When is a Contract Not a Contract?

Answer: When one party to the writing specifically states it is not a contract. This may sound like an obvious answer, but the implications could be far-reaching.

Recently, the Michigan Court of Appeals decided Miller-Webb v Genesee County(.pdf)—a case where a discharged employee was suing her previous employer for a Wrongful Discharge. She claimed she was fired without just cause, relying upon the employer’s Personnel Policy Manual.

Now both the Employee—Shenelle Miller-Webb—and the Employer—Genesee County—presumed the Employee Handbook created a Contract, and each party had to follow the terms within the handbook. Ms. Miller-Webb argued she followed the handbook; Genesee County claimed she did not.

But the Court of Appeals ruled differently. The Court noted language within the Employee Handbook that stated: “This Manual is a statement of Board established policies and procedures. It is not an employment contract, nor part of one. No provision or collection of provisions in this Manual, … is or are an offer of a contract or of a contractual right, nor does any provision or group of provisions, or the Manual in its entirety, constitute a contract, or part of a contract or a contractual right.”

Therefore, there was no contract; the entire Employee Handbook was mere suggestion!

Reflect on this for a moment. The Handbook contained specific procedures upon having a complaint. It could have contained language concerning holiday pay, vacation time, sick leave, hours, pay, position, title, promotion, expenses…any number of important employment issues. Yet not a single line in the entire Handbook mattered—because these three sentences simply wiped the slate clean.

Remember—even the Employer who prepared the Handbook thought it was a contract!

You could enter an employment relationship and receive a 108-page Employee Handbook, with a Table of Contents, Index and extremely detailed provisions, yet because of a few words buried in a footnote on page 44, the whole thing is a ruse. It has as much force and effect as the daily suggested amount of sodium we should take, and routinely ignore.