Watch Out for Manual Danger Zones

03/05/07

Many employee handbooks contain legal land mines that you should dig up and defuse now. Among them:

Unnecessary Promises. G. Neil Corporate Attorney Wendy Smith: “Never, ever make a promise like, ‘As long as you perform well, you’ll always have a job here at Acme.’ Amazingly, you sometimes see such promises in manuals. The problem is, they imply terms of employment, which can create contractual obligations. Avoid promises in manuals and all other forms of employee communication.”

“Loaded” Words. Some words can get you in trouble. Examples:

Permanent. Using the phrase “permanent employee” can imply that a job lasts forever. Say “regular employee” instead.

Just cause, cause. If your manual says you terminate employees only for “cause,” or “just cause,” you undermine your employment at-will policy and make it difficult to get rid of average employees. Strike all such references from your handbook.

Probation, probationary. Many companies have probationary policies that explicitly state the company can terminate a new hire for any reason. But does that mean the employee can’t get fired after probation? To be safe, use another phrase, like “training period” or “introductory period”—and have an attorney ensure the language you use does not conflict with your at-will policy.

Multiple Editions of the Handbook. Having more than one edition of your handbook in circulation can get you in trouble. Imagine, for example, that you’ve introduced a manual with a sexual harassment policy reflecting new, tough standards. Meanwhile, an older version of the manual with a milder policy is still floating about. That’s trouble waiting to happen.

When you issue a new handbook, recall the older version and put in a notice that reads something like, “This version of the employee handbook was issued on January 1, 2001, and supersedes all other statements of policy distributed by the company.” Have employees sign an acknowledgement that says they received the new version.

Outdated Policies. In 1999, believe it or not, a major corporation got its hands slapped badly in court for having a policy that directly violated the Age Discrimination in Employment Act. The company said the policy remained in the handbook for fourteen years because of a “clerical oversight.” Review your handbook yearly to make sure all policies are legal.

Inconsistent Policies. Ed Kaplan of Personnel Dynamics in Highland Park, Illinois, once had a client with a stiff anti-drug policy. It called for disciplinary action up to and including termination for the first offense. But the policy continued, “Discipline shall be at the sole discretion of the Company and employees shall not have any right to a progressive discipline procedure.”

Says Kaplan, “To include language about the lack of an employee’s right to progressive discipline implies that they have a right to progressive discipline in other areas. This weakens, significantly, the concept of at-will employment.”

Following Policies Inconsistently. Attorneys say this is one of the biggest legal traps employers fall into. Employee “A” goes beyond the handbook’s limit for days clocking in tardy, and you do nothing. Employee “B” is late the same number of days, and you start disciplinary procedures immediately. Discrimination cases often revolve around inconsistent application of policies. The rule is simple: If a policy is in the handbook or policy manual, follow it to the letter. If that’s hard to do, then change the policy.