Caution: Employers May Not Disregard Employment Handbook Terms for At-Will Employees
Pennsylvania is an "employee-at-will" state. This means that unless an employer and employee have an express verbal or written agreement that the employment relationship will be for a definite length of time (such as a one year contract), the law assumes that the employer and employee intended the employment relationship to be for an indefinite length of time and that either the employer or the employee may terminate the employment relationship "at-will" i.e. at any time with or without cause or notice. (Agreeing on an employee's "annual" salary is not a guarantee that the employee will be employed for a year or any definite length of time.)
Employers wisely include employment-at-will disclaimers in employment handbooks so as to put employees on notice that their services can be terminated at any time for any reason. However, the fact that an employer may terminate an employee at-will, does not mean that an employer can disregard express promises in the employment handbook concerning wages, benefits, and other terms and conditions of employment. A recent Pennsylvania Superior Court case, Bauer v. Pottsville Area Emergency Medical Services, Inc. illustrates the point. In this case, an employment handbook expressly provided that if a part-time employee worked at least 36 hours or more a week for 90 days, the part-time employee would begin receiving full-time benefits. In this case, a part-time employee alleged that he had worked 36 hours or more a week for over 200 days, but the employer declined to provide him the same benefits as full-time employees. When he complained about it, he was no longer called to work, and was effectively terminated. The Pennsylvania Superior Court ruled that although the employer clearly retained the right to terminate the part-time employee "at-will," this did not mean that while he was employed, the employer could disregard the provisions of the handbook providing that part-time employees would be treated as full-time employees for the purposes of benefits if they worked at least 36 or more hours a week for 90 days. The Court stated that upon completion of the 90 days, the part-time employee was entitled to receive the benefits that full-time employees received until the time he was terminated.
Accordingly, when an employer makes specific promises to employees in an employment handbook or other written policies concerning the vesting of vacation, pensions, health insurance, stock options, etc. the promises may be deemed enforceable as part of the employment relationship between the employer and the employee, even if the employment relationship, itself, can be terminated at-will.