Massachusetts Court Explains Why Your Employee Handbook is Almost Certainly not a Contract

Employee handbooks, when done right, are helpful documents. They help employees understand important workplace rights, rules, expectations, and policies. They tell you how much vacation you get, who to call when you need to use sick time, who to call when you are being harassed, what not to put in the work refrigerator, and what you can’t wear to work. Important stuff, for sure. But are they contracts? Can you actually enforce one? A Massachusetts court recently faced this argument and explained why that’s almost always: no.

Is My Massachusetts Employee Handbook a Contract? Can I Enforce My Massachusetts Employee Handbook?

Jeannie Lee sued her former employer, the Howard Hughes Medical Institute, for a number of things, including discrimination on the basis of sex and race. She also sued them for breach of contract, arguing that her employer breached the employee handbook by failing to comply with provisions regarding the promotion process. That claim can only survive if the handbook is a contract. Is it?

Under Massachusetts law, whether an employee handbook constitutes an enforceable contract turns on a variety of factors including its content and the circumstances of its distribution. Massachusetts courts generally consider the following six factors when deciding whether an employee handbook is a contract:

1. Does the handbook allow the employer to unilaterally modify the terms;

2. Does the handbook state that it is only meant as ‘guidance’ as to the employer’s policies;

3. Were there any negotiations that led to the terms of the handbook;

4. Does the handbook contain a stated term of employment;

5. Did the employer call any ‘special attention’ to the handbook;

6. Was the employee required to sign, assent-to, or acknowledge the handbook’s policies as a condition of employment.

The Court evaluated these factors and determined that Ms. Lee’s contract claim failed because her handbook was not a contract. First, the handbook contained the following disclaimer on the very first page:

HHMI may unilaterally, at any time and in its discretion, amend, supplement, modify, or eliminate any or all policies described in this Handbook (with the exception of policies relating to at-will status of employees), or any or all benefits described in this Handbook, with or without prior notice.

Also, the handbook made a clear distinction between official policies and the guidance contained in the handbook. The handbook also contained no term of employment and the policies in the handbook were not negotiable.

Most Massachusetts handbooks are structured to avoid becoming contracts. Employers have grown to be pretty good at avoiding handbooks becoming contracts. In all likelihood, your employee handbook is not a contract. If you think that may not be the case, or if you have other question about your employee rights, feel free to contact us to schedule a free consultation.