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Handbooks – Woolley Claims

Good Faith & Fair Dealing in Employment Contracts

In most employment situations, employees and employers are engaged in an at-will relationship.

This means that either party may terminate the employment relationship at any time and for any reason. This relationship is different, however, in situations where there is a contract, either express or implied, that governs the conditions of employment. In these instances, both parties are bound by the terms of the contract and can be liable if there is a breach.

One way that an at-will employment relationship may be modified is when a Woolleycondition exists. Richard Woolley worked for his company for several years. When he began his job, he was given an employment manual that explained several ways in which the employment relationship may be terminated. These included layoff, discharge due to performance, disciplinary discharge, retirement, and resignation. Nowhere in the manual was it stated that an employee could be terminated at the will of the employer without cause.

Woolley was later fired without cause, and he sued for wrongful termination. In his case, Woolley argued that by enumerating different methods of termination, his employer had modified the at-will relationship. Although the lower courts disagreed with Woolley and ruled in favor of his employer, the New Jersey Supreme Court eventually heard the case. There, the court found that by not listing “discharge without cause” in the employee handbook as a possible termination method, the employer created an implied employment contract with Woolley.

Although Woolley’s employer continued to argue that no such contract existed, the New Jersey Supreme Court disagreed. In its ruling, the court concluded that in exchange for Woolley’s continued work, he was provided with job security, thereby creating a valid contract. The driving force behind the court’s decision was that employers should treat their employees fairly. In other words, it is unfair for an employer to make an express or implied promise to its employees and to then later renege on that promise.

Despite the way the Woolley case turned out, the New Jersey Supreme Court also gave employers an important piece of advice to avoid accidentally creating promises. The court stated that a simple disclaimer could have avoided this type of confusion or the mistaken belief that a contract or promise exists. In order to be sufficient, however, the disclaimer must be clear and prominent, such that it is not misleading or confusing.

Overall, the Woolley case protects New Jersey workers. The court’s decision means that employers cannot mislead their employees or make promises that they do not intend to keep. Doing so is unfair and possibly illegal. Unfortunately, sometimes it can be difficult for an employee to understand all of the terms and conditions of an employment contract or employee handbook. If you need assistance in understanding the terms of your employment agreement, an experienced attorney can help. By understanding your rights, you can better protect yourself against illegal employment practices. Furthermore, if you have been treated unfairly or illegally, a knowledgeable employment lawyer can help you exercise your rights by filing a complaint or lawsuit against your employer.

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