Policy manual or personnel handbook can create contractual terms

Karim Salehpoor was an engineering professor at New Mexico Institute of Mining & Technology (NM Tech). Salehpoor taught under a series of annual employment contracts. As the 2011-12 academic year came to an end, he was notified that his contract wouldn't renewed for the upcoming year.

Salehpoor sued NM Tech, claiming it hadn't followed the pretermination procedures set forth in its policy and procedure handbook. NM Tech countered that Salehpoor's employment was governed by the terms of his written contract, which didn't require the same pretermination process.

Complicating the case was a state law requiring that any contract with a public entity must be in writing to be enforceable. NM Tech argued that the personnel policies Salehpoor was invoking weren't part of any written contract.

It has long been the law that the terms and provisions in a policy handbook or personnel manual can be the basis of an implied employment contract as long as employees have a “reasonable expectation” that their employer will follow the handbook. In Salehpoor's case, the New Mexico courts ruled that because a written employment contract existed, he could rely on other materials that would help him interpret the contract. As a result, his claim will continue to trial, leaving a jury to determine whether he was wrongfully terminated and whether he is entitled to damages.