Court: Employee Handbook Disclaimer Not a Lawsuit Shield

January 15, 2003 (PLANSPONSOR.com) - A fired sales administrator for a Vermont apparel maker has the right to sue her ex-employer for breaching an implied contract despite a prominent disclaimer on an employee handbook, the Vermont Supreme Court ruled.

The split three to two ruling partly reverses a lower court’s decision to throw out a lawsuit from sales administrator Linda Dillon against Champion Jogbra of Burlington, Vermont, the National Law Journal reported.

According to the National Law Journal, Dillon had sued the apparel maker after she was encouraged to take a more challenging position and was then soon fired for not meeting expectations. She claimed that when encouraged to apply, she was told that it would take several months to get up to speed and that Champion would give her extensive training. Instead, Dillon got just four days of training and was removed from the slot without prior notice after two months.

The legal wrangling revolves around the handbook’s all-capitals liability disclaimer: “THE POLICIES AND PROCEDURES CONTAINED IN THIS MANUAL CONSTITUTE GUIDELINES ONLY. THEY DO NOT CONSTITUTE PART OF AN EMPLOYMENT CONTRACT, NOR ARE THEY INTENDED TO MAKE ANY COMMITMENT TO ANY EMPLOYEE.”

According to the majority Vermont Supreme Court opinion, the Dillon lawsuit should go to a jury to resolve tension between the disclaimer and “an elaborate system governing employee discipline and discharge” outlined in the handbook, the Law Journal article said.


The terms spelled out in the book “are inconsistent with the disclaimer at the beginning of the manual, in effect sending mixed messages to employees,” the majority justices wrote. .

Champion lawyer Eric Hudson told the National Law Journal that the inconsistency is  “a real blow to the status of at-will employment in Vermont.”  
Dillon’s lawyer, Pietro Lynn, also of Burlington, argued that the finding of ambiguity was consistent with state law.

The case is Dillon v. Champion Jogbra, No. 2000-560.

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