Does a manual constitute an employment contract?

By Raymond Dreyfack -- Plant Engineering, 1/1/1998

Bill Hadley, a young engineer in the plant engineering department hired six months ago, had his good points and bad. But, when Chief Engineer Charley Graham decided that the cons exceeded the pros, Graham decided to let him go. A hard-nosed professional, he wasn't one to pull punches.

The chief summoned Hadley to his desk and gave it to him straight. "It's not working out, Bill; I'm letting you go as of Friday."

Hadley was stunned. "Just like that?"

The chief shrugged. "There's no point in giving you a whole line of bull. It's just not working out. Let's leave it at that. We'll help you relocate any way that we can."

That didn't satisfy Hadley. "If you feel I'm not cutting the mustard, you have a right to fire me, but I think I deserve to know why."

"Not really. It's complicated. I don't want to go into it. If you take a look at your employment agreement, you'll see that it included an employment-at-will clause when you accepted the job. Under that clause, no explanation is required."

Hadley didn't dispute the clause but pointed out that subsequent to his employment, the company published a policy manual which specified a progression of verbal and written warnings before an employee could be discharged.

"The manual invalidates the employment-at-will clause," Hadley claimed.

Graham disagreed, but promised to check into it.

Question: Is Hadley correct in his contention that the manual nullifies the employment-at-will clause?

Marshall's verdict: Plant Engineer Art Marshall agreed with Hadley that the policy manual preempts his employment contract. He told Graham, "The manual, supplemented by a set of separate guidelines, constitutes a contract in itself that overrides Hadley's employment contract. Not only must he be told why he is being fired, the company must be able to produce evidence that supports the reasons given."