Joseph Two
By Joseph Two

An employee handbook can be a valuable tool for a company.  But it can also create significant liability for employers, including exposing the employer to claims under the Illinois Wage Payment and Collection Act and common law contract claims.

Generally speaking, a handbook can communicate what is expected of both employees and management, oftentimes designed in an effort to promote fairness, increase employee satisfaction, and with the intention of trying to protect employers.

However, the general presumption in Illinois of an “employee-at-will” employment can be overcome by an employee handbook that is worded so that it becomes an enforceable contract. This can be the case if the handbook contains promises that an employee would reasonably believe to be an offer, if it is disseminated so broadly that all employees are aware of its contents and reasonably believe that it constitutes an offer, and an employee accepts the offer by commencing or continuing to work after reviewing the manual.  Duldulao v. St. Mary of Nazareth Hospital Center, 115 Ill. 2d 482, 490 (1987).

Sometimes employers insert disclaimers in handbooks in an effort to prevent an employee handbook from being considered an enforceable contract.  Illinois courts have held that disclaimer language within an employee handbook can negate language which would otherwise reasonably be believed to be an offer for a contract.  Wheeler v. Phoenix Co. of Chicago, 276 Ill.App.3d 156 (1995); Moore v. Illinois Bell Telephone Co., 155 Ill.App.3d 781 (1987).  However, simply inserting a disclaimer into a handbook may not be enough to preclude the formation of a contract in every instance. For example, a disclaimer that is clear in its language but is not sufficiently conspicuous or set off from the rest of the handbook is not enough to negate the effect of unequivocal contract terms in a handbook. Perman v. ArcVentures, Inc. 196 Ill.App.3d 758 (1990).  Another issue is whether the disclaimer states in clear, unequivocal language that the handbook is not a contract, and whether it is conspicuous and prominently set off from the rest of the handbook text.  Perman, id.

Disclaimers may not be enough though and handbooks can be interpreted as making a binding contract, especially where employers fail to draft disclaimers that are clear, unambiguous, and conspicuous, or where the disclaimer is not set apart from the rest of the handbook text, printed in larger font, and there is no receipt for an employee to sign and return to the employer upon review of the handbook.

Attorney Joseph J. Two is Of Counsel to the DeBlasio Law Group.  For over 25 years, Mr. Two has focused his practice on complex civil, business and employment litigation cases, working for some of Chicago’s best national and multinational law firms.  At DeBlasio Law Group, he provides added depth and experience on select client matters and supports the firm’s litigation and counseling teams.  For information on scheduling a consultation, call DeBlasio Law Group at (630) 560.1123, or you may reach us through our firm’s website at www.DGLLC.net/contact.