Before You Sign That That Employment Agreement

A recent case in a New Jersey District Court was dismissed based on one clause in an employee handbook. This clause, known as a “Woolley Clause,” basically stated that the employee handbook is in no way, shape, or form, an employment contract, and that any employee is retained on an “at-will” basis.

That Woolley Clause protects the employer by having all employees agree to abide by the rules set forth in the employee handbook as it stands at the time of their signing, and that they also agree to any changes that may be made in the future.

For this particular case in New Jersey, that meant that the employee, Sandra Rossi, could not be held by her employer, Raymour & Flanigan, to any forced arbitration rules based on this clause.

When Sandra Rossi brought discrimination and retaliation claims against her employer, Raymour & Flanigan, their settlement talks stalled. In order to get the process moving again, the furniture company tried to force the settlement into arbitration based on the employee handbook.

However, since the handbook clearly stated via the Woolley Clause that it was not a formal employment contract, their request for forced arbitration was dismissed.

All too often, both employers and employees sign acknowledgements of handbooks, policies, and other documentation without fully understanding their meaning. It is important to not only read all documents that require signatures, but also to make an effort to understand what they mean.

Additionally, employers should take note and make every effort to clearly define policy as part of, or separate from any employee handbook or other guidelines. When both parties fully understand the nature of their expectations and responsibilities, everyone benefits.

If you have any questions or concerns about employment contracts, arbitration, or employee rights, contact the skilled New Jersey Employment Agreement Attorneys at Castronovo & McKinney today.