ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Tuesday, November 15, 2005

Employee Handbook Doesn't Create Contract Term

Mississippi_flag An employer’s “progressive discipline” system outlined in its handbook does not convert at-will employment into one where notice or cause is required for termination, according to a recent decision by the Mississippi Court of Appeals.

In the case, plaintiff John Senseney was hired by the Mississippi Power Co.  The employment application that Senseney signed provided:

4. No obligation to hire/Employment At Will.  I understand . . . and agree that nothing in this employment application, in the Company's policy statements, personnel guidelines or employee handbook is intended to create an offer of employment and compensation with the Company or an employment contract between the Company and me.  I understand and agree that employment with the Company will be on an at-will basis, meaning that my employment will be for no definite duration and can be terminated, with or without cause and with or without prior notice, at any time, at the option of either the Company or myself.  Further, I understand that, except for an officer of the Company, no supervisor or manager may alter or amend my at will employment status and only an officer, of the Company has the authority to enter into any agreement for employment for a specified period of time and any such agreement must be in writing and executed by the Company and me.  My signature below certifies that I understand that the foregoing is the sole and entire understanding between the Company and me concerning the duration of my employment and the circumstances under which my employment may be terminated and supersedes all prior arrangements, understandings and representations concerning my employment with the Company.

After Senseney was hired, he received the company guidelines for “progressive employee discipline,” which outlined a system under which employees were to be given notice of problems with their work and a chance to correct it.  After Senseney was fired without warning and without cause, he sued.

And lost, said the court.  Mississippi has previously held that where an employment agreement is otherwise silent, an employer’s discipline guidelines become part of the contract.  But here, the contract between the parties specifically provided for employment at will, and put Senseney on notice that the guidelines will not alter that status.  Accordingly, said the court, his complaint was correctly dismissed.

Senseney v. Mississippi Power Co., 2005 Miss. App. LEXIS 798 (Nov. 1, 2005).

[Frank Snyder]

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