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Employee Handbooks: Shields or Swords?

By Joan M. Vecchioli | Categories: Articles, Labor & EmploymentPrint PDF July 2014

Most companies that employ more than a handful of employees are well served to have a formal employee handbook, setting forth their workplace policies, procedures and practices. Although there is no legal requirement for private employers to provide handbooks to their employees, there are numerous reasons for employers to do so. A handbook provides an opportunity to formally welcome new employees, introduce the organization and explain the company’s expectations.  Additionally, grouping various employment policies together in a handbook makes it easier for an employer to ensure that each employee receives copies of all relevant policies and serves as a centralized place for employees to look for answers to common procedural questions.  More importantly, handbooks and signed acknowledgments can assist employers in their legal defenses to employment related claims.

Some policies are required or recommended for all employers, such as an anti-harassment policy. This is based on the fact that many local, state and federal laws prohibiting discrimination in the workplace apply to businesses with at least five employees.  Most of these laws provide defenses in cases of alleged harassment where clear policies are set forth that provide opportunities to report, investigate and remediate complaints of harassment in the workplace, and specific non-retaliation clauses are included.  Additionally, in wage and hour disputes, it is helpful for an employer to provide a safe harbor policy in an employee handbook that encourages employees to report all uncompensated work time to management immediately upon its discovery as well as any improper deductions that salaried employees believe have been taken from their pay.  In both instances, if such events are reported and the employer investigates and promptly reimburses the employee for the uncompensated time or improper deduction, as the case may be, the employer may be insulated from losing an overtime exemption it otherwise would have had and incurring additional damages for the violation.

Furthermore, the Family and Medical Leave Act (“FMLA”), which applies to employers with fifty or more employees, requires an employer to set forth its FMLA policy in writing and distribute it to its employees as part of its compliance obligations.  Also, in the case of unemployment compensation, Florida law provides that an employer, who informs its employees in writing that they are hired for an initial probationary period not to exceed 90 days, will not be required to pay unemployment compensation claims for those employees who are terminated for unsatisfactory performance within the first 90 days of employment.  These are just a few examples of policies that should be set forth in an employee handbook to mitigate against employee claims.  Certain other policies are optional and their inclusion in a handbook largely depends on the employer’s specific practices and procedures. In all cases, employees should sign an acknowledgement that they have been given a copy of the handbook and have read and understood its contents.  Moreover, they should acknowledge that the statements contained in the handbook are not intended to create any contractual or other legal obligations and that the company may modify or rescind any policies, benefits or practices at any time without prior notice.

There are other instances, however, where an employee handbook can be used as a sword against the employer and overbroad policies may create exposure to employment claims.  Seemingly innocuous personnel policies can violate the National Labor Relations Act (“NLRA”).  Whether unionized or not, an employer may be subject to liability if it implements policies that can reasonably be understood to restrict employees’ exercise of protected rights. Section 7 of the NLRA provides that “employees shall have the right to self organization … and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection…” The National Labor Relations Board (“NLRB”), the agency that enforces the NLRA, has taken the position that certain workplace rules and policies enacted by employers are in violation of the NLRA if those rules would reasonably tend to chill employees in the exercise of their Section 7 rights.

In general, rules prohibiting the communication of confidential or non-public information without exempting Section 7 activity inhibit the rights of employees to discuss wages or conditions of employment with third parties and themselves.  Many employers are still shocked to learn that policies requiring employees to keep compensation information confidential violate the NLRA on their face as they chill the rights of employees to discuss their wages. Rules that are ambiguous as to their application to Section 7 activity and contain no limiting language or context to clarify to employees that the rules do not restrict their Section 7 rights are unlawful.  On the other hand, rules that clarify or restrict their scope by including examples of clearly illegal or unprotected conduct such that they would not be reasonably construed to cover protected activity are not unlawful.

These rules and policies can typically be divided into five classes: restrictions on employee communication with the media; restrictions on employee communication with NLRB agents; confidentiality; intranet policies on company information; and employees’ use of employers’ equipment and property.  Many employer violations arise in the context of personnel policies restricting employee speech through social media, confidentiality policies, standards of conduct, solicitation and distribution policies, and electronic communications policies. Requiring employees to comply, however, with laws regarding discrimination, harassment, and violence in the workplace are not considered overly restrictive.  Similarly, respecting copyright and other intellectual property laws, requiring employees to obtain permission prior to relaying information in the name of the employer or to refrain from using company time or company equipment in connection with these activities have also been upheld.

As illustrated above, employee handbooks can be used as both shields and swords in employment related claims.  The benefits of developing and implementing effective employee handbooks containing personnel policies that are legally compliant largely outweigh their potential pitfalls.  To ensure compliance, however, these handbooks should be kept current and periodically reviewed by counsel to reduce the risks that they may create.


Joan Vecchioli is a partner with Johnson Pope and is Board Certified in Labor and Employment Law.

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