On Twitter and Facebook, the concept of “Throwback Thursday” (or #tbt) has become quite popular. Typically, it’s a picture from long ago that you’ve forgotten.The theory behind why its so popular is that there is still gold to be mined out of older things.
I was thinking about that concept lately when it comes to blogs and employment law. Overall, lawyers tend to write about the latest and greatest development as if it requires a wholesale reinvention of human resources. I’ve tried to provide some context over the years but I’ve also been trying to find a forum to provide additional perspective on certain issues.
So, with that in mind, from time to time, I’ll take a look back at some cases and issues that still have relevance today and give them that modern day “blog” makeover.
The case that immediately comes to mind is Torosyan v. Boehringer Ingelheim Pharmaceuticals, Inc., which was decided just a few months before I started my career in employment law. It was the case I can remember being discussed in my employment law meetings when I first started work.
According to the court’s decision, back in 1982, the plaintiff came to Connecticut at the defendant’s invitation and expense, for job interviews with five of the defendant’s employees. According to the court:
At several of the interviews, the plaintiff informed the defendant’s employees that he was seeking “long-term” employment, and that he did not want to move his family from California unless the defendant could guarantee him job security. In response, one interviewer told the plaintiff that if the plaintiff did a good job, the defendant would “take care” of him. Another interviewer told the plaintiff that he hoped that the plaintiff would stay forever and that the plaintiff would have the opportunity to examine the company’s employee manual to determine whether it provided the guarantees that he sought. ….
On August 31, 1982, the defendant wrote to the plaintiff, stating that “[t]his letter confirms our offer to you for employment as Biochemist III at an initial salary of $30,000 per year.” Although the letter from the defendant further represented that the defendant would provide the plaintiff with various fringe benefits, it did not state that the plaintiff’s employment would be terminable only for cause. The letter also did not state, however, that it contained all the terms of the plaintiff’s employment contract or that it superseded any prior or subsequent oral representations that might be made to the plaintiff. The plaintiff countersigned the letter without adding anything thereto and returned it to the defendant.
On his first day of work, Torosyan received the employee manual. The manual provided that the company could discharge employees for “cause.” Approximately two years later, the company distributed a new employee manual which no longer limited discharges to cause. The new manual included a disclaimer stating that the manual was for instructional purposes only, and also added a section stating that falsification of any company record could result in termination. One year later, Torosyan was fired for submitting a false expense report, and sued claiming breach of contract and defamation.
The Supreme Court’s Conclusion
On appeal, the Connecticut Supreme Court held that the comments made to Torosyan during his interview and the language in the earlier personnel manual created an implied contract that he would only be terminated for cause, and that Boehringer breached that implied contract by using the false expense report as a pretext for his discharge.
The Company then argued that the employee’s decision to continue his employment after receiving the revised handbook constituted his acceptance of changed policies. But the Court did not accept that argument saying that “[w]hen an employer issues an employment manual that substantially interferes with an employee’s legitimate expectations about the terms of employment…. the employee’s continued work after notice of those terms cannot be taken as conclusive evidence of the employee’s consent to those terms.”
The Significance of the Decision
The court’s decision really emphasized that employers needed to focus on two aspects of the employment relationship that had not received a lot of attention before: Offer Letters and Employee Handbooks.
Employers started to put all offers in writing and included specific language that the employee was at-will, meaning the employer or employee could terminate employment for any reason at any time, with or without notice. Employers also added language that stated that this offer letter superceded any prior representations that were made and that the employee was not relying on any such promises.
For handbooks, employers also started to get employees to sign off on handbooks and agree that the handbook could be revised in the future without futher approval from the employee. And in some instances, employers started to get employee acknowledgements on significant revisions to the handbook as well. In addition, employers started to offer some additional “consideration” for an employee’s consent to the new employee handbook rules; a floating holiday was offered by a few employers, for example.
Offer Letters and Handbooks
So, hopefully now you have a better picture on why offer letters and employee handbooks contain the language that they do and why those acknowledgement forms shouldn’t be ignored. If you haven’t had your offer letters or employee handbooks revised (or, if you have downloaded one off the internet without making sure it complies with Connecticut law), be sure to do so.
Twenty years is long enough warning.
(As to the defamation claim, the Connecticut Supreme Court revisited that aspect narrowing a qualified privilege that employers have.)