Avoid Potential Policy Pitfalls With a Handbook Review

Your company has an employee handbook. You have developed polices for hiring, reporting harassment and all the other potential pitfalls involved in employing people. You're done, right? Not quite. Handbooks and policies, like so many other aspects of your business, need to be reviewed and updated on a regular basis. Outdated handbooks can become a liability when they no longer reflect current law or company practices. The following are some potential problems you may find:

Policies From Other Sources

Companies that "borrow" policies or rely on generic policies may be opening themselves to lawsuits. Employment laws vary from state to state. Generic or borrowed policies may not apply the law that governs your company. Policies are not only interpreted differently from company to company, but may differ within the same company. This can also be a pitfall for employers with employees in more than one state who try to rely on a single policy handbook.

Waiver of At-Will Status

Although Oregon is an "at will employment" state, the language used in the handbook can transform an "at will" employee into one who can be terminated only "for cause." Oregon courts have held a formerly "at will" employee may then bring a breach of contract claim as a result of his or her termination.

To reduce this risk, the preface to the handbook should include a disclaimer preserving the "at will" relationship. Even with the disclaimer, the language of the handbook as a whole may have the effect of waiving employment at will. A signed acknowledgment indicating the employee has read the handbook and understands the handbook is not a contract, strengthens the position the employment is "at will."

Employers should also keep in mind "at will" status does not affect discharge claims made by an employee on the basis of discrimination, harassment, whistle blowing, or any other wrongful discharge.

Progressive Discipline Plans

Many companies have a progressive discipline plan which promises discipline will proceed in a series of steps, such as: oral or written warnings; suspension and then termination. The policy language may be interpreted to create an enforceable right in the employee, limiting the employer's ability to terminate an employee without going through each of the steps. Even an illustrative list of possible reasons for termination in a policy can be interpreted as the only reasons you can fire someone.

To avoid these problems, policies should reserve your right to determine which step is appropriate and confirm that employees are employees "at-will." Any list of rules or illustrative reasons an employee may be discharged or disciplined should be labeled as such and state other infractions may result in termination.

Harassment Policies Should Be In Writing

The employee handbook should contain a written harassment policy. Policies for reporting and handling harassment claims assure the employer can act promptly. Employees should have more than one option for reporting harassment to avoid a situation where the employee is required to report to the alleged harasser.

Yearly Update

Your handbook and policies need to reflect changes in the law and your operations. At the end of the fiscal or calendar year, take time to revise, remove, and add new policies. An attorney familiar with employment law should review changes and updates, as language can be very specialized. Spending the time and money now will save the time, money, and emotional upheaval of defending an employment claim later.

This article is intended to inform the reader of general legal principles applicable to the subject area. It is not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.

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