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Dorsey e-update – Employee Handbooks (and Policies): Make Sure that the Policies and Disclaimer Accomplish their Purpose

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On February 3, 2021, in Hall v. City of Plainview, A19-0606, the Minnesota Supreme Court gave something to employees and employers alike when it addressed the issue of whether a handbook policy can create a unilateral contract (as to that provision), and what impact, if any, a general disclaimer has in negating the existence of a contract based on a specific policy. To reach its holding, the Court travelled back in time to revisit its seminal case, Pine River State Bank vs. Mettille, and its progeny to outline the circumstances under which a handbook policy may rise to the level of a contract. In a nod to employees, and as a matter of first impression, the Court held that general disclaimer provisions in an employee handbook may not necessarily immunize employers from contractual liability based on specific policy language, particularly relating to compensation. In a nod to employers, the Court affirmed that Minn. Stat. §181.13(a) (for non-payment of wages) does not create an independent substantive right to payment of accrued paid time off (PTO) absent a contract between an employer and an employee.

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