A 56 million dollar plus Texas credit union adopted a personnel policy manual which included an internal grievance procedure. The manual contained a specific assurance that:

[n]o employee shall be penalized for using the grievance procedure.

A veteran credit union employee of eight years filed an internal grievance when she and three other employees were passed over for promotion under circumstances suggesting age and race discrimination. The complaining employee did not file a complaint with a federal or state agency handling such matters, rather this employee relied upon the personnel policy manuals assurance that her job would not be jeopardized by utilizing the internal grievance procedure.

Thereafter, the complaining employee was discharged and filed suit against the credit union alleging, among other things, breach of contract and promissory estoppel. The suit against the credit union alleged that the discharge was in retaliation for the employee exercising her rights as outlined in the employee manual.

Here, the court noted the long-standing rule in Texas that an employee without a written employment contract is an employee at-will, and the employment relationship is terminable at any time by either party, with or without cause.

Although courts usually find that general statements about working conditions, disciplinary procedures, or termination rights are not sufficient to change the at-will employment relationship, a handbook may modify the at-will relationship if it specifically and expressly curtails the employer’s right to terminate the employee.

In this case, the appellate court noted that the manuals provision specifically and expressly promising that an employee would not be discharged for using the internal grievance procedure, alters the at-will relationship in a meaningful way. The matter was, therefore, sent back to the trial court for a determination on the merits to determine if said employee was wrongfully discharged in violation of the terms of the employee manual. Joanne Vida v. El Paso Employees’ Federal Credit Union (Court of Appeals of Texas, Case No. 08-93-00333-CV).

EDITOR’S COMMENT

The case above serves as notice for other credit unions to review their own employee policy manuals and determine if provisions in that manual could be construed to alter an “at-will” employment relationship. Credit Unions are encouraged to review their manual with their attorney so that potential actions by discharged employees may be minimized.

In another case, a court awarded a former employee five years salary when a credit union continued to deny promotions to a qualified employee.

Author: Charles R. Harroun, Attorney at Law