Implied Contract

HR Newbie

We are in the process of revising our (seriously antiquated) handbook. My concern is based on the fact that New Mexico is an at-will employment state, but our old handbook could be construed (easily) to be an implied contract. Are there any suggestions for keeping my legal bases covered as we move from the old handbook to the new?

Margaret Morford

Be sure that your handbook has a very strong disclaimer that says it does not constitute a contract of employment with anyone, that the only binding contracts of employment must be in writing signed by the CEO of the company. Also, get each employee to sign an acknowledgement that they received the handbook and acknowledging that it does not constitute a contract of employment. I may have a sample I could send you. Call me at 615-371-8200 if you want me to send it to you.

System

Here is a great article from New Mexico Employment Law Letter that confirms what Margaret stated about the disclaimer. It also includes some sample disclaimer language.

[url]http://www.hrhero.com/headlines/030901/handbooks.shtml[/url]

Hope this helps!

Rockie

Make sure you put in your employee acknowledgement that this copy of the handbook supercedes any foregoing handbooks. Also, make sure all employees sign the disclaimer and turn it in to you for their personnel files.

Rockie

I would certainly have an attorney in your state review the handbook. This is worth the money as it is unbelievable how many ways you can get into trouble with a poorly drafted handbook. Also, concerning the disclaimer, I would advise putting it on the front of the handbook in a different color in very bold or very large print. Some courts have ruled that disclaimers are not prominent enough.

Terry

As said before, definitely have an attorney review. Also, some DOLs have an employer services unit that will also review it and make recommendations. The one thing that I have seen that becomes a potential problem is the use of the word "permanent" when describing employee status which it technically shooting yourself in the foot. Better off using "regular" to define status. Even the strongest and most prominent statement of at-will can be jeopardised by a mis-statement in the content.

Gillian

You may not be able to completely rid yourself of past implied contracts if such arrangements exist. Part of this game is that one cannot just rid themselves of a previous contract, implied or otherwise, by just having someone sign a new form. The issue is "consideration" - whereby one party pays for the privelege of making a change in the contractual relationship. That doesn't mean that you shouldn't do it, just be aware that it is not a panacea and that somewhere along the line someone may challenge the way it was done. I expect that state contract laws vary but this is an issue in California.