Monday, November 15, 2010

Employee's Clever Attempt to Use Employer's Own Handbook Against Them Fails

Many of you employees have probably seen and many of you employers and human resource department personnel have probably authored language into employee handbooks that read, "...policies set forth in this handbook are not intended to create a contract, nor are they to be construed to constitute contractual obligations of any kind or a contract of employment between employer and any of its employees." This language is inserted for the obvious reason of ensuring that the default at-will terms of employment are not changed to for cause. However, that language gave birth to a rather clever and seemingly novel motion for summary judgment for a plaintiff who was sued by his former employer after the employer sought money back it gave the former employee-defendant for educational and training courses. The defendant asserted that the language quoted above meant what it says regarding no contract being created and that therefore he does not owe the money back. The New York appellate court disagreed.

The court started out by noting that the issue of whether a contract is ambiguous is an issue of law to be decided by a court and that language in a contract is not ambiguous just because parties interpret them differently. The court then explains that the above-quoted handbook language is merely to prevent the policies from being construed as an implied employment contract, and that it was the defendant's execution of a separate contract in which he expressly agreed to the handbook's terms (presumably an acknowledgement form) that kept him on the hook for paying the employer back.

Furthermore, the court states, "[i]n interpreting such an agreement, as with any contract, the goal should be a practical construction of the lanuage used so that the reasonable expectations of the parties are realized." That is, the handbook does not alter the at-will arrangement but the employee IS expected to uphold their end of the terms held within the handbook. The court also notes that to uphold the defendant's argument would lead to an "absurd and self-contradictory result."

Defendant's motion for summary judgment was DENIED and Plaintiff's cross motion for a judgment as a matter of law was GRANTED.

The case is Currier, McCabe & Associates v. Maher, 906 N.Y.S.2d 129 (3d Dept. 2010).

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