Tuesday, May 13, 2008

Cat fight on aisle 6: court leaves open the possibility that a handbook can create a contract

In White v. Fabiniak, Wal-Mart fired Carla White for threatening to "slap the piss" out of a co-worker, Stephanie Jeppe. Prior to the termination, White had used Wal-Mart's Open Door Policy to complain to her supervisor that Jeppe had been threatening her.

White was an at-will employee of Wal-Mart. At the start of her employment, Wal-Mart provided her an employee handbook that contained, among other provisions, an Open Door Policy. That policy provided:

If you have an idea or a problem, you can talk to your supervisor about it without fear of retaliation. Problems may be resolved faster if you go to your immediate supervisor first. However, if you feel your supervisor is the source of the problem, or if the problem has not been addressed satisfactorily, you can go to any level of management in the Company. But remember, while the Open Door promises that you will be heard, it cannot promise that your request will be granted or that your opinion will prevail.

White claimed that the open door policy created an implied contract between her and Wal-Mart, and terminating for using the policy violated that contract. The court of appeals disagreed:

The policy provides an avenue an employee may use in the event he or she has a work related concern, idea, or grievance. Within the context of the policy, therefore, Wal-Mart admits it will not terminate or otherwise punish an employee for choosing to share his or her ideas or problems with management. Read plainly, this is neither an implied or express promise of continued employment. Rather, it is merely an assurance that an employee can utilize the policy without concern of unfair reprisals on behalf of management or the company at large. ...

[W]e hold the plain meaning of the open door policy assured an employee he or she would not be retaliated against for utilizing it as a means to air his or her grievances. This does not imply the policy guaranteed an employee continuous employment if, for example, he or she breached a separate policy set forth in the manual in the course of utilizing the open door policy. ...

Nothing in the open door policy states that an aggrieved employee who decides to use the policy may utilize or threaten to utilize vigilante tactics if a particular supervisor does not handle the grievance in a manner the employee demands. Quite the contrary, the policy provides that, while an employee will assuredly be heard, an employee's view or opinion regarding the resolution of a problem will not always prevail.

Appellant does not specifically allege Chuba refused to hear her complaint, nor did she provide any evidence that her termination was retaliatory in nature. Appellant acknowledges, and the record demonstrates, she was fired for threatening Jeppe in violation of the workplace violence policy. Nothing in the record indicates Wal-Mart acted inappropriately in terminating appellant on this basis.

This opinion, however, may not be as pro-employer as it seems. It does not say that the employee handbook cannot create a contract, but merely that it does not in this case because Wal-Mart terminated White because she violated its workplace violence policy. The court did not find that White had no legal claim, but that Wal-Mart had a good reason to fire her. Thus, this opinion leaves the door open to the possibility that an employee can make a breach of contract claim if the employer does not have good cause for the termination.

Although unclear from the opinion, it is safe to assume that the handbook contained an at-will disclosure, such as: "This handbook is not a contract, express or implied, and does not guarantee employment for any specific period of time. Although we hope that your employment relationship with us will be long term, you are at all times an at-will employee, which means that either you or the company may terminate this relationship at any time, for any reason, with or without cause or notice." If that is the case, I fail to see how any employee could complain that the handbook creates an implied contract that the employer can breach, even if the employer admitted it fired an employee for using a handbook provision such as the open door policy.

Unless handbook disclaimers are to be rendered meaningless, employees cannot be permitted to bring breach of contract claims based on an employer's failure to follow a policy in the handbook. The claim must be based on some other recognized legal right, such as statutory retaliation or some public policy separate and apart from the handbook language itself.