Employee Handbooks: Every Word Counts hel p!Allan H. Weitzman | August 29, 2011
SEVEN PRINCIPLES TO FOLLOW WHEN CREATINGAN EMPLOYMENT HANDBOOKI. Make Sure Your Handbook is NOT an Employment ContractII. Plainly State Employer Rules, Regulations and ProceduresIII. Describe Your Policies Designed to Assist EmployeesIV. Communicate Your Commitment to Equal OpportunityV. Set Guidelines for the Termination of EmploymentVI. Develop Cutting Edge PoliciesVII. Incorporate State and Local Legal Requirements into Your Handbook
I. Make Sure Your Handbook is NOT an Employment Contract2
I. Make Sure Your Handbook is NOT an Employment Contract Handbooks Can Be Interpreted as Creating Express or Implied Contracts • State law controls • Old handbooks may create rights that cannot be freely changed3
I. Make Sure Your Handbook is NOT an Employment Contract Handbooks May Create Implied Contracts of Employment Where: • Handbook sets forth progressive discipline plan or corrective action procedures • Handbook distinguishes between “probationary” and “permanent” employees and provides for discharge of “permanent” employees only after specific preconditions are met – e.g., written notice and a 30-day opportunity for improvement required before termination because of unsatisfactory work performance4
I. Make Sure Your Handbook is NOT an Employment ContractSee:• Falls v. Lawnwood Medical Center, 427 So. 2d 361 (Fla. 3d DCA 1983): – The court reversed the grant of summary judgment in favor of the employer hospital and remanded the case back to the trial court to consider whether certain policy manuals were part of the employee’s employment contract. Thus, Falls leaves open the possibility that, under certain circumstances, a policy manual might be viewed as constituting an enforceable contract in Florida.• Walton v. Health Care Dist., 862 So. 2d 852, 855 (Fla. 4th DCA 2003) : – Stating that “while Florida’s courts have expressed a decided reluctance to find that provisions in an employee handbook or policies and procedures manual rise to the level of enforceable contract rights, the courts have acknowledged it is possible for such handbooks or manuals to create enforceable rights if there is language in the employee manual expressly providing that the manual constitutes a separate employment agreement or the parties have reached a mutual agreement to this effect.”
I. Make Sure Your Handbook is NOT an Employment ContractSee also:• Muller v. Stromberg Carlson Corp., 427 So. 2d 266, 268 (Fla. 2d DCA 1983): – The court ruled in favor of the employer in a case brought by a discharged employee, stating: “[The Employee] feels that we should find an enforceable inference of . . . contract terms from the company policy. We cannot agree. We see no justification to depart from long established principles that an employment contract requires definiteness and certainty in its terms. . . . Mere expectations are insufficient to create a binding term of employment.”
I. Make Sure Your Handbook is NOT an Employment ContractBut see:• Quaker Oats Co. v. Jewell, 818 So. 2d 574 (Fla. 5th DCA 2002): – The appellate court overturned the decision of a lower court that held Quaker Oats responsible for creating a contractual obligation as a result of its employment handbook. Nine employees sued Quaker Oats alleging breach of contract because Quaker Oats failed to pay overtime in accordance with the policies set forth in its handbook. The court held that based upon well established Florida law, policy statements in an employee handbook do not constitute the terms of a contract of employment.
I. Make Sure Your Handbook is NOT an Employment Contract Disclaimers Assist in Preventing the Creation of Implied Contracts • Prominently display the disclaimer in the handbook • Advise employees that the policies and procedures are not intended to create a contract • Obtain a signed receipt upon distribution of the handbook • Reserve the right to modify or discontinue the policies and benefits set forth in the handbook at any time, without notice8
I. Make Sure Your Handbook is NOT an Employment Contract Examples of the role of a disclaimer in a handbook: • Turner v. Fed. Express Corp., 539 F. Supp. 2d 404 (D.D.C. 2008): – Handbook does not create an implied contract where the disclaimer expressly states that it is not a contract of employment and should not be read or implied to provide one, and where that language is repeated on the acknowledgement of receipt signed by the employee.9
I. Make Sure Your Handbook is NOT an Employment ContractExamples… (cont’d)• Aponte v. Alinabal, Inc., 2008 Conn. Super. LEXIS 1505 (Conn. Super. Ct. May 29, 2008): – In determining the validity of disclaimers, Connecticut courts have looked at the specificity of the disclaimer language, its location in the handbook, whether the disclaimer was signed by the employee, and the size of the print. Where, the disclaimer is in the same size print as all other text; contains an underlined statement that the Handbook “does not constitute an employment contract, neither expressed nor implied”; is signed by the plaintiff; and could not be clearer, the progressive disciplinary policy discussed therein did not result in an implied contract.• But see Burns v. Universal Health Servs., Inc., 361 S.C. 221 (S.C. Ct. App. 2004): – Where promissory language and disclaimers make the handbook ambiguous, a jury should interpret whether the handbook creates or alters an existing contractual relationship.
I. Make Sure Your Handbook is NOT an Employment Contract Sample Disclaimer: • There are several things that are important to keep in mind about this handbook. First, it contains only general information and guidelines. It is not intended to be comprehensive or to address all the possible applications of, or exceptions to, the general policies and procedures described. For that reason, if you have any questions concerning eligibility for a particular benefit or the applicability of a policy or practice to you, you should address your specific questions to the Human Resources Department. • Neither this handbook nor any other Company document confers any contractual right, either express or implied, to remain in the Companys employ. Nor does it guarantee any fixed terms and conditions of your employment. Your employment is not for any specific time and may be terminated at will, with or without cause and without prior notice by the Company, or you may resign for any reason at any time.11
I. Make Sure Your Handbook is NOT an Employment ContractSample Disclaimer: (cont’d)• No supervisor or other representative of the Company (except the President, in writing) has the authority to enter into any agreement for employment for any specified period of time, or to make any agreement contrary to the above.• Second, the procedures, practices, policies and benefits described here may be modified or discontinued from time to time. We will try to inform you of any changes as they occur.• Finally, some of the subjects described here are covered in detail in official policy documents. You should refer to those documents for specific information since this handbook only briefly summarizes those benefits. Please note that the terms of the written insurance policies are controlling.
I. Make Sure Your Handbook is NOT an Employment ContractSample Receipt for an Employee Handbook: I acknowledge that I have received a copy of XYZ Companys Employee Handbook. I agree to read it thoroughly, including the statements in the foreword describing the purpose and effect of the Handbook. I agree that if there is any policy or provision in the Handbook that I do not understand, I will seek clarification from the Human Resources Department. I understand that XYZ Company is an "at will" employer and as such, employment with XYZ is not for a fixed term or definite period and may be terminated at the will of either party, with or without cause, and without prior notice. No supervisor or other representative of the company (except the President, in writing) has the authority to enter into any agreement for employment for any specified period of time, or to make any agreement contrary to the above. In addition, I understand that this Handbook states XYZs policies and practices in effect on the date of publication. I understand that nothing contained in the Handbook may be construed as creating a promise of future benefits or a binding contract with XYZ for benefits or for any other purpose. I also understand that these policies and procedures are continually evaluated and may be amended, modified or terminated at any time.
I. Make Sure Your Handbook is NOT an Employment Contract Disclaimers Don’t Solve Every Problem: Even with a disclaimer, it is important for an employer to follow its handbook policies.14
II. Plainly State Employer Rules, Regulations and Procedures15
II. Plainly State Employer Rules, Regulations And Procedures• Access to Personnel Records• Anti-Nepotism or No-Spouse Rule• Searches on Employer Property• In-House Investigations• No Solicitation, Bulletin Boards and E-Mail Rules• Travel Policies• Attendance, Punctuality and Dependability• Performance Evaluations• Payment of Wages• Employer Property
II. Plainly State Employer Rules, Regulations And Procedures • Deductions from pay for unpaid disciplinary suspension of one or more full days for infractions of workplace conduct rules applicable to all employees – exempt and non-exempt (pursuant to FLSA DOL regulations) • Policy that prohibits improper pay deductions and creates avenue for employee complaints concerning deductions17
II. Plainly State Employer Rules, Regulations And ProceduresBeware of NLRA Dangers Lurkingin Personnel Policies!• Unfair labor practices have been predicated on common policies found in many employee handbooks: – Employee Rules of Conduct – Confidentiality Rules – Chain-of-Command Rules – Fraternization Rules – Solicitation and Distribution Policies – Bulletin Boards and E-Mail Systems – Employee Dress Codes
II. Plainly State Employer Rules, Regulations And Procedures • An employer rule will be found unlawful when it “reasonably tends to chill employees in the exercise of their Section 7 rights” to form, join or assist unions or engage in other concerted activity for mutual aid or protection. – Lutheran Heritage Village–Livonia, 343 NLRB 646 (2004), citing Lafayette Park Hotel, 326 NLRB 824, 825 (1998).19
II. Plainly State Employer Rules, Regulations And ProceduresTo Avoid Running Afoul of the NLRA . . .• Policies MAY prohibit: • Policies may NOT prohibit: – Abusive and profane language – Selling or soliciting anything – Harassment anywhere on company property at any time without permission – Verbal, mental and physical abuse – Loitering on company property – Deliberately or maliciously false without permission statements regarding other employees, the company or its – Strikes, work stoppages or other products interference with production – Being uncooperative with – Merely false or inaccurate supervisors, employees or guests statements – Engaging in conduct that does not – Employee discussion of support employer’s goals and “confidential” terms and objectives conditions of employment
III. Describe Your Policies Designed to Assist Employees21
III. Describe Your Policies Designed to Assist Employees• Federal Family and Medical Leave Act • Military Leaves of Absence• State Family and Medical Leaves of • Jury Duty Leave Absence • Bereavement Leave• Pregnancy, Disability and • Employee Assistance Programs Child Care Leaves of Absence • Other Time Off:• Short Term Disability Leaves of Absence and Salary Continuance – Vacations Policies – Holidays – Religious Observance – Personal Days – Flex Time – Blood, Bone Marrow, and Organ Donation Leave – Domestic Abuse Leave
III. Describe Your Policies Designed to Assist EmployeesRecent Developments:• “Reasonable Break Time For Nursing Mothers” – Section 4207 of the Patient Protection and Affordable Care Act (P.L. 111-148) signed into law by President Obama on March 23, 2010 requires that: • Break time be provided for one year after a childs birth each time an employee needs to express milk. • Provision of a private, shielded place other than a restroom in which the nursing mother may express breast milk. – Section 4207 does not specify what constitutes “reasonable” break time, nor does it indicate any limits on the number of breaks a nursing worker may take. – The measure does not preempt state laws with more generous provisions for nursing mothers.
III. Describe Your Policies Designed to Assist EmployeesRecent Developments: (cont’d)• “Reasonable Break Time For Nursing Mothers” (cont’d) – E.g., Ca. Civ. Code §43.3 (2007), Cal. Lab. Code §1030 (2007) • Employer must allow the mother to breastfeed her child in any location mother and child are otherwise permitted to be (does not apply to expressing milk). • The penalty for violating this statute is $100.00 per violation. • Employer must provide storage (e.g., a refrigerator) for expressed milk.
III. Describe Your Policies Designed to Assist EmployeesRecent Developments: (cont’d)• The 2010 National Defense Authorization Act – Service-Member Family Leave • Provides up to 26 weeks/year of protected unpaid leave to any eligible employee who is the spouse, child, parent, or next-of-kin of a covered service-member to care for his or her relative (the service-member) injured during active duty – “Qualifying Exigency” Leave • Permits an otherwise eligible employee to take up to 12 weeks/year of leave as a result of any “qualifying exigency” (e.g., employee’s spouse, child, or parent is on or has been called to covered active duty in the armed forces)
III. Describe Your Policies Designed to Assist EmployeesRecent Developments: (cont’d)• Employees ineligible for FMLA leave may have cause of action based on handbook statements – Peters v. Gilead Sci., Inc., 533 F.3d 594 (7th Cir. 2008): • An employee handbook promised 12 weeks of leave and recited the 12-month, 1,250-hour prerequisites for FMLA eligibility, but failed to mention the 50/75 exception. In addition, the employer informed the employee that he was eligible for leave. Prior to reinstatement, the employee was terminated based on his status as a “key employee” under the FMLA. • The employee, though statutorily ineligible for FMLA leave under the 50/75 rule, could assert a valid promissory estoppel cause of action under Indiana state law. The court held that the leave provisions in the employee handbook may be enforceable as a contract under Indiana law, and, at the least, are promises giving rise to recovery under promissory estoppel.
III. Describe Your Policies Designed to Assist EmployeesRecent Developments: (cont’d)• Employees ineligible for FMLA leave may have cause of action based on handbook statements (cont’d) – Jadwin, D.O. v. County of Kern, 610 F. Supp. 2d 1129 (E.D. Cal. 2009): The court held that when an employer grants FMLA leave, estoppel can bar an employer from later challenging the timeliness of the notice, and, furthermore, that estoppel can also bar an employer from later challenging eligibility for that leave.)
IV. Communicate Your Commitment to Equal Opportunity28
IV. Communicate Your Commitment to Equal Opportunity• Equal Employment Opportunity Policies• Anti-Discrimination, Harassment and Retaliation Policies and Complaint Procedures – Faragher and Ellerth – Gorzynski – Suders – Kolstad – Burlington Northern
IV. Communicate Your Commitment to Equal OpportunityEqual Employment Opportunity Policy Statement:• Equal Employment Opportunity has been, and will continue to be, a fundamental principle at XYZ, where employment is based upon personal capabilities and qualifications without discrimination because of race, color, religion, sex, pregnancy, age, national origin, disability, genetic information, or any other protected characteristic as established by law.• This policy of Equal Employment Opportunity applies to all policies and procedures relating to recruitment and hiring, compensation, benefits, termination and all other terms and conditions of employment.• Employees’ questions or concerns should be referred to the Human Resources Department, which has overall responsibility for this policy and maintains reporting and monitoring procedures.• Appropriate disciplinary action may be taken against any employee willfully violating this policy.
IV. Communicate Your Commitment to Equal OpportunityElements of an “C’mon – let’s discuss your promotion over dinner…”Anti-Harassment Policy:• Include Sex and All Other Protected Characteristics (check local and state laws)• Specifically State EEOC’s Definitions• Define Other Forms of Harassment• Give Examples of Harassing Behaviors• Define Supervisory Responsibility
IV. Communicate Your Commitment to Equal Opportunity Elements of an Anti-Harassment Policy: (cont’d) • Outline Penalties for Engaging in Harassment • Set Forth Clear, Internal Complaint Procedure, with Multiple Intake Points – [Not Just Supervisor!] • State Employer’s Investigation Obligations • Limited Confidentiality Assurance • Include Anti-Retaliation Provision32
V. Set Guidelines for the Termination of Employment33
V. Set Guidelines For The Termination Of Employment• Required Notifications• Severance Pay Policies• Post Employment References• Grievance or Complaint Procedures• Arbitration and/or Jury Trial Waiver Agreements
V. Set Guidelines For The Termination Of EmploymentArbitration Agreements• Arbitration agreements provide that any claim or controversy arising out of the employment relationship will be submitted to an impartial private arbitrator for final and binding resolution.• Arbitration agreements are valid and enforceable in the employment context.
V. Set Guidelines For The Termination Of EmploymentAdvantages To Mandatory Arbitration• Reduces litigation expenses• Minimizes litigation risks• Promotes confidentiality• Improves employee relations• Can prevent class actions BEWARE of special requirements (e.g., that employer pay all costs and fees, including arbitrator’s fees).
V. Set Guidelines For The Termination Of EmploymentJury Trial Waivers:• What they mean• Jury Trial Waivers Are Generally Enforceable• The Advantages of Jury Trial Waivers – Removes risk that prejudiced and impassioned juries will decide on a large verdict for the employee – Avoids additional expense of arbitrator’s fees – Judges are more inclined than arbitrators to impose sanctions, if necessary – Judges are more likely to grant motions to dismiss on the pleadings and summary judgment – Judge’s decision is subject to full appellate review
VI. Develop Cutting Edge PoliciesTechnology Policies• Social Networking Sites• Blogging• Company Equipment – Use for Business Purpose Only – Be Courteous• No Expectation of Privacy/Employer Property• Waiver of Privileges
VI. Develop Cutting Edge PoliciesTechnology Policies (cont’d)• Anti-Harassment Policies are Applicable• E-mail, Voicemail, Blackberries and PDAs, Internet, Instant Messaging, Chat Rooms, Public Internet Posting, etc.• Telephone Call Monitoring• Tape Recording• Telecommuting
VI. Develop Cutting Edge PoliciesCell Phones:• Potential liability to the employer may attach based on employees’ use of cell phones while driving in the course of their employment – An employer is vicariously liable for an employee’s negligence if the employee’s negligent act(s) occurred within the scope of his or her employment and was in furtherance of the employer’s interest
VI. Develop Cutting Edge PoliciesCell Phone Tips for Employers to Avoid Liability:• Make sure that employees know the features available on their cell phone and how to use them• Require the use of hands-free devices, memory, one-button and voice-activated dialing• Check that the cell phone is within easy reach of the driver• Advise employees to inform anyone with whom they are speaking that they are driving while on the phone• Advise employees to avoid using cell phones during hazardous weather and traffic conditions
VI. Develop Cutting Edge PoliciesCell Phone Tips for Employers to Avoid Liability: (cont’d)• Ensure that employees do not look up phone numbers or take notes while they are driving• Advise employees to make calls while they are not moving or prior to pulling into traffic• Advise employees to avoid emotional or stressful discussions while driving• NO TEXTING!!!
VI. Develop Cutting Edge PoliciesSpecial Issue: Camera Phones• Total or partial ban• If partial, ban camera phones in restrooms and locker rooms
VI. Develop Cutting Edge PoliciesDress and Grooming Codes:• Employers are free to define business attire differently for men and women• Courts have upheld – Prohibitions on female employees wearing pants • But see California Government Code Section 12947.5: making it unlawful for an employer to refuse to permit an employee to wear pants on account of the sex of the employee (but not prohibiting an employer from requiring an Employee to wear a uniform). – Prohibitions on male employees wearing an earring – Policies on hair length for men
VI. Develop Cutting Edge PoliciesSpecial Issue: Body Piercings and Tattoos• Some courts have upheld company policies that prohibit wearing facial piercings or body art in the workplace.
VI. Develop Cutting Edge PoliciesCross-Dressing in the Workplace• Some courts have held that a male employee dismissed for wearing female attire cannot successfully bring a claim of sex discrimination.• However, cross-dressing may be protected under certain state and local anti-discrimination laws.
VI. Develop Cutting Edge Policies Drug and Alcohol Testing in the Workplace: • Benefits of drug-free workplace policies – Decreases in absenteeism, turnover, downtime, accidents and thefts – Increased productivity and overall employee morale • A drug and alcohol testing policy should be part of the company’s drug-free workplace policy – Include a detailed description of the drug testing procedures48
VI. Develop Cutting Edge Policies Drug and Alcohol Testing in the Workplace: (cont’d) • Generally, employers may test applicants and employees in the following circumstances (subject to state and local laws) – During a yearly physical – Prior to transfers or promotions – Prior to being placed in positions involving security, safety or money – After an accident – Where used drugs in past – After treatment – Based on reasonable suspicion – On a random basis49
VI. Develop Cutting Edge PoliciesGuns in the Workplace:• Requirements of the Occupational Safety and Health Act (“OSHA”): – Employers must provide a workplace that is “free from recognized hazards that are causing or likely to cause death or serious physical harm to his employees.”
VI. Develop Cutting Edge PoliciesState and Local Gun Laws:• Before implementing a ban on weapons, check state and local laws. – Many states have enacted laws that prohibit employers from enforcing any workplace policy that would prevent their employees from storing guns in their cars on a company lot: • 2010 • 2007 – Indiana – Kansas (HB 2528) • 2009 - Governors veto overridden – Arizona • 2006 – Idaho – Kentucky – Montana – Mississippi – Utah • 2005 • 2008 – Oklahoma – Florida – Alaska – Georgia – Minnesota – Louisiana – Kentucky
VI. Develop Cutting Edge PoliciesWeapons Policy• If an employer decides to ban weapons in the workplace, the policy should: – Define terms such as “weapon,” “firearm,” and “possess” – Clearly state the policy’s purpose – State that, despite state and local law provisions that allow the carrying of concealed weapons, the employer has elected to prohibit weapons on its property – Clarify whether the policy applies only to employees or to all persons entering the employer’s premises – Explain which areas are covered
VI. Develop Cutting Edge PoliciesWeapons Policy – Drafting Tips:• If an employer decides to ban weapons in the workplace, the policy should also contain: – A description of the employer’s policy on workplace searches – A statement that employees have no reasonable expectation of privacy in their personal work areas – A signed, written acknowledgment of the policy – Disciplinary consequences for violating the policy
VII. Incorporate State and Local Legal Requirements into Your Handbook54
VII. Incorporate State And Local Legal Requirements Into Your Handbook• Specified Personnel Policies• Workplace Smoking Policies• Voting Policies• Jury Duty Policies• Blood, Organ, and/or Bone Marrow Donation Leave• Protected Off-Duty Legal Activity• Breastfeeding Accommodations