FILED

April 18, 1997

Cecil Crowson, Jr.

Appellate Court Clerk

IN THE COURT OF APPEALS OF TENNESSEE, WESTERN SECTION

AT JACKSON

_______________________________________________________

)

ROY ROSE, ) Tipton County Circuit Court

) No. 3745

 Plaintiff/Appellant. )

)

VS. ) C. A. NO. 02A01-9608-CV-00189

)

TIPTON COUNTY PUBLIC WORKS )

DEPARTMENT, JEFF HUFFMAN, )

COUNTY EXECUTIVE, CURRIE )

ERWIN, JAMES HARKNESS, )

JOHN McINTYRE, JAMES OSBURN, )

SHELBY ROSE, HAROLD TWISDALE, )

CLIFFORD WILSON, )

)

 Defendants/Appellees. )

)

______________________________________________________________________________

From the Circuit Court of Tipton County at Covington.

Honorable Joseph H. Walker, Judge 

Frank Deslauriers, Covington, Tennessee

Attorney for Plaintiff/Appellant.

James L. Holt, Jr.,

JACKSON, SHIELDS, YEISER & CANTRELL, Cordova, Tennessee

Duke H. Brasfield, Covington, Tennessee

Attorneys for Defendants/Appellees.

OPINION FILED:

AFFIRMED AND REMANDED

FARMER, J.

CRAWFORD, P.J., W.S.: (Concurs)

LILLARD, J.: (Concurs)
1

If the three violations did not occur within a one-year period, “then the discipline drops

back one step.” 

2

In his complaint, Rose also asserted a claim for retaliatory discharge. See T.C.A.

§ 50-1-304 (1991). On appeal, however, no issue has been raised regarding the trial court’s

dismissal of this claim.

In this action for breach of an employment contract, Plaintiff Roy Rose appeals the

trial court’s order entering summary judgment in favor of Defendants/Appellees Tipton County

Public Works Department, County Executive Jeff Huffman, and individual members of the Tipton

County Public Works Department Committee. The trial court granted the Defendants’ motion for

summary judgment based on the court’s conclusion that an employee handbook distributed by the

Public Works Department in 1982, and revised in 1988, did not constitute an employment contract.

We affirm.

Rose began working for the Public Works Department in 1979. At the time he was

hired, Rose signed a statement acknowledging that his employment was “for no definite period” and

that he could “be terminated at any time without any prior notice.” In 1982, the Department

promulgated an employee handbook. The Department revised its employee handbook in 1988. The

current version of the handbook sets forth a progressive system of discipline which categorizes

offenses into Class I and Class II offenses and describes the disciplinary action which will result

from violations of each category of offenses. For Class I offenses, the first violation results in

suspension without pay for a period of up to thirty days, and the second violation results in automatic

termination. For Class II offenses, the first violation results in a written reprimand; the second

violation results in suspension without pay; and the third violation results in dismissal, provided the

three violations occurred within a one-year period.1

 

In August 1991, the Director of Public Works terminated Rose for insubordination.

It was undisputed that, in terminating Rose, the Director did not follow the progressive system of

discipline set forth in the Department’s employee handbook. The handbook categorizes

insubordination as a Class II offense, and this was Rose’s first violation. 

AfterthePublicWorksDepartment Committee upheld Rose’s termination,Rose filed

this lawsuit for breach of employment contract.2

 The Defendants subsequently moved for summary
3The handbook defines insubordination as “[d]isregarding or refusing to comply with

instructions or job assignments given by authorized personnel,” including “any verbal or nonverbal showing of disrespect toward your supervisor.”

4

Inasmuch as the resolution of this case is controlled by the above-stated issue of law, we

agree that the case was appropriate for summary judgment. Byrd v. Hall, 847 S.W.2d 208, 216

(Tenn. 1993).

judgment, contending that Rose’s action should be dismissed because the employee handbook

distributed by the Public Works Department, as a matter of law, did not constitute a contract. Based

on this argument, the trial court granted the Defendants’ motion and dismissed Rose’s complaint.

For purposes of these summary judgment proceedings, Rose appears to concede that

his actions resulting in his termination constituted insubordination.3

 On appeal, however, Rose

contends that the Public Works Department was in breach of contract when it terminated Rose

because the Department failed to follow the progressive system of discipline set forth in its employee

handbook. This appeal, therefore, requires us to determine whether the employee handbook

distributed by the Department constituted an employment contract.4

We begin our analysis of this issue with the well-established rule “that a contract for

employment for an indefinite term is a contract at will and can be terminated by either party at any

time without cause.” Bringle v. Methodist Hosp., 701 S.W.2d 622, 625 (Tenn. App. 1985); accord

Graves v. Anchor Wire Corp., 692 S.W.2d 420, 422 (Tenn. App. 1985); Whittaker v. Care-More,

Inc., 621 S.W.2d 395, 396 (Tenn. App. 1981). Because Tennessee continues to adhere to the

foregoing “employee-at-will” rule, a presumption arises in this state that an employee is an employee

at will. Davis v. Connecticut Gen. Life Ins. Co., 743 F. Supp. 1273, 1280 (M.D. Tenn. 1990). In

the present case, Rose does not dispute that he was an “at-will” employee when he was hired by the

Department in 1979. Rose contends, however, that his “at-will” status was changed by the

Department’s promulgation of the employee handbook in 1982.

Even in the absence of a definite durational term, an employment contract still may

exist with regard to other terms of employment. Williams v. Maremont Corp., 776 S.W.2d 78, 80
5See also Davis v. Connecticut Gen. Life Ins. Co., 743 F. Supp. 1273, 1278 (M.D. Tenn.

1990) (“Indeed, the non-existence of a definite term of employment at the outset of employment

does not preclude the modification of the employment contract to provide for a definite term or

to provide for other terms originally not contained in the employment contract.”).

6Gregory v. Hunt, 24 F.3d 781, 785 (6th Cir. 1994); Davis v. Connecticut Gen. Life Ins.

Co., 743 F. Supp. 1273, 1279 (M.D. Tenn. 1990); MacDougal v. Sears, Roebuck & Co., 624 F.

Supp. 756, 759 (E.D. Tenn. 1985).

(Tenn. App. 1988); accord Hooks v. Gibson, 842 S.W.2d 625, 628 (Tenn. App. 1992).5

 In this

regard, this Court has recognized that an employee handbook can become a part of an employment

contract. Smith v. Morris, 778 S.W.2d 857, 858 (Tenn. App. 1988) (citing Hamby v. Genesco, Inc.,

627 S.W.2d 373 (Tenn. App. 1981)); accord Davis v. Connecticut Gen. Life Ins. Co., 743 F. Supp.

1273, 1278 (M.D. Tenn. 1990). In order to constitute a contract, however, the handbook must

contain specific language showing the employer’s intent to be bound by the handbook’s provisions.

Smith v. Morris, 778 S.W.2d at 858. Unless an employee handbook contains such guarantees or

binding commitments, the handbook will not constitute an employment contract. Whittaker v. CareMore, Inc., 621 S.W.2d 395, 397 (Tenn. App. 1981). As stated by one court, in order for an

employee handbook to be considered part of an employment contract, “the language used must be

phrased in binding terms, interpreted in the context of the entire handbook, and read in conjunction

with any other relevant material, such as an employment application.” Claiborne v. Frito-Lay, Inc.,

718 F. Supp. 1319, 1321 (E.D. Tenn. 1989). 

Inasmuchasthe determination of this issue depends upon the specific language used,6

we examine the provisions of the employee handbook distributed by the Public Works Department,

as well as other relevant documents. When he received a copy of the handbook in 1982, Rose signed

a form stating “I realize that these guidelines shall be enforced for fulfilling the purpose of the

Department.” The revised handbook distributed in 1988 stated the following purpose:

[T]o bring into the service of Tipton County Public Works

Department the high degree of understanding, cooperation, efficiency,

and unity which comes through systematic application of good

procedures in personnel administration, and to provide a uniform

policy for all employees, with all the benefits such a program insures.

The handbook indicated that the procedures did not apply to probationary employees:
Each new County employee who has been appointed to a

permanent position is required to serve a probationary period of at

least 90 days. An employee may be terminated during this period for

any reason without respect or reference to the procedures set forth in

the rules. Employees who received promotions must serve a new

probationary period of 30 days in the new positions if they are to be

permanent. Employees who are transferred from one department to

another shall be required to serve new probationary periods of 30

days in the new departments. . . . If your probationary period is

determined satisfactory, you should be recommended for a permanent

appointment.

In introducing the Department’s progressive system for disciplining employees,the handbook stated:

DEPARTMENT RULES

As an employee you have certain responsibilities in regard to

your conduct towards your fellow employees, the department, and the

public, which is not unlike the responsibilities you have as a citizen.

Certain standards must exist to insure the orderly operation of the

department. No attempt has been made to include every possible

breach of good employee conduct, and where no specific rule exists,

employees are expected to follow good common sense.

Below are listed the established department rules to serve as

a guide for your conduct while employed with the Public Works

Department of Tipton County. . . . Violation of these rules will bring

written warnings and/or disciplinaryactionsincluding suspension and

discharge.

In explaining the progressive discipline system for Class II offenses, the handbook stated:

The department recognizes and accepts the principle [of]

progressive discipline and, therefore, has developed a positive

approach to handle the violations of Class II rules on both an

objective and progressive basis. The employee will receive a written

reprimand for the first violation of Class II rule. The second violation

of Class II rule will result in suspension without pay. The third

violation of a Class II rule will result in dismissal.

The three violations must occur within a one year period of

time. If they do not, then the discipline drops back one step.

Finally, the handbook provided that its policies could be unilaterally changed by the Public Works

Department Committee:

The general policies of the Department are contained in this

booklet. However, it is impossible to provide for every situation
which comes up. The Supervisor, Deputy Director, Director, and the

Public Works Committee retains his/her, or their power to respond

appropriately in these situations. The policies contained herein are

subject to change by the Tipton County Public Works Department

Committee without notice.

After carefully reviewing the specific language contained in Rose’s employment

application, the Department’s employee handbook, and other relevant material, we conclude that the

handbook’s provisions are insufficient to overcome the presumption that Rose was an at-will

employee. Although the acknowledgment form distributed with the handbook in 1982 warned

employees that “these guidelines shall be enforced for fulfilling the purpose of the Department,” we

do not perceive this language to be a demonstration by the Public Works Department of its intent to

be contractually bound by the handbook’s provisions. Similarly, we conclude that the handbook’s

stated purpose, “to provide a uniform policy for all employees,” is not the type of specific guarantee

required to elevate the handbook to contractual status. Moreover, although the handbook refers to

the system of progressive discipline as “established department rules,” any mandate suggested by

this language is undermined by subsequent language indicating that the rules serve as a “guide” for

the employee’s conduct. Inasmuch as the foregoing “language is not specific enough to give rise to

a guarantee,” we hold that the handbook’s provisions are insufficient to create a binding contract

between Rose and the Public Works Department. Davis v. Connecticut Gen. Life Ins. Co., 743 F.

Supp. 1273, 1281 n.3 (M.D. Tenn. 1990).

In so holding, we reject Rose’s argument that the handbook’s provision regarding

probationary employees requires a different result. The provision indicates that probationary

employees may be terminated “without respect or reference to the procedures set forth in the rules.”

Rose contends that, by implication, non-probationary employees may be terminated only in

accordance with the progressive discipline system. In rejecting this argument, we note that creating

such a contract by implication appears to be in contravention of the requirement that the employee

handbook contain “specific language” of “contractual intent.” See Smith v. Morris, 778 S.W.2d

857, 858 (Tenn. App. 1988); accord Davis v. Connecticut Gen. Life Ins. Co., 743 F. Supp. 1273,

1279 (M.D. Tenn. 1990).

Our holding that the handbook is not a part of the employment contract is bolstered
7For unpublished decisions on this subject, see Guekel v. Cumberland-Swan, Inc.,

No. 01A01-9410-CV-00482, 1995 WL 386558, at *3 (Tenn. App. June 30, 1995) (handbook

reserved to employer “the right to make changes in the guidelines of their application as it deems

appropriate . . . with or without notice”); Gaines v. Response Graphics, Inc., No. 01-A-01-9204-

CV-00181, 1992 WL 319441, at *2 (Tenn. App. Nov. 6, 1992) (handbook provided that it could

be revised without notice); Crigger v. Columbia Power & Water Sys., No. 01-A-01-9001-CV00036, 1990 WL 121570, at *2 (Tenn. App. Aug. 24, 1990) (handbook expressly stated that it

could be unilaterally changed at any time by employer), perm. app. denied (Tenn. Jan. 28, 1991);

Smith v. Dixie Cement Co., No. C.A. 89-248-II, 1989 WL 146739, at *3 (Tenn. App. Dec. 6,

1989) (handbook specifically provided that changes may be made “from time to time”); Blalock

v. Hecks Discount Stores, No. C.A. 140, 1986 WL 4591, at *1 (Tenn. App. Apr. 18, 1986)

(handbook reserved to employer “right to make changes in the guidelines or their application as it

deems appropriate”).

by the existence of a provision in the handbook indicating that its policies are subject to change

without notice by the Public Works Department Committee. “Any language that preserves a

unilateral right on the part of the employer to alter or modify the contents of the handbook” generally

precludes the handbook from being considered an employment contract. Claiborne v. Frito-Lay,

Inc., 718 F. Supp. 1319, 1321 (E.D. Tenn. 1989) (handbook reserved to employer “the right to make

changes to the material contained in this guide from time-to-time to meet changing conditions and

business needs”); see, e.g., Smith v. Morris, 778 S.W.2d 857, 858 (Tenn. App. 1988) (handbook’s

language clearly showed “that modifications were anticipated”); Bringle v. Methodist Hosp., 701

S.W.2d 622, 624 (Tenn. App. 1985) (handbook reserved to employer “right to change and abolish

policies, procedures, rules and regulations”);7

see also Gregory v. Hunt, 24 F.3d 781, 786 (6th Cir.

1994) (handbook provided that policies were “subject to change by management, unilaterally and

without notice”); Davis v. Connecticut Gen. Life Ins. Co., 743 F. Supp. 1273, 1279 (M.D. Tenn.

1990) (handbook reserved to employer “the right to change any or all such policies, practices and

procedures in whole or in part at any time, with or without notice to you”). Such language instead

indicates “that the handbook simply constituted a set of guidelines or a source of information for an

employee.” Claiborne v. Frito-Lay, 718 F. Supp. at 1321. In the present case, this conclusion is

supported by language in the handbook indicating that the Department rules are “to serve as a guide”

for the employee’s conduct.

Our research has revealed only two appellate decisions in this state holding that an

employee handbook was a part of the employment contract. The first such decision is easily

distinguishable from the present case. In Hamby v. Genesco, Inc., 627 S.W.2d 373, 376 (Tenn.

App. 1981), the handbook specifically provided that, for so long as the employment relationship
continued, these policies “shall be The Guaranteed Policies, Practices and Procedures” of the

employer. As previously discussed, the employee handbook in the present case contains no such

language guaranteeing the application of its guidelines.

The more difficult case to distinguish is Williams v. Maremont Corp., 776 S.W.2d

78 (Tenn. App. 1988). In that case, the court enforced a handbook provision stating that, upon the

resumption of work following a layoff, “employees will be recalled in the order of seniority.” Id.

at 80. Emphasizing the word “will,” the court reasoned that the employer “was not obligated to

create its seniority policy, but having done so to the detriment of those relying upon the policy, it

may not now treat its promise as an empty one.” Id. at 80-81.

Nevertheless, we believe the present case to be distinguishable from Maremont.

First, we note that the Maremont decision involved a recall provision, while the handbook

provisions at issue in the present case directly affect the employer’s right to terminate employees at

will. Courts have expressed a greater willingness to enforce the provisions of an employee handbook

when the provisions affect an employee’s right to receive benefits, as opposed to an employer’s right

to terminate its employees. See Graves v. Anchor Wire Corp., 692 S.W.2d 420, 422 (Tenn. App.

1985); see also Gregory v. Hunt, 24 F.3d 781, 785 (6th Cir. 1994); Shelby v. Delta Air Lines, 842

F. Supp. 999, 1014 (M.D. Tenn. 1993), aff’d, 19 F.3d 1434 (6th Cir. 1994). Further, the element of

reliance referred to in the Maremont decision appears to be lacking in this case. In Maremont,

employees with seniority may have foregone other employment opportunities in reliance on the

employer’s seniority policy of conferring increased benefits upon employees with ten years of

employment. No such reliance has been alleged by Rose in the present case. Finally, we note that

the Maremont decision makes no mention of any provision preserving a unilateral right on the part

of the employer to alter or modify the handbook’s contents. In the present case, the employee

handbook provided that its policies were “subject to change by the Tipton County Public Works

Department Committee without notice.” As previously indicated, the presence of such a provision

generally precludes the handbook from being considered a contract. Claiborne v. Frito-Lay, Inc.,

718 F. Supp. 1319, 1321 (E.D. Tenn. 1989).

The trial court’s judgment is affirmed. Costs of this appeal are taxed to Appellant.
_______________________________

FARMER, J.

______________________________

CRAWFORD, P.J., W.S. (Concurs)

______________________________

LILLARD, J. (Concurs)