Last Updated on November 21, 2024

In early 2023, the Alabama Supreme Court issued a landmark decision in Ed Davis v. City of Montevallo that serves as a crucial reminder for employers about the legal weight of employee handbooks. This ruling underscores two critical points for businesses: (1) even in at-will employment states, employers must adhere to the rules and procedures they establish, and (2) failing to follow handbook policies can create significant liabilities. 

Here’s a detailed look at the case and actionable strategies to help businesses avoid similar pitfalls.

Case Summary: Ed Davis v. City of Montevallo 

The dispute arose when Ed Davis, a City of Montevallo employee, challenged his termination, arguing that the city failed to follow its employee handbook policies regarding dismissal. The city contended that Davis was an at-will employee, emphasizing that the handbook explicitly stated it was not a binding contract. 

However, the Alabama Supreme Court found otherwise. The handbook’s language included mandatory provisions such as “shall” and detailed specific steps—written notice, a determination hearing, and an appeals process—that the city was required to follow before termination. The court concluded that these mandatory terms created a unilateral contract obligating the city to adhere to its stated procedures, even for an at-will employee. 

The city’s argument that the handbook’s disclaimer protected it from contractual obligations was also dismissed. The court emphasized that while the handbook reserved the right to revise policies, it did not explicitly allow the city to deviate from the procedures already in place. As a result, on January 13, 2023, the court reversed the summary judgment in favor of the city, allowing Davis’s claims to proceed. 

Lessons for Employers and HR Teams 

The Ed Davis decision highlights the risks of neglecting or mismanaging handbook policies. Here are actionable takeaways employers can take to safeguard their business: 

1. At-Will Status Doesn’t Overrule Handbook Obligations 

At-will employment allows termination without cause, but it does not exempt employers from adhering to their outlined policies. Courts may view clear, mandatory language as creating enforceable promises. 

2. Follow Handbook Policies to the Letter 

Consistency is key. Skipping steps outlined in your handbook—even unintentionally—can expose your organization to breach-of-contract claims. 

3. Use Clear and Intentional Language 

Avoid vague or overly mandatory terms like “shall” or “must” unless they align with your intentions. Instead, use permissive language such as “may” to maintain flexibility in policy enforcement. 

4. Include Comprehensive Disclaimers 

Ensure your handbook explicitly states that it does not constitute an employment contract or any obligation beyond at-will employment. The court ruled the disclaimer was too narrow and only focused on the duration of employment.  

5. Regularly Review and Update Handbooks 

Conduct annual reviews of your policies to ensure compliance with current laws and alignment with your organizational practices. As new versions are rolled out, make sure to obtain updated acknowledgements that the employee did receive the new version. 

Allow MyHRConcierge to Help With Your Handbooks

Navigating the complexities of employment law and handbook compliance can be daunting, but MyHRConcierge offers tailored solutions to protect your business: 

• Handbook Reviews: Our team of experts will assess your employee handbook for potentially problematic language and ensure it aligns with your goals and legal requirements. 

• Ongoing Compliance Support: Stay ahead of regulatory changes with our proactive updates and expert advice. 

 MyHRConcierge offers comprehensive support for HR departments, providing tailored solutions for your organization’s needs, as well as handbook monitoring, review and creation services. By partnering with MyHRConcierge, organizations can minimize risks, maintain compliance and focus on what matters most. 

Final Thoughts: Handbooks and Ed Davis v. City of Montevallo

The Ed Davis v. City of Montevallo ruling is a stark reminder that employee handbooks can carry significant legal weight. While at-will employment provides some flexibility, it does not absolve employers from adhering to their own rules. Protect your business by ensuring your policies are clear, consistent, and properly implemented. 

Don’t let your handbook become a liability. Contact MyHRConcierge today to ensure your policies are working for—not against—you. To learn more about partnering with MyHRConcierge for all of your handbook needs, contact ccooley@myhrconcierge.com, 855-538-6947 ext. 108. Or, schedule a free consultation below: