Do I Have A Claim Against My Employer In New Jersey For Firing Me In Violation Of The Company’s Employee Handbook?
In New Jersey, employment is at-will. That means that employment law in New Jersey is not always fair, and it is not always just. In New Jersey, unless you have an employment agreement that states otherwise, or unless you belong to a labor union, you can be terminated – that is, fired — for any reason or no reason, good reason or bad reason, as long as it is not a reason that is prohibited by statute or by public policy.
That said, and depending on the circumstances, you may have a claim against your employer in New Jersey for firing you in violation of the company’s employee handbook, also known as an employment manual.
In Woolley v. Hoffmann La Roche, Inc., the New Jersey Supreme Court held that in appropriate circumstances, representations made in employee handbooks or employment manuals are enforceable. The Woolley Court stated:
[w]hen an employer of a substantial number of employees circulates a manual that, when fairly read, provides that certain benefits are an incident of the employment (including, especially, job security provisions), the judiciary, instead of “grudgingly” conceding the enforceability of those provisions should construe them in accordance with the reasonable expectations of the employees.
Woolley is not an exception to the at-will employment doctrine. Instead, the Woolley decision recognizes basic contract principles concerning the acceptance of unilateral contracts.
In addition, even where an employment manual constitutes the contract, the contract is between the employee and the employer and not between the employee and other employees of the employer.
In determining whether an employee handbook is enforceable, courts must look to its meaning and effect and the circumstances under which it was prepared and distributed.
To be enforceable under Woolley, an employment manual must have been distributed or generally disseminated to all relevant portions of the workforce. Therefore, where an employee handbook has not been generally distributed, workers’ claims have been rejected for lack of actual reliance.
Similarly, employment manuals distributed only to managerial employees, and meant for their use in dealing with subordinates, have been found unenforceable under Woolley.
The job security provisions of the employee handbook enforced in Woolley were “explicit and clear,” and the conditions relating to discipline and firing were comprehensive. These factors seem to have been crucial to the New Jersey Supreme Court’s determination in Woolley that the handbook was meant to be binding and should be enforced. Conversely, the handbook’s provisions will not be enforced if the language is such that no one could reasonably have thought it was intended to create legally binding obligations.
An employee handbook that prohibits termination except for just cause protects against arbitrary discharge. However, it is unsettled in New Jersey whether an employer may satisfy this standard by acting in good faith or whether the employer must be correct, that is, that the facts upon which the employer acted are accurate.
The New Jersey Supreme Court has held, in the context of an individual employment agreement, that where the agreement permits an employer to terminate an employee for failure to perform to the employer’s satisfaction, genuine subjective dissatisfaction with the employee’s performance is sufficient to justify discharge.
Absent an explicit promise to the contrary, employers are presumed to have retained the right to fire employees for economic reasons, even if the employee handbook otherwise restricts discharges to employee misconduct or poor performance.
However, an economic justification for a layoff may not alone suffice, where procedural requirements of the manual are at issue, or where the choosing of employees to be affected touches on statutory concerns such as compliance with state and federal anti-discrimination laws.
Employees covered by collective bargaining agreements or individual agreements of employment have been held to be precluded by those agreements from raising Woolley claims. It is considered unreasonable for such workers to rely on an employee handbook — rather than their contract – as controlling the terms and conditions of employment.
Similarly, an employee’s completion of an employment application that provides that the job will not be for a fixed period of time and may be terminated by the employer with or without cause or notice renders unreasonable any employee expectation that an employee handbook changes the at-will nature of employment.
Formation of an implied contract through an employment manual may be avoided by including a clear and prominent disclaimer. However, to be effective, the disclaimer must be robust, straightforward, and entirely clear. It should comply with the New Jersey Supreme Court’s description of disclaimers in Woolley:
All that need be done [to prevent the creation of a contract] is the exclusion in a very prominent position of an appropriate statement that there is no promise of any kind by the employer contained in the manual; that regardless of what the manual says or provides, the employer promises nothing and remains free to change wages and all other working conditions without having to consult anyone and without anyone’s agreement; and that the employer continues to have the absolute power to fire anyone with or without good cause.
The effect of a manual may also be restricted by entering into individual agreements of employment with particular employees stating that the employment is at-will. These individual employment contracts have been held to supersede the terms of an employment manual.
In determining the effectiveness of disclaimers, New Jersey courts apply a common-sense standard based upon the document as a whole. This common-sense standard weighs not just the language of the disclaimer but also its prominence (For example, is it in the front of the handbook? Is it in bold? Is it set off from other provisions by a separate subtitle?) and effectiveness in light of other provisions of the handbook (For example, is a disclaimer providing that employment is at will contradicted by other provisions of the handbook referring to job security?).
Where an employer has distributed an employment manual which lacks a disclaimer, and thereby has created a Woolley contract, the employer’s mere distribution of a subsequent manual with an otherwise effective disclaimer may not be sufficient to revoke any promises made in the first manual. Therefore, to be sure that revocation or amendment is effective, the announcement and publication of a new or revised manual should be at least as prominent as that of the original manual.
The New Jersey Supreme Court has held that an agreement to arbitrate claims contained in an employment application is enforceable to the same extent as such a provision in an employment contract or an employment manual.
The U.S. District Court for the District of New Jersey has held that when an employee handbook provides for grievance and arbitration of claims under the handbook, employers must comply with the procedure described.
Although the New Jersey Supreme Court has held that a company-wide policy in a written employment manual, generally distributed to its workers, may create an enforceable unilateral contract, that Court, to date, has not decided whether Woolley should be extended to verbally communicated company-wide policies. New Jersey’s Appellate Division has held that, if proven, an unwritten company policy of non-termination of managers except for cause is enforceable under Woolley. A plaintiff must show:
- That the oral employment policy contained “an express or implied promise concerning the terms and conditions of employment”;
- That the policy was “a definitive, established company-wide policy”;
- That the oral statement of policy by a supervisor constituted an “accurate representation of policy”; and
- That the supervisor was “authorized to make” the oral statements of policy.
A clear and prominent disclaimer in an employee handbook can be sufficient to avoid formation of oral agreements.
If you are an executive or a professional in the New Jersey metro area and you believe that you have been wrongfully terminated, that you’ve been denied salary, bonuses, commissions, or other wages that are owed to you, or that your employer has failed or refused to reasonably accommodate your disability, call New Jersey Wrongful Termination Lawyer David S. Rich at (201) 740-2828 today.