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Handbooks or handcuffs
LITIGATION, LEGISLATION, AND ETHICS
Handbooks or handcuffs Laurance Jerrold, DDS, JD Jacksonville, Fla
S
uppose you are the proud owner of a large, multi-office practice. You have over 30 employees working in your offices. Perhaps you have hired a human resources (HR) consultant to help you develop policies to better administrate your operation. One recommendation is to develop an employment manual that outlines, among other things, the termination process. One day, you hire someone for a front-desk position. Her responsibilities include collecting money from patients on their way out and making their next appointments. She seems to be doing okay, but you believe that her people skills are underused. A position for treatment coordinator opens up at another office, and you think this woman would be perfect because she’s great with people and seems to understand orthodontics. Since she does well at collecting money, she will be just as good if not better at “selling the case.” You ask her if she’s interested, and she is. She says that she has never done this type of job before, and you respond that you’ll train her, and that it takes a few months to become proficient, but you’re sure she’ll rise to the occasion. Two months later, you realize you made a terrible mistake. Her silver tongue has seemed to tarnish, and she’s just not performing to your expectations. You tell her that a front-desk person in a third office is taking maternity leave in a few months, and even though the job pays less than what she is currently earning, you’ll continue to employ her at her current salary until the mother-to-be returns; then, if no other positions are open in any of your offices, she must seek employment elsewhere. No openings come up, and you let the woman go. Because of this, she initiates a wrongful termination suit. These are essentially the facts in Dillon v Champion Jogbra, Inc, (No. 2000-560, 2002 Vt. LEXIS 343, Supreme Court of Vermont). The lawsuit was based on breach of contract (the contract in question is the employee manual that Program director, Postgraduate Orthodontics, Jacksonville University, Dental School of Orthodontics, Jacksonville, Fla. Am J Orthod Dentofacial Orthop 2003;124:746-7 Copyright © 2003 by the American Association of Orthodontists. 0889-5406/2003/$30.00 ⫹ 0 doi:10.1016/j.ajodo.2003.09.013
746
outlined the termination process that in this case was not followed) and promissory estoppel. The trial court ruled for the defendant on both counts, and this appeal followed. In addressing the plaintiff’s claim that the employment manual constituted an implied contract, the court noted that “when an employer takes steps to give employees the impression of job security and enjoys the attendant benefits that such an atmosphere confers, it should not then be able to disregard its commitments at random.” (cits. omit.) Even though the employee handbook stated clearly that employment was “at will,” the court noted that this concept is merely a starting point, and this doctrine “imposes no limitation on the right of . . . parties to modify the terms of their arrangement or to specify other terms that supercede the terminable-at-will arrangement.” In addition, “an employer may modify an at-will employment agreement unilaterally.” At this point in the court’s analysis, one might conclude that the verdict would be upheld. However, courts address the legal arguments for both sides before rendering a verdict. The court also noted that interpreting the terms in an employment manual is a matter for the jury, which must decide whether a handbook of this type has established contractual rights. But the jury can make this determination only when the terms of the manual are ambiguous or send mixed messages. When a manual’s policies dictate 1 thing, but the language of at-will employment implies just the opposite, the court stated that “[t]he mere inclusion of boilerplate language providing that the employee relationship is at will cannot negate any implied contract and procedural protections created by an employee handbook.” (cits. omit.) Suppose the manual in your case, as in the real case, established elaborate policies governing employee discipline and discharge. It stated that policies were to be enacted “in a fair and consistent manner” and that corrective action would include “training and employee counseling to achieve the desired action of employees.” The court listed some policies in the manual that were inconsistent with the at-will employment verbiage, the disclaimer found at the beginning of the manual. These inconsistencies would obviously send a mixed message to any employee and would be at odds with the concept
Litigation, legislation, and ethics 747
American Journal of Orthodontics and Dentofacial Orthopedics Volume 124, Number 6
that an at-will employer can fire an employee for “good cause or for no cause, or even for bad cause.” Because of the inconsistencies between the manual’s policies and the concept inherent in the doctrine of at-will employment, the court ruled that the plaintiff’s claim for breach of an implied contract was ambiguous enough that it should be submitted to a jury for determination as to whether an implied contract was formed. The court reversed the summary judgment entered by the trial court in the defendant’s favor and remanded the case for a new trial. The court next addressed the plaintiff’s claim that her termination was wrongful based on the concept of promissory estoppel. This legal doctrine is based on the premise that if you induce someone to rely on your promise and then you don’t fulfill that promise, you cannot claim (you are estopped from claiming) that no contract (promise) existed, when the first person suffered an injury by relying on your promise. Here, our analogous plaintiff claimed that she was to have received adequate training for the treatment coordinator’s position. Because she was promised training for a job she had never performed, she relied on that promise and accepted the job. Since her claim was that she was inadequately trained, it was the employer’s fault that she didn’t perform her job well. Therefore, termination based on inadequate job performance was not her fault and should not be the basis for her termination because her reliance on the underlying promise was unmet. Our analogous defendant countered with the argument that the plaintiff just didn’t possess the necessary skills for the job: her time management, prioritization, and verbal skills were inadequate. The court turned to other cases based on similar fact patterns and noted that “generalized assertions made in [the] course of [an] interview that [the] employee would have opportunities to develop trading skills [were] not the kind of definitive promise that would support [a] claim of promissory estoppel”; and “[a]n estimate of how long it would take a person to adjust to a job cannot be converted into a definite promise of employment.” In closing, the court noted that the “mere expression of hope is not sufficiently definite to give rise to a claim for promissory estoppel in [the] employment context.” (cits. omit.) The court upheld this portion of the trial court’s ruling.
COMMENTARY
Once again, I’m reminded of the dichotomy between those who espouse expertise about a particular matter and walk confidently in that domain and those who see the matter in a totally different light because they hail from the other side of the street. Practice management gurus tell us that employee handbooks are a wonderful way to induce qualified people to become long-term valued employees—they’re right. They claim that these handbooks promote a sense of security in the workplace—right again. From an HR perspective, spelling out policies and procedures relating to workplace issues is a good thing, and providing these safeguards for employees is a wonderful thing—make it 3. But, and here’s the thing, if you are a “mom and popper” or a solo practitioner with maybe 8 employees, give or take a few, why would you want to give up the freedom of being an at-will employer by having a handbook that does what you yourself can just as easily do? If you treat your employees well, train them properly, provide adequate supervision and support, pay them well, care about them as people, and take an interest in their lives to whatever extent you feel comfortable, you won’t need any handbooks to keep long-term and valued employees—it just naturally happens. The downside of the manuals is that employees can perceive them as employment contracts, implied or otherwise. Suppose you want to fire an employee because she’s “just not working out.” Let’s assume that this person was just not performing to your level of expectation. You’ve had a few talks with her, told her what you expect, shown her what to do, and led by example. You might want to fire this person immediately, no questions asked, no more remediation, time to move on, and all that. This is, after all, your office. You built it, it runs the way you want it to run, it’s your team, and you’re the manager, coach, and star player. But wait, these HR people are professionals in their field, they are experienced consultants to the small businesses of the world, they know best. At this point, it might be wise to cross to the other side of the street. Talk to your attorney and evaluate the risks of putting a handbook in place. If you will be bound by the policies in it, be sure that they suit your entrepreneurial personality. Remember what Pharaoh said to Moses: “So shall it be written, so shall it be done.”
Information pertaining to litigation, legislation, and ethics will be reported under this section of the American Journal of Orthodontics and Dentofacial Orthopedics. Manuscripts for publication, reader’s comments, and reprint requests may be submitted to Laurance Jerrold, DDS, JD, Jacksonville University, Dental School of Orthodontics, 2800 University Blvd North, Jacksonville, FL 32211.
Handbooks or handcuffs Laurance Jerrold, DDS, JD Jacksonville, Fla
S
uppose you are the proud owner of a large, multi-office practice. You have over 30 employees working in your offices. Perhaps you have hired a human resources (HR) consultant to help you develop policies to better administrate your operation. One recommendation is to develop an employment manual that outlines, among other things, the termination process. One day, you hire someone for a front-desk position. Her responsibilities include collecting money from patients on their way out and making their next appointments. She seems to be doing okay, but you believe that her people skills are underused. A position for treatment coordinator opens up at another office, and you think this woman would be perfect because she’s great with people and seems to understand orthodontics. Since she does well at collecting money, she will be just as good if not better at “selling the case.” You ask her if she’s interested, and she is. She says that she has never done this type of job before, and you respond that you’ll train her, and that it takes a few months to become proficient, but you’re sure she’ll rise to the occasion. Two months later, you realize you made a terrible mistake. Her silver tongue has seemed to tarnish, and she’s just not performing to your expectations. You tell her that a front-desk person in a third office is taking maternity leave in a few months, and even though the job pays less than what she is currently earning, you’ll continue to employ her at her current salary until the mother-to-be returns; then, if no other positions are open in any of your offices, she must seek employment elsewhere. No openings come up, and you let the woman go. Because of this, she initiates a wrongful termination suit. These are essentially the facts in Dillon v Champion Jogbra, Inc, (No. 2000-560, 2002 Vt. LEXIS 343, Supreme Court of Vermont). The lawsuit was based on breach of contract (the contract in question is the employee manual that Program director, Postgraduate Orthodontics, Jacksonville University, Dental School of Orthodontics, Jacksonville, Fla. Am J Orthod Dentofacial Orthop 2003;124:746-7 Copyright © 2003 by the American Association of Orthodontists. 0889-5406/2003/$30.00 ⫹ 0 doi:10.1016/j.ajodo.2003.09.013
746
outlined the termination process that in this case was not followed) and promissory estoppel. The trial court ruled for the defendant on both counts, and this appeal followed. In addressing the plaintiff’s claim that the employment manual constituted an implied contract, the court noted that “when an employer takes steps to give employees the impression of job security and enjoys the attendant benefits that such an atmosphere confers, it should not then be able to disregard its commitments at random.” (cits. omit.) Even though the employee handbook stated clearly that employment was “at will,” the court noted that this concept is merely a starting point, and this doctrine “imposes no limitation on the right of . . . parties to modify the terms of their arrangement or to specify other terms that supercede the terminable-at-will arrangement.” In addition, “an employer may modify an at-will employment agreement unilaterally.” At this point in the court’s analysis, one might conclude that the verdict would be upheld. However, courts address the legal arguments for both sides before rendering a verdict. The court also noted that interpreting the terms in an employment manual is a matter for the jury, which must decide whether a handbook of this type has established contractual rights. But the jury can make this determination only when the terms of the manual are ambiguous or send mixed messages. When a manual’s policies dictate 1 thing, but the language of at-will employment implies just the opposite, the court stated that “[t]he mere inclusion of boilerplate language providing that the employee relationship is at will cannot negate any implied contract and procedural protections created by an employee handbook.” (cits. omit.) Suppose the manual in your case, as in the real case, established elaborate policies governing employee discipline and discharge. It stated that policies were to be enacted “in a fair and consistent manner” and that corrective action would include “training and employee counseling to achieve the desired action of employees.” The court listed some policies in the manual that were inconsistent with the at-will employment verbiage, the disclaimer found at the beginning of the manual. These inconsistencies would obviously send a mixed message to any employee and would be at odds with the concept
Litigation, legislation, and ethics 747
American Journal of Orthodontics and Dentofacial Orthopedics Volume 124, Number 6
that an at-will employer can fire an employee for “good cause or for no cause, or even for bad cause.” Because of the inconsistencies between the manual’s policies and the concept inherent in the doctrine of at-will employment, the court ruled that the plaintiff’s claim for breach of an implied contract was ambiguous enough that it should be submitted to a jury for determination as to whether an implied contract was formed. The court reversed the summary judgment entered by the trial court in the defendant’s favor and remanded the case for a new trial. The court next addressed the plaintiff’s claim that her termination was wrongful based on the concept of promissory estoppel. This legal doctrine is based on the premise that if you induce someone to rely on your promise and then you don’t fulfill that promise, you cannot claim (you are estopped from claiming) that no contract (promise) existed, when the first person suffered an injury by relying on your promise. Here, our analogous plaintiff claimed that she was to have received adequate training for the treatment coordinator’s position. Because she was promised training for a job she had never performed, she relied on that promise and accepted the job. Since her claim was that she was inadequately trained, it was the employer’s fault that she didn’t perform her job well. Therefore, termination based on inadequate job performance was not her fault and should not be the basis for her termination because her reliance on the underlying promise was unmet. Our analogous defendant countered with the argument that the plaintiff just didn’t possess the necessary skills for the job: her time management, prioritization, and verbal skills were inadequate. The court turned to other cases based on similar fact patterns and noted that “generalized assertions made in [the] course of [an] interview that [the] employee would have opportunities to develop trading skills [were] not the kind of definitive promise that would support [a] claim of promissory estoppel”; and “[a]n estimate of how long it would take a person to adjust to a job cannot be converted into a definite promise of employment.” In closing, the court noted that the “mere expression of hope is not sufficiently definite to give rise to a claim for promissory estoppel in [the] employment context.” (cits. omit.) The court upheld this portion of the trial court’s ruling.
COMMENTARY
Once again, I’m reminded of the dichotomy between those who espouse expertise about a particular matter and walk confidently in that domain and those who see the matter in a totally different light because they hail from the other side of the street. Practice management gurus tell us that employee handbooks are a wonderful way to induce qualified people to become long-term valued employees—they’re right. They claim that these handbooks promote a sense of security in the workplace—right again. From an HR perspective, spelling out policies and procedures relating to workplace issues is a good thing, and providing these safeguards for employees is a wonderful thing—make it 3. But, and here’s the thing, if you are a “mom and popper” or a solo practitioner with maybe 8 employees, give or take a few, why would you want to give up the freedom of being an at-will employer by having a handbook that does what you yourself can just as easily do? If you treat your employees well, train them properly, provide adequate supervision and support, pay them well, care about them as people, and take an interest in their lives to whatever extent you feel comfortable, you won’t need any handbooks to keep long-term and valued employees—it just naturally happens. The downside of the manuals is that employees can perceive them as employment contracts, implied or otherwise. Suppose you want to fire an employee because she’s “just not working out.” Let’s assume that this person was just not performing to your level of expectation. You’ve had a few talks with her, told her what you expect, shown her what to do, and led by example. You might want to fire this person immediately, no questions asked, no more remediation, time to move on, and all that. This is, after all, your office. You built it, it runs the way you want it to run, it’s your team, and you’re the manager, coach, and star player. But wait, these HR people are professionals in their field, they are experienced consultants to the small businesses of the world, they know best. At this point, it might be wise to cross to the other side of the street. Talk to your attorney and evaluate the risks of putting a handbook in place. If you will be bound by the policies in it, be sure that they suit your entrepreneurial personality. Remember what Pharaoh said to Moses: “So shall it be written, so shall it be done.”
Information pertaining to litigation, legislation, and ethics will be reported under this section of the American Journal of Orthodontics and Dentofacial Orthopedics. Manuscripts for publication, reader’s comments, and reprint requests may be submitted to Laurance Jerrold, DDS, JD, Jacksonville University, Dental School of Orthodontics, 2800 University Blvd North, Jacksonville, FL 32211.