Here are two easy steps to prevent your employee handbook from turning into a binding contract. First, make sure you don’t give employees a copy until after they have been hired and are about to start work. That prevents employees from arguing that the handbook induced them to accept the employment offer.
Second, make sure the handbook includes a clear statement that it isn’t a contract and isn’t intended to create specific rights.
Recent case: Kwame, who is black, worked as a professor at the University of Pittsburgh. He wrote an award-winning book on his academic specialty—African studies—and won many accolades. However, his one-time university mentor warned him that getting tenure would be very hard because of his race and that getting tenure required being part of a “boy’s club.”
Kwame lost his tenure bid and protested, using an appeals process outlined in the employee handbook. His tenure appeal was denied.
He sued, alleging that the university refused to follow the process it had outlined in the handbook. This, he argued, was breach of contract.
The university argued that the handbook specifically stated that it was not a contract. The handbook included this disclaimer: “The language used in this Handbook is not intended to create a contract between the University of Pittsburgh and its employees.”
The court agreed that the disclaimer meant the handbook wasn’t a contract. Plus, because Kwame didn’t get a copy before he was hired, it couldn’t have been a factor that induced him to take the job either. (Botwe-Asamoa v. University of Pittsburgh, No. 13-817, WD PA, 2013)
Final note: The employer also dodged a potential race discrimination claim when Kwame didn’t file his Pennsylvania Human Relations Commission (PHRC) complaint within 180 days of being denied tenure.