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Employer handbooks: Employment Law 101: #6 of 60
December 09, 2005 by Ross Runkel at LawMemo

Employers often have handbooks or policy manuals that spell out employee behavior rules, procedures for disciplining or firing employees who violate the rules, and "money matters" such as wages, holidays, vacations, and so on.

The question is whether such a handbook becomes part of the contract between the employer and the employee. And there is no easy answer.

[Employment Law 101, published Monday-Wednesday-Friday, is a series designed to give you ideas and help you spot legal issues. It is not a substitute for a good lawyer or thorough research. For the most current developments in employment law court cases, try Employment Law Memo - World's Best.]

Confusion in the courts:

• Courts often do not consider a handbook to be part of a contract.
• Courts often see a handbook as nothing more than a statement of policy or intention.
• On the other hand, some courts in some situations will consider a handbook to be part of a contract.
• There has been a trend in the law for courts to view a handbook as a contract.

For a handbook to be part of contract, usually these things must happen:

• The employer makes an "offer." This can be done by the employer distributing the handbook to employees.
• The employee accepts the offer. This can be done by the employee signing an acknowledgement form, or perhaps simply by continuing to come to work.
• There must be "consideration." This means the employee must give or promise to give something of value. Typically, that is simply continuing to come to work.

Disclaimers:

• Over the years, as more and more courts viewed handbooks as contracts, many employers made changes in how they wrote the handbooks.
• The main change has been to include a disclaimer - a provision that says that the handbook is not intended to be a contract.
• Even so, some courts have said these handbooks can be contracts if the disclaimer was not clear or of it was not conspicuous.

Coming next: Good faith and fair dealing: Employment Law 101: #7 of 60

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Editor: Ross Runkel, Professor of Law Emeritus. email Ross@LawMemo.Com, Phone 503-399-8028. Copyright LawMemo, Inc. Employment Law Memo emails designed for lawyers.  Expert summaries of decisions from all federal and state appellate courts.  Direct link to full text.  Click here for free 4-week subscription