The Many Benefits of an Employee Handbook

By March 18, 2015Startup Law

An Employee handbook often communicates general information about a company such as its mission, procedures, and history. But employee handbooks that do not outline important company guidelines miss the point. An employee handbook is instrumental in protecting the company from suit because the employee handbook has the potential of binding employees, just like a contract would.

How Employee Handbooks Can Protect Employers

The content of an employee handbook matters greatly. When it is well-drafted and tailored to the nature of the company it can prevent or greatly minimize liability. It could be the difference between having a disgruntled employee suit quickly thrown out of court and a never-ending employee suit. For example, a carefully drafted provision in an employee handbook stating that employee bonuses are purely discretionary could effectively protect the employer against a suit from a disgruntled employee claiming to be entitled to unpaid bonuses. When done right, courts could be very deferential towards the content of employee handbooks.

An employee handbook is particularly helpful to limit liability in connection with employee bad behavior and harassment and discrimination issues.

Employee Bad Behavior The general rule is that the employer is liable for the employee’s negligent conduct and omissions occurring in the course of employment. But the employer may even be on the hook for the malicious bad acts of the employee. Setting clear expectations as to employee behavior in the handbook can be very useful, should a court need convincing that the employer did not encourage a certain type of behavior.

Harassment & Discrimination: This continues to be an area many employers are getting wrong. Clear and actionable procedures to report harassment and discrimination can be a very effective tool to both prevent unwanted behavior in the workplace and ward off legal woes.

Among many other things, an employee handbook should also: prominently state that employees are at-will employees; that the handbook can only be altered by the company in writing, with newest version superseding older ones; be accompanied with an acknowledgment signed by the employee the day the handbook is given and, importantly, the employer should apply with care and consistency the procedures outline in the handbook.

Of course, those are just some of the issues that can help protect an employer from suit. And an employee handbook also has a valuable business purpose: aligning expectations between employer and employees. By using clear policies and procedures, the handbook has the potential of lifting employee morale and can promote efficiency in the work place by freeing up employer’s time from answering basic questions about company policies. And naturally, if the employee handbook is clear, concise and written without legalese, employees are much more likely to read it.

Leave a Reply