South-Western Legal Studies in Business

At-Will Employer May Change Terms of Employment at Any Time

Appeals court held that promises made by an at-will employer regarding its vacation policy could be changed without notice. Employees did not retain rights that existed under the previous policy.


Employment Law

Key Words

At-Will; Contracts; Handbook; Policies; Vacation

C A S E   S U M M A R Y

Brown was employed by Sabre when part of the company was sold to EDS. Brown and 4,000 other at-will employees were given the option to move to EDS or quit. Brown and others moved to EDS. Sabre's vacation policy was that vacation days were earned one year and taken the next year. Those days could not be carried forward to the following year. Sabre said it would honor its vacation policy during the change to EDA, but it then changed the policy. Brown was paid for half of his vacation days, but lost the remainder. He did not recover that time when he began at EDS. He sued Sabre for the value of his lost vacation days, claiming breach of contract. The district court rejected the claim; Brown appealed.


Affirmed. Any modification of an employee's at-will employment status must be based on expressed, rather than implied, agreements that are clear and specific. If an employee claims a contract existed, they have the burden to prove it existed. As a general rule, employee handbooks and policy manuals are general guidelines in the employment relationship and do not create implied contracts that are an exception to the at-will relationship. The disclaimer in the employee handbook negated any implication that personnel procedures placed a restriction on the at-will relationship. The employer had the right to alter, amend, modify, or terminate the policies at any time. Hence, Brown had no contractual right to payment for accrued vacation time. That policy was subject to change at the employer's discretion.


Brown v. Sabre, Inc., 173 SW3d 581 (Ct. App., Tex. , 2005)

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