Employee Handbooks Can Provide Important Legal Protection

Originally published: 06.01.11 by Mike Coyne


Be careful not to ‘create’ new rights with language.

Whether you have three employees or 30, you need to have a way to inform them of your employment policies. An employee manual is an easy way to communicate these policies, and it can provide important prtection to your business as well.

One of the biggest advantages of using an employee manual is that a written document promotes consistent application of company rules. This is especially important for companies that are too small to have a full-time human resources manager on board. An employee who has received a written document setting forth company policies can be expected to follow those policies or face consequences for failing to do so.

A second advantage of a written manual is that it is an effective way of dispelling various myths concerning employee rights. For example, some employees actually believe that they are entitled to a written reprimand before they can be terminated. We have frequently seen employees assert rights under federal laws that are inapplicable to their employer. Recently, one employee of a small employer claimed the right to an unpaid leave of absence to care for a sick relative under the federal Family Medical Leave

ADVERTISEMENT  
Act, a law that applies only to employers with 50 or more employees.

Finally, a written manual provides strong evidence of an employer's good faith effort to comply with laws ensuring equal employment opportunity, nondiscrimination, and protection against harassment in the workplace. If a policy describes the steps that the employee should take when faced with harassment or discrimination, and the employee fails to take those steps, that employee's claim against an employer is severely weakened.

A good employee manual can cover a variety of issues including the following: vacation, sick days, bereavement policy, conduct policies, substance-abuse policies, dress codes, etc. If employees have access to company computers, the employee manual might describe limitations on employee's use of the Internet, e-mail policies, and the like.

If your business is located in a state that recognizes "at will" employment, your employee manual must include a clear statement that the manual does not change the employee's status as an "at will" employee. Here is the language that we use: 

This handbook does not create a contract of employment (express or implied) between the Company and its employees. Rather this handbook is only intended to provide guidelines for employees of the Company. Our relationship remains at-will, notwithstanding any provision in this handbook to the contrary. Just as you have the right to end your employment at any time, for any reason, the Company also reserves the right to end the employment relationship for any reason at any time. No officer or representative of the Company other than the president has the authority to enter into any agreement with you regarding the terms of your employment that changes our at-will relationship or deviates from the provisions in this handbook.

Employee manuals can create problems, too. An employer who adopts an employee manual and then fails consistently follow its terms will poison its relationship with its employees. In some cases, employers have outlined elaborate procedures for terminating an employee, replete with first warnings, second warnings, etc. These types provisions can actually create rights for employees that the employees would not otherwise have. 

Considering the sometimes-litigious nature of employees, the number and complexity of regulatory-compliance issues employers face, and the subtleties of language, it is always good to have your attorney review your employee manual for possible legal issues.

Michael P. Coyne is a founding partner of the law firm Waldheger Coyne, located in Cleveland, OH. For more information of the firm, visit: www.healthlaw.com or call 440.835.0600.


Articles by Mike Coyne

How to Be a Savvy Negotiator for Commercial Leases

Consider more than just the rental rate when evaluating commercial property and negotiating leases.
View article.

Carefully Consider Coverage for Liability

Too often, customers do not appreciate that such demands for protection against damages cannot be accommodated without exceptional costs that translate into significantly higher prices for services.
View article.

Tactics for Avoiding Lawsuits

Litigation is always the result of a failure of people to deal with each other reasonably.
View article.

How to Take Control From Minority Shareholders

Several options focus on shares and voting. Also, consider alternatives before rewarding key employees with ownership shares.
View article.

Rules for Retaining Tax Records

An explanation and some clarity on the IRS guidelines
View article.