Is Your Employee Handbook Working For You?

by Frank L. Day, Jr.

Employee handbooks are not legally required, but they can be very helpful to employers when utilized correctly. A handbook should set forth company policies, the terms and conditions of the employment relationship, and describe the employer’s expectations. In short, it should set the tone for the employment relationship. A good handbook is one that reflects the values of the organization and is tailored to meet its needs.

One purpose of an employee handbook is to protect the company from legal claims by confirming that the employer follows the law. A handbook cannot serve this purpose if it is not kept compliant with the changing laws and regulations. Companies are now subject to more than 100 federal and/or state laws, making it infeasible to have written policies addressing them all. In fact, employers should only adopt written policies that they intend to manage because a policy that violates the law is far worse than having no written policy at all. At a minimum, employers should conduct annual compliance reviews paying particular attention to the following areas:

1. Distribution

The best employee handbook in the world is of no value if the employer cannot prove that it was distributed. Employers must consider how they will prove employees received the handbook and should ensure they receive a written acknowledgment of receipt regardless of whether the handbook is distributed electronically or in paper form. These acknowledgments should be kept in a location where they will be accessible in the future.

2. Disclaimers and At-Will Employment

In some states, including Tennessee, a handbook is generally not considered a contract of employment unless the employer includes language that expressly offers a term of employment rather than employment-at-will. However, laws vary, and some state laws may treat handbooks as contracts of employment. To help avoid this, a handbook should contain a clear and conspicuous disclaimer stating that it does not create a contract of employment. The handbook should also make clear that the company’s employees are at-will. It is a good idea to place the at-will statement in the front of the handbook on the same page as the disclaimer.

3. EEO Policies

There are many separate EEO concerns that should generally be addressed in an employee handbook and reviewed frequently for compliance and needed changes to reflect recent legal developments:

a. General nondiscrimination pledge

Employers operating in more than one state should ensure that their EEO pledge covers all protected groups identified in the various state and local laws and regulations, which may protect classifications that are not protected by federal law.

b. Reasonable accommodations

Americans with Disability Act (ADA) regulations require employers to make accommodations for disabilities they know about. If an employer’s policy clearly indicates a willingness to make such accommodations, and an employee does not disclose a job-related disability needing accommodation until after the termination of employment, the policy statement could be useful in defending against any ADA claim the employee may bring.

c. Complaint procedure

The employer must ensure that its complaint procedure is actually used and meets the organization’s needs. The complaint process should permit employees to make complaints of unlawful discrimination, including harassment, and identify multiple individuals/positions to whom a complaint can be made, to enable employees to bypass, a supervisor, who may be the subject of the complaint.

3. Social Media and the NLRB

Employers should frequently review social media policies to ensure they are not in conflict with federal labor laws. In recent years, the National Labor Relations Board (NLRB) has found many such policies unlawful because they interfere with the right of employees to engage in “protected concerted activity.” Recent decisions have reiterated that policies should not be so broad that they prohibit the kinds of activity protected by federal labor law, such as the discussion of wages or working conditions among employees.

4. Work Rules and the NLRB

The NLRB also recently has found several common types of employer work rules unlawful. Employers should review their work rules or standards of conduct to ensure that the rules do not infringe on protected activity or serve to “chill” any employee from exercising those rights. Examples of rules the NLRB has found unlawful include rules requiring employees to treat each other respectfully, prohibitions against solicitation that are not limited to specific working areas and/or during work hours, and confidentiality requirements prohibiting employees from discussing working conditions, wages, work hours or benefits of employment.

4. Benefits and Miscellaneous Policies

As with EEO policies, there are many legal issues related to benefits. The following are some of the most essential that should be reviewed regularly:

  • The handbook should speak in terms of coverage and not in terms of particular benefits. If particular benefits are discussed, an employer runs the risk that it will be required to provide those benefits, even where the carrier has denied coverage.

  • The handbook should explicitly state that all coverage is subject to the terms, conditions, restrictions and other eligibility requirements set forth in a plan document.

  • The employer should reserve the right to modify, amend or terminate any benefit plan at any time and for any reason. If this language is not included in the handbook, employers run the risk that ERISA may require advance notice before any change can be made and/or prohibit certain changes from being made at all.

Other policies that should be reviewed regularly include workplace violence policies that may be impacted by varying and frequently changing state concealed weapons laws; leave policies that may be impacted by state and local laws requiring paid sick leave; and “bring your own device” policies that may raise wage and hour, privacy and other issues.

While these are just a few of the troublesome areas, all employers should annually review their employee handbooks to ensure compliance or reach out to their favorite employment attorney to assist in the review.

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Frank L. Day, Jr. FordHarrison