P was employed as a salesman for D for thirteen years until he was discharged on March 23, 1981. P was discharged for poor job performance. P sued contending there was a policy that D would not terminate its employees without just cause, and that in reliance upon that policy he remained in D's employ for more than twelve years. The case was removed based on diversity jurisdiction pursuant to 28 USC 1332. P prevailed at trial because the lower court held that the relationship was controlled by [a] 1980 Personnel Policy Digest which expressly states that 'an employee may be . . . discharged for cause.' In January 1981, D revised its Digest to eliminate any 'for cause' requirement for discharge of its employees. The January 1981 Digest states that '[employment] is at the will of the company.' The court found as a matter of law that the 1980 Digest created a 'for cause' employment contract and that once such a contract is established, the employer cannot unilaterally alter the employment relationship as to existing employees to permit discharge at will. P was awarded $55,000 in damages for breach of its obligation not to discharge without cause. D appealed, and the court of appeals certified a question.

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