Cross Your Fingers

On January 19, 2010, the Michigan Court of Appeals issued Foote v. Dow Chemical in which it reaffirmed the importance of including disclaimer language in employee handbooks. In Dow, no employment contract was created, and hence no breach could occur, because Dow's handbook said "[n]othing in this document constitutes a contract of employment with any individual," and "I understand that I will have the right to terminate my employment with Dow at any time without notice and for any reason. I understand that Dow has the same right."

Employers should always include similar language in order to prevent accidental contract formation.

Click here for a copy of the Court's opinion.

Should Parties Limit an Arbitrator's Authority

On February 9, the Michigan Court of Appeals issued City of Center Line v. Police Officers Association of Michigan and Angela Post in which it affirmed a trial court's decision to affirm an arbitration award. In that award, an arbitrator determined the employer had "unreasonably" relied on medical evidence when finding that an employee was unable to return to work and, as such, had violated the CBA. The arbitrator then ordered the employer to seek another medical opinion to determine, for damage reasons, when the employee was fit to return to work. Based on this evidence, the arbitrator ordered backpay.

The employer challenged this order on the grounds that granting this relief was not within the arbitrator's authority. After noting that the "arbitrator's chose of remedy is . . . generally broad," the Court of Appeals explicitly noted that the CBA in question "does not limit the arbitrator's authority to order a particular remedy."

This raises an important question for employers. When negotiating CBAs, should you insist on a provision that limits an arbitrator's remedial powers? CBAs traditionally contain provisions prohibiting arbitrators from adding to or subtracting from CBAs, but a remedial limitation is different and, in a more targeted fashion, addresses the authority of the arbitrator to grant certain remedies.

Click here for a copy of the Michigan Court of Appeals decision.