Are Your Employment Policies Ambiguous? Third Circuit Case is a Reminder of the Value of Clear Wording

October 18, 2019

Few employers like to spend time analyzing their employment handbooks and policies for inconsistencies and loopholes. A recent opinion by the United States Court of Appeals for the Third Circuit highlights the importance, and value, of periodically doing so. It is a reminder that it may be time to dust off the company handbook and give it a review.

In Fagal v. Marywood, No., 18-2174 (3d Cir., Oct. 8, 2019), a university professor sued his employer for breach of contract after he was fired for creating and circulating videos to fellow faculty members that belittled the university’s president and mocked the institution. He sued the university for breach of contract, alleging that it violated the progressive discipline policy that was incorporated into the terms of his employment contract. He argued that the policy required the university to comply with various disciplinary steps prior to terminating him, and that the university skipped those steps. The university claimed that the language of policy permitted it to immediately dismiss the professor without following the initial steps.

The case went to trial in the United States District Court for the Middle District of Pennsylvania. The professor lost, and appealed. The United States Court of Appeals for the Third Circuit affirmed in a 2-1 opinion. The majority held that, although the policy was ambiguous, the district court did not err in determining that the language of the policy allowed the university to proceed directly to dismissal. The dissenting judge disagreed, stating that the policy clearly required all steps to be followed and, even if it was ambiguous, the law required such an ambiguity to be construed against the policy’s author – here, the university.

Unfortunately for the professor, he lost his case. Unfortunately for the university, it had to spend a lot of time (and probably money) defending itself. Fortunately for other employers, however, there are lessons to be learned here.

1. Employment policies, handbooks, and contracts should be reviewed periodically to make sure they are clear and consistent. Often, an outside look by a fresh set of eyes (e.g., outside counsel) can provide a valuable perspective. The clearer and more consistent the language in a policy or handbook, the less likely its application will result in protracted litigation with potentially bad outcomes.

2. Progressive discipline policies (if your organization uses one) can often benefit from a clear statement that the employer retains the right to skip steps and begin the discipline process at any step, including termination.

3. This case involved a breach of contract because the professor had an employment contract with the university. If your employees don’t have contracts, take care to make sure that your policies and handbooks don’t unintentionally create contract claims. Again, experienced employment law counsel can help with this.

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