Employee Handbooks: Pitfalls and Best Practices
Though employee handbooks are common in modern employment relationships, handbooks vary significantly in the legal protections they provide. A well-drafted handbook provides helpful guidance to employees, serves as a valuable tool for an employer, and may even give businesses an edge in litigation. If drafted poorly, a handbook may have unintended consequences and may cripple a business faced with a lawsuit from an employee (or several). Business owners should thus take care when implementing a handbook and should seek counsel from an experienced employment law attorney to avoid some of the pitfalls discussed below.
Minnesota is an “at-will” employment state. Generally, the employer or employee can end the employment relationship at any time, for any reason. If the employer and employee form a contract for employment, however, an employer may be liable for terminating an employee before the term of employment ends.
An employee handbook should state unambiguously that it is not an employment contract. This language should appear near the beginning of the handbook, as well as on any acknowledgment form the employee signs (more on this later). This disclaimer should use clear language, set apart in its own section.
The handbook should also define the employer’s obligations to its employees in permissive terms whenever possible. Among other things, the handbook should give the employer discretion to impose discipline, as well as flexibility with discretionary benefits such as short breaks or vacations. If the policies are too rigid, courts may find that the handbook created a de facto employment contract, despite disclaimers to the contrary.
Scope and Size
A well-drafted handbook is accessible to employees of all education levels and clearly states their duties and obligations. A handbook should not be a legal treatise on employment law, however. The scope and size of the handbook should be tailored to meet the needs of the business (one size does not fit all).
Except for some legally mandated notices, an employer should not attempt to educate employees on the law. For example, a handbook should not attempt to list every type of leave provided by federal, state, and local laws. Instead, the handbook should contain general policies regarding leave and define the notice required. Some statutes explicitly define the notice an employee must provide while other laws only require that the employee provide “reasonable” notice. In the latter case, courts will often look to the handbook to determine whether the employee’s notice was reasonable.
Employees should sign a form that, among other things, states they have read the handbook and that they understand its contents. The acknowledgment form should also reiterate the “at-will” nature of the employment relationship, as stated above. This acknowledgment has less legal significance, however, if the employer required the employee to sign the acknowledgment immediately after receiving the handbook.
Nonetheless, employers should still require employees to sign the acknowledgment form. The law does not prevent an employer from firing, or withdrawing an offer of employment, if the applicant or employee refuses to provide a signature. Employers arguably waive their policies if they allow employees to continue working after the employee refuses to sign an acknowledgement form.
However, a handbook should not condition the employer’s policies and procedures on this form. Because of the “at-will” nature of the employment relationship, an employer has wide discretion to set requirements for its employees, subject to applicable law. A handbook should emphasize this discretion as opposed to limiting the employer to arbitrary conditions, such as a signed acknowledgment.
Every handbook should contain a reporting policy for discrimination and harassment. This policy should outline a clear process for employees to bring complaints to the attention of the employer and identify the person or department who receives such reports. This policy should have at least one further stage of reporting if the employee either believes the person designated to receive reports is the perpetrator, or if the employee does not believe the complaint was properly handled. In addition to reducing discrimination and harassment in the workplace, a well-drafted reporting policy may also protect the employer. Courts have dismissed discrimination and harassment lawsuits because the plaintiff-employee failed to follow the employer’s reporting policy.
Job Requirements and Policies
The handbook should outline the employer’s policies and job requirements in a clear and precise manner. In addition to addressing the employer’s expectations for an employee during working hours, the handbook should also encompass off-work conduct, such as an employee’s conduct on social media. Courts will often review the handbook to determine whether the employer articulated the requirement that led to an employee’s termination, even if the employee was terminated for something that seems obvious, such as the requirement to show up on time or to report an absence.
Employment laws change frequently at the federal, state, and local level. To ensure that your handbook complies with the current state of the law, you should involve an experienced employment law attorney when preparing a handbook and to regularly review your policies. With the help of experienced counsel, your handbook will serve as a better guide for your employees while also reducing your litigation risks.