A Policy Handbook as an Employment Contract

By Lane V. Erickson, Attorney

Regardless of whether there is a written employment contract, an oral employment contract or no employment contract at all, when an Employment Handbook or Policy Handbook exists, it may provide additional contractual rights either for the employer or the employee. The result is that an Employment Handbook or Policy Handbook could control an employer’s ability to either discipline or terminate an employee for misconduct. For this reason, it is important to review all of the statements made in the Employment Handbook or Policy Handbook regarding discipline and termination.

The very best Employment Handbooks or Policy Handbooks contain statements that allow discretion to the employer for both disciplining and terminating employees with language such as, “should the employee engage in this or similar behavior, the employee may be subject to discipline up to and including termination.” Some even go so far as to state specifically that certain types of described misconduct by an employee may lead to discipline and/or termination.

There is one case in Idaho dealing with internal policies creating a contractual right of termination for misconduct that is worth mentioning. In O’Neal v. Employment Security Agency, 89 Idaho 313 (1965), the employee was a postal worker who was terminated when the Postal Service learned that he had been charged and convicted of lewd conduct with a child under the age of 16. The employee was put on probation and did not have to serve a jail sentence. However, the Postal Service terminated the employee for violating a policy stating that termination could occur if the employee participated in “Infamous, dishonest, immoral, or notoriously disgraceful conduct, . . .”  This termination was upheld.

Although the O’Neal, decision was focused more on whether the employee who was terminated should be eligible to receive unemployment benefits, the termination of the employee in O’Neal occurred due to off-duty misconduct. The Idaho Supreme Court quoted, and appears to have adopted the reasoning of a Pennsylvania court in Department of Labor, Etc., v. Unemployment Comp. Board of Review, 148 Pa.Super. 246, 24 A.2n 667 (1942) where the Pennsylvania Superior Court stated, “An employer cannot be blamed because of his unwillingness to employ a thief, or one guilty of a crime involving dishonesty or moral turpitude, whether the offense was committed to his injury or another’s.”

If you have any questions about employment termination, we can help. Call us toll free at 877-232-6101 or 208-232-6101 for a consultation with Lane Erickson and the Racine Olson team of Employment Law attorneys in Idaho. You can also email Lane Erickson directly at lve@racinelaw.net. We will answer your Idaho Employment Law questions and will help you solve your Idaho Employment Law problems.

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