Employee Handbook Creates Jury Question of Contract - Vt View

Posted 10:52 AM by Michael Fox

In what appears to be a throwback to the judicial rulings of 10 years ago, the Vermont Supreme Court has held that a specific disciplinary proceeding established in a company handbook, coupled with the employer's normal practice of following it, creates a jury question as to whether or not there is a contract. Dillon v. Champion Jogbra (Vt. 12/27/02). This is true notwithstanding a specific disclaimer that the employee remains at will and the disciplinary procedures are only guidelines to be followed. Interestingly, the opinion quotes a mid-90's University of Texas Law Review article that it finds indicates that at will employment relationships have 'fallen into disfavor'. It also cites the Michigan Supreme Court decision of Toussaint v. Blue Cross, a 1980 decision, from which the Michigan courts seem to have retreated with such decisions as Lytle v. Malady, 579 N.W.2d 906, 914 (Mich. 1998) which held that an express disclaimer in a handbook was sufficient to maintain the at will status of employees.

The viewpoint expressed by the 3-2 majority opinion, which seems destined to make it very difficult for Vermont employers to have both a handbook and maintain a clear at will status for their employees , along with the actions of Vermont's two senators, Patrick Leahy and Jim Jeffords, plus its former governor and now Democratic presidential candidate, Howard Dean, makes one wonder whether Vermont is seeking to become the 'east coast California' for employers. It is one way to slow economic growth and keep Vermont pristine for its current residents.

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