Progressive discipline may all be in the handbook
Published 06/24/05

Progressive disciplinary procedures set forth in an employee handbook for lesser misconduct may be forced upon an employer even if the employer's handbook clarifies that it is not a contract between the worker and the employer, if the Court finds that disclaimer was not conspicuous.

On October 26, 2001, in the case of Ferguson v. Host International, Inc ., the Massachusetts Appeals Court found that Ferguson was permitted to go forward with his breach of contract claim for being terminated as a sales clerk at the Dunkin Donuts counter at Logan Airport because Host International alleged he was rude to a customer.

The customer had asked what was special about the special of the day and got upset at Ferguson when he responded "not much" or "nothin" thereby causing the customer to go to a competitive cafe. Ferguson was fired for that conduct when a supervisor came across the scene after the verbal exchange and saw the angry customer.

There was no indication that Ferguson used improper language, called the customer names, threatened, or took any physical action against the customer. Host International had an employee handbook in which it reserves the right to modify, change, disregard, suspend, or cancel at any time without written or verbal notice, all or any part of the handbook's contents as circumstances might require.

It was expressly stated in the handbook that it would not be construed to constitute a contract, expressed or implied, between the Marriott Corporation and Host/Tr

avel Plaza and any of its workers.

However, the Massachusetts Appeals Court found that this language was buried in fine print in the handbook and that the handbook had an expressed progressive discipline procedure when a situation occurs which is in violation of policy or rules or indicative of inappropriate behavior or poor judgment

The Court noted that based upon the language in the handbook, Ferguson could reasonably believe that his conduct would fall within the handbook's progressive discipline procedures that required prior warnings and an opportunity to respond. The Court further noted that it is hardly in the position to treat the right to be heard and the right to tell one's side of the story as being valueless.

Ferguson was denied that right and the Massachusetts Appeals Court overturned the trial judge's summary judgment ruling in favor of Host thereby allowing the case to go to trial on this breach of contract theory. Of course, if the misconduct was more severe, such as if Ferguson had physically or verbally assaulted the customer, the Court might have ruled that he did not have a reasonable belief that he could commit such acts and only get an oral or written warning.

For employers this case reaffirms the need to have a clear, conspicuous disclaimer in a handbook stating that it is not a contract and is subject to change, and such disclaimer may also be contained within a receipt signed by each employee acknowledging receipt of the handbook and their obligation to read, understand and follow it.

Also for any progressive disclaiming process, the employer should reserve full discretion in determining whether to use that process so that if the performance deficiency or misconduct is sufficiently severe in management's mind, she can proceed directly with firing the employee under that process.

J. Daniel Marr is a director and shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and business persons on a variety of legal issues, including employment, and advocating on their behalf. You can reach Attorney Marr by e-mail at: dmarr@hamker.com

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