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Employee Handbook Review – Five Clauses to Avoid at All Costs

As the calendar flips to January, many companies take the opportunity to review and fine tune their employee handbooks. Having reviewed (and litigated) countless handbooks over the years, I have come upon a number of provisions that generally create more problems than they purport to solve and should be avoided at all costs. Here are five of the most problematic:

  • Fair and Equitable” – It is not unusual for employers include in their “Introduction” (or elsewhere), a promise to treat all employees “fairly and equitably.” While this is certainly a laudable aspiration, it is best demonstrated in practice, not promised in writing. Who decides what is “fair” or “equitable”? Is it a promise you can keep? Do you want to litigate whether your decision was equitable? Even if you have an “at will” confirmation in your handbook, this “promise” can come still back to haunt you in other ways. My recommendation:  Practice it, don’t promise it.
  • Just Cause” – “Fair and Equitable’s” troublesome cousin, this clause is often found residing in the discipline section of a non-union employer’s handbook. It promises that employees will only be terminated for “just cause” (or something similar). If employment is presumed to be “at will,” why would you modify that presumption and promise to terminate only for “just cause” – a question that begs for litigation. My recommendation:  Delete, delete, delete.
  • Harassment” – Make no mistake. Every employee handbook should contain a provision that prohibits harassment and provides a mechanism for employees to report it – but it should be limited to complaints of sexual and other harassment based upon an employee’s race, national origin, religion, disability, etc. It should not “strictly prohibit” “all forms” of harassment, which is frequently interpreted to include behavior that is “mean,” “disrespectful,” “rude,” “hostile” or otherwise unacceptable. While such behavior makes for a bad boss, the law “does not guarantee a utopian workplace, or even a pleasant one. If the workplace is unsavory for any reason other than hostility generated on the basis of [a protected category],” it is not unlawful. Vore v. Ind. Bell Tel. Co., 32 F.3d 1161, 1162 (7th Cir. 1994). My recommendation: prohibit harassment that is unlawful; discipline conduct that is unacceptable.
  • SalariedMost experienced HR professionals know that there is a critical, and potentially costly, difference between a “salaried” and “exempt” employee. Only employees who are lawfully classified as exempt under state and federal law are not entitled to receive overtime compensation. Yet, many handbooks continue to classify employees as “hourly” and “salaried” in defining who is eligible for overtime and who is not. However, being paid a salary is only the start of the analysis, not the end. My recommendation:  If you are not aware of this distinction, learn it. Today.
  • Vanishing Discipline – On occasion, a progressive discipline policy will limit the progression of discipline to conduct that occurs within a specific time period, with prior discipline “falling off” once that time passes. While this may seem fair, does it mean that the unacceptable conduct never occurred? What about the serial offender? Is he granted a “get of jail free” card every twelve months? This is problematic. My recommendation: eliminate the limitation but add a caveat stating that the age of a prior offense will be considered in determining the next step in the progression.

Employee handbooks are important tools that help an employer define employee expectations and avoid legal exposure. However, they are not “one size fits all” and must be carefully considered to ensure that they meet each employer’s needs – and not create additional unforeseen and unnecessary legal exposure. Sometimes, saying too much is just as problematic as saying too little. 

Questions? Contact attorney Alan Seneczko at (262) 560-9696 or by email.

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