Safeguarding At-Will Employment: The Role of an Employee Handbook
Alexa Martin
It is of utmost importance that an employer maintains an employee handbook that complies with current legal standards. One important provision that an employer should include in an employee handbook is an at-will provision which states, among other things, that the employee handbook does not constitute a contract of employment or modify the at-will nature of the employment relationship.
Employment relationships in Pennsylvania are presumed to be at-will unless there is a statutory or contractual provision to the contrary. If employment is at-will, either the employer or the employee may terminate the employment relationship at any time and for any reason. However, the presumption of at-will employment can be rebutted by establishing, among other things, the existence of an agreement for a definite duration or an agreement specifying that the employee will be discharged only for just cause.
Absent an at-will provision in an employee handbook, an employer runs the risk that the employee handbook will be construed as an enforceable employment contract. An employee handbook may be considered a binding employment contract if a reasonable employee would interpret the provisions of the employee handbook as indicating the employer’s intent to override the at-will rule and be legally bound by the representations in the employee handbook. For example, in the 2024 case of Morrissey v. St. Joseph’s Preparatory School, the Pennsylvania Superior Court considered whether an employee handbook created enforceable contractual obligations. The court held that the at-will provision in the employee handbook sufficiently preserved the at-will employment relationship. Thus, the school was not contractually bound by the employee handbook’s procedures, and the employee was unable to prevail on his claim that the school breached a policy in the employee handbook which outlined a process for the non-renewal of contracts.
If you are an employer with questions about how your employee handbook may affect the at-will nature of your employment relationships, please contact a member of the Labor and Employment Law attorneys at Appel Yost.