How Breach of Contract Claims Can Be Avoided

Employers can minimize the likelihood of being faced with breach of contract claims based on their employee handbooks (and increase their chances of prevailing against any such claims) by:

• informing their employees that the handbooks are guides --not employment contracts; and
• making sure that the handbooks are worded accordingly.

• The handbooks should not contain provisions that promise --directly or indirectly --permanent, lifetime, or a fixed term of employment.
• Employers should retain sufficient discretion in stating terms and conditions of employment. In fact, it is best to retain such discretion with respect to each policy statement.
• The use of a disclaimer is generally desirable, but it should be in a prominent place so that employees know what is intended. Also, the language of the disclaimer should be clear and unambiguous; otherwise, a court may find that a contract was created from the handbook despite the disclaimer.