So You Think Your Handbook Disclaimer Is Adequate? Think Again . . .

This past February the Appellate Division of the New Jersey Superior Court issued its unreported opinion in Maselli v. Valley National Bancorp (the “Bank”), a case that serves as a stark warning to employers of the exacting standards that must be met before a contractual disclaimer in an employee handbook (or other document) will be deemed adequate by the courts.

By now, most employers are aware that employee handbooks or other policies describing the terms and conditions of employment may give rise to contractual obligations unless the employer includes a clear and prominent disclaimer of any contractual obligation. In its seminal decision in Woolley v. Hoffman La Roche, the New Jersey Supreme Court suggested that the disclaimer indicate that “there is no promise of any kind by the employer contained in the manual; [and] that regardless of what the manual says and provides, the employer promises nothing…”

In Maselli, the plaintiff claimed she was transferred and ultimately terminated because the Bank failed to comply with that anti-harassment and bullying provisions of its Code of Conduct. The Bank moved to dismiss, pointing to the following disclaimer that was prominently displayed on the first page of its employee manual:

Employment is at Will:
Employees of Valley National Bank are generally employees-at-will. This means that both the employee and Valley have the unrestricted right to terminate the employment relationship, with or without cause, at any time. No employee or agent of Valley National Bank is authorized to make any oral or written representations altering the at-will employment relationship unless made the subject of a specific written contract of employment. Such contract can only be authorized by the Chairman, President, and CEO.

It should be noted that nothing contained in this Valley Code of Conduct and Ethics or in any policy or work rule of Valley shall constitute a contract of employment or a contract or agreement for a definite or specified term of employment.

Although the court found that the disclaimer was sufficiently prominent, it nevertheless found that the disclaimer was insufficient. First, it reasoned that the title “Employment is at Will” did not clearly describe the extent of the disclaimer that followed. Second, it noted that while the language of the disclaimer effectively negated any contract of employment or other promise of job security, it did not “clearly and unqualifiedly” disclaim a promise by the Bank to abide by the Code of Conduct as long as the employee remained employed. To do so, the Bank should have incorporated the language suggested in Woolley that “there is no promise of any kind by the employer contained in the manual; [and] that regardless of what the manual says or provides, the employer promises nothing…”

This case is yet another example of the how the courts will hold employers to very stringent standards when reviewing the enforceability of a Woolley contract disclaimer. Employers should have the language of any contract disclaimers contained in employment handbooks, policies, offer letters and other employment documents reviewed by employment counsel to ensure that they effectively disclaim the wide array of contractual obligations that could be implied against the employer.