Posts

Minnesota Supreme Court Holds that Employment Handbooks May Create Contractual Rights, Even When They Claim Not To

Today, the Minnesota Supreme Court ruled in favor of employees. In an important ruling, the Court held that employers who use blanket language stating that an employee handbook is “not a contract” do not necessarily prevent employees from bringing valid claims for breaching a contract. The case, Donald Hall v. City of Plainview, reiterated prior cases holding that employee handbooks can, in certain cases, be legally enforceable.

In Hall, the City of Plainview promised to pay its employees accrued paid time off (PTO) upon separation from employment. But the City refused to pay Hall his PTO upon his separation. The City claimed that a blanket statement in its handbook stating that no provision was intended to create a contract was enough for it to avoid responsibility for paying the PTO. But the problem, the Court held, was that the company promised to pay the PTO in one part of the handbook, while also vaguely and generally claiming that it did not have to follow any of the promises it made in the handbook. The Court held that such duplicitous language is ambiguous and that, as a result, a jury had to decide what the contract actually meant.

The takeaway for Minnesota employees is that when even if an employee handbook contains a statement that it does not create a contract, courts may still find that the terms of the contract are enforceable. It is a good idea to consult with an experienced employment attorney in these situations.

Phillip Kitzer and Brian Rochel of Kitzer & Rochel, PLLP participated in the case on behalf of Minnesota NELA, who appeared as amicus curiae arguing in favor of employees.

If you would like to learn more, or if you have any employment law question, contact Kitzer & Rochel today.