Court Ruling Illustrates the Dangers Presented by a Poorly Drafted Employment Manual

In a case that illustrates the dangers employers face from poorly drafted employment manuals and from manuals that give a too many rights to their employees, a U.S. District Court judge recently found that a professor can sue her college over what she sees as an unfair tenure review process. The holding’s significance is heightened by the fact that the court dismissed the plaintiff’s other claims, which were likely her primary ones – gender and race discrimination – and permitted suit to proceed only on a theory that the college breached a contract implied by its employee handbook.

While employment manuals are a valuable tool that virtually every employer should use, they present risks that must be addressed by careful drafting. Most employers include disclaiming language that says, in effect, that employees cannot rely on a manual’s terms to create contractual rights. Still, policies set out in manuals must be precisely drafted to clearly and concisely say what employers mean and no more. Employers should always plan to comply with all terms in their own manuals until and unless those terms are changed, regardless of disclaiming language. They thus must take great care in defining policies and procedures to assure they are comfortable implementing them in all situations. Changes should be made prospectively only.

The defendant in the U.S. District Court case apparently transgressed these principles by providing a detailed and comprehensive procedure for tenure review. This, in the court’s view, reasonably led the plaintiff to believe the process would be unbiased. Because the tenure review panel included two individuals who the plaintiff did not believe met that standard, the college arguably violated the procedures it provided in its employment manual. It now faces a jury over the question whether its tenure procedure was fairly and/or properly applied. That is not, of course, a place where any employer desires to find itself.