7 July 2009
DILLON v. CHAMPION
Linda Dillon has sued Champion after she was encouraged to take a more challenging position within the company and was then fired for not meeting expectations. She claimed that she was told that it would take several months to get up to speed and that Champion would give her extensive training. Instead, she was only given four days of training and was fired without notice after two months.
This case highlights the care that employers should take with the design of employee handbooks. Even where a handbook contains a prominent disclaimer stating that it does not establish any contract rights, an employer must be careful with all of the handbook’s wording to not create a contractual liability.
1. Legal Issues: Linda Dillon sued her former employer, Champion Jogbra, claiming that it breached an implied contract when it terminated her employment without following the company’s progressive discipline policy as stated in the company handbook. She also argues that the trial court’s summary judgment on her claim of promissory estoppels was incorrect. Champion claimed that Dillon was an at-will employee, and thus could be terminated at any time, and that nothing in the employee handbook created any contract rights. To support this claim, Champion pointed to the prominent disclaimer on page one of the handbook, which stated: "The policies and procedures contained in this manual constitute guidelines only. They do not constitute part of an employment contract, nor are they intended to make any commitment to any employee concerning how individual employment action can, should, or will be handled.” Court’s Ruling:
The court held that the progressive discipline policy outlined in the employee handbook could create an implied contract even though the handbook contained a large, all capital letter disclaimer stating that it did not create a contract. In addition, the court stated...