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Handbook Disclaimers: Location, Location, Location

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The most effective means for preventing your employment manual from being considered an employment contract is to include a clear and prominent disclaimer. But what qualifies as "clear and prominent"? Most courts would agree that whether a disclaimer is clear and prominent is a function of its physical appearance (typeface, point size, heading), as well as its placement within the document and the clarity of its language. However, as the court in the following case held, no single distinctive feature is essential to make a disclaimer clear and prominent.


Does Placement = Prominence?

A customer service manager for a convenience store chain was diagnosed with bulging disks in her back and neck. She took a leave of absence and applied for short-term disability benefits. While she was on leave, the store where she worked closed and she was terminated. HR informed her that her employment had been terminated because her disability application had been denied and she hadn't worked for three consecutive weeks.


The manager sued for breach of contract, claiming that the company's employment manual created a contract stating that the store could not terminate her for the reasons it did and/or in the manner in which it did.


A district court held that an employer may negate an implied contract in its employment manual by including a clear and prominent disclaimer. The manager argued that the disclaimer was ineffective because it was hidden at the end of the 39-page manual.


The court rejected that argument. Said the court: Prominence can be satisfied in a variety of settings. In this case, the disclaimer appeared under the heading "Important Information," was set off in bold-face type, and appeared in a larger font than the rest of the handbook. (Ruffo v. Wawa, Inc., D.C. NJ, No. 09-5264, 2010)


Personnel Pause

Despite the outcome of this case, it is a best practice to include handbook disclaimers at the beginning of your employment manual, in addition to using bold type or a larger point size, so there is no question about its prominence. Even though this court determined that no one distinctive feature is essential to make a disclaimer conspicuous, don’t take the chance that your handbook's disclaimer is not set off enough and a court rules that the disclaimer was effectively "hidden" in the back.

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