Did you know that policies in your employee handbook could potentially create contractual obligations? The Minnesota Supreme Court addressed this issue in its recent decision, Hall v. City of Plainview, which dealt specifically with whether the City’s PTO policy created a unilateral contract with respect to its PTO payout provision, despite a general handbook disclaimer stating that the document shouldn’t be construed as creating a contract. Ultimately, the Court held that the “broad and general disclaimer in the Handbook’s introduction, in the context of the entire Handbook and the relationship between the City and its employees, is ambiguous as to its applicability to the PTO policy,” and as such did not necessarily suffice to destroy an employee’s contractual entitlement to accrued PTO per that policy. The Court stopped short of expressing any opinion about the impact of a general disclaimer on non-compensation conditions of employment. So while this is a matter likely to be shaped by future case law, employers can still implement some takeaways today.
For example, review your general handbook disclaimer to ensure it confirms that employment is at-will and that neither the handbook, nor any policy therein creates a contract of employment. You may also update this language to specifically disclaim that compensation policies, such as PTO, sick, and vacation, create a contract. Ensure that the disclaimer stands out, such as with bolded font and its own page. Consider including disclaimer language in individual compensation policies and the handbook acknowledgment, as well.
If you have questions, myHRcounsel is here to help employers navigate this evolving area of law.