Category Personnel/Employment
Title Employee Handbooks: What Does Yours Contain?
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Preview Employee Handbooks: What Does Yours Contain?
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Employee Handbooks: What Does Yours Contain?
By Thomas J. Cathey, EdD, ACSI Director for Legal/Legislative Issues

Victoria Domenichetti was hired by the Salter School in Massachusetts as an externship coordinator. Ms. Domenichetti was responsible for placing students in on-the-job settings to gain practical skills. The Salter School, a private for-profit school, provides career education in various health-related fields. Within months after Ms. Domenichetti started her job, Salter asked her to train approximately five fellow externship coordinators. They also informed her that she would be rewarded for training the externship coordinators with a raise after her annual evaluation. At all times, Ms. Domenichetti's work was above average, and she never received a written or verbal warning. Her annual evaluation rating report stated that her work performance had exceeded expectations.  

Several months after that evaluation, Ms. Domenichetti informed the human resources director that she was pregnant and requested information on the school's maternity-leave policy. After that she submitted her Family and Medical Leave Act (FMLA) paperwork to the director, requesting time off to care for her newborn.  

The Salter School was a covered employer under the FMLA, and Ms. Domenichetti had worked 12 months and for at least 1,250 hours of service with the school. Later on that same day, one of Ms. Domenichetti's peers was promoted to director of career services. At the time of her promotion, she had less experience than Ms. Domenichetti in career services. Then just a few days later, the campus president of the school e-mailed Ms. Domenichetti to inform her that she was being transferred to a part-time position. Reducing her to 20 hours per week resulted in reduced benefits, such as FMLA job-protected leave. She was told that the demotion was because of decreased student enrollment. However, other campuses of the school with similar student populations had not undergone reductions similar to hers.  

Ms. Domenichetti then filed a complaint with the court alleging unlawful interference and retaliation in violation of FMLA. She contended that the school had interfered with her request for maternity leave under FMLA and retaliated against her by passing her over for promotion and demoting her to a part-time position.  

However, the school argued to have the dispute move to arbitration and to stay or dismiss the litigation. They contended that Ms. Domenichetti had signed an agreement requiring that the dispute be arbitrated. However, Ms. Domenichetti stated that she did not agree to arbitrate such claims, because the arbitration agreement was contained within a noncontractual employee handbook and was unenforceable. What did the court decide? You be the judge ...           

Employee Handbooks: What Does Yours Contain?  

On Ms. Domenichetti's first day of employment, she was asked to sign a "Receipt & Acknowledgment of the Premier Group Employee Handbook." (Premier was the parent company.) Every employee is required to receive an employee handbook and acknowledge receipt of that handbook. "The handbook articulates the school policies under 22 headings, with various subheadings." Early in the handbook, under the heading Employment, it states, "Nothing in this handbook constitutes a promise or guarantee as to the terms and conditions of your employment with Premier." The school acknowledged that the employee handbook is not a contract. The school also made the employees aware that it maintains the authority to alter the policies contained within the handbook at its discretion.  

The handbook did contain a "dispute resolution policy" that would govern the resolution of "covered disputes" arising from the employment agreement. According to the handbook, the school "adopted its dispute resolution policy in order to provide 'an efficient and mutually beneficial' system of resolution. The Dispute Resolution Policy states that the employee and the employer both make mutual promises to one another to agree '[t]o be bound by the grievance and arbitration procedure' " and "that any covered dispute be submitted first to the grievance procedure." A covered dispute includes " 'any claim that the employer has violated the employee's rights under any federal, state, or municipal constitution, statute, regulation, common law or ordinance' and applies to 'any claims for discrimination[,] including but not limited to, discrimination based on sex [or] pregnancy." The agreement outlined all the appropriate procedures for resolving a grievance. The Dispute Resolution Policy did not have a signature line on the bottom of its last page nor did the school present the policy in a separate document from the handbook.  

At the time, the receipt and acknowledgement page stated that " 'the handbook is intended to provide an overview of the company's current policies,' and that 'the contents of this handbook may be changed at any time at the discretion of Premier Education Group.' " On her first day, Ms. Domenichetti did sign the receipt and acknowledgment page. The handbook also contained two additional pages on their drug policy and conflict of interest policy; each had signature lines that were to be signed.  

The court stated that under Massachusetts law, an employee handbook or personnel manual may form the basis of a contract. However, "under Massachusetts law, courts must consider (1) whether the employer 'retain[s] the right to modify unilaterally the personnel manual's terms;' (2) whether the manual's language states that its purpose is to 'provid[e] guidance to company policies;' (3) whether there was 'any negotiation over the terms of the personnel manual;' (4) whether there was 'any special attention called to the manual by the [employer];' and (5) whether the '[employee] signed the manual, or in any way manifested his assent to it or acknowledged that he understood its terms.' "  

The court went on to say, "Even in cases where the employee has acknowledged his or her receipt of an arbitration agreement-either independently or contained within an employee handbook-courts have found the obligation to arbitrate unenforceable when the employer retains the unilateral right to change the terms of the agreement because such a right renders any recited promise illusory."

The school had contended that while the handbook itself is not a contract, the Dispute Resolution Policy contained within the handbook is a separate and distinct binding agreement. They said the policy itself did not say anything within the policy about the ability to change the terms.  

The court stated that in their opinion the Dispute Resolution Policy is not distinct from the handbook. The court concluded its decision on the basis of the following factors:  

  1. The school conceded that the handbook is not a contractual agreement between the parties.
  2. The school retained the unilateral right to alter the terms of the handbook without the plaintiff's consent.
  3. "The handbook makes clear that its purpose is to provide guidelines to company employees."
  4. The school did not give Ms. Domenichetti "the opportunity to negotiate the terms of the handbook and likewise did not direct any special attention to the handbook's import."
  5. Although Ms. Domenichetti "signed the Receipt & Acknowledgment page, that fact, standing alone, is not dispositive of contract formation."  

In summary, the court opinioned that the school "retained the ability to modify the terms of the handbook at their discretion, without notice to plaintiff. Because the Dispute Resolution Policy was a subsection of the handbook, the power to modify terms also applied to the Dispute Resolution Policy." The school "thus had the power to require plaintiff to arbitrate the covered dispute, while simultaneously reserving the right to modify the agreement. Such an agreement is not enforceable."  

Therefore, the court concluded that the school was not entitled to arbitration, and the motion to compel arbitration was denied.  

Domenichetti v. The Salter School, LLC, 2013 WL 1748402 (D. Mass. 2013)  

What Does This Mean for Christian Schools?   

For many years, ACSI has recommended that Christian schools consider using Christian conciliation and binding arbitration agreements in their employee materials and even their parent agreements. Utilizing such agreements provides benefits such as fulfillment of the scriptural mandate in 1 Corinthians 6 of Christians not going before secular courts, addressing conflict biblically pursuant to Matthew 5:23-25 and Matthew 18: 15-17, the opportunity to pursue reconciliation of all parties according to Ephesians 5:1-2, Ephesians 4:1-3, and 2 Corinthians 5:11-21, so as to be a witness of God's love and provision, John 13:34-35.  

If the Christian school utilizes a Christian mediation or arbitration agreement, the board and administration should be committed to its purpose and make every effort to resolve disputes in a Christlike manner. This includes working with the disgruntled employee (or parent, if you use such an agreement in your enrollment contract) on a reasonably quick time schedule to resolve differences.  

For the mediation and arbitration agreement to work, the Christian school must do the following:  

  1. Have the policy in the employee contract. (It can be referenced in the employee handbook.
  2. Have a separate document that explains the dispute resolution policy and how the mediation or arbitration works.
  3. Have the employees sign acknowledgement that this policy has been explained to them, they understand the policy, and they agree to abide by the policy.
  4. Make sure your mediation and arbitration policy is legal under your state law. The wording of the policy can make all the difference in a dispute.
  5. Arbitration standards or procedures referenced in your mediation and arbitration agreement need to be made available to employees at the time the contract is signed.  

ACSI has suggested language for Christian mediation or arbitration. Contact the Legal/Legislative Department for a copy and other resources on this subject. The Personnel Resources for Christian Schools CD can be purchased from the ACSI online store, www.purposefuldesign.com. This CD contains the policy and how to incorporate it into your contracts. It also contains a booklet entitled Guidelines for Christian Conciliation by Peacemaker Ministries.  

LLU 24.3

Notice: This article is designed to provide accurate and authoritative information in regard to the subject matter covered. It has been provided to member schools with the understanding that ACSI is not engaged in rendering legal, accounting, tax, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Laws vary by jurisdiction, and the specific application of laws to particular facts requires the advice of an attorney.  

Association of Christian Schools International
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Colorado Springs, CO 80920
Phone: 719.528.6906
ACSI.org  

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