Although Marshall Field’s forest green has been replaced by Macy’s black and red, one of Field’s employment lawsuits continues. Employers are warned, again, that their employee handbooks may be contracts, unless they contain a disclaimer and, if a disclaimer is included, the employees must receive extra monetary consideration. That was the decision by the Illinois Appellate Court for the First District, located in Chicago, Illinois, which allowed a case to proceed based upon a 1968 employee handbook. Ross v. May, No. 1-06-0239 (1st Dist Nov. 13, 2007).
The male employee allegedly drew stick figures depicting a coworker being electrocuted, boiled, guillotined, run over by a train, shot out of a canon, tied to a rocket, and standing precariously under a 10,000 pound weight. Field’s terminated the employee, but failed to follow the progressive discipline policy in its 1968 handbook. That handbook did not include a disclaimer, although the 1987 and 1989 handbooks did contain a disclaimer.
The court ruled that the disclaimer inserted in the revised handbooks did not modify the previous handbook that created contractual rights and did not convert the plaintiff into an at-will employee. Field’s should have offered monetary consideration to all of the employees who had contractual rights under the 1968 handbook. By not offering any consideration, Field’s did not bargain with the employee, did not ask for or obtain his assent, and did not purport to provide any consideration other than his continued employment. Mere continued employment does not, alone, constitute consideration supporting the unilateral modification of an existing employment contract. Therefore, the Court overruled the lower court’s dismissal of the suit, allowing the suit to continue for wrongful termination in violation of the progressive discipline procedure in the 1968 handbook.
According to Alan Kaplan, the beginning of the calendar year is a good time for all employers to review their employee handbooks. Although handbooks should contain a policy concerning discipline and discharge, the policy does not have to set forth a rigid progressive disciplinary system. The handbook should allow the employer flexibility to determine the appropriate discipline based upon a number of factors. In addition, the handbook should include a disclaimer stating that the handbook is not a contract. If the contract contains a disclaimer and the previous handbook did not contain a disclaimer, the employer should give the employees some monetary consideration to support the change of the employee’s agreement with the employer from a contractual relationship to an at-will employment relationship