Do Employee Handbooks Create Enforceable Contractual Rights ?
In Duldulao v. Saint Mary of Nazareth Hospital Center, 115 Ill. 2d 482, 505 N.E.2d 314, 106 Ill. Dec. 8 (1987), our supreme court focused on particular disciplinary procedures described within an employee handbook and concluded that they constituted a specific offer for a unilateral contract - the employer's promise in exchange for the employee's labor. Duldulao, 115 Ill. 2d at 490-91.
Our supreme court explained that the handbook provided:
"'At the end of 90 calendar days since employment the employee becomes a permanent employee and termination contemplated by the hospital cannot occur without proper notice and investigation.'
It states that permanent employees 'are never dismissed without prior written admonitions and/or an investigation that has been properly documented', and that 'three warning notices within a twelvemonth period are required before an employee is dismissed, except in the case of immediate dismissal.'" Duldulao, 115 Ill. 2d at 491.
Considering these provision, the Duldulao court held that "an employee reading the handbook would thus reasonably believe that, except in the case of a very serious offense, he or she would not be terminated without prior written warnings." Duldulao, 115 Ill. 2d at 491.
Moreover, the court found that the handbook's language that its policies "'are designed to clarify your rights and duties as employees '" (Duldulao, 115 Ill. 2d at 491) "is such that an employee would reasonably believe that after the expiration of the initial probationary period the progressive disciplinary procedure would be part of the employer's offer" (Duldulao, 115 Ill. 2d at 491-92).
There was also no question that the plaintiff accepted the handbook provisions by continuing to work with knowledge of the provisions. Duldulao, 115 Ill. 2d at 492.
The Duldulao court therefore concluded that the employee handbook created enforceable contractual rights.