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Don’t make handbook promises you’re not prepared to keep

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Handbooks are a necessary part of managing the workforce. But drafting handbook language can be tricky. You don’t want the whole handbook to become a binding contract, but you do want employees to understand they have to follow the rules.

But you may want some sections of the handbook to be binding—such as an agreement to arbitrate any employment disputes rather than take them to a state or federal court.

So what’s the best approach? Include language in your handbook that explains the rules, but leaves it up to the organization to make changes whenever necessary. 

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Advice: Consider treating arbitration agreements as separate documents, so they do become contractually binding.

Recent case: Theresa Niebrugge sued her employer, King’s Medical Group, for allegedly unpaid overtime hours. The medical practice asked the federal court to dismiss the case because it claimed employees were bound by an arbitration agreement. The practice said arbitration was mandatory to resolve any employment disputes.

Niebrugge argued that there were several versions of the company handbook. The first said that arbitration was a voluntary option. That original handbook also said that it “may be amended at anytime.” Niebrugge said she understood that the company would inform her of any handbook changes. When the company electronically sent a new version of the handbook, it required employees to click through to show they had received the material. The instructions included the statement, “I understand that I will be told about any handbook changes.”

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That was enough for the court to hang onto the case a bit longer. Niebrugge claims she was never told that the click-through handbook agreement included any changes from the earlier arbitration agreement. The employer will have to show she got that notice, since it was promised. (Niebrugge v. King’s Medical Group, No. 08-1018, CD IL, 2008)

Final note: Had the employer left out the promise to tell employees about any changes and simply informed them that it retained the right to make any changes it saw fit, the case probably would have been dismissed.

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