June 16, 2010

Contractual Disclaimer in Employee Handbook Defeats Lund Boat Employees’ Claims

Posted in Contracts, Disclaimers, Employee Handbooks, Vacation Policies tagged , , , , at 10:49 am by Tom Jacobson

In a June 15, 2010 decision the Minnesota Court of Appeals has re-affirmed the importance of contractual disclaimers in employee handbooks.

The case, Roberts v. Brunswick Corp., involved a change in the vacation policy at the Lund Boat Company which is owned by Brunswick. After Brunswick acquired Lund, it implemented a new vacation policy. Several Lund employees were unhappy with the change because they preferred the old policy, and they believed Brunswick was contractually obligated to follow it. The employees also felt that Brunswick breached that contract by refusing to honor a promise to credit them with earned vacation pay.

In the employees’ ensuing class-action lawsuit, the trial court sided with the employees. The trial court concluded that the company’s employee handbook, which included the old vacation policy, created a unilateral employment contract because it referred to vacation pay in the context of a general benefit.

Brunswick appealed, and the Minnesota Court of Appeals reversed the trial court’s decision on the handbook-as-a-contract issue. Crucial to the appellate court’s decision was the fact that the handbook included a disclaimer establishing that the handbook did not created a contract. Because it did not create a contract, Brunswick was free to modify its vacation policy, and doing so was not, therefore, a breach of contract.

The case stresses the importance of including a properly drafted contractual disclaimer in employee handbooks for Minnesota employers who do not want to be contractually bound to policies and procedures stated in their employee handbooks and policy manuals.

You can read the entire opinion at http://bit.ly/bQT99q.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

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