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An employee handbook can be the foundation of employee performance and a shield against lawsuits, or it can be a ticking time bomb that confuses employees and strips away your legal defenses. It all depends on how well it's written and put to use.

Companies face many hazards if they try to whip up handbooks on the fly. Too often, handbooks are inconsistent with the way business is actually conducted, or they mistakenly imply that workers have certain rights.

Example: poorly written progressive discipline policies that suggest an employee will be fired only for good cause. Such language can erase a worker's "at will" status and the employer's right to fire him for any reason.

Even a statement about an initial "probationary period" can suggest that workers are virtually guaranteed continued employment after a certain period of time.

Bullet-Proof Your Employee Handbook — Find Out How!

Here are some additional considerations as you write or review your company's handbook:

Don't let it collect dust

Regularly update your handbook to incorporate changes in law and your company policies. To make it easier on yourself, don't include details that are likely to change frequently. Make sure all sections are consistent with other company documents.

When you do update the handbook, make sure everyone knows which version is in force. Collect and destroy old handbooks. Also, include a conspicuous disclaimer that you reserve the right to make changes in the future.

You may want to include disclaimers in several places, specifying, for example, that you reserve the right to change benefits or bypass progressive discipline.

Note, however, that courts take a dim view of unilateral changes in the terms of employment. You may need to provide some type of "consideration" to workers when making such changes, such as additional pay or benefits. In some instances, continued employment may be enough consideration.

Another possible benefit of updating: lower rates for employment practices liability insurance.

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Keep it simple

Your handbook shouldn't be a legalistic tome with detailed instructions to managers and complex benefit specifications. Keep it simple, in plain English.

Still, it's important to have an attorney review the document. A poorly worded employee handbook can create contract obligations.

What policies should you include? Basics should include policies and rules on sexual harassment, equal employment opportunity, meal/break periods, overtime, pay periods, discipline, holidays, vacations, paid sick leave, absenteeism, grievances, ethics, email/phone use, dress code, safety and substance abuse.

Be wary of providing too many specifics on each policy. You can box yourself in. Trying to detail the consequences of every possible infraction makes it too easy for an attorney to later show how your company was inconsistent.

To cite a recent example, a federal court reinstated a UPS worker who had been fired for swearing at a supervisor. The court said that swearing was not listed as one of the seven reasons for immediate dismissal in UPS' employee manual.

Also, don't let the handbook grow too large. A 300-page book is unlikely to be read.

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Have employees sign off

To preserve the "at-will" status of employees whom you may hire and fire at will, include provisions in the handbook that say employment is at will and that nothing in the handbook should be considered a contract or guarantee of employment. Document employees' agreement to this by having them sign and return an acknowledgment form.

However, simply stating that the handbook doesn't create a contract is no guarantee that a court will see it that way. A court may decide that your company should abide by the rules spelled out in that document.

Note: You may also want to have workers sign an acknowledgment form that requires employees to resolve disputes with the company through binding arbitration. If so, you and your company's attorney need to work out a procedure.

Finally, make sure your staff, especially supervisors, knows the handbook and follows its provisions. The best written policy in the world isn't enough if your actions don't back it up.

With Bullet-Proof Your Employee Handbook, you'll learn how to:
    book cover
  • Let employees know about company benefits – without inviting “breach of promise” lawsuits.
  • Guide managers on how to apply policies without painting the organization into a corner.
  • Protect against today’s newest trends in litigation by having policies on dishonesty, dating and one other key area.
  • Eliminate actions that can turn even the most carefully written disclaimers into snap-shut legal traps.
  • Get rid of language about everything from arbitration to leave policies that can put you at risk.

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