I’ve talked many times before about the importance of a well-drafted disclaimer in your employee handbook (here and here, for example).

This is not a new thing and in Connecticut dates back to an important case back in 1995 .

Without such disclaimers, employers can be subject to a breach of contract claim by your employees.

Yesterday, a federal judge in Connecticut was the latest to reinforce this message by allowing a breach of contract claim to proceed based on the employer allegedly failing to comply with its own anti-harassment policy, even though the federal legal claim of harassment was time-barred.

You can download the decision denying the employer’s motion for summary judgment on this issue in Mariani v. Costco Wholesale Corp. here.

One important note at the outset. This decision does not mean Costco is liable for a breach of contract; all the court decided is that the employee’s claim can proceed to a trial.  (In doing so, the court threw out many other claims of the employee.)

The facts on this issue seem straightforward. Costco seemingly has an employee handbook that it titles “Employee Agreement”.  It requires the employees to acknowledge receipt.  Costco conceded to the court that this “Agreement” could create a contractual obligation to its employees.

But, according to the court, Costco’s anti-harassment policy created an additional contractual responsibility that it did not disclaim. In other words,  the court said that while the employer was under no obligation to have tougher anti-harassment policies than state or federal law — having said it would abide by stronger language, it must follow that or face a breach of contract claim.

The court’s “money” quote is this:

The Employment Agreement does not contain any disclaimer language to the effect that its “super” anti-harassment provisions do not create legally enforceable protections beyond the protections of background law. Today’s corporate employers compete not only on grounds of their raw ability to make, deliver, and sell goods and services at a low or reasonable cost but also on grounds of their corporate self-image as “good” corporate citizens. They likewise compete on grounds of their ability to attract employees by means of promises of innovative management practices that foster dynamic workplaces that are comfortable and safe. This is not to fault the fact that Costco has adopted progressive anti-harassment policies but only to make clear that these policies, as framed without disclaimer, may give rise to legally independent and enforceable obligations for the benefit of employees that rely on them

How can Connecticut employers avoid this same result?

This case should be yet another reminder of the importance of a disclaimer in any company handbook that these policies.  Remind employees that no provision of the handbook creates an employment contract or any other obligation in regard to employment.  And consider using this language in the acknowledgment of receipt.

And, without stating the obvious, consider calling your employee handbook, well, a handbook instead of an “agreement”.  If you call it an agreement, a court isn’t going to disagree with you.

With the year coming to a close, this is the perfect time to have your handbook reviewed by an attorney.  Otherwise, you could be facing an employment law claim that you created yourself.

 

Costco Contract Claim

Remember earlier this year when the NLRB was hinting that certain at-will disclaimers (you know, the type of language in offer letters that says that the employee is at-will and can be fired for any reason or no reason at all) might be illegal under a new reading of applicable labor law?

At will disclaimers are Alive!

The issue for the NLRB was that it viewed some at-will disclaimers as suggesting that employees who asserted their rights under the NLRA might not get what they want.  In other words, even if employees wanted to form a union, the NLRB was concerned that the disclaimers might suggest that it was futile to do so based on the at-will disclaimers.

Frankly, it seemed an overreach by the NLRB. 

In a pair of advice memos issued a few weeks ago, the NLRB seemed to back off of its position somewhat by blessing two types of at-will disclaimers used by employers.  The issue is by no means set in stone, but the basic parameters of the discussion are starting to take shape. 

What language passed muster under the most recent pair of memos?

  • “No representative of the Company has authority to enter into any agreement contrary to the foregoing “employment at will” relationship.” (As noted by the Minnesota Labor & Employment Law Blog, the NLRB ruled the language was not overly broad, as it did not “… require employees to agree that the employment relationship cannot be changed in any way, but merely highlights that the employer’s representatives are not authorized to change it.”)
  • “No manager, supervisor, or employee of [the Company] has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will…Only the president of the Company has the authority to make any such agreement and then only in writing.” (This provision made it clear that the at-will relationship is not entirely set in stone and could be modified by the president.)

Contrast this with language found objectionable in an ALJ decision earlier this year where the employer had a disclaimer that forced the employee to agree  “that the at-will employment relationship cannot be amended, modified or altered in any way.”  That seemed to be too strong of a disclaimer.   

What’s the takeaway for employers? First, this is an area still in flux. The exact parameters of what is going to be acceptable are still being fleshed out by the NLRB (not to mention, the court cases that will inevitably follow).  Arguably, the NLRB is still overreaching here and it will be up to the courts to decide whether language, such as that used in the ALJ case, is really objectionable after all.

To be extra cautious, consider adding some language in your disclaimer that the at-will status can only be modified by something in writing from the President. That would seem to satisfy the NLRB (for now).  In any case, take these cases as an opportunity to review your at-will disclaimers.

For more on this subject, there are several articles to recommend from Employment Law Daily, Labor Relations Today, Vorys on Labor, Labor Relations Counsel, Labor Relations Update, The Employer Handbook, and the Ohio Employer’s Law Blog.      

 

At yesterday’s labor & employment law seminar, we had both Heidi Lane, a Prinicipal Attorney with the Connecticut Department of Labor, and Jonathan Kreisberg, Regional Director of the NLRB’s Hartford Office, speak to attendees about the latest developments under both Connecticut and federal law.

But for those who couldn’t make it, here are five notable things they discussed:

1) Paid Sick Leave adoption appears to be going smoothly.  According to Lane, there have only been two complaints filed since the start of the year.  Neither case went very far, either because of merit, or settlement.  But for those expecting a big influx in complaints, we haven’t seen it.  Yet.

2) The Connecticut Department of Labor has, quietly to some, been conducting many more investigations of individuals who may be abusing the unemployment compensation system.   As a result of cutting down on fraud, it is hoped that more money can be kept in the system for those who need it the most and to keep employer expenses down.  I provided a link to a report of this last week

3) Social media has, and will continue to, dominate the NLRB’s agenda.  Kriesberg highlighted two new Board cases on the subject that I discussed on this blog earlier this week.  He said another is in the pipeline that could be the first Board case to find an employer’s firing of an employee because of his or her Facebook post was illegal. 

4) What’s still on the NLRB’s horizons? More cases challenging at-will disclaimers and confidentiality policies.    Again, if you’ve been following these issues, this won’t come as a surprise, but for those who think the NLRB is somehow going to back down, Kreisberg’s words indicate the opposite.  He also indicated that the issue of mandatory class action waivers continued to be a focus of the NLRB and that he wouldn’t be surprised to see the issue at the U.S. Supreme Court as well.  

5) Kreisberg had no news to share on whether the proposed consolidation of the Hartford and Boston regional offices was still going forward (though he hinted he would be in charge of such a combined office) but indicated that he believed people in Connecticut wouldn’t notice any issue. 

My sincere thanks to both of them for taking the time to speak to the attendees. 

If you’re interested in commentary like this, we will be conducting a replay of our presentation for the southern Connecticut audience on October 18th in Norwalk.  Be sure to sign up (it’s free) and remember that breakfast AND lunch are included.

On Monday, the Connecticut Bar Association held its annual meeting. Lots of labor and employment law topics were covered, some of which I missed. I’ve asked one of my bar colleagues, Rita Trivedi — who will be a Teaching Program Fellow at Columbia Law School in the fall — to share her insights on the events.   My thanks to Rita for the contribution.

First up: A recap of NLRB Acting General Counsel Lafe Solomon’s address to the meeting.  

It’s been a busy year at the National Labor Relations Board, and Acting General Counsel (ACG) Lafe Solomon’s address at the Connecticut Bar Association’s Annual Meeting gave practitioners much to think about.  

Among the highlights:

  • The next possible “big thing” for employers to think about are at-will disclaimers.   Solomon observed that a blanket at-will statement might (emphasis on might) violate the NLRA.  Thus, employers should now take particular care when drafting at-will clauses in employee handbooks.   

    In general, many employer handbooks have clauses that provide that the employee is and will remain at-will, unless that status is changed by the company’s top executive (either in writing or otherwise).  Intended to prevent a change based on the casual statements of a manager or co-worker, at-will clauses have become a bastion of employment policy.  

    Yet, according to Solomon, if an employee could reasonably believe that this kind of clause means that even union representation and a collective bargaining agreement cannot alter his or her at-will status, the employee might conclude that organization is futile – in which case the employer’s provision might violate the NLRA.  

    What then should management attorneys and their clients do to address what Solomon recognized as a valid concern? 

    Through a passionate discussion on all sides at the meeting, the takeaway seems murky, and few concrete examples or models came to light.  Savings clauses to the effect that nothing in the policy infringes on rights under the NLRA will likely be insufficient to prevent exposure.  
    Continue Reading Guest Post: NLRB Acting General Counsel Addresses At-Will Disclaimers and More at CBA Annual Meeting