Best Practices: Employee Handbooks

Have one. And make sure it stays up-to-date. Employers need to prove expectations have been communicated to minimize litigation exposure. Good handbooks also promote consistency in management and supervision, which increases productivity. Compliance with objective written policies refute claims of discrimination and provide evidence that the employer actively seeks to prevent discrimination.

What should you include? We suggest you include liberal doses of "at will" language, contract disclaimers and reservation of right to modify or rescind policies and benefits without prior notice. Also use the handbook to provide required employee notices under a variety of laws (e.g., notice of FMLA policies).

Include a comprehensive sexual and other discriminatory harassment policy and complaint procedure covering unlawful harassment and give specific examples of prohibited conduct (not just sex-based). Set the bar for acceptable behavior higher than legal standard. Require reporting of policy violations or retaliation to two or three named individuals who have expertise and authority to invoke investigation. Do not require individual to complain first to offending person or to direct supervisor.

With advice of counsel, establish a uniform written limitation on medical leaves of absence for any reason, whether pursuant to the FMLA, ADA, workers' compensation, or simple temporary incapacity.

Include the attendance policy. If employer is FMLA-covered, give very serious consideration to adopting a broadly worded attendance policy over a complicated point system. One mischaracterized absence under a point system can turn a case in a plaintiff's favor.

Adopt a broadly worded discipline policy covering misconduct and performance issues. Describe progressive disciplinary and corrective action approach, but make clear it need not be followed in every case and that the employer has sole discretion over its implementation. Avoid point systems and do not link further (or more severe) disciplinary action only to repetitions of the same behavior or performance issue.

Put teeth into the drug and alcohol policy. Use pre-employment, reasonable suspicion and post-accident testing for drugs and alcohol. Incorporate return-do-duty and follow-up testing if the company ever contemplates the possibility extending "grace" to any employee who violates the policy. Choose what blood alcohol level counts as "positive" and which classes of drugs will be tested for.

Include an illustrative, non-exhaustive list of behaviors that result in discipline, up to and including termination, even for a first offense. Make sure every major policy is reflected in the list, along with garden variety sins such as sleeping at work or walking off the job without permission. Make absolutely sure to cover dishonesty of any kind, whether written or oral, and whether prior to or during employment.

Include an acknowledgment of receipt and understanding stating that employee has received the handbook, knows he or she is responsible for reading in its entirety, for complying with all of the policies contained in it, asking for clarification from HR for any questions related to the policies, and that it does not create a contract of any kind and that the employee knows he or she is terminable at will. Require all employees to sign the acknowledgement upon receipt of the handbook or face termination, and maintain the documents in the employee's personnel file.

What should be left out? Keep contractual agreements (e.g., non-competition and confidentiality agreements or agreements to deduct amounts owed from wages) separate from the handbook itself.

First impressions. Your handbook may be the first company document a new employee reads. Choose a consistent, respectful, firm tone. Handbooks communicate expectations and give general information regarding the administration of benefits. They are not an appropriate mechanism for front-line supervisory management skills training. Hint: if the existing document contains several policies describing what managers or supervisors "should" do, the policies need rewriting. Use simple, direct sentences. Include the information relevant to the employee. If HR or managers need more detailed instructions, draft a separate Policies and Procedures manual.

Be wary of templates. If you must use one, choose a sample that bears some resemblance to the reality of your organization's existence. Some samples assume higher levels of employee protection than are necessary under Tennessee law- the employer may well decide those are reasonable and fair choices, but it should do so deliberately.