Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

Exercise 30

Louie E. Brown worked for the Phelps Dodge Corporation under an oral contract for approximately twenty-three years. In 2011, he was suspended from work for unauthorized possession of company property. In 2012, Phelps Dodge fired Brown after discovering that he was using company property without permission and building a trailer on company time. Brown sued Phelps Dodge for benefits under an unemployment benefit plan. According to the plan, ''in order to be eligible for unemployment benefits, a laid-off employee must: (1) Have completed 2 or more years of continuous service with the company, and (2) Have been laid off from work because the company had determined that work was not available for him.'' The trial court held that the wording of the second condition was ambiguous and should be construed against Phelps Dodge, the party who chose the wording. A reading of the entire contract, however, indicates that the plan was not intended to apply to someone who was fired for cause. What is the correct interpretation of this contract?