Well-Written Handbooks Can Protect Against Lawsuits

WELL-WRITTEN HANDBOOKS CAN PROTECT AGAINST LAWSUITS

Clearly spelled-out procedures and policies in your company’s employee handbook can prevent expensive lawsuits by employees.

Such handbooks were once considered a basic human resources tool, the manual summarizing policies and procedures that affect the employee and employer. The idea has always been that each employee would have a handbook to turn to for answers to questions on such things as vacation or benefits policies.

However, recent court decisions have made a company’s handbook something more than a staid policy. These days, employees are beginning to use the handbook as a tool in litigation; a carefully crafted handbook has become a way for the employer to protect the company.

The language in which your company’s handbook is written can now protect the company by spelling out the at-will employment relationship, employee rights, and other important details that can become factors in employee lawsuits.

What should the manual include in order to maximize its value to both the employer and employees?

For starters, both management and employee rights should be included. In particular, the complaint procedure and disciplinary procedure have become a focus in all sorts of discrimination and harassment complaints.

An important sexual harassment ruling in the case of Burlington Industries Inc. v. Ellerth recently determined that an employer could be held liable for the acts of supervisors even if the company was unaware of any harassment. This decision affects what information employers should include in their manual. Employers who ignore it do so at their peril. Sexual harassment and discrimination lawsuits can be expensive to fight and expensive to lose.

It isn’t enough for employers to say their policy delineates the steps they took to prevent the harassing behavior. The anti-harassment policy needs to include measures to preclude recriminations against the employee, and to provide reasonable confidentiality when complaints occur. To legally protect themselves, employers should be able to show that they have a complaint procedure and an anti-sexual harassment procedure that works and is reasonable. One of the best ways to show this is to have this information clearly spelled out and included in the employee handbook.

What else should the manual include? It should provide basic information on payday, work hours, overtime, benefits, absenteeism and tardiness policies, as well as a clear statement of policies regarding holidays, vacation, and sick pay. The handbook should include a definition of full-time and part-time employees, probationary periods, and policies regarding performance review and evaluation.

The employment manual also should spell out the company’s standards of conduct, including dress codes and policies on personal phone calls and e-mail. The handbook should state how employees are expected to handle the confidentiality of important information or conflicts of interest that might arise on the job.

Disciplinary procedures, in particular, should be clearly stated. The employer must be quite comfortable with these policies, because employees and their attorneys will review this information in case of a disciplinary dispute, and employees will expect procedures to be followed as spelled out in the handbook.

From a strictly legal point of view, employers should clearly state that the handbook is not a contract and can be modified without the employees’ consent. Without this statement, some courts will consider what is included in the handbook as a written contract between the employee and the employer. Employers should insist that this boilerplate statement be included, so the handbook can be amended easily.

The employer’s right to review an employee’s overall job performance should be clearly stated, including important factors, such as what the company expects in terms of a proper work attitude and meeting deadlines. The handbook should say that a performance review is not necessarily a salary review, although occasionally both may coincide.

Of course, the handbook should point out that the company is an equal opportunity employer, and that all employees are evaluated regardless of sex, race, religion and other factors. State that the company will not tolerate any type of harassing behavior, and spell out a reasonable complaint procedure in case harassment occurs. Question and complaint policies must apply uniformly to all employees.

The biggest mistake that companies make is in their complaint procedure. If the complaint is against an employee’s immediate supervisor, the employee should not have to file the complaint procedure with that particular supervisor. This would deter most types of complaints against the supervisor, of course, and could easily be seen as unreasonable.

The handbook should detail how the company handles checking and giving references, as well as policies on resignations and terminations. Most importantly, along with the handbook itself, an acknowledgment form should be given to the employee. This form should be signed by the employee and filed, as proof that each employee has reviewed the handbook and understands what is inside.

This article was authored by Sanford Michelman, a member of the California Bar, who is associated with the Law Firm of Michelman & Robinson, LLP, with an office in Sherman Oaks, California.