Promise in Employee Handbook Not Enforceable, Fourth Circuit Overturns Jury Verdict

  Make clean with hand; then make dirty with the other.

  That is what a lot of employers do in employee handbooks.  They publish employee-favorable policies, but then pepper the handbook with disclaimers that state that their policies are not contractual and cannot be enforced in Court.

A Maryland employee sued her employer claiming its anti-retaliation policy rose to the level of a contract.   The policy stated:

Retaliation and threats of retaliation against employees who raise concerns, or against individuals who appropriately bring important workplace and business issues to the attention of management, are serious violations of [the Company's] values and standards and will not be tolerated. . . . All directors, officers and employees are strictly prohibited from engaging in retaliation or retribution . . . which is directed against an individual on the basis of or in reaction to that individual making a good faith report to the Company . . . of suspected violations of law, regulation, policy or procedures, or Our Values and Standards.

The employee claimed her supervisor fired her for reporting the supervisor's violations of the company's published ethical rules.  

She won a $555,000 jury verdict in the Maryland Federal District Court.

The Company, of course, appealed.

On appeal, the Fourth Circuit reversed and directed the trial court to enter judgment in the Company's favor.  The Appellate Court ruled that the disclaimers in the employee handbook rendered unenforceable the Company's anti-retaliation promise.

Q: How many times has the Montgomery County Domestic Worker Law been enforced?

A:  Once

Since 2008, Montgomery County, Maryland, has a Domestic Worker Law.  The Law requires that a family who employs a domestic worker have a written employment contract with that worker.  The Law is enforced by the Office of Consumer Protection.  The Office may seek a civil penalty of not more than $1,000.00 for each violation, and additional damages, restitution, or any other available legal or equitable relief.

A recent Washington Post article noted that the Office has only sought to enforce the law once.  According to the article:

Take the law passed in 2008 requiring residents to offer domestic workers a written contract. At the time, Council member Roger Berliner (D-Potomac-Bethesda) said he was worried about “whether we would be deemed to be the nanny government of all time.” 

Still, the bill passed unanimously. 

Since then, it’s been enforced once.

Pending Law Will Ban Employer Facebook Password Queries

My take on the pending Maryland Law  (waiting for the Governor's signature) banning employer requests for social media passwords:

“Fishing expeditions into an employee’s private life are both bad form and an invitation for discrimination and breach of privacy claims,” Rubin says. “The real question to me, regardless of liability, is do you want to work for an employer who wants to snoop through your private information and does not trust you simply to provide it yourself?”

(I apologize for the obvious horn toot and the bad picture).

Terminated for Absenteeism? You May Still Be Entitled to Unemployment Benefits

An employer, of course, can terminate a Maryland employee for being absent too many times (so long as none of the absences are protected by the FMLA, ADA, or Maryland Flexible Leave Act).  But, are you entitled to unemployment benefits if you are terminated for excessive absenteeism?  The answer is:  it depends.  If your absences are not your fault and you timely notified your employer when you would be out, then you are likely entitled to unemployment benefits. 

I just represented an employee who found herself in exactly that position.  She was terminated for being out of work too often.  Each time she was absent she gave her employer proper notice.  It was undisputed that she was out of work for a chronic medical condition.   Over the employer's objections, the employee was awarded benefits. 

A summary in the Maryland Department of Labor's decision digest summarizes the law:

• The claimant was absent from work on an authorized maternity leave. Due to unexpected medical complications, the claimant was not able to return to work as early as anticipated. The claimant kept her employer informed of her medical condition. The employer would not hold the claimant's job until she could return to work after her six-week checkup. Absenteeism due to illness is not misconduct. The claimant was discharged, but not for any misconduct. DuBois v. Redden and Rizk, P.A., 71-BH-90.

Promise in Employee Handbook Can Become Enforceable Contract in Maryland

UPDATE: 11/28/12 -- The Fourth Circuit reversed the decision discussed below and found the disclaimers enforceable.  See my discussion here.

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     Many employers issue employee handbooks.  The handbooks usually include disclaimers that state that the handbooks do not change the "at will" nature of employment. 

     But, the United States District Court of Maryland recently ruled that an employer's anti-retaliation provision can become the basis for an enforceable contract.    A pharmaceutical representative alleged that her employer terminated her for reporting her supervisor's ethical violations.   The Company's handbook stated:

Retaliation and threats of retaliation against employees who raise concerns, or against individuals who appropriately bring important workplace and business issues to the attention of management, are serious violations of [the Company's] values and standards and will not be tolerated. . . . All directors, officers and employees are strictly prohibited from engaging in retaliation or retribution . . . which is directed against an individual on the basis of or in reaction to that individual making a good faith report to the Company . . . of suspected violations of law, regulation, policy or procedures, or Our Values and Standards.

     Despite several disclaimers, the Court ruled that the above language was sufficiently specific and definite to constitute an enforceable promise.  The Court held: "Given the unambiguous nature of the non-retaliation policy, the disclaimers that [the Company] relies upon are insufficient to defeat [the plaintiff's] reasonable expectation that [the Company] intended to limit its ability to terminate her for retaliatory reasons."