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A distributed company policy manual that is intended to cover the general work force may be construed as an implied contractual offer to abide by the terms contained therein. The operative determination is whether the distributed manual or handbook could have led employees to reasonably believe that the company's "policies," particularly with respect to job security, would be honored as terms and conditions of employment, therefore, obviating the need for unionization.
In November 1980, plaintiff Martha Preston was hired by The Claridge Hotel & Casino, Ltd., now known as The Claridge at Park Place, Inc., d/b/a Del Webb's Claridge Casino Hotel (hereinafter referred to as "Claridge") as a casino floor person and was responsible for supervising the blackjack and baccarat games. Prior to the opening of the casino in June 1981, Claridge held a general orientation meeting at which time a Claridge representative distributed Employee Handbooks to all employees. The representative explained what was expected of the employees and what, in turn, the employees could expect in terms of employment policies. All employees were required to read the handbook and sign a form which indicated that they understood that they could be terminated for violating the terms contained in the handbook. Approximately one year later, Claridge issued an otherwise identical "revised" handbook which contained a disclaimer advising employees that the handbook was not to be construed as a contract. Although no explanation was provided as to the significance of this disclaimer, all employees were required to read the revised handbook and sign the detachable acknowledgment form.
In August 1984, Preston was fired by Claridge after becoming involved in a dispute with a co-worker in the casino. Thereafter, Preston instituted this action for wrongful discharge and was awarded damages in the sum of $ 67,000. The jury found that (1) Claridge was contractually prohibited from discharging Preston without just cause by virtue of the representations concerning maximum job security contained in the first handbook; (2) these obligations had not been extinguished by the disclaimer contained in the second or "revised" handbook; (3) Preston had not been fired for just cause and (4) Preston was entitled to $ 42,000 in current lost wages and $ 25,000 in future lost wages. The trial court awarded Preston pre-judgment interest on the $ 42,000 jury award. Claridge's motion for a new trial or, alternatively, a remittitur of the damages award, was denied. This appeal followed.
Did the disclaimer within the second handbook distributed by Claridge extinguish any contractual job security obligations that already existed?
The court affirmed the judgment rendered in favor of Preston for wrongful discharge because it found that the distributed company policy manual was properly construed to create an implied contractual offer to abide by the terms contained therein. The court found that the policy manual could have led employees to reasonably believe that the policies of appellant employer, regarding job security, would be honored as terms and conditions of employment. The court held that the disclaimer within the second handbook distributed by Claridge did not extinguish any contractual job security obligations that already existed. The court determined that there was sufficient credible evidence for the jury to have found that the first employee handbook created an implied contract of employment under which respondent could be not be discharged without just cause. The court held that since appellant failed to utilize clear, straightforward language for a disclaimer, the jury verdict and damage award rendered in favor of Preston would not be disturbed.