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Civil Model Jury Charge 2.12 PERSONNEL MANUAL CREATING A CON

Civil Model Jury Charge

2.12 PERSONNEL MANUAL CREATING A CONTRACT1

(Approved 1/97)

Plaintiff has asserted a claim against defendant for breach of an employment contract. Plaintiffs claim is not based upon an individual contract he/she had with defendant, but rather, upon defendants[personnel manual/handbook use employers terminology].

In order to resolve plaintiffs claim you must make two determinations:

First, you must determine whether the personnel manual in fact created a contract between the parties; and

Second, if you find that a contract did exist, you must then determine whether defendant breached that contract.

I will now explain to you in more detail the two determinations you must make.

1This charge is to be given if a claim is asserted underWoolley v. Hoffman-LaRoche, 99N.J.284, modified, 101N.J.10 (1985), wherein the Court recognized a cause of action for breach of contract premised on an employers personnel manual. The Committee has retained the original placement of this charge within the Exceptions to the Employment At-Will Doctrine section, although the Supreme Court has held that theWoolleydoctrine is not an exception to the at-will doctrine, but rather, a recognition of basic contract principles.CHARGE 2.12 Page 2 of 15

2The charge assumes plaintiff alleges a breach of the manuals progressive discipline policy and/or just cause termination policy, rather than other policies that may be contained in the manual. If plaintiffs allegations are otherwise, the appropriate changes should be made.

A. Whether a Contract Existed2

You must first determine whether defendants personnel manual in fact created a contract between the parties, that is, whether the manual contains enforceable and binding obligations. Plaintiff claims that defendants manual contains a binding promise that he/she could only be terminated[insert appropriate allegations, e.g., after receiving progressive discipline and/or only if good cause existed].

You must determine whether a contract existed from the perspective of a reasonable employee. That is, you must decide whether a reasonable employee would believe that the manual was intended by the defendant to create these enforceable and binding obligations.

You must consider[two/three]general factors in this regard:

First, you must consider the manuals specific provisions.

Second, you must consider the context in which the manual was prepared and distributed.CHARGE 2.12 Page 3 of 15

3TheWoolleyCourt held that an employer can negate the otherwise binding effect of an employment manual by inclusion of a disclaimer.Woolley, 99N.J.at 309. To be effective, the disclaimer must satisfy two elements: it must be prominent/conspicuous and it must appropriately advise employees that their employment is terminable at will.Id.

InNicosia v. Wakefern Food Corp., 136N.J.401 (1994), the Court held that We are...satisfied that when the facts surrounding the content and placement of a disclaimer are themselves clear and uncontroverted ... the effectiveness of a disclaimer can be resolved by the court as a question of law.Id.at 416.Conspicuousnesswill always be a matter of law.Id.In other cases, the effect of a disclaimerscontentwill also be a question of law. In some cases, however, just as a jury determines whether an employment manual gives rise to an implied contract, so too may a jury need to decide whether thecontentof a disclaimer is effective.Id.(Emphasis supplied).

Nicosiathus directs that in all cases the court should determine as a matter of law whether a disclaimer satisfies the conspicuous/prominence requirement. (Nicosiaprovides guidance to courts on this issue. 136N.J.at 415-416.) Further, if reasonable minds cannot differ as to the effectiveness or ineffectiveness of the content of the disclaimer, the court should also resolve that issue as a matter of law. However, if reasonable minds can differ as to the effectiveness or ineffectiveness of the content of the disclaimer, the issue should be put to the jury using the instructions provided in charge 2.12(A)(3).Cf. Michaels v. Brookchester, Inc., 26N.J.379, 387 (1958) (construction of unambiguous contract is question of law for court; where meaning is uncertain or ambiguous, meaning should be left to jury).See alsonote 8,infra.

Third, you must determine whether the manual contained an effective disclaimer of liability, that is, a clear statement by which the employer unequivocally reserved the right to terminate employees without cause.3

1. Manuals Specific Provisions

a. Manuals Application to Plaintiff

[This paragraph should be read to the jury only if a question of fact exists as to whether the plaintiff is in the class of employees to whom the manual applies.] CHARGE 2.12 Page 4 of 15

4Not all of these factors may be applicable to a particular case. If a factor is not applicable, it should not be charged.

You must first determine whether the manual applies to the plaintiff. If you find that the plaintiff is within the class of employees covered by the manual, the manual may have created a contract between the plaintiff and the defendant. On the other hand, if you find that the plaintiff is not within the class of employees covered by the manual, the manual could not create a contract between the plaintiff and the defendant, and the plaintiffs claim fails.

b. Provisions Suggesting Intention to Create Binding Obligations

[Note: The bracketed language should only be used if there is an instruction on 1. above; otherwise begin the instruction with the language following the brackets.]

[If you find that the manual applies to the plaintiff, then](Y)ou must decide whether a reasonable employee reading the manual would believe that the manual created a binding promise. In making this decision, you should look at the manual as a whole. By that I mean you should consider the entire document.

Here are some provisions that, if present, tend to indicate the manual created a binding promise or, if not present, that tend to indicate the manual was not intended to be binding.4CHARGE 2.12 Page 5 of 15

5For example, inWoolley, the manual provided that It is the policy ofHoffman-La Rocheto retain to the extent consistent with company requirements, the services of all employees who perform their duties efficiently and effectively. InPreston v. Claridge Hotel & Casino, 231N.J. Super.81 (App. Div. 1989), the manual made various representations of maximum job security.

a. Any statements promising or implying job security to those employees who satisfactorily perform their duties.5

b. A definite and comprehensive progressive discipline policy under which employees are entitled to specified warnings prior to termination. A definite and comprehensive termination policy that, for example, identifies different types of terminations, or identifies specific acts or offenses that will justify termination.

c. Whether the manual applies to all classes of employees.

d. You may also consider any other specific provisions in the manual that would lead a reasonable employee to believe that the defendant intended or did not intend the manual to create an enforceable and binding promise.

As I instructed you, you should consider the manual in its entirety in making your determination, and no single factor standing alone is determinative.CHARGE 2.12 Page 6 of 15

6The Committee is undecided on whether this factor should be presented to the jury. TheWoolleyCourt found that a workforce of 3000 employees was substantial. TheNicosiaCourt found that a workforce of 1500 non-unionized (to whom the manual applied) and 1500 unionized employees was substantial. However, it is not clear from the Courts decisions whether reference to the number of employees was intended to establish the number of employees as a separate factor to be considered by the jury or whether the references are solely factual. This issue has not yet been directly litigated and the Committee could not resolve the matter in the absence of more definitive judicial authority.

7InWoolley, the court found the widely-distributed requirement satisfied when 300 out of 3000 employees received the manual. InNicosia, the Court found this requirement satisfied when 300 out of 1500 non-unionized employees (to whom the manual applied) received the manual. In an appropriate case, the court may choose to charge the substance of this footnote to the jury.

2. Manuals Preparation and Distribution

The next matter you must consider is the manuals preparation and distribution. You must now decide whether the manuals preparation and distribution would create a reasonable expectation in defendants employees that the manual was intended to govern the rights and duties of defendants employees. In considering the manuals preparation and distribution, you should consider the following factors. However, no single factor standing along is determinative and you should consider all of the evidence relating to the manuals preparation and distribution in making your decision.

-- [Consider whether defendant employs a substantial number of employees.]6

-- Consider whether the manual was widely distributed.7For example, if the defendant distributed the manual to all or a substantial number of its employees, that is an indication it was intended to be binding. On the other hand, if the employer limited distribution of the manual to only aCHARGE 2.12 Page 7 of 15

8This should not be confused with the effect of an acknowledgment form which contains a valid disclaimer. While the fact that the employer requires employees to sign a general acknowledgment form is an indication that the employer intended the manual to be binding, if the acknowledgment form contains a valid disclaimer, it will negate any contractual effect of the manual.

small group of employees, such as upper management, that would suggest the manual was not intended to be binding.

-- Consider whether the manual was made available to employees for their inspection or whether access to the manual was restricted. If the manual was made available to employees for their inspection, that is an indication that the manual was intended to be binding; if access to the manual was restricted, that is an indication that the manual was not intended to be binding.

-- Whether the defendant required employees to acknowledge receipt of the manual, for example, by signing an acknowledgment form. If so, that is an indication that the manual was intended to be binding; if not, that is an indication that the manual was not intended to be binding.8

-- Whether there are any other circumstances concerning the preparation and distribution of the manual that would lead a reasonable employee to believe that the defendant intended or did not intend the manual to create enforceable and binding obligations.

Again, as I previously instructed you, remember that none of these factors standing alone is determinative. You should consider all the evidence relating to the manuals preparation and distribution in reaching your decision.

[The following paragraph should be read only when it is claimed that the plaintiff did not receive the manual.] CHARGE 2.12 Page 8 of 15

9Nicosia v. Wakefern Food Corp.136N.J. at 411.

10The prominence of a disclaimer is a matter of law for the trial judge.Nicosia v. Wakefern Food Corp.136N.J.at 415-416.

However, it is not necessary if the plaintiff actually received or read the manual or relied upon it or even knew of its existence. If the manual was widely distributed to the defendants work force, it may form the basis of the plaintiffs claim.9

3. Manuals Disclaimer10

[The next three paragraphs are to be read if a jury question exists regarding the effectiveness of the content of a disclaimer. See notes 3 and 8,supra.]

The third and final factor you must consider in determining whether the manual created a contract is whether the manual contains an effective disclaimer. An effective disclaimer is a clear statement by which the defendant reserved the unambiguous right to terminate employees without cause. An employment manual that contains an effective disclaimer cannot create a binding promise even if all the other factors on which I have previously instructed you are present. If you find that the manual did contain an effective disclaimer, then the manual did not create a contract between the parties. To be effective, a disclaimers language must convey to a reasonable employee that the manual does not constitute a legally binding obligation. The language in the disclaimer must make clear that the employee is terminable at will and that the employer retains the absolute power to fire anyone at any time with or withoutCHARGE 2.12 Page 9 of 15

cause. Although no specific language is required, the disclaimer must convey this message in straightforward terms and without confusing legal language.

The defendant contends that the following statement in the manual constitutes an effective disclaimer: .

4. Summary

In sum, to determine whether the manual created a contract between the parties, you must consider[both/all three]of the foregoing factors, that is, the manuals specific provisions and the context and distribution of the manual[and whether the manual contained an effective disclaimer.]

If you determine that the manual didnotcreate a contract between the parties, then there can be no breach of contract and plaintiff is not entitled to damages. If, on the other hand, you determine that the manualdidcreate a contract between the parties, you must then make the second determination, that is, whether defendant breached the contract.CHARGE 2.12 Page 10 of 15

11This charge assumes plaintiff alleges that defendant breached the manual by failing to follow the progressive discipline procedures and/or by terminating him/her without good cause. If plaintiffs allegations are otherwise, the appropriate changes should be made.

B. Whether Defendant Breached the Contract11

Plaintiff claims that the defendant breached the manual by terminating his/her employment without[first applying the manuals progressive discipline procedures and/or without good cause insert appropriate allegations].

[Option 1: This paragraph for use when plaintiffs claim is only for breach of progressive discipline provisions, and manual containsnoexceptions to progressive discipline requirement,e.g., no provision for immediate termination for certain infractions.]

You must determine whether defendant followed the progressive discipline procedures contained in the manual before terminating plaintiffs employment. If you determine that defendantdidfollow the progressive discipline procedures, you must find that defendant did not breach the contract. If you determine that defendant didnotfollow the progressive discipline procedures, the defendant breached the contract.

[Option 2: This paragraph for use when plaintiffs claim is only for breach of progressive discipline provisions, and manualdoescontain exceptions to progressive discipline requirement,e.g., when manual authorizes immediate termination for certain infractions.] CHARGE 2.12 Page 11 of 15

You must first determine whether defendant followed the progressive discipline procedures contained in the manual before terminating plaintiffs employment. If you determine that defendantdidfollow the progressive discipline procedures, you must find that the defendant didnotbreach the contract. If you determine that defendant didnotfollow the progressive discipline procedures, you must then determine whether one of the exceptions to the progressive discipline procedure stated in the manual is applicable. Specifically, defendant contends that progressive discipline was not required before termination because plaintiff engaged in[insert specific exception from manual]. If you find that plaintiffdidengage[insert specific exception from manual],then defendant did not breach the contract. If you find that plaintiff didnotengage in[insert exception], then the defendant breached the contract.

[Option 3: This paragraph for use when plaintiffs claim is only for breach of good cause termination provisions, and manual defines good cause by citing specific examples of conduct that constitutes good cause.]

You must determine whether good cause existed for plaintiffs termination under the terms of the manual. Specifically, defendant contends that plaintiff engaged in[insert infraction, poor performance, etc.]. If you find that the plaintiff did engage in[insert infraction, poor performance, etc.], then defendant did not breach theCHARGE 2.12 Page 12 of 15

12With respect to Options 3 and 4, it has not yet been determined whether there is a good faith defense to aWoolleyclaim,i.e.,whether the employee must actually have engaged in the proscribed conduct or whether the employersreasonable belief that the employee engaged in such conduct is sufficient.

13Woolley101N.J.at 11.

contract.12If you find that the plaintiff did not engage in[insert infraction, poor performance, etc.], then the defendant breached the contract.

[Option 4: This paragraph for use when plaintiffs claim is for breach of progressive discipline provisions and for breach of good cause termination provisions, and manual defines good cause by citing specific examples of conduct that constitute good cause.]

You must first determine whether defendant followed the progressive discipline procedures contained in the manual before terminating plaintiffs employment. If you determine that defendant didnotfollow the progressive discipline procedures, then the defendant breached the contract.13If you determine that defendantdidfollow the progressive discipline procedures, you must then determine whether good cause existed for plaintiffs termination under the terms of the manual. Specifically, defendant contends that plaintiff engaged in[insert infraction, poor performance, etc.]. If you find that the plaintiffdidengage in[insert infraction, poor performance,CHARGE 2.12 Page 13 of 15

14Seenote to Option 3.

etc.], then defendant did not breach the contract.14If you find that the plaintiff did not engage in[insert infraction, poor performance, etc.], then the defendant breached the contract.

[Option 5: This paragraph for use when plaintiffs claim is only for breach of good cause termination provision, and manual does not define good cause through specific examples or otherwise.]

You must determine whether good cause existed for plaintiffs termination. Specifically, defendant contends that plaintiff engaged in[insert infraction, poor performance, etc.]

The manual does not define what is meant by good cause. This is a determination you must make based on the following instructions. To constitute good cause for termination, an act or omission need not necessarily involve either commission of a crime or involve an improper purpose. However, the act or omission must substantially disadvantage the employer, in view of the duties and obligations of the employee. A discharge for mere whim or caprice is not a discharge for good cause. Nor is a discharge because of the employers general subjective dislike or disapproval of an employee. Rather, a discharge for good cause must bear some relationship to and focus on the ability and fitness of the employee to discharge theCHARGE 2.12 Page 14 of 15

15Fried v. Aftec, Inc., 246N.J. Super. 245, 254-256 (App. Div. 1991).

duties of his or her position. In sum, good cause is a cause or ground that a reasonable employer, acting in good faith, would regard as a good and sufficient reason for terminating an employees services.15

[Option 6: This paragraph for use when plaintiffs claim is for breach of progressive discipline provisions and for breach of good cause termination provisions, and manual does not define good cause through specific examples or otherwise.]

You must first determine whether defendant followed the progressive discipline procedures contained in the manual before terminating plaintiffs employment. If you determine that defendant didnotfollow the progressive discipline procedures, then the defendant breached the contract. If you determine that the defendantdidfollow the progressive discipline procedures, you must then determine whether good cause existed for plaintiffs termination. Specifically, defendant contends that plaintiff engaged in[insert infraction, poor performance, etc.]. The manual does not define what is meant by good cause. This is a determination you must make based on the following instructions. To constitute good cause for termination, an act or omission need not necessarily involve either commission of a crime or involve an improper purpose. However, the act or omission must substantially disadvantage the employer,CHARGE 2.12 Page 15 of 15

16Fried, 246N.J. Super.254-256.

in view of the duties and obligations of the employee. A discharge for mere whim or caprice is not a discharge for good cause. Nor is a discharge because of the employers general subjective dislike or disapproval of an employee. Rather, a discharge for good cause must bear some relationship to and focus on the ability and fitness of the employee to discharge the duties of his or her position. In sum, good cause is a cause or ground that a reasonable employer, acting in good faith, would regard as a good and sufficient reason for terminating an employees services.16

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Kenneth Vercammen was the Middlesex County Bar Municipal Court Attorney of the Year
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Since 1985, KENNETH VERCAMMEN has worked as a personal injury attorney, working for injury victims and their families. By taking a hard-hitting, aggressive approach toward the insurance companies, KENNETH VERCAMMEN and our co-counsel have consistently obtained outstanding results for many injured clients over the years I am proud to have worked on cases in various capacities, small and large. While obviously prior results cannot guarantee the outcome of future cases, I can guarantee that you case will receive the same degree of dedication and hard work that went into each of these prior cases.

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I am an experienced aggressive trial lawyer and a 3rd degree Black Belt. I am not afraid to take your case to trial if that is what it takes to maximize the amount of money your recover for your personal injury. I offer one-on-one service, and I will not hand your case off to an inexperienced lawyer or a paralegal.

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Kenneth A. Vercammen is the Managing Attorney at Kenneth Vercammen & Associates in Edison, NJ. He is a New Jersey trial attorney has devoted a substantial portion of his professional time to the preparation and trial of litigated matters. He has appeared in Courts throughout New Jersey each week on personal injury matters, Criminal /Municipal Court trials, and contested Probate hearings.

Mr. Vercammen has published over 125 legal articles in national and New Jersey publications on criminal, elder law, probate and litigation topics. He is a highly regarded lecturer on litigation issues for the American Bar Association, NJ ICLE, New Jersey State Bar Association and Middlesex County Bar Association. His articles have been published in noted publications included New Jersey Law Journal, ABA Law Practice Management Magazine, and New Jersey Lawyer. He is the Editor in Chief of the American Bar Association Tort and Insurance Committee Newsletter.

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