Quicks Hits

• In Dailey v. University of Portland, the Court of Appeals of the State of Oregon addressed the enforceability of handbook provisions as a “contract.”
• Generally, Oregon law recognizes that handbook provisions can form a contract unless effectively disclaimed.
• The court emphasized that employers must ensure disclaimers are clear, prominently placed.

Background

Stephen Dailey was a student in the University of Portland’s doctoral nursing program. He began the nursing program in 2015. However, in 2017, due to personal circumstances, he reduced his course load. The following year, in 2018, he took a leave of absence and did not return until three years later, at which point he reenrolled in the program. To earn his degree, Dailey was required to complete a specific sequence of academic and clinical courses within a six-year period.

According to the university’s intranet bulletin, nursing students’ clinical courses must have a supervisor with a minimum of 2,080 hours of licensed experience. For two semesters, Dailey’s clinical supervisors did not meet this requirement, as neither had the necessary licensed experience.

Dailey was ultimately unable to complete the program within the permitted six-year timeframe and withdrew. Dailey brought a breach of contracts claim against the university, arguing that disclaimers in its general student handbook, nursing school handbook, and online bulletin were ambiguous and gave rise to contractual obligations for the university to find clinical opportunities for Dailey.

The Court’s Decision

The appeals court agreed with the university that clear and conspicuous disclaimers can prevent handbook provisions from forming a contract. The court, however, found that while the general student and nursing school handbook’s disclaimers were clear and conspicuous, the university’s disclaimer on its bulletin was “tucked away in a mousehole.” To access the bulletin’s disclaimer, a reader had to click through two separate webpages without any clear indication that a disclaimer would be found there. The court noted that the university’s disclaimer was therefore effectively hidden. The court held that, as a matter of law, the disclaimer was not conspicuous enough to defeat the plaintiff’s contract claim and reversed the trial court’s grant of summary judgment.

Key Takeaways for Employers

• Although the case involved a student rather than an employee, the law applies equally in the employment context.
• Employers may consider placing clear and conspicuous disclaimers in their employee handbooks, personnel policies, and intranet-based policies to ensure that such documents do not inadvertently become enforceable employment contracts.