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Don’t bury your rights in fine print

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by on
in Leaders & Managers,Performance Reviews

When a Dunkin' Donuts customer stormed away after an exchange with sales clerk Richard Ferguson, a supervisor followed and talked with him out of Ferguson's earshot. A few days later, Ferguson was fired for being rude without being asked for his side of the story. He sued for breach of contract, and an appellate court is letting the case go to trial.

Ferguson was an at-will employee, so the company could fire him at any time for any reason that wasn't discriminatory. The problem: Its personnel policies manual may have guaranteed Ferguson additional rights.

The company's manual lays out its progressive discipline policy, saying that employees will have at least two warnings before being fired, except in cases of egregious conduct. Plus they'll have the opportunity to challenge those warnings.

Those promises, the court said, essentially could constitute a contract. And while the handbook listed "misconduct" as one of the grounds for bypassing the discipline policy, it didn't define the term. The court noted most of the other offenses listed in that section were criminal or borderline criminal conduct, not rudeness.

The handbook includes a broad disclaimer that states the company "reserves its rights to modify, change, disregard, suspend or cancel at any time without written or verbal notice all or any part" of the handbook. But the court bashed the company for placing that and another disclaimer in the "fine print." It said that if the employer is actually promising nothing in the manual, it should state that prominently. (Ferguson v. Host International Inc., No. 97-P-1599, Mass. App. Ct., 2001)

Advice: Having a poorly drafted handbook is often worse than having no handbook at all.

Keep your handbook simple, and highlight or reiterate key provisions. If you seek to confirm your employees' "at-will" status, often the most important function of a handbook, do so in an obvious and consistent manner. For example, have a separate section in the handbook on "at-will" employment, and refer back to that section in other key areas.

As to progressive discipline, there is no requirement that you have such a policy. If you do, make it simple and give yourself plenty of room to fire an employee quickly when necessary. The more complicated or multilayered the policy, the more likely you'll fail to comply and subject yourself to scrutiny. Likewise, the more detailed the policy, the more likely employees will demand due process.

Finally, make sure your supervisors understand and apply your policies consistently. Too often, companies draft a handbook, put it on a shelf and dust it off only after key decisions have been made. A handbook is often an exhibit at trial, so make it a good one for you.

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