Are You Creating Contractual Obligations and Increased Liability?
It has long been recognized that statements in an employee handbook can create contractual obligations between an employer and employee. In a more recent case, a Connecticut U.S. District Court considered a case in which anti-harassment language contained in a Costco Wholesale Warehouse employee handbook provided more protection for its employees than required by law. In Marini v. Costco Wholesale, D. Conn. No. 3:11-cv-00331 (Dec. 1, 2014), a baker’s assistant (Peter Marini) at a Costco Warehouse in Connecticut suffered from Tourette’s syndrome, which causes involuntary twitches and other physical reactions and verbal utterings. A co-worker continuously taunted him for years and continued to do so even after the employee complained to management. Subsequently, Marini was terminated for recording these attacks by his co-worker. Marini then sued Costco, asserting claims for violation of ADA, Connecticut Fair Employment Practices, breach of contract and common law claims.
On December 1, 2014, the District Court granted Costco’s motion for summary judgment on all claims except the breach of contract claim. The Court found that the employer’s anti-harassment policy created contractual rights exceeding applicable state and federal discrimination laws in favor of the employee to be free from harassing behaviors and created investigative duties and obligations on behalf of Costco. The Costco handbook language provided as follows:
. . . [i]n cases where investigation confirms the allegations, appropriate corrective action will be taken, regardless of whether the inappropriate conduct rises to the level of any violation of law.
Further, the employee handbook provided broad definitions of harassment:
Harassment can be difficult to define. Misconceptions abound. For this reason, we require you to use our harassment reporting policy without worrying about whether the conduct involved would be considered harassment in a legal sense.
If you consider the conduct to be harassment, report it. This policy is intended to assist Costco in addressing not only illegal harassment, but also any conduct that is offensive or otherwise inappropriate in our work environment.
As Marini demonstrates, if an employee handbook provides broader protections to its employees than required, an employer may be subjecting itself to increased and unnecessary liability. To avoid potentially significant exposure to employee claims, companies must be strategic and diligent in drafting their employee handbooks. For assistance in crafting an employee handbook that both complies with state and federal law and minimizes legal exposure, feel free to contact the EMPLOYMENT PRACTICES GROUP.