Policy Manual Can Wipe Out Oral Contract

Frederick Harms worked as a deputy sheriff for Power County, Idaho. The County’s deputy sheriffs have no labor organization. When Harms was hired in 1990, he had no written contract, but a supervisor informed him that once he completed a probationary term, he would not be terminated except for cause.

In 1999, the County adopted a Personnel Manual. The first page of the Manual contained a general disclaimer stating: “This Personnel Policy Is Not A Contract. This handbook supersedes any representation previously made whether verbal, written, express or implied.” By signing a form acknowledging receipt of the Manual, Harms indicated he had read all of the policies outlined in the Policy Manual, and that he agreed and understood that the Policy Manual was “not an employment contract nor…a guarantee of any particular length or term of employment, even after a successfully completed introductory period. I also acknowledge and agree that I am an Employee at will. I further acknowledge that the statements made in this handbook control verbal statements and representations made by County elected officials, supervisors and county employees.”

In late 2008 and early 2009, Harms was involved in an investigation related to a stolen airplane. Although Harms was cleared of any wrongdoing with respect to the airplane, the County put Harms on probation after it concluded he swore at and hung up on a member of the public during the investigation.

Later, an altercation occurred between Harms and a supervisor over the County’s decision to cut back its dive team, of which Harms was a member. Another investigation ensued, and Harms was fired in October 2009. Harms sued, claiming the County had violated his right to due process.

The key issue in the case was whether Harms had any guarantee of continued employment, or whether he was an at-will employee. Harms pointed to the conversation with his supervisor when he was hired; the County pointed to the Manual.

A federal trial court judge agreed with the County. The Court held that “the Manual, which Harms received and read in 1999, specifically states that it superseded any representations previously made, whether verbal or implied. The Manual also unequivocally provides that no contract with Power County is valid unless it is signed by both the appropriate authorized official of Power County and an individual, named employee. Harms also agreed that the Manual controlled over ‘verbal statements and representations made by County elected officials, supervisors and county employees,’ when he signed the Receipt and Acknowledgment Form. “Because the provisions of the Manual and the Receipt and Acknowledgement Form ‘specifically negate any inference that statements of supervisors or peers may constitute a contract,’ there is no issue of fact as to whether oral statements created an implied contract.

“The disclaimers provided in both the Sheriff’s Manual and the Manual stated that nothing contained in the manuals were intended to be part of the employment relationship; that the 1999 Manual superseded any contrary provisions in the Sheriff’s Manual; that the Manual specifically required any valid contract to be in writing and signed by both Power County and a specific, named employee; that the aforementioned provision superseded and controlled over any previous verbal representations; that Power County reserved the right to unilaterally and without notice modify the Manual; and that Harms both received the Manual and signed and understood the Receipt and Acknowledgement Form stating he was an employee at-will with no guarantee of any particular length or guarantee of employment in 1999, well before he was terminated in 2009.”

Harms v. Jeffries, 2013 WL 791452 (D. Idaho 2013).