An employee without an employment contract is typically deemed to be an at-will employee. In an at-will employment relationship, the employer has the right to terminate the employee for any reason permitted by law, with or without cause.
Moreover, when employers write their employee handbooks, they frequently adopt strong language describing this at-will employment structure and warning employees of this termination right. But sometimes even this handbook language isn’t enough to protect an employer from a claim that an employee is exempt from termination without good cause.
That’s exactly what happened to Barnes & Noble in Oakes v. Barnes & Noble College Booksellers, LLC, a recent decision from the California Court of Appeal.
Christine Oakes was a manager at Barnes & Noble’s store at West Valley College. She had worked for the company for 22 years. After she complained about comments that a college vice president made to her, Barnes & Noble decided she was “not a good fit” for the job and fired her.
Oakes sued, claiming—among other things—wrongful termination based on an implied contract. In defending against that claim, Barnes & Noble pointed to its employee handbook, which stated (in all capital letters) that the employment relationship was “at-will,” and the company retained the “absolute power to discharge anyone at any time, with or without cause and without prior notice.”
Oakes, however, testified that she understood “at-will” employment to mean that she had to “do something to the company” to be let go. In addition, the Barnes & Noble handbook described a process of progressive discipline. Although the handbook reserved the company’s rights to skip steps if necessary, Oakes testified that she had been told that she had to use the progressive discipline policy in all circumstances when seeking to terminate an employee. Further, “[d]eposition testimony from Barnes & Noble supervisors also supported the existence of an unwritten policy of always using progressive discipline.”
These facts, said the court, are enough to merit a trial on the issue of whether Oakes can benefit from “an implied contract that converted her status from at-will to requiring good cause for termination.”
Oakes may still have a tough task in convincing a jury that Barnes & Noble entered into an implied agreement with her that it would not terminate her without good cause, given the strong language that Barnes & Noble used in its handbook. Barnes & Noble could also present testimony showing that other employees were fired without progressive discipline, perhaps where, as with Oakes, the company determined them not to be a “good fit.”
But for now, Barnes & Noble’s handbook—and its at-will employment policy—is not a bestseller in the Court of Appeal.