The Employee Handbook: Pitfalls and Importance of Employer Communication

An employee handbook is the synopsized policies and procedures of an organization. One of the most important aspects of any employment relationship is the communication between the employer and the employee, and the employee handbook is an integral part of that communication. It presents an opportunity to present the organization and create a positive connection with employees but also presents some danger as well.

The employee handbook sets forth company expectations as well as the expectations an employee should have from the company. A well written handbook addresses the major points of employment with the company in as clear and as concise language as possible, while maintaining the maximum amount of flexibility.

The handbook itself should not be the policies - it should be a representation of the policies or the standard operating procedures of the organization. It should be generalized philosophy, an explanation of the organization's operations, and should anticipate questions an employee may have: "what is the attendance policy," "to whom to I report a problem" and "how are problems resolved," "when will I receive a review," and "what is the work week?"

The specific details in the handbook will depend on the complexity of the organization, the mission of the organization, the size, location and a host of other considerations, but should at minimum address the "at-will" employment relationship, a statement of compliance with federal and state anti-discrimination statutes (equal employment opportunity), and harassment.

Larger organizations will have more details to include, such as the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), and continuation of health insurance coverage (COBRA), for example. In Massachusetts, employers of 11-or more employees have to offer employees health insurance; if your company is required to comply, you will want to note your compliance; also in Massachusetts, employers with 6-employees or more are mandated to have implemented a Sexual Harassment policy, for which the Massachusetts Commission Against Discrimination (MCAD) has published a model policy. Again, you should spell your policy out.

However, the specificity of the language included in the employee handbook should be looked at carefully. Words such as "guarantee" and always avoid the word "entitled." Words indicative of guarantees should be avoided: Use of the word "permanent," and arguably the word "temporary" (as "temporary" would be the opposite of "permanent"), should be avoided when describing the employment relationship: "regular" or "regularly scheduled" do not imply the same sort of employment guarantee "permanent" does. "Contingent" or "seasonal" could substitute for the word "temporary."

A November 2007 decision in the Massachusetts Appeals Court ruled that an employee handbook could be an employment contract - the court ruled that the handbook constituted an offer to employees and that the continuation of employment constituted acceptance. The court noted that it would be unfair to allow an employer to distribute a policy manual that makes the workforce believe that certain promises have been made and then to allow the employer to renege on those promises, and therefore absent the strong language and prominent placement of "an appropriate statement that there is no promise of any kind by the employer contained in the manual; that regardless of what the manual says or provides, the employer promises nothing," the manual was a contract.

However, overly broad statements can be problematic, indeed illegal, as well. In March 2007, the Circuit Court of Appeals for Washington DC agreed with the National Labor Relations Board in determining that an overly broad handbook language concerning the confidentiality of wages and terms and conditions of employment, which could have a chilling effect on the National Labor Relations Act (NLRA).

For all the issues having one can raise, not having one can raise even more. It is an opportunity for the company to articulate expectations with it's employees and to take control of its communications. With an emphasis on maximum management flexibility, an employee handbook can and should present the organization in a positive light, explaining what it exists to do, and what the organization expects from its employees. Clear, concise employee communication that spells out expectations and describes the organization, while avoiding overly broad or overly specific language, is the goal of the employee handbook.

RESOURCES

http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=ma&vol=appslip/17603&invol=1
http://www.ll.georgetown.edu/federal/judicial/dc/opinions/05opinions/05-1305a.pdf
http://www.mass.gov/mcad/shtoc.html
http://www.mass.gov/mcad/harassment.html
http://en.wikipedia.org/wiki/Employee_handbook