Rose v. Tipton County Public Works Department

Citations: 953 S.W.2d 690; 12 I.E.R. Cas. (BNA) 1364; 1997 Tenn. App. LEXIS 264; 1997 WL 188803Docket: 02A01-9608-CV-00189

Court: Court of Appeals of Tennessee; April 18, 1997; Tennessee; State Appellate Court

Original Court Document: View Document

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

Roy Rose, the plaintiff, appealed a summary judgment from the Tipton County Circuit Court, which ruled in favor of the Tipton County Public Works Department and its officials regarding a breach of employment contract claim. The trial court determined that the employee handbook issued by the department did not constitute an enforceable employment contract. Rose, hired in 1979, acknowledged at hiring that his employment was "for no definite period" and could be terminated without prior notice. The handbook, first issued in 1982 and revised in 1988, detailed a progressive discipline system for Class I and Class II offenses, including specific consequences for insubordination, categorized as a Class II offense. Rose was terminated in August 1991 for insubordination, but it was undisputed that the progressive discipline system was not followed during his termination. The Public Works Department contended that the handbook did not establish a contractual obligation, leading to the dismissal of Rose's lawsuit. On appeal, Rose argued that his termination breached the handbook's disciplinary procedures. The court reaffirmed the principle that employment contracts for indefinite terms are considered at-will, allowing termination by either party without cause, thus upholding the trial court's ruling.

Tennessee maintains an 'employee-at-will' presumption, implying that employees can be terminated at any time without cause, as established in multiple cases (Bringle v. Methodist Hosp., Graves v. Anchor Wire Corp., Whittaker v. Care-More, Inc.). In this instance, Rose acknowledges his 'at-will' status upon hiring in 1979 but asserts that it changed with the 1982 employee handbook. While an employment contract can exist without a specified duration, it must contain clear language indicating the employer’s intent to be bound by its terms (Williams v. Maremont Corp., Hooks v. Gibson). An employee handbook can be considered part of an employment contract if it includes binding guarantees. However, it must be phrased in definitive terms, interpreted within the context of the entire handbook, and considered alongside other relevant documents (Claiborne v. Frito-Lay, Inc.).

Rose signed a form acknowledging the handbook’s guidelines. The 1988 handbook aimed to standardize procedures within the department and specified that procedures did not apply to probationary employees, who could be terminated without adherence to these rules. New employees must complete a 90-day probationary period, with similar requirements for promotions and transfers. The handbook also outlined employee responsibilities, emphasizing conduct towards colleagues and the public. The determination of whether the handbook constitutes a contract hinges on the specific language used within it and related materials.

Standards are established to ensure the orderly operation of the Public Works Department of Tipton County, with an expectation for employees to exercise common sense in the absence of specific rules. The department has outlined rules that, if violated, may lead to written warnings or disciplinary actions, including suspension or dismissal. A progressive discipline system is in place for Class II offenses, where a first violation results in a written reprimand, a second in suspension without pay, and a third in dismissal, all occurring within a one-year period for the penalties to apply. The handbook indicates that it can be modified by the Public Works Department Committee without prior notice. 

Analysis of the handbook and Rose’s employment application reveals that the handbook does not establish a binding contract, as the language lacks the specificity needed to demonstrate contractual intent. The handbook's purpose is to provide uniform policy but does not guarantee job security. Although it refers to 'established department rules,' this is countered by its characterization of the rules as a 'guide.' Furthermore, the argument that non-probationary employees must adhere to the progressive discipline system is rejected, as it contradicts the requirement for the handbook to contain explicit contractual language.

The ruling establishes that the employee handbook does not constitute a part of the employment contract, supported by its provision allowing the Public Works Department Committee to change policies without notice. Such unilateral modification rights typically prevent a handbook from being classified as a contract. Citing various legal precedents, the ruling highlights that the handbook's language indicates anticipated modifications and serves merely as guidelines for employee conduct, rather than guaranteeing specific policies.

Only two appellate decisions in Tennessee have recognized handbooks as contractual, with one being distinguishable due to explicit language guaranteeing policy permanence, and the other concerning a seniority recall provision that does not apply here. The current case involves provisions that impact the employer's right to terminate employees at will, which courts treat differently than those affecting employee benefits. The lack of reliance on the handbook's provisions by the employee further differentiates this case from the precedent set in the second appellate decision. The presence of a clause allowing for changes without notice strongly supports the conclusion that the handbook is not a binding contract. The trial court's judgment is affirmed, with costs assigned to the appellant.