Your Employee Handbook:
How Well does it Protect Your Company?
Employers often wonder whether they ought to have an employee handbook.
There are both advantages and disadvantages to a handbook, but overall
many employers come out on the side of having one. Handbooks can establish
clear standards that help reduce disputes; promote consistent management;
inform new employees of the company’s policies; demonstrate a commitment
to equal treatment of personnel; and reduce the chances of unintentional
illegal behavior.
The disadvantages to having a handbook, most of which can be reduced
or eliminated with proper phrasing of policies, include discovering that
the handbook forms the basis of an employment contract, and/or that it
limits the company’s ability to handle situations on a case-by-case
basis.
Employers that want a handbook, but also want to reduce the likelihood
of its being used against them at a future date must be certain to have
a properly worded disclaimer prominently displayed in it. Although such
a disclaimer cannot guarantee that a disgruntled employee will not sue
for breach of contract or wrongful discharge, it can be a deterrent against
such claims being brought and, if brought, can be a helpful defense against
them.
To be effective, the disclaimer must state in simple to understand language
that the handbook is not intended to create an express or implied contract
of employment. It must also state that all employment with the company
is "at-will." This means that either the employee or the employer
may terminate employment at any time for any reason, with or without
notice. In addition, the disclaimer should note the handbook is not intended
to be a complete description of the company’s policies or practices
and that the company reserves the right to revise, supplement, suspend
or discontinue the policies at any time.
To avoid diminishing the effect of a disclaimer, employers should be
careful not to make statements anywhere in a handbook that it is designed
to clarify the "rights" of employees. Employers must also take
particular care when adding disclaimers to existing handbooks. The addition
of a disclaimer should be well publicized to best protect the company,
and, even then, employers should be aware that the disclaimer may not
be effective as to employees who were hired under previous editions of
the handbook.
Employers should have employees sign an acknowledgment that they received
a copy of the handbook and that they understand it is their obligation
to read, understand and comply with it. The acknowledgment should reiterate
that the handbook is not intended to create an express or implied contract
and that all employment with the company is at-will.
Employers should also pay particular attention to disciplinary policies.
Clearly drafted work rules that are adhered to consistently are an important
component of an employer’s disciplinary policy. Such work rules
can be used to defend against unemployment compensation claims as well
as discrimination and wrongful discharge claims. Disciplinary policies
that include reference to progressive discipline, such as verbal warnings
followed by written warnings prior to termination, must contain language
granting the employer flexibility to skip any or all steps in the disciplinary
process when it deems it appropriate to do so.
Other important policies include sexual harassment and proper absentee
control policies — both of which must comply with relevant law.
For example, a sexual harassment policy should include a definition of
sexual harassment. Employers of 50 or more employees must be certain
that any absentee policy complies with the Family and Medical Leave Act.
Drafting a handbook or revising an existing one is a time consuming
procedure, but one the importance of which cannot be overestimated. For
members who would like help with these tasks, CBIA offers both a handbook
review and a handbook development service.
If you would like to discuss these services
for your company, e-mail
CBIA's Mark Soycher or call him at 860-244-1900.
CBIA’s top human resources experts have developed its Employee Handbook Software an easy-to-use tool to help you create a solid handbook that is just right for your organization. Available on CD-ROM or diskette, the software offers templates that give you our recommended policies and wording and also lets you tailor them to meet your special needs.
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