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'Woolley v. Hoffmann-LaRoche': Finding a Way to Enforce Employee Handbook Promises

J.H. Verkerke, University of Virginia

Abstract

Throughout much of the 20th Century, a virtually irrebuttable presumption that an employment relationship was terminable at will made it surprisingly difficult to enforce even individually negotiated agreements for job security. The New Jersey Supreme Court’s decision in Woolley v. Hoffmann-La Roche, along with several other leading cases, reversed this presumption and embraced the principle that employee handbook statements could create an implied contract. A close examination of the case reveals the significant doctrinal hurdles that courts had to overcome, the legal fictions that they commonly employed to make handbook provisions enforceable, and the practical consequences of their decisions to enforce. Moreover, the events leading up to Woolley’s termination show how complex and difficult it can be to determine whether just cause for discharge exists. The case also warrants attention because the plaintiff, Richard Woolley, was, by all accounts, an admirable man and his employer, Hoffmann-La Roche, had a reputation both in the local community and in the pharmaceutical industry for treating its employees fairly and well. Finally, the Woolley court’s opinion, like countless other decisions in this area, relies on what I have elsewhere called a “legal-information-forcing” argument. Under this approach, the court places the burden of clarifying the legal relationship between two contracting parties on the more legally sophisticated party. One might reasonably question whether these statements genuinely prevent employee misperceptions. Nevertheless, the contours of existing doctrine are clear, and a prominent disclaimer ordinarily precludes contractual claims based on employee handbook terms. The Woolley decision thus should be seen as a crucial step along a path from the traditional at-will presumption to a new, and currently stable, contractual equilibrium in which the overwhelming majority of employers contract expressly for an at-will relationship.

Subject Area

Employment Practice, Law and Economics

Recommended Citation

J.H. Verkerke, "'Woolley v. Hoffmann-LaRoche': Finding a Way to Enforce Employee Handbook Promises" (June 2006). University of Virginia Legal Working Paper Series. University of Virginia John M. Olin Program in Law and Economics Working Paper Series. Working Paper 32.
http://law.bepress.com/uvalwps/olin/art32

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