Company Manual Did Not Create Enforceable Right to Severance

In Cohen v. National Grid USA, 2016 NY Slip Op 05786 (App. Div. 2nd Dept. Aug. 17, 2016), the court stated and applied the following employment law principle:

Provisions contained in company policy manuals which, like the one in this case, can be amended or withdrawn unilaterally, do not constitute enforceable obligations owing from an employer to its employees absent a showing of a regular practice by the employer to provide the benefits now claimed, the employee’s knowledge of the practice, and his or her reliance upon such practice as evidenced by accepting or continuing employment as a result thereof.

The Appellate Division held that the Supreme Court should have granted defendants’, and denied plaintiffs’, motions for summary judgment, where there was no such “regular practice” and that the “plaintiffs did not rely on any such practice in accepting or continuing their employment” following a merger and sale.