Builders and Contractors Exchange
Weekly Bulletin: 16 feb 2007
employee handbook -- friend or foe?
Employers often ask whether employee handbooks are necessary in today’s business world. Construction companies sometimes believe “less is more” when it comes to employment policies or employee handbooks. This article will explore the pros and cons of creating written employment policies and employee handbooks.
Most employment lawyers and human resources consultants generally recommend that employers should publish some sort of employee handbook, so that both employees and supervisors understand the general policies governing employment with the company. An employee handbook can be extremely beneficial to employers by setting forth: (1) the nature of the at-will employment relationship; (2) the non-contractual nature of the handbook; (3) company policies with respect to non-discrimination and the reporting of alleged discriminatory or harassing conduct in the workplace; and (4) the company’s expectations with regard to attendance and workplace conduct.
An employer that has a written non-discrimination and anti-harassment policy will be in a much better legal position to defend against any claims of unlawful discrimination or harassment, if such claims are filed later. An employer that has a written policy setting forth general workplace rules, the violation of which could result in discipline, up to and including discharge, will be in a better position to win unemployment claims filed by employees who were discharged for misconduct. Good employee handbooks also preserve management flexibility in disciplining employees, based on all the circumstances involved.
Employers that have written policies for reporting and correcting payroll errors, especially the inadvertent “docking” of salaried exempt employees’ paychecks for partial day absences, will have better defenses, should the federal or state Labor Departments conduct an audit of their payroll practices. Lawful non-solicitation and non-distribution policies, established before a non-union employer is targeted by a union organizing drive, also will help the targeted employer limit union organizing activity on its premises.
Finally, an employee handbook that clearly sets forth the fact that employees are employed “at will” will create a good defense for employers that are sued for wrongful discharge or breach of an alleged employment agreement.
In short, employee handbooks are an excellent management tool for effectively communicating with the employees, if properly drafted, and can be the company’s best friend if it is sued by a former employee.
Employee handbooks, however, are not without their risks. Like other written company documents, if the policies set forth in an employee handbook are not followed by company management, they could do more harm than good. For example, if an employee handbook states that employees will be first warned before discharged, for committing certain misconduct at work, an employee discharged on the first offense probably will be able to collect unemployment benefits. The same employee may possibly have a claim for wrongful discharge or unlawful discrimination, depending on how other employees were treated for the same first offense. Another possible handbook risk is created when a company states that it will conduct performance reviews of employees, without fail, every year, but does not do so. If an employee discharged for poor work performance claims that he really was discharged because of his race, and can show that his performance was never evaluated (despite a contrary company handbook policy), despite other employees of another race being evaluated, the employer may have trouble defending its actions. Another common mistake with employee handbooks is when an employer uses a “form” handbook that contains policies that are not legally required or recommended, based on the state where the employees are working and/or the number of employees who are employed by the company.
If adopted, all company handbooks should be reviewed by a lawyer, before publication, for compliance with applicable law in the state(s) where employees are working. Once published to employees, employee handbooks must be supported and followed by company management. Employee handbooks should be reviewed periodically, and revised according to changes in company policy and changes in applicable law. A good employee handbook will help protect your company from liability and also should help improve employee morale.
Questions?
If you have any questions about this article or any other related matters, please contact:
This article is meant to bring awareness to this topic and is not intended to be used as legal advice.