Philadelphia Employment Lawyers: Costco’s Harassment Policy May Have Created a Binding Contract

Nearly all employment handbooks that are issued to employees upon hiring include anti-harassment policies that conform to federal and state laws. Some employers take their policies further than the minimum standards set by these laws. However well intentioned these practices may be, they may have the unintended effect of creating a legally enforceable contract under certain circumstances.

Such was the case in Marini v. Costco Wholesale Corp., brought before the U.S. District Court in Connecticut. In that case, the plaintiff was a 10-year employee of Costco who suffered from Tourette’s syndrome. Marini claimed that he had been subject to harassment and retaliation in violation of the Americans with Disabilities Act (ADA) and corresponding state statutes. He also claimed promissory estoppel and breach of contract based on the anti-harassment provisions found in Costco’s employee handbook.

Case Background

Marini worked for seven years in the bakery department at Costco before he complained to managers that he was being harassed, threatened, and ridiculed by his coworkers because of his disability. He was subsequently transferred to the gas station, where he alleged the harassment continued.

Marini complained to his superiors again, which led to an investigation conducted by Costco’s Human Resources department. The investigation found Marini’s complaint to be valid and he was assured that corrective action would be taken to prevent any further inappropriate conduct.

Marini was apparently unsatisfied with Costco’s response or conclusion. As a result, he began to secretly tape-record his workplace interactions with co-workers and customers. This went on for nearly two years before Costco learned of the recordings, at which point they fired Marini for violating its policy against recording conversations without permission from all parties.

Marini filed a lawsuit against Costco claiming that 1) he had endured a hostile work environment under the ADA; and 2) that the employer had breached its’ contract when it failed to deliver on the promise to protect him from harassment as stated in the employee handbook. Costco moved for summary judgment, at which point Marini’s claims under the ADA were dismissed because he did not file a charge of discrimination within 300 days of an act of harassment as required by federal and state laws.

The court did, however, allow the breach of contract claim to go forward. Costco’s handbook contained a written policy which stated that any offensive or inappropriate conduct in the workplace was prohibited, not only illegal harassment. Upon review of the employee handbook, the court agreed that the policy could be interpreted as providing protection for employees from harassment beyond what protections may exist by law.

Additionally, the handbook stated that anyone found in violation of the anti-harassment policy would be subject to corrective action up to and including termination, regardless of whether the conduct rose to the level of any violation of the law. The court also noted that there was no disclaimer in the employee handbook stating that its anti-harassment provisions did not create legally enforceable protections beyond the protections of the law.

Reminder for Employers

Employers often adopt broad anti-discrimination and anti-harassment policies that go beyond what the law requires as a means of deterring the behavior before it becomes legally actionable. This can also serve to attract and retain employees by creating a safe and comfortable workplace free from harassment and discrimination. While these efforts are commendable, employers must decide if their intent is to confer enforceable rights beyond those existing under applicable law. Moreover, employers should consult with a reputable employment lawyer with experience drafting employment policies and procedures.

Philadelphia Employment Lawyers at The Ezold Law Firm, P.C.: Experienced Representation for Employees and Employers

Philadelphia employment lawyers at The Ezold Law Firm, P.C. represent both employees and employers using their extensive experience and proactive management of all employee-related issues, including workplace harassment, employee discrimination, contract disputes, and employee handbook and policy development. For a consultation with one of our highly skilled and knowledgeable Philadelphia employment law attorneys, call today at 610-660-5585 or contact us online.