In a decision to be officially released tomorrow, the Connecticut Appellate Court has affirmed a dismissal of a breach of contract claim that alleged that the company failed to follow procedures that were outlined in a management training seminar.
The case, Brule v. Nerac (download here), is important because it sets some limits to a theory that had been making the rounds the last few years that statements made during the course of employment could somehow change the at-will status of employees.
So what was the case about? The court provides a brief summary:
The gravamen of these claims is that in 2003 Nerac provided a management training course, entitled ‘‘Managing Within the Law,’’ which was attended by certain Nerac managers…. The plaintiffs alleged that the training materials used in the course directed Nerac’s managers to provide progressive discipline, open communication and an opportunity for improvement prior to terminating their subordinates’ employment. By virtue of teaching the attendees the contents of this training course, the plaintiffs claimed, Nerac formed contractually binding obligations not to terminate its managing employees absent such discipline. …
Additionally, each plaintiff alleged that the individual defendants had committed negligence by terminating their employment. They claimed that the contracts of employment included a duty on the part of the individual defendants not to terminate their subordinates without affording progressive discipline and an opportunity to improve, and that the individual defendants had breached this duty by not providing these procedures prior to the plaintiffs’ terminations.
The employer had originally moved to strike the complaint on the grounds that the statements were too indefinite to form a contract and that there was no legal duty owed to the plaintiffs (and therefore, no negligence claim). The Superior Court had agreed. Upon appeal, the Appellate Court affirmed.
The court said the materials merely provided that progressive discipline was an option:
Our review of the course text reveals that the language at issue could not reasonably be construed as mandatory directives but instead was meant to inform the attendees on suggested managing practices. For example, in the section of the training materials entitled ‘‘At-will vs. Progressive Discipline,’’ the text allegedly stated: ‘‘[A]t- will employment . . . means that you do not have to
follow any specific procedures or processes before you terminate someone. You do not need to follow a specific ‘progressive discipline program.’ ’’ (Emphasis added.)
The materials went on to instruct the attendees that this language did not prohibit them from using progressive discipline as part of their management strategy; instead, it simply meant that they were ‘‘not bound by any formal rules or discipline.’’ This section is followed by a series of suggested principles that the managers should observe, including terminating employees without prior warning or discipline only when their conduct resulted in egregious company violations. The materials are devoid, however, of any language that demonstrates an intention to contractually bind the parties by way of directing the attendees to follow specified management procedures in a mandatory fashion.
What’s the takeaway for employers here? First, always have disclaimers that protect the at-will status of employers. Second, even in training program, words matter. Make sure that things cannot be taken out of context in a Powerpoint slide. And lastly, reconsider a progressive discipline policy — or at least the wording of it.
I’ve previously talked about the issues with progressive discipline policies here. If you still have them, it’s time to review them to ensure compliance with recent caselaw.