Handbook Disclaimer Dented in VT
Petard
24 Posts
This may have been posted previously, but here's a note from one of our corporate attorneys:
A recent case decided by the Vermont Supreme Court (3-2) is a chip at the employee handbook disclaimer language. Sidestepping an all-capitals disclaimer on page one of the handbook, the court reversed in part the lower court decision and reinstated an employee breach of implied contract suit. The disclaimer included language that the policies and procedures were guidelines, did not constitute part of an employment contract nor were they intended to make any commitment to any employee. Nonetheless the majority noted that the handbook also contained “an elaborate system governing employee discipline and discharge” and stated that the tension between the promised procedure and the disclaimer created an ambiguity that should be resolved by a jury. The terms spelled out in the book “are inconsistent with the disclaimer at the beginning of the manual, in effect sending mixed messages to employees” the majority added. The employee had sued after she was encouraged to take a more challenging position within the company and was then soon fired for not meeting expectations. The court based its ruling in part on two law review articles where one author said that “the legal right to fire for bad reasons has been virtually decimated” and the other author said that “employers cannot take away a promise, the progressive discipline policy, with a disclaimer.” The opinion is certainly one that will draw both praise and criticism.
A recent case decided by the Vermont Supreme Court (3-2) is a chip at the employee handbook disclaimer language. Sidestepping an all-capitals disclaimer on page one of the handbook, the court reversed in part the lower court decision and reinstated an employee breach of implied contract suit. The disclaimer included language that the policies and procedures were guidelines, did not constitute part of an employment contract nor were they intended to make any commitment to any employee. Nonetheless the majority noted that the handbook also contained “an elaborate system governing employee discipline and discharge” and stated that the tension between the promised procedure and the disclaimer created an ambiguity that should be resolved by a jury. The terms spelled out in the book “are inconsistent with the disclaimer at the beginning of the manual, in effect sending mixed messages to employees” the majority added. The employee had sued after she was encouraged to take a more challenging position within the company and was then soon fired for not meeting expectations. The court based its ruling in part on two law review articles where one author said that “the legal right to fire for bad reasons has been virtually decimated” and the other author said that “employers cannot take away a promise, the progressive discipline policy, with a disclaimer.” The opinion is certainly one that will draw both praise and criticism.
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