The Employee Handbook: Sword and Shield

While no law requires an employer to have a handbook, employers should implement and distribute certain policies in order to defend themselves from potential claims from employees. The employee handbook is an appropriate, centralized and convenient medium for doing so. In addition, the handbook can be an important resource to employees who have questions about company policies, work rules, and benefits. Equally important, the employer can use its handbook to put forward a positive corporate image to its employees, which can be effective in highlighting favorable benefits, keeping employee morale high, and avoiding union organization.

While there is no "one size fits all" employee handbook, employers should consider the following policies when implementing an employee handbook:

- Disclaimer:  All employee handbooks should include a prominent disclaimer at the beginning of the handbook advising employees that the handbook is not a contract, that employees are employed at-will, and that the employer can terminate their employment or change benefits at any time for any reason. The employer should require employees to sign an acknowledgment that they received the handbook and reviewed and understand its contents, including the at-will disclaimer. 

- Privacy issues:   Employers now have the capability to monitor computers, e-mail, and telephones; videotape; conduct drug and genetic testing; and eavesdrop. Many states recognize that employees have a common law protection from invasion of privacy by their employer and recognize tort claims for violation of that right, including claims for defamation, false imprisonment, false arrest, and intentional infliction of emotional distress. Accordingly, employers should include policies in the employee handbook that diffuse expectations of privacy, where reasonable to do so.

For example, the handbook should include a policy that advises employees that any containers or packages (regardless of ownership) that they carry in or out of the company’s premises are subject to inspection, as well as desks, lockers, cabinets ( as well as voice mail, e-mail, and computer data) and other similar items on company property. The employer can provide that a refusal to consent to such a search is grounds for discipline of the employee.

In addition, employers must have a policy advising employees that the e-mail system is owned by the employer and that employees have no reasonable expectation of privacy in their e-mail communications and internet searches. The policy should advise employees that the employer can retrieve even deleted messages. The policy should prohibit employees from accessing each other’s e-mails, as well as illegal and improper uses of e-mail and the internet, such as pornography, obscenity, harassment, and gambling. The employer also should prohibit employees from subscribing to information without employer permission; violating copyrights; or, issuing defamatory statements. Employers should issue passwords to employees and prohibit them from sharing those passwords, while maintaining the employer’s right to know all passwords and access an employee’s e-mail at any time. 

Employers must remember that even with such notice, employer monitoring of personal communications, and attorney-client privileged communications, is still restricted. 

Telecommuting:  For employers, telecommuting offers the benefits of decreased office space requirements and more flexibility in hiring. The employee gains flexibility in terms of work hours and commuting. However, there are several potential pitfalls presented by allowing employees to telecommute, including lack of direct supervision, costs involved with establishing an appropriate home work environment, and attendant liability and implementation issues. To address these issues, a telecommuting policy should include a statement that telecommuting is at the employer’s discretion; a length of service and satisfactory performance requirement; a trial period; restrictions on child and other dependent care; safety and confidentiality protections; and, requirements for face-to-face and telephone or other regular interaction.  In order to comply with the record-keeping requirements of federal and possibly state wage and hour laws, the employer must require non-exempt employees to keep and submit a record of all hours worked. In addition, the employee must be required to notify the employer immediately of any injuries sustained in the home office.

- Non-harassment:   In response to a hostile work environment harassment claim, in the absence of a tangible employment action, the employer may raise an affirmative defense based on a showing that it exercised reasonable care to promptly prevent and correct any sexually harassing behavior, and that the employee unreasonably failed to avail himself of any preventative or corrective opportunities offered by the employer. A non-harassment policy, which the employer has distributed to employees and in which the employer has trained employees, is a critical part of such a defense.  A non-harassment policy should include a clear statement that the employer will not tolerate any harassment on the basis of any protected trait or activity. The policy should define harassment and specify that its terms apply to work-related settings such as business trips and business-related trips, as well as in the office. The policy should cover all employees, managers, and outside clients or vendors doing business with the company. While the employer may be limited in what action it can take against non-employees for harassing its employees, the employer can limit, change, or end the relationship with the client or vendor who is the source of the harassment.  The non-harassment policy should advise employees how to report harassment that they experience or witness; how the employer will investigate the alleged conduct and communicate the results; how an employee can appeal the conclusion; and, what sanctions may be imposed (including termination). The non-harassment policy should explicitly prohibit retaliation against an employee for making a complaint.

- Reasonable accommodation:  Under federal and some state anti-discrimination laws, employers may have an obligation to “reasonably accommodate” an employee’s disability or religious belief. Generally, reasonable accommodations are those adjustments or modifications which specifically assist the employee in performing the duties of a particular job. However, an employer is not required to make reasonable accommodations where the accommodation(s) would cause the employer undue hardship, such as where the accommodation is too expensive or disruptive or would be ineffective.  A reasonable accommodation policy should institute a procedure for evaluating requests and, where appropriate, for providing the appropriate accommodation to the employee. The policy should require the employee to report his or her disability or religious belief to the employer and make a request for an accommodation where the condition at issue is not readily apparent. The employer must balance the request for the accommodation against the hardship it may impose, based on the employer’s size, type and financial strength. Employers should document requests for accommodations, discussions pertaining thereto, and decisions regarding implementing or denying the request.

References Employee references can be the basis for defamation and retaliation claims against former employers for releasing potentially damaging information regarding an employee.  Accordingly, employers must control who responds to reference requests and what information is released. An employee reference policy must designate an individual to respond to requests and prohibit other employees from doing so. The policy should limit the information that will be released, such as to job title and terms of employment, unless the former employee has signed his or her consent to the release of any additional information. 

- Cell phone use:    In order to limit liability, employers should include polices in their handbooks governing cell phone use for business purposes by driving employees. Employers also should be cognizant of state laws that place restrictions on cell phone use while driving.

- Leaves of absence: Employers who are covered  by the Family and Medical Leave Act ("FMLA") must have a FMLA policy in their employee handbooks.  In addition to addressing employee rights and responsibilties under the FMLA, the policy should address interaction with any applicable state leave law rights, other employer leaves, and paid time off.

- State laws: Employment laws differ from state to state.  Mutli-state employers must supplement core policies with applicable state law requirements.

- Other:  In general, an employee handbook should contain certain basic policies addressing, for example, compensation, leaves, equal employment opportunity, substance abuse, and benefits. The handbook also can describe a company’s structure, goals, and philosophy.  

Drafting and implementing the handbook are only the first steps.  Employers must train supervisors in how to apply the policies, as deviation from policies and practices can be evidence of improper motive, such as discrimination, as well as create feelings of unfair treatment among employees.

While every employee handbook must be tailored to the business at issue, depending on its goals, culture, location, and practices, all handbooks can have the common results of meeting legal obligations and bringing structure to the workplace.