Preparing and Living With Your Employee Handbook: Legal Requirements, Recommended Policies, Pitfalls, Disclaimers, Cutting Edge Clauses, and More

PREPARING AND LIVING WITH YOUR EMPLOYEE HANDBOOK:
LEGAL REQUIREMENTS, RECOMMENDED POLICIES, PITFALLS, DISCLAIMERS, CUTTING EDGE CLAUSES, AND MORE

CONTENTS
IS A HANDBOOK A GOOD IDEA OR A LIABILITY?
PUBLICATION FORMAT: ELECTRONIC OR HARDCOPY
HANDBOOK INTRODUCTION
ACKNOWLEDGMENT AND RECEIPT FORM
KEY PROVISIONS FOR HANDBOOKS
BENEFITS
OTHER COMMON POLICIES
SUPERVISORS' GUIDELINES

IS A HANDBOOK A GOOD IDEA OR A LIABILITY?

There is no legal obligation to publish a handbook.

Advantages: Handbooks are a common tool that communicate an employer’s expectations to its employees. Employees, moreover, have come to expect and want handbooks in order to understand employer policies and practices, especially from larger organizations.

Disadvantages: Handbooks may create unintended legal obligations for the employer.
PUBLICATION FORMAT: ELECTRONIC OR HARDCOPY

Some employers are publishing handbooks electronically, rather than issuing a hard copy, especially where the business has an “intranet” not available to the public. Others, especially public employers, make their policies available on websites.

Advantages: Ease of revisions and updating of handbooks and individual policies.

Disadvantage: It may more cumbersome to ensure that individual employees have a reviewed a copy and acknowledge its receipt (and more difficult to prove at a trial).
HANDBOOK INTRODUCTION
- Welcome statement, typically, a statement of the employer’s president introducing the business and its history and recognizing its employees as a valuable asset and the employer’s interest in attracting and retaining capable employees.
- Purpose of handbook / disclaimer – handbook is a guide and not a contract
- Right to modify handbook, policies and procedures
- “Zipper clause:” Current versions replace all prior handbooks, policies and procedures
- Employment is at will – handbook does not alter at will employment status
ACKNOWLEDGMENT AND RECEIPT FORM

Acknowledging --
- receipt of handbook,
- instruction to read handbook,
- actual reading and understanding of handbook and
- opportunity to ask questions and have questions answered
- employment is at will
- handbook is not a contract, replaces prior versions and company may alter policies
KEY PROVISIONS FOR HANDBOOKS
1. POLICY PROHIBITING DISCRIMINATION, HARASSMENT AND RETALIATION
  1. Non-discrimination statement
    
    [Company] will not discriminate nor tolerate discrimination on any basis prohibited by law, including race, color, creed, religion, sex, national origin, sexual orientation, marital status, veterans’ status, mental or physical disability, or any other factor unrelated to job requirements or an individual’s performance.
  2. Applicable to all personnel decisions, including hiring, training, promotions, reassignments, transfers, layoffs or recalls, compensation and benefits
  3. Non-harassment statement
    
    Applies to sexual harassment and other types of harassment
    
    Every employee is assured the right to work in an environment free of conduct and comments that are free of discrimination and harassment, including comments that are sexually offensive, degrading, or inappropriate.
    
    Company does not and will not condone violations of employees' rights to be free of harassment.
  4. Descriptions of prohibited forms of harassment
    1. Unwelcome sexual advances, requests for sexual favors, offensive or degrading sexual comments, jokes or conduct, or any other verbal, visual, or physical conduct of a sexually offensive nature.
    2. Any threat or suggestion that an employee's refusal to submit to sexual advances will adversely affect that person's employment, work status, evaluation, advancement, or any other condition of employment or career development.
    3. Grant or imply that any preferential treatment in connection with another employee engaging in sexual conduct.
  5. Non-retaliation policy should be included
    
    Best Practice Tip: We recommend that employer’s use a stand-alone harassment policy with a complaint procedures and its own acknowledgment. One copy is given to the employee to keep and a second is signed by the employee (and a manager) and is maintained in the employee’s personnel file. To institute such a practice among current employees, the policy can be reviewed in a firm wide training for all current employees and signed at that time.
  6. Complaint procedure
    
    Need to report harassment immediately
    
    Specify to whom harassment should be reported (specify person in
    
    Note that reports will be treated as confidential as possible and investigated immediately.
    
    Some employers have instituted “blind” complaint telephone lines and voicemail systems where individuals can voice complaint or concerns and remain anonymous.
    
    Best Practice Tip: The complaint procedure should be as specific as possible identifying to whom complaints can be made. Including names and telephone numbers is recommended, especially for employer’s with many remote locations or workers, so long as the procedure is kept up to date.
  7. Professional conduct policy – an alternative approach is to characterize the handbook policy as a professional conduct policy and leave the details to the stand alone harassment policy.
2. BASIC COMPENSATION PRACTICES
  1. No overtime unless expressly permitted and authorized
  2. Rest and meal breaks (set time and require employees take breaks)
  3. Specify working hours
  4. Specify pay days
  5. Provide specific instructions as to submission of time cards, time sheets
  6. Identify holidays and holiday pay practices
    
    Best Practice Tip: While employers should specifically instruct employees when and how they should submit time reports, an employer cannot refuse to pay the employee who fails to comply. Other forms of discipline or corrective action should be imposed.
3. VACATIONS
  1. Earning and vesting of vacation time
    
    Note that with increased mobility, employers are providing higher vacation earnings for new hires.
  2. Selecting vacation time
  3. Accrual policy on unused vacations
  4. Set practices for vacation pay and pay in lieu of vacation (cashing out)
  5. If the intent is to not pay for unused vacation pay at time of termination, the policy should so state.
4. SEARCH OF COMPANY AND PERSONAL PROPERTY
  - assert all property is subject to search when on company premises (or a client’s)
  - includes desks, work stations, vehicles
  - includes employee’s personal possessions and property at the workplace including clothing, lockers, lunch boxes, vehicles, bags, purses or tool boxes.
  - Employee-owned locks-- use of employee-owned locks creates an expectation of privacy; thus, employees should not be allowed to use their own locks or lockers should be equipped with master key override that allows access regardless of the individual paddle lock.
5. EMAIL, COMPUTER AND ELECTRONIC PRIVACY POLICY
  - Computerized equipment [such as electronic mail (“E-mail”), pagers, computer hardware and software] are business resources, owned or leased by the company
  - intended to used by employees for business purposes only (not for personal use)
  - Only software purchased and owned by the Company (or a Client) is allowed to be installed on company equipment.
  - [Company] has the right to audit any company equipment and records on such equipment at any time. Programs which are discovered to be in violation of this policy will be immediately removed from company equipment.
  - Employees should not have any expectation of privacy regarding any information or data contained in the company equipment (including E-mail, voice mail and computer memory), even if the employee is provided with a personal access code or password.
  - Passwords are to be kept strictly confidential, and not shared with co-workers without manager approval for any reason or as requested by management. Passwords should not be written on anything in or around the workstation.
  - Employees using company equipment expressly consent to company review and audit of any material entered or stored there.
  - Incidental and occasional personal messages are permitted, but personal use should be confined to appropriate and respectful communications.
  - Employees are expressly prohibited from sending any messages that may be interpreted as harassing, discriminatory, obscene or defamatory.
    
    Workplace privacy was the subject of a prior roundtable and more detailed material on this subject can be found at the firm website by clicking here.
6. SOLICITATION/DISTRIBUTION POLICIES
  
  Solicitation and distribution policies, especially for non-union employers, should be carefully crafted to be valid under the federal National Labor Relations Act and effective deterrent to union organizing.
  1. Employee-to-employee solicitation
    
    Employees cannot be barred from union solicitation when either the soliciting employee or the solicited employee are not working–that is, during lunch and rest breaks and before and after work hours.
    
    Barring from union solicitation during “working time” is permissible, but barring solicitation during “working hours” or “company time” is presumptively ambiguous and without more detailed, precise explanation is not permissible. The NLRB has reasoned that working hours or company time is likely to be interpreted by employees as meaning time from beginning of a shift to the end of a shift. The NLRB has also reasoned that the term working time is presumptively valid because it is likely to be interpreted as excluding breaks.
  2. No distribution policies
    
    Employers can bar employees and others from distributing literature in working areas if distribution of other materials is also barred.
    
    Thus, distribution of literature can be limited to the non-working areas, generally lunch rooms, cafeteria, break areas and parking lots.
    
    No distribution rules that apply only to union literature are discriminatory, and an employer’s enforcement of such a rule against a union only would be an unfair labor practice.
    
    Employers should take care not to allow employees to post notices selling used cars, trucks or other property or to distribute literature about upcoming events. In such cases, the employer’s efforts to bar union literature are likely to be found discriminatory.
  3. Off-duty employee soliciting
    
    A rule that prohibits solicitation and distribution either before or after work hours or during another’s shift is presumptively invalid unless special circumstances can be shown justifying the rule, such as the need to maintain discipline or production. Where property access is restricted, such as to a fenced-in area, one court overturning the NLRB upheld an employer’s restriction of access to off-duty employees. See Diamond Shamrock v. NLRB, 443 F.2d 52 (3d Cir. 1971).
  4. On-premises solicitation and distribution by third-party (non-employee)
    
    An employer can bar on-premises solicitation by third parties if the following two conditions are satisfied:
    1. The company did not discriminate against the union by denying it access while permitting others access.
    2. The union had “reasonable alternative” means to communicate to employees and deliver its message. See NLRB v. Babcock & Wilcox, 351 U.S. 105 (1956).
      
      Such alternative means do not exist in remote company-owned and controlled communities, such as North Slope of Alaska oil exploration outpost or a live-in resort.
      
      Best Practice Tip: To keep unwanted third parties from accessing parking lots, post no trespassing signs on the premises.
  5. Off-premises solicitation and distribution by third party (non-employees)
    
    General rule: Non-employees are free to distribute literature and solicit employee support on public property such as adjoining sidewalks, near plant gates, and parking lot entrances.
    
    Restrictions are generally limited to local ordinances designed to keep traffic moving, promote safety or minimize litter.
  Quasi-public areas (shopping malls and parking lots): An employer lawfully excluded a union from access to a shopping center sidewalk where it barred all solicitation from its private sidewalks. See Lechmere, Inc. v. NLRB, 112 S. Ct. 841 (1992).
  
  Charitable solicitations: Employers which have permitted two solicitations for charitable causes during the year have been found to have acted in a non-discriminatory and lawful manner when barring union solicitation. Permitting four charitable solicitations, however, while barring union solicitation has been found to be discriminatory and unlawful.
7. MOONLIGHTING/OFF-DUTY CONDUCT
  
  Reasons for rules prohibiting moonlighting and working for another employer:
  1. Working for a competitor
  2. Conflict of interest / divided loyalties
  3. Absences
  4. Unavailability for overtime, call-in work
  5. Justify not hiring of union “salts”
  Best Practice Tip: An employer that is concerned about union “salting” should be able to articulate a neutral rational for the no moonlighting rule, and the rule must be enforced uniformly and not just against the union salt.
8. OPEN DOOR / DISPUTE RESOLUTION POLICY
  - open door policy: permitting any employee to talk to any manager or executive about a problem
  - dispute resolution process – directing employees to attempt to resolve dispute first with co-worker or supervisor, that person’s superior and then specific Human Resources designee
  Best Practice Tip: Open door and dispute resolution policies offer practical and low cost solutions to diffusing difficult situations without an outside party (such as a lawyer, government agency or union) being involved and provides the possibility for very favorable evidence in resolving any dispute.
  
  Caution: Some executives, managers or supervisors may not be equipped or disposed to handle complaints. Such considerations should be taken into account in deciding whether to adopt and publish an open door policy.
9. CONFIDENTIALITY POLICY
  - Note that employees may become aware of sensitive, confidential or proprietary business information of the employer, its customers or clients.
  - Note that employees who become aware of such information are obligated to maintain such information as confidential and private.
  - Specify that such information be shared only with other employees who require it for a business reason.
  - Require that such information be maintained as confidential and private even after leaving employment.
10. SUBSTANCE ABUSE POLICIES
  1. Typical content:
    1. Statement that employees are prohibited from engaging in any activity relating to the manufacture, distribution, dispensation, possession, use or under the influence of a controlled substance or alcohol in their workplace or on Company or Client’s property, during work hours or so as to affect work performance.
    2. Define under the influence to be testing positive for any controlled substance or alcohol or, for alcohol, over the legal limit for operating vehicle.
    3. Define “controlled substance,” such as drugs or other substances determined by law to have potential for abuse and which may lead to psychological or physical dependence. Controlled substances include, but are not limited to, those drugs commonly known as cocaine, crack, marijuana, heroin, peyote, opium derivatives, amphetamines and hallucinogenic substances.
    4. Statement when drug and alcohol tests may be required
      1. When an employee sustains an injury or causes injury to someone else or damage to property at work or on working time.
      2. At unannounced times or pursuant to random screenings
      Caution: Under Oregon law, “reasonable grounds to believe that the individual is under the influence of intoxicating liquor” is required for an employer to require “a blood alcohol content test administered by a third party or a breathalyzer test. An employer, may, however, administer a breathalyzer test when an “individual consents.” ORS 659A.300(4).
    5. Statement about employee assistance program.
  2. Other legal concerns.
    1. Where the employer is obligated to bargain with a union, drug and alcohol testing policies for current employees (but not applicants) must be bargained to impasse before implementation.
    2. Government contractors providing more than $100,000 in goods or services to the federal government must comply with the Drug-Free Workplace Act. 41 U.S.C. § 701; 48 C.F.R. §§ 223 and 252.
    3. DOT commercial motor vehicle operations must implement a drug testing program for certain drivers that includes pre-employment, random, reasonable cause, post-accident and periodic testing through urinalysis. 49 C.F.R. part 40.
    4. Invasion of privacy issues – advisable to put employees on notice through a published policy before commencing and implementing a testing program.
BENEFITS
1. ERISA-COVERED BENEFITS
  1. ERISA covered plans include plans such as group insurance programs providing medical, dental and long-term disability benefits and retirement plans.
  2. Caution should be taken in describing in the handbook any ERISA-covered plan which has its own plan documents and summary plan description (SPD).
    
    First, there is a risk of inconsistencies and the resulting unintended creation of additional benefit for the employee and liability for the employer.
    
    Second, if benefits are summarized in the handbook, the handbook will need to be changed with the benefit plan.
  3. Handbook statements on ERISA-covered plans should be indicate the following:
    
    A description of the plan is provided in the summary plan description which is available through the Human Resources department. Plan documents control any inconsistency between the description provided in this handbook or the summary plan descriptions.
2. FAMILY AND MEDICAL LEAVE UNDER FEDERAL LAW
  1. Federal regulations require that any handbook that includes a description of benefits include a statement of rights under the federal Family Medical Leave Act (FMLA).
    
    The federal Department of Labor (DOL) has provided a fact-sheet that specifies employee rights and employer obligations under FMLA. That fact sheet is appended to this booklet and download-able from the DOL’s website.
    
    Best Practice Tip: Make the federal fact-sheet (or some modestly-edited version tailored to your operation) part of your handbook. Do not attempt a general statement of rights because you may unintentionally leave something out.
  2. Federal FMLA law does not apply to smaller employers and the fact sheet should not be included unless you are a covered employer. FMLA applies to employers with 50 or more employees in 20 or more work weeks in the current or preceding calendar year.
3. STATE LEAVE LAWS
  1. Neither Oregon nor Washington have a similar requirement obligating an employer to summarize state law within their handbook.
  2. Some employers like to include summaries of state law obligations, however, to fully inform supervisors and employees and prevent them from thinking that compliance with federal law satisfies all leave-related obligations.
  3. Key additional or differing requirements of Oregon leave laws:
    1. Leave must be extended to provide care for a parent-in-law (not covered by federal law) suffering from a serious health condition.
    2. Oregon law has been construed to cover domestic partners;
    3. Leave must be extended to provide home health care for a child not suffering from a serious medical condition if no other person is available to care for the child, and an additional 12 weeks is provided for care of sick child at home.
    4. Another 12 weeks is provided for any pregnancy-related leave for any employee employed the 180 days preceding the leave (note no minimum hour requirement applies here);
    5. Employees must be returned to their original job unless the position has been eliminated, unlike federal law which permits return to an equivalent position.
    Note: Oregon law covers employers with 25 or more employees within Oregon in each of 20 or more weeks during the calendar year in which the employee seeks leave.
  4. Key additional or differing requirements under Washington leave law :
    1. Coverage: Employers (with 100 or more employees in a single location or within a 25 mile radius during last calendar quarter)
    2. Reason for leave: care of a newborn or adopted child under age of 6; OR care of a child under 18 years with a terminal health condition:
    3. Benefits:
      1. 12 weeks of leave in a 24 month period (at once or a reduced work basis);
      2. Continuation of health and medical insurance coverage at the employee’s expense;
      3. Return to work to same position with same pay or benefits or to a position with equivalent pay and benefits; AND
      4. Any other leave for disability, sickness or pregnancy related disability that is provided may still be taken
      Note: Even if 12 weeks of leave already provided, company sick leave can still be used for the employees’ own leave.
  5. Washington family care law:
    
    Employees can use any paid time off (sick, vacation or personal time) for family care. Family care covers care for a child under 18, a child over 18 who is incapable of self care due to mental or physical disability, a spouse, parent, parent in law or grandparent, who has a serious health condition or medical emergency.
4. OTHER LEAVE AND BENEFIT POLICIES
  
  Bereavement leave, jury duty leave, personal leave, sick time, education leave, tuition reimbursement, severance pay.
OTHER COMMON POLICIES
1. PERFORMANCE EVALUATIONS
  1. Policy is a guide or goal only.
    
    Employer should not commit to undertaking evaluations in any specific manner or time schedule.
  2. Statement of purpose for undertaking evaluations:
    1. Communications tool among mangers, supervisor and employees;
    2. Measure of employee accomplishments, learning and performance.
    3. Assist in managing improvement in performance of individual and organization;
    4. Salary increases.
  3. Frequency (annually at year end, anniversary date, salary review time)
  4. Process (such as draft by supervisor, review and approval by manger, presentation to employee, opportunity for comment)
2. DISCIPLINE PROVISIONS
  1. Policy is guide only.
    
    Employer reserves right to skip steps or move to immediate termination at its sole discretion.
  2. Goal: Apply progressive, corrective and positive discipline.
  3. Process: Describe usual progressive steps.
  4. What due process, right to appeal or review is available.
  5. Rules of conduct–impermissible offenses.
  6. Non-inclusive list of examples of offenses subject to immediate termination
  7. Consider explaining practice of retaining discipline records, especially if it is company practice to keep records as part of permanent file.
3. EMPLOYEE CLASSIFICATIONS
  1. Introductory or trial employee
    
    Emphasize: No guarantee of continued employment even when pass introductory period.
    
    Sample description: “The introductory period of ___ months is a time for training and becoming acquainted with your skills. Completion of the introductory period should not considered an indication of a right to continued employment or permanent employment.”
  2. “Regular” not permanent employee status
    
    No employment is permanent.
  3. Part time / Full time classifications.
    
    Employers frequently find it useful to differentiate between part and full time employees, especially for vacation accrual and eligibility for benefits.
4. PRIVACY POLICIES / ACCESS TO COMPANY RECORDS
  
  Emphasize need to respect employee records, record retention, limit use and access to records on need to know, ADA and HIPAA obligations where medical records at issue
5. MILITARY LEAVE AND REINSTATEMENT
6. EMPLOYMENT REFERENCES
  
  Require all references to be forwarded to HR department.
7. ATTIRE / DRESS CODE
  1. Union issues:
    - Where a union represents its workforce, an employer must bargain over dress codes.
    - Union insignia –General rule: Wearing union buttons or insignias qualifies as protected activity except where interfering with safety, productivity or employee discipline.
  2. Religious dress
    
    Sikh beards and head-covering. Bar permitted only where a business necessity is shown.
  3. Racial impact
    
    No beard policy not upheld where based solely on use of desire for corporate uniformity, but permitted for safety concerns such as respirator fit or where exceptions made for individuals with particular skin disorder.
    
    Barring braids not discriminatory against black women’s preferences for corn rows.
  4. Sexual impact
    
    Dress codes must apply to both sexes. Uniforms if required must be required for both sexes. But some difficulty given gender stereotyping and trans-gender issues.
  5. Safety
    
    Employers can generally require employees to dress in certain protective clothing for safety, OSHA and environmental concerns.
    
    Best Practice Tip: If you have a dress code, notify employee during the application process and before hiring. Apply dress codes uniformly. Focus on business necessity in justifying a dress code or standards.
8. ARBITRATION CLAUSES
  1. Arbitration clauses have become more common for workplace disputes. Advantages and disadvantages and various terms were the topic of a prior roundtable and materials from that program can be found on the firm website by clicking here.
  2. Some courts have refused to enforce mandatory arbitration provisions, especially when provided in handbooks, and an employer that wants to implement a mandatory arbitration program would be better having a stand alone, separately signed arbitration agreement.
9. FIREARMS
  
  Alternatives:
  
  No firearms permitted on company property, including personal vehicles in parking lot
  
  Firearms may be left in personal vehicles if locked in trunk and kept unloaded.
10. ABSENCES / TARDINESS
11. JOB BID / TRANSFERS
12. INVENTIONS
  
  Recognizing that any work produced working for the employer is the property of the employer and that employee will assign all rights to such work. Employee further agrees to identify any personal work in progress when first employed by employer that will not be subject to this policy.
13. CONFLICT OF INTEREST AND BUSINESS ETHICS
14. OTHER POLICIES
  
  Use of telephones, emergency closing, business travel expenses, visitors, violence prevention.
SUPERVISORS’ GUIDELINES

Consider if and when there should be a separate guideline for supervisors.

Avoid inconsistencies

Supplementing the handbook on matters not covered in the handbook to minimize inconsistencies.

Disclaimer: The materials available on this web site are for informational purposes only. Nothing on this site should be construed as legal advice or opinion. It is important that you consult an experienced attorney concerning your particular factual situation. Do not rely solely on the information provided on this web site.

Use and Disclaimer