Part 2 of a series on West Virginia employment law
This article follows up my prior blog article, The Employment at Will Rule in West Virginia. In that article, I explained the basic contours of the employment at will rule.
With the employment at will rule radiating in the background, there are many ways it can be modified or bypassed. All claims relating to discrimination and retaliation, for example, modify the rule to the extent an exception is created by which the employer may not terminate the rule for a specific reason, such as age.
Scenarios: handbooks and other promises
But this article focuses on contractual or contract-like limitations on the employment at will rule. The parties (employer and employee) can enter into a formal employment contract that modifies the employment at will rule. But I am not addressing that formal contract in this article. I am really trying to focus on two scenarios:
- Employee alleges that the employer’s employee handbook creates a contract or otherwise enforceable restrictions on the employer’s right to fire an employee at any time for any reason.
- Employee alleges that a dialog (verbal, email, letters, whatever) between the employer and employee established an agreement which restricted the employer’s right to terminate the employee at-will. This might be an agreement for a term or period of employment, and it might be an agreement that sets out some other alleged long-term guarantee of employee, such as during “good performance” or “a job for life”.
But does the agreement actually limit the at will rule?
But it is important to remember what the at will rule means. It means that the employer has the right to terminate the employee (a) at any time, and (b) for any reason.
An agreement, be it in a handbook or an exchange of letters, might set out contract terms, but that doesn’t necessarily mean that the agreement expressly (or even impliedly) limits the right of the employer to terminate at any time for any reason. For example, an employment agreement that sets out certain benefits, such as health insurance, does not expressly limit the timing and reason for termination. Therefore, there can be an employment “agreement” that still does not alter the employment at will rule.
So, in looking at handbooks and alleged promises or agreements, we have to keep in mind that we are focusing on agreements that specifically limit (a) the right to terminate at any time, and (b) the right to terminate for any reason.
Legal standards applied to handbooks etc.
The West Virginia Supreme Court has put a heavy burden on the employee claiming a contract that alters the employment at will rule: “Where an employee seeks to establish a permanent employment contract or other substantial employment right, either through an express promise by the employer or by implication from the employer’s personnel manual, policies, or custom and practice, such claim must be established by clear and convincing evidence.” Tiernan v. Charleston Area Medical Center, Inc., 212 W. Va. 859, 865–866, 575 S.E.2d 618, 624–625 (2002) (emphasis in original) (quoting Syllabus Point 3 of Adkins v. Inco Alloys Intern., Inc., 187 W. Va. 219, 417 S.E.2d 910 (1992)).
A handbook may, if not drafted very well, create an exception to the employment at will rule. A “provision in an employee handbook may alter the at-will nature of an employment relationship if there is a definite promise in the handbook by the employer not to discharge the covered employee except for specified reasons.” Bine v. Owens, 208 W. Va. 679, 682, 542 S.E.2d 842, 845 (2000) (citing Cook v. Heck’s, Inc., 176 W. Va. 368, 342 S.E.2d 453 (1986)); Minshall v. Health Care & Retirement Corp. of America, 208 W. Va. 4, 537 S.W.2d 320, 325 (2000) (“[A]n employee handbook may form the basis of a unilateral contract if there is a definite promise therein by the employer not to discharge covered employees except for specified reasons.”) (quoting Cook v. Heck’s Inc., 176 W. Va. 368, 342 S.E.2d 453 (1986) (syllabus point 6)); Collins v. Elkay Mining Co., 179 W. Va. 549, 549, 371 S.E.2d 46, 46 (1988) (Syllabus Point 6: “A promise of job security contained in an employee handbook distributed by an employer to its employees constitutes an offer for a unilateral contract; and an employee’s continuing to work, while under no obligation to do so, constitutes an acceptance and sufficient consideration to make the employer’s promise binding and enforceable”.).
But if the handbook has an appropriate disclaimer, then it is very likely that there will be no contractual limitation on the employment at will rule: “An employer may protect itself from being bound by any and all statements in an employee handbook by placing a clear and prominent disclaimer to that effect in the handbook itself.” Bine v. Owens, 208 W. Va. 679, 682, 542 S.E.2d 842, 845 (2000) (quoting Syllabus Point 5, Suter v. Harsco Corporation, 184 W. Va. 734, 403 S.E.2d 751 (1991)); accord Lilly v. Overnite Transp. Co., 995 F.2d 521, 523–24 (4th Cir. 1993).
In White v. Nat’l Steel Corp., 938 F.2d 474, 487–88 (4th Cir. 1991), the 4th Circuit discussed West Virginia law on handbooks and allege oral contracts: “Not only do Heck’s and Suter require a definite and specific promise to alter an employee’s at will status, such as the terms by which an employee will be laid off, but Stuckey requires clear and convincing evidence of the oral contract. In combination, these cases establish an exacting evidentiary standard for the alleged oral contracts to meet.” The two decisions cited by the Fourth Circuit are: Cook v. Heck’s Inc., 176 W. Va. 368, 342 S.E.2d 453, 457 (1986); and Suter v. Harsco Corp., 184 W. Va. 734, 403 S.E.2d 751, 754 (1991).
In Mills Wetzel Lands, Inc. v. EQT Prod. Co., No. 5:18CV23, 2019 WL 286748, at *6 (N.D. W. Va. Jan. 22, 2019), in an employment setting, the District Court stated: “West Virginia law does not, however, recognize an independent cause of action for the breach of an implied covenant of good faith and fair dealing separate and apart from a breach of contract claim. Stand Energy Corp. v. Columbia Gas Transmission Corp., 373 F. Supp. 2d 631, 644 (S.D. W. Va. 2005); see also Warden v. PHH Mortg. Corp., No. 3:10–cv–75, 2010 WL 3720128, at *5 (N.D. W. Va. Sept. 16, 2010).”
For oral promises to constitute an employment agreement, the promises must set out “ascertainable” terms and must be “definitive in nature”. See Ways v. Imation Enterprises Corporation, 214 W. Va. 305, 589 S.E.2d 36, 44–45 (2003) (promise of continued employment must include “terms of the alleged contract” which “were ascertainable and definitive in nature”. There must be “mutuality of assent” on those terms.); Sayres v. Bauman, 188 W. Va. 550, 425 S.E.2d 226 (1992) (oral promise in employment setting sufficient to alter employment at will relationship “must contain terms that are both ascertainable and definitive in nature to be enforceable”).
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