Understanding and Developing an Employee Handbook

Employee Handbook

“Oklahoma jurisprudence recognizes that an employee handbook may form the basis of an implied contract between an employer and its employees if four traditional contract requirements exist: 1) competent parties, 2) consent, 3) a legal object, and 4) consideration. Oklahoma case law has established two limitations on the scope of implied contracts through an employee handbook: First, the manual only alters the at-will relationship with respect to accrued benefits. Two, the promises in the employee manual must be in definite terms, not in the form of vague assurances.” “… [I]n order to create an implied contract, the promises must be definite. Courts must distinguish between carefully developed employer representations upon which an employee may justifiably rely, and general platitudes, vague assurances, praise, and indefinite promises of permanent continued employment. Only when the promises are definite and, thus, of the sort which may be reasonably or justifiably relied on by the employee, will a contract claim be viable, not when the employee relies on only vague assurances that no reasonable person would justifiably rely upon. There is, thus, an objective component to the nature of such a contract claim in the form of definite and specific promises by the employer sufficient to substantively restrict the reasons for termination.”

Where the handbook provides a specific procedure for terminations, and where the procedure is not followed, the employee may have a claim. Similarly, a claim that an employer would lay off employees ”based on seniority” is sufficiently specific to be enforceable. A handbook provision that no employee would be discharged without good cause is enforceable. The at-will relationship may be altered with respect to accrued benefits by a manual without altering the right to terminate. Claims for these benefits can be made under an implied contract theory, even if a wrongful discharge claim cannot be brought.

“The factors that are critical in evaluating whether an implied contract right to job security exists are: (a) evidence of some separate consideration beyond the employee’s services to support the implied term, (b) longevity of employment, (c) employer handbooks and policy manuals, (d) detrimental reliance on oral assurances, pre employment interviews, company policy and past practices, and (e) promotions and commendations.”

Although the existence of an implied contract generally presents an issue of fact, if the alleged promises are nothing more than vague assurances the issue can be decided as a matter of law. An implied contract must be based on definite promises. While an employer may disclaim any intent to make the provisions of an employee handbook part of the employment relationship, the disclaimer must be clear. Inconsistent conduct by the employer may negate the disclaimer’s effect.

For more information on Employment Law check out our website and helpful video on employment law cases! As always, check with us for legal updates and as to the facts of your situation.