Who won this case? He says the handbook’s a contract
March 4, 2008 by Jim GiulianoPosted in: Discipline, Handbooks, In this week's e-newsletter, Latest News & Views, Terminations, Who won?
An employee gets disciplined, but he sues, walks into court and says, “The company handbook doesn’t allow that.” Read the case and decide: Who won? Take a look at the facts of this HR lawsuit and see if you can tell who won the case:
The facts:
An employee sued after being fired for arguing with a customer. The employee insisted his company’s handbook had a “three strikes” provision barring his firing unless he committed three offenses and had been warned at least twice.
The employer said:
The company’s handbook wasn’t a binding contract. Instead, it just contained a set of guidelines for managers and workers. No one was bound to act strictly according to those guidelines. In fact, a manager could recommend termination after one offense if the manager decided that offense was serious enough.
Who won the case?
Answer: The employer.
Why: A judge said that unless the handbook clearly stated that it was a contract between employer and employee, the employee couldn’t argue that the three-strikes provision was binding upon the employer.
Most courts, particularly those in states that have at-will-employment laws, recognize that handbooks aren’t contracts and that employers can terminate employees for offenses that are outside the scope of the handbook.
Exception: In some states, courts have ruled the other way when the employer required the employee to sign a statement acknowledging receipt of a handbook and an understanding of its contents.
Cite: Katsifos v. Pulte Homes Corp.
Tags: at will, company handbook, termination, three strikes
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March 11th, 2008 at 6:16 am
We ask that employees sign as a receipt they received the company handbook. We having been doing this for years. Do you think it would be better to keep a list with each employee’s name and the date the handbook was distributed?
Thank you.
March 11th, 2008 at 10:13 am
What states took the acknowledgement of receipt as the equivalent of an agreement? Many handbooks have a receipt statement to ensure a new employee has one, and has an opportunity to ask questions or seek advice before a problem occurs.. so what was the reasoning?
March 11th, 2008 at 3:17 pm
What is the point of an employee handbook that includes a description of progressive discipline if the company is not committed to the practice? Once a company declines to uphold the provisions of its own handbook, the handbook ceases to have any legitimacy in the eyes of workers. An employee could just as easily say “well, it’s just a guideline - not a contract that’s binding on me” - and, according to the logic of this legal decision - s/he’d be right.
March 14th, 2008 at 1:20 pm
So the next employee is allowed to argue with a customer, or commits another infraction two or even three times, but management does not terminate them, as a “favor” to upper management or for some other reason. Once management starts to “cherry-pick” handbook policies that they will uphold, it is a death knell for employee morale, because sooner or later everyone will know about it. If you don’t happen to be on the A-List, (or the right gender, or the right religion…) you’d better keep your nose clean and follow the letter of the handbook. Exceptions like this are discrimination, pure and simple.
March 25th, 2008 at 9:07 am
This is my first issue of HR Morning and I’m looking forward to many more.
Great job, HR Morning!!
November 18th, 2008 at 10:47 am
Simple solution: Our handbook lays out the typical steps of discipline but CLEARLY states that if the nature of the problem is serious enough we may “fast track” to any step including termination.