96 N.Y.2d 313 (2001)
An express disclaimer in an employee handbook, stating that the handbook does not create contractual rights and that employment is at-will, is enforceable and prevents an employee from claiming breach of contract based on handbook provisions.
Summary
Anthony Lobosco sued New York Telephone/NYNEX for breach of contract, alleging he was fired for refusing to testify untruthfully and for reporting a fellow employee’s misconduct. His claim was based on a provision in NYNEX’s employee manual (Code of Business Conduct) assuring protection against reprisal for reporting violations. However, the manual also contained a disclaimer stating it was not a contract and that employment was at-will. The New York Court of Appeals held that the disclaimer was enforceable, preventing Lobosco from claiming a contractual right to continued employment based on the manual’s no-reprisal provision, thus reaffirming at-will employment principles.
Facts
Anthony Lobosco was employed by NYNEX for 27 years. He became a party-witness for NYNEX in a litigation. Lobosco alleged that NYNEX counsel instructed him to limit his testimony and pressured him to testify untruthfully. He also claimed he reported a fellow employee’s concealment of documents. Subsequently, NYNEX fired Lobosco, ostensibly for having unreported communications with the adversaries’ principals. NYNEX distributed a “Code of Business Conduct” to employees, which included a section assuring protection against reprisal for reporting violations. The Code also included a disclaimer stating it was not a contract of employment and could be modified at any time without notice.
Procedural History
The Supreme Court initially dismissed all of Lobosco’s claims except for the breach of contract claim, holding that the no-reprisal provision superseded the general disclaimer. The Appellate Division reversed, dismissing the entire complaint, finding that Lobosco failed to plead or assert reliance on the manual. The Court of Appeals affirmed the Appellate Division’s decision, but on different reasoning, focusing on the enforceability of the disclaimer.
Issue(s)
Whether an express disclaimer in an employee handbook negates any contractual obligations that might otherwise arise from the handbook’s provisions, thereby preserving the at-will employment relationship.
Holding
Yes, because the explicit disclaimer of a contractual relationship contained in the employee manual clearly preserves NYNEX’s right to maintain an at-will employment relationship with its employees.
Court’s Reasoning
The Court of Appeals relied on the principle that employment for an indefinite period is presumed to be at-will, terminable by either party at any time for any reason. While New York recognizes an exception for breach of contract when an employer provides an express written policy limiting discharge rights and the employee relies on that policy (Weiner v McGraw-Hill, Inc.), this exception does not apply when a clear disclaimer exists. The court emphasized that routinely issued employee manuals should not lightly be converted into binding employment agreements, especially when conspicuous disclaiming language is present. The court stated: “An employee seeking to rely on a provision arguably creating a promise must also be held to reliance on the disclaimer.” The Court found that the disclaimer prevented the creation of a contract, negating any protection from termination Lobosco may have inferred from the manual’s no-reprisal provision. The Court also noted that the Code itself contained a procedure wherein the at-will employment relationship can be modified – and that is by written agreement signed by both parties. The Court specifically stated, “To the extent that Waldman v NYNEX Corp. suggests otherwise, it should not be followed.”