Employee handbooks are not enforceable. They have not been enforceable since the early 1990’s. In the early 1990’s, after a few court decisions, Texas employers realized they had to include a disclaimer in each handbook stating that the handbook is not a contract. Employers wanted employe handbooks to not bind the employers. Much of what makes a good handbook does not make for a good contract from the employer’s perspective. There were one or two cases in the late 1980’s in which employees successfully argued that they had not been warned three times prior to termination, as required in the employee handbook. So, their terminations were overturned. Employers responded with clauses making the handbook not binding and not contractual.
Then comes this movement to send disagreements to arbitration. Employers thought arbitration would be cheaper and faster than lawsuits. So, they sought to make arbitration the default forum for disagreements in the workplace. But, how do you have a binding arbitration in an employee handbook that has a disclaimer? That is, how does one make a non-binding handbook binding, sort of, sometimes, maybe?
Easy. Include a phrase that sets the arbitration clause apart from the rest of the handbook, so that only the arbitration clause is binding. This is what has lead to the Hatton v. D.R. Horton case. See report. The Texas Supreme Court has asked the parties to provide briefing on the issue, which usually means the court will consider the issue. The Texas Supreme Court has been very supportive of large corporations and employers for many years. And, the movement to take disagreements to arbitration, for everything from buying a car to workplace complaints is still strong. So, the chances of success for the employee in Hatton v. D.R. Horton are slim indeed.