ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Thursday, October 27, 2005

Handbook Doesn't Change Employment at Will

Oregon_flag An employee whose written employment application provided for at-will employment lost a claim that his employer’s policy bulletin promised dismissal only for just cause, in a recent decision by the Oregon Court of Appeals.  In the case, plaintiff Robert Ewalt signed an employment application with the Coos-Curry Electric Co-Op.  The application included these clauses:

     3. I understand and agree that if I am offered and accept a position, I may resign or be terminated, with or without cause or notice, at any time;
     4. I agree to conform to all existing and future Coos-Curry Electric Cooperative policies and rules, and I understand that such policies and rules may be changed, interpreted, withdrawn or added to as the company deems appropriate.

After he was hired, Ewalt was given a company handbook that stated:

These work rules are to be enforced fairly and uniformly, and not in an arbitrary manner by supervisors. Employees are entitled to adequate notice and warning of the consequences of their behavior and a fair and objective investigation of the facts must be made before discipline is administered. Where immediate action is required, an employee may be suspended, pending an investigation. Discipline short of discharge shall be used whenever possible for violation of these rules.

It also contained a list of things for which an employee could be terminated, and provided suggested punishments for first, second, and third violations.  After Ewalt was fired for “deficient job performance,” he sued, claiming that he had a contractual right to be afforded the protections of the policy manual.

The question, said the court, was whether the bulletin was an agreement to alter the original at-will employment created by the application and the hiring.  Here, the terms themselves were plainly "guidelines" for application of management discretion.  There was nothing to suggest any intent that employment at will be abrogated.  The original application had stated that the employer would be free to change or alter such procedures at any time.  Under the circumstances, there was no triable issue of fact and the contract claim was dismissed.

Ewalt v. Coos-Curry Elec. Coop., Inc., 2005 Ore. App. LEXIS 1353 (Oct. 19. 2005).

[Frank Snyder]

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