Friday, September 6th, 2013 | Author:

Employee Incentive Plans May, Sometimes, Create Contract Rights

The Fourth District Court of Appeal, in Turton v. Singer Asset Finance Company, LLC, 2013 WL 4727388 (Fla. 4th DCA September 4, 2013), reversed a summary judgment in a case involving a dispute as to whether an employee was entitled to compensation based upon an employee incentive plan.  The court noted that “Florida law has long recognized that statements made in employee handbooks, policy statements, or procedure do not give rise to enforceable contract rights” (emphasis added).  Id. However, the court found that there was a factual issue, thereby precluding summary judgment, because there was a dispute concerning the parties intent and, more specifically, whether the plan induced the employee to work hard or induced the employee from exercising their right to terminate employment.  Id.

This case is interesting for two reasons.  First, the Court reaffirms well-established law that employee handbooks and policies/procedures do not create contract rights for employees.  Second, and more interesting, is the fact that this general rule may be inapplicable if the employer induced the employee to refrain from quitting as opposed to merely giving that employee an incentive to work hard.  The nuance, in this case, is that contract rights may exist if the employer used the plan to induce the employee not to quit.

This should not be taken to mean that contract rights existed in this case.  Rather, summary judgment was reversed and the issue will have to be resolved in the trial court.

This article does not constitute legal advice or the formation of an attorney-client relationship, and is not for re-publication without express permission of the author.

Brad Kelsky