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Employer’s Best Defense? Updated Handbook

by Steve Bruce

Establishing and maintaining policies in an employee handbook or personnel policy manual consistent with current legislation and case law is an employer’s best defense when negotiating employment issues, says Attorney Marc L. Jacuzzi.

In today’s Advisor, Jacuzzi offers tips and recommendations for improving your employee handbook.  He is a shareholder in law firm Simpson, Garrity, Innes & Jacuzzi, P.C. in South San Francisco, CA.

The Big ‘Buts’

The two handbook “buts” Jacuzzi encounters are:

“But don’t policies restrict our flexibility?”

Jacuzzi responds that employers can counter this challenge by having a mechanism which allows them to alter the employee handbook to meet the changing needs of both business and employees.  However, he adds, employers must give reasonable notice of handbook change.

But if state law presumes an at-will employment relationship, why do I need a handbook?

You need a handbook for the following reasons, Jacuzzi says.

  • To enhances credibility of decisions based on policies by publishing the policies
  • To promote uniform application of policies and consistency of treatment
  • To reduce the risk of unlawful discrimination claims
  • To provide evidentiary support for compliance with employment laws
  • To reduce confusion about policies that can affect employee morale
  • To acquaint new employees with the business
  • To educate supervisors and managers
  • To provide guidance in resolving employee complaints
  • To reduce liability against implied contract terms other than employment at-will

Common Pitfalls in Handbooks

Jacuzzi sees the following mistakes made with handbooks:

  • Including “This handbook is not a contract” and other phraseology that could weaken the at-will statement
  • Including policies that are inconsistent with at-will employment:  probationary periods, strict progressive discipline, grievance procedures
  • Internal inconsistencies within the handbook
  • Handbook does not reflect acual practice
  • Illegal terms.  (Legal review is critical! Jacuzzi urges.)
  • Failure to include an acknowledgment
  • Failure to update regularly (The law changes annually; you must keep up, Jacuzzi says.)

At-Will Protections

The basic at-will statement goes like this, Jacuzzi says:

“Either the employee or employer may terminate employee’s employment for any lawful reason, or for no reason, with or without advance notice, with or without cause, and at any time.”

There are two common claims people make to get around that, says Jacuzzi.

1. “But, John Doe orally promised me long‑term employment at my first review.”

That challenge is met by the handbook statement, “This at-will relationship can only be changed in writing signed by you and _____________.”

2. “But in my interview John Doe said this was boilerplate, and I will have a five-year commitment.”

This challenge is countered by the following wording in the offer letter:  “You agree by signing below that the Company has made no other promises other than what is outlined in this letter.  It contains the entire offer the Company is making to you.”

Here’s Jacuzzi’s recommendation for an at-will statement:

It is the goal of the Company to provide a positive work environment and a solid economic foundation upon which all employees may build a future.  However, the Company is also aware that personnel changes are sometimes initiated by employees and management alike.  In this regard, it is expressly understood that employment at the Company is for no specific duration, and shall continue only so long as it is mutually agreeable to you and the Company.  EITHER YOU OR THE COMPANY MAY TERMINATE EMPLOYMENT FOR ANY REASON WHATSOEVER, WITH OR WITHOUT CAUSE OR ADVANCE NOTICE, AND AT ANY TIME.  No section of this handbook is meant to be construed, nor should be construed, as establishing anything other than an employment-at-will relationship, nor does it limit management’s discretion to make personnel decisions such as reassignment, change of wages and benefits, demotion, etc.  Moreover, no one in the organization, other than the President, has the authority or legal ability to modify the at-will nature of the employment relationship.  The President can do so only if it is clearly set forth in a written agreement that is signed by both the President and the employee in question.

– end of article

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