Employee Handbooks Are Either Binding or They’re Not

The Massachusetts Federal Court recently reaffirmed what should be obvious by now.  If an employer issues a Handbook or similar set of policies and procedures and includes language reserving the right to unilaterally change those policies and procedures, then the employer cannot seek to bind an employee to those policies and procedures.  In this particular case, the Handbook contained a provision requiring employees to arbitrate any disputes.  There were numerous provisions in the Handbook (likely recommended by well-meaning attorneys including this one) included to ensure that the Handbook would not be deemed to be a contract or to impose any contractual obligations on the employer.  This is a wise practice.  At the same time, however, the employer wished to have any and all disputes subject to binding arbitration, also arguably a wise practice.  However, rather than create a separate arbitration agreement, the employer included the arbitration provision in its non-binding, non-contractual Handbook.  Not surprisingly, the Court was unwilling to treat the arbitration provision any differently from any other provision of the Handbook.

Takeaway:      Enforceable agreements cannot contain language to the effect that they are not enforceable.


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