Handbooks and other ways to bypass the employment at will rule

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:

  1. 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.
  2. 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”).

Drew M. Capuder
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