Question

Buttrick was given an employee manual, which contained day-to-day employment policies such as attire as well as a system of progressive discipline. The section entitled "Disciplinary Policy" stated: "It is the policy of Intercity Alarms that no disciplinary action taken against any employee will be arbitrary, capricious, unreasonable or discriminatory." The next paragraph provided, "No company likes to discipline or separate its employees from employment, however, disciplinary action will be taken whenever an employee violates any rule of the company, fails to adhere to any policies and procedures, or fails to uphold the spirit of our corporate objectives _._[T]he severity of the action taken will be in accordance with the following: Verbal Counseling ... Written Counseling ... Suspension." There was no provision for termination in that section. The Manual also stated that the employer may unilaterally modify the Manual's terms, and that the Manual serves only as a guide, not an employment contract. On May 4, 2004, a dispute developed regarding Buttrick's handling of a potential sales lead. The general manager fired Buttrick without any warning or counseling. Buttrick sued Intercity for wrongful termination, arguing that the Manual was an implied contract, and that Intercity had breached the contract because it failed to adhere to its own system of progressive discipline. Buttrick was given the Manual, which contained day-to-day employment policies such as attire as well as a system of progressive discipline. Issue: Did the employee handbook in this case rise to the level of an implied contract? Ruling: Yes. The handbook had a system for progressive discipline that was not used by management in handling Buttrick's employment decisions. It was reasonable for Buttrick to have relied on the language of the handbook. Case Questions: 1. Why did the court overlook the "disclaimer language" in the Manual? Shouldn't that have influenced its analysis?

Answer 1

The court overlooked the "disclaimer language" in the Manual because it found that the specific progressive discipline system outlined in the handbook created a reasonable expectation for employees like Buttrick. Despite the disclaimer stating the Manual wasn't an employment contract, the existence of a structured disciplinary procedure implied an obligation on the employer's part to follow it.

Step-by-step explanation:

The court focused on the reasonable expectations set by the handbook's specific provisions rather than solely relying on the disclaimer language. While the Manual stated it wasn't an employment contract and could be unilaterally modified by the employer, the existence of a well-defined disciplinary process indicated an implied agreement.

The court considered Buttrick's reliance on the handbook's progressive discipline system, which was not followed in his termination. This reliance formed the basis for the court's ruling, emphasizing the importance of consistent application of policies outlined in the Manual.

Despite the disclaimer's presence, the court weighed Buttrick's reasonable reliance on the handbook's language that detailed a step-by-step disciplinary procedure. The absence of a termination provision in the disciplinary policy implied a commitment to follow the outlined steps before termination.

Therefore, the court deemed it reasonable for Buttrick to believe that progressive discipline would be adhered to. Consequently, the court held that the employer breached an implied contract by not following the disciplinary procedure specified in the Manual.