From the Owens and Millsaps Blog

Employee Handbooks: An Integral Part of any Compliance Strategy

Many employment cases are won or lost due to employee handbooks. They are often the cornerstone of a plaintiff’s case or an employer’s defense. With the right compliance structure in place, well-written handbooks can solve employment disputes long before trial.

Here are three crucial questions to ask about employment handbooks in today’s litigation climate:

  1. Are the employees aware there’s a handbook, and understand what it contains?

Often, employers give their new employees handbooks along with a stack of paperwork covering taxes, direct deposits, and the like. Each handbook usually contains or is accompanied by a page the employee is required to sign to acknowledge they have read the handbook. Then, the handbook is either trashed by the employee or placed in the employee’s file with the rest of the new hire paperwork. All the while, no one explains to the new employee what the provisions in the handbook actually mean.

Attorneys representing employees have successfully argued the provisions in some handbooks were not made sufficiently clear to the employees when they signed the acknowledgement. These arguments are successful because handbooks are often written in vague language. To ensure their handbooks will be useful defenses in court, employers should make sure to write their provisions clearly.

Unclear handbooks often result in verdicts for employees, but clear handbooks the employees didn’t take the time to read are often strong defenses for employers. Employees should make sure to read their employee handbooks carefully, and ask their employers if they have questions about what’s inside. Employers, on the other hand, should make sure their handbooks are clear, the employees have adequate opportunities to read them, and that the acknowledgement page in the handbook is detachable and placed in the employee’s file after it is signed.

But what happens if the law has changed or the employer has updated the handbook, and the employee never sees it or doesn’t realize it’s changed? Significant legal issues can arise if employers do not let their employees know the handbook has changed or do not make the altered handbook available to their employees. It’s helpful for employers to work out a plan with an experienced employment attorney for periodic updates to the handbook to reflect the changes accompanying the growth and evolution of the business. An experienced employment attorney can also advise employers on how often to review policies and procedures with their employees.

  1. Is the handbook actually consistent with the law?

Any provision of an employee handbook that is inconsistent with the law can be used against the employer. For example, the Sixth Circuit Court of Appeals recently ruled that an employee is allowed to argue that provisions of a handbook that are inconsistent with the law create something called equitable estoppel, which could mean that, for fairness to the parties, the employer would not be entitled to the protection of the inconsistent provision.

The handbook in that case made an unqualified statement that any employee who works over 1,250 hours in a 12 month period was eligible for FMLA leave. An employee applied for leave under the handbook provision, but was denied by the employer because the company had less than 50 workers within 75 miles of that employee’s place of work (a requirement of FMLA). The Sixth Circuit held that, if the employee could prove that he reasonably relied on the employee handbook, the employer would not be allowed to argue the worker was ineligible for FMLA leave.

Employees should pay attention to what’s in their employee handbooks, because portions that are inconsistent with the law can be effective parts of an employment case. On the other hand, employers should periodically have their handbooks reviewed by an experienced employment attorney knowledgeable about the latest developments in the law.

  1. Are the policies and procedures in the handbook consistently enforced?

Many employment cases are won or lost depending on whether the employee can show the policies or procedures were not consistently enforced by the employer. Experienced employment attorneys representing employees usually do this with what is known as comparator evidence. A comparator is an employee in a job that is similar or identical to the plaintiff employee’s job, but who is outside the plaintiff’s protected class (race, age, gender, etc…). Employees often find strong comparator evidence when employers do not consistently apply their own policies and procedures, especially those found in employee or policy handbooks.

If an employer’s handbook contains employee disciplinary procedures, leave procedures, or any similar provisions, employers should make sure all such policies are consistently followed and enforced across the board. Failure to do so could make the employer more susceptible to employment discrimination claims.

The best way to ensure that managers and supervisors are consistently following the employer’s policies is for the employer to periodically review the policies with its managers and supervisors, and to make sure they understand that the policies must be applied consistently. It also helps to have an attorney review with the managers and supervisors the pitfalls of employment law, including consistent application of company policy.