University of Minnesota (Minn. 1988)
- Ware v. Prudential Ins. Co. (N.J. Super. Ct. App. Div. 1987)
- Edwards v. County of Hennepin (Minn. Ct. App. 1986)
- Corum v. Farm Credit Services (D. Minn. 1986)
This list shows which later cases cite this one. It does not say how they treated it, and no review of that has been done. Not a substitute for Shepard’s or KeyCite — verify before relying.
Full opinion
The complete text of the court's opinion as published.
Opinion
OPINION
Montgomery Ward appeals from judgments entered in favor of three of its former management employees for overtime meal allowances unpaid during their terms of employment. The cases of respondent Joanne Furman Tobias, Roger Tobias and Dale Koch were consolidated for trial in conciliation court. Judgment for the employees was entered following appeal to district court, and a court trial. We reverse.
FACTS
The Tobiases and Koch were management employees in Montgomery Ward [hereafter, Wards] stores during the years 1977 to 1981. As managers, their duties on two nights of the week required working until the store closed, which was not until 9 P.M.
The company’s Personnel Manual included the following provision:
b. Management and Supervision Employees who do not receive extra compensation for night overtime will receive either cash allowances for meals or meals without charge.
Night overtime work must be in excess of two hours beyond normal quitting time (at least past 6 P.M.) in order to qualify for a meal allowance.
The Personnel Manual was not distributed to employees, either managers or hourly employees. Instead, a “Fact Book,” an employee handbook, was given to beginning employees. Other handbooks and brochures specific to particular duties were distributed from time to time.
At least two Personnel Manuals were maintained in every store — one each by the personnel manager and store manager, and one by the comptroller, if the store had one. Two of the respondents, the Tobiases, were personnel managers at times during the period involved, and were thus familiar with the manual.
The respondents conceded that the evening work was mandatory, that they were scheduled to work extra hours two nights per week. They testified that they were expected to work from 48 to 56 hours per week (including some Saturdays). Thus, there was no doubt that their “scheduled quitting time” extended to at least 9 P.M. on the two evenings per week. The manual, however, uses the term “normal quitting time,” explained only as “at least past 6 P.M.”
ISSUE
Was the Personnel Manual provision part of the employment contract between Wards and its management employees?
ANALYSIS
The leading Minnesota case on personnel handbooks or manuals as forming part of the employment contract is Pine River State Bank v. Mettille, 333 N.W.2d 622 (Minn. 1983). The court there held that, although general statements of policy db not meet the contractual requirements of an offer, more definite terms in a handbook or manual may become part of the employment contract if the requirements for formation of a unilateral contract are met. 333 N.W.2d at 627. Those requirements are: an offer, communicated to the offeree, an acceptance by the offer-ee, and consideration. Id. at 626-27.
The requirement of communication to the offeree presents the only genuine issue here. The meals allowance provision was not in the handbook distributed to *382 employees, nor was it otherwise disseminated to them. The provision on disciplinary procedures held to be part of the contract in Pine River was contained in the handbook distributed to employees. The trial court here rejected Wards’ position that such a distribution was essential to “communication.” The court noted the availability of the manual to the management employees and their intended use of it.
The supreme court has held that a personnel policy manual, not distributed to employees, did not become a part of the employment contract. Cederstrand v. Lutheran Brotherhood, 263 Minn. 520, 117 N.W.2d 213 (1962). In Cederstrand the plaintiff was the company personnel director, who recorded employment policies in the manual herself, and maintained the sole copy. The court, nevertheless, stated as follows:
The fact that the dismissal provision was not included in the Employee’s Manual, given to new employees explaining important personnel regulations, indicates that plaintiff did not consider it as a provision of her employment relationship. * * * The fact that it was not important enough to be included in the employee’s handbook or employee’s bulletins indicates forcefully that during its entire existence it was not regarded as a contractual offer to all employees, but merely as a policy guide for supervisory personnel.
Id. at 534, 117 N.W.2d at 222.
Although the holding in Cederstrand arises from an unusual factual situation, courts in other jurisdictions have required more than employee access to the manual before finding communication of an offer. Thus, in Hinkeldey v. Cities Service Oil Co., 470 S.W.2d 494, 497 (Mo. 1971), not only was the manual not protected or kept confidential, but the company directed that its provisions were to- be disseminated to employees. Two of the respondent employees here regularly consulted the Personnel Manual while serving as personnel managers. In Brooks v. Trans World Airlines, Inc., 574 F.Supp. 805, 809 (D.Colo. 1983), however, the employee not only consulted the manual, but was promised the manual would govern as to the terms of his employment.
DECISION
The overtime meals allowance provision was not communicated to Wards’ management employees and, therefore, did not become part of respondents’ employment contract.
Reversed.
Continue your research
- Minnesota cases applying the Pine River handbook-contract test after Tobias
- Cases addressing whether employee access to a personnel manual communicates handbook terms
- Secondary sources on employment handbooks as unilateral contracts
Case-law data current through September 30, 2026. Source: CourtListener bulk data.