Minnesota Supreme Court Rules That Handbook Policies Can Be Contractual Notwithstanding Disclaimer

On February 3, 2021, the Minnesota Supreme Court decided Hall v. City of Plainview, holding that a general contract disclaimer in an employee handbook did not, as a matter of law, nullify a breach of contract claim with respect to a paid time off (PTO) policy within the handbook. As the Hall Court explained, the PTO policy at issue was sufficiently detailed to create a unilateral employment contract such that the employer would be obligated to follow its terms. The decision reminds employers of the importance of careful planning and drafting when it comes to their PTO policies. In light of the Court’s holding, employers should also review their handbooks for other policies and procedures that could be construed as contracts.

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