Published on August 11th, 2011 by Alan L Sklover
Question: I recently read your Newsletter entitled “In Employment Agreements and Offer Letters – Beware of ‘Incorporated by Reference.’” Great stuff. I have a related question:
What if, on the one hand, language in an Employee Handbook (that is incorporated by reference into an employment agreement) says that all employees are “at will,” and thus can be terminated at any time. However, on the other hand, my Employment Agreement says “The employer must give the employee 30 days notice before termination?” Which controls?
Manchester, New Hampshire
Answer: Robert, your question comes up very often, and for that reason I expect this answer will be helpful to many. For several reasons, while I cannot interpret written materials I have not examined, it is almost certain that the Employment Agreement controls over a conflict with the Employee Handbook:
1. First and foremost, you need to read each and every word of both the Employment Agreement and the Employee Handbook. I know this might very well put you to sleep – it has done that to me – but a thorough word-for-word reading of both documents is the only and best place to start. You may very well be surprised to find words, phrases and sentences you have never noticed before, especially since before this time you did not have this issue in mind. I’ve been astounded to find words, phrases and sentences in the strangest of places in documents, seemingly put there by accident, or perhaps with intent to deceive. I read every word, and even every punctuation mark, and say to myself, “How can this help, or hurt, my client?” There is simply no substitute for care and precision in reviewing documents.
2. A common rule for interpreting legal documents is this: “Specific controls over general.” It is quite common for there to be errors, inconsistencies and contradictions between documents. Over many years, perhaps centuries, general rules of “fairness” and “common sense” have developed, in good part by the decisions made by judges over the centuries. This is what we call “common law,” or what some people refer to as “the law of the common people.” One common law rule of interpretation is this: “Specific expressions control over general expressions.” Thus, if in your employment agreement your employer wrote “We promise, Robert, to give you 30 days notice before termination,” but also wrote in its handbook, “All employees are hereby placed on alert that we do not have to give any notice before termination,” the specific promise to you would predominate over the general words to all employees. That’s common sense, no?
3. In addition, it is probable that your employee handbook says, in its first few pages, “This is not a contract of any kind.” Most employee handbooks have such language in their first few pages. This would likely be interpreted to mean that “Any Employment Agreement predominates over this Employee Handbook.” In fact, you may find just that sort of language in your own Employee Handbook. Another common sentence found in many Employee Handbooks is “In the event of conflict, contradiction or inconsistency between this handbook, on the one hand, and an employment agreement, on the other hand, the terms and provisions of the employment agreement will govern and control.” I have seen such a sentence in many employee handbooks.
4. Moreover, most employment agreements have a clause that says “This constitutes the entire agreement between employer and employee, and supersedes all other agreements.” That is what us lawyers call an “integration clause.” [You might want to read a Newsletter I have written on this subject entitled “In Employment Agreements and Offer Letters – Watch Carefully for an ‘Integration Clause.’”] While it could be argued that the Employee Handbook is “integrated into” the Employment Agreement, the better and more likely view is that it is not.
5. If you remain concerned, consider asking HR or Legal for an assurance that your (and my) interpretation of the contract and handbook is theirs, too. In making this suggestion, I understand and appreciate that doing so may make you feel awkward, defensive or uncomfortable. If you would feel that way by asking such a question, it is understandable. At the same time, sometimes the “uncomfortable” things in life end up bringing us “greater comfort” in the long run. It is just a suggestion. If you do follow this suggestion, consider doing so by email, so you will hopefully receive an email response, and then you will have a permanent “record” of your legal rights. As I often say about workplace navigating and negotiating, “Speak with your fingers, not with your lips.”
Robert, thanks for writing in, and for raising this interesting question. I hope this is helpful. If you are helped by it, I ask you to consider using our advertisers from our blogsite, for your travel, printing, domain name and other needs, because that is how we “keep the lights on.”
© 2011 Alan L. Sklover, All Rights Reserved.