Most employers know that an employee handbook is an essential document for any business that has employees. This document typically communicates essential policies, outlines employee benefits, and ideally communicates something about the company’s mission, culture, and values. That can add up to a lot! But what shouldn’t be in your employee handbook is just as important as what should be.
First and foremost, your handbook should be tailored to your company. Particularly for small or young businesses, template handbooks from the internet or other sources will contain unnecessary or inapplicable information. For example, these handbooks typically cover FMLA compliance, which does not apply to companies with fewer than 50 employees. Too much information leads to an unwieldy handbook that many employees may not even read or absorb. Worse than inapplicable information is inaccurate information – if you are not adhering to the policies in your handbook, you may find yourself on the wrong end of a lawsuit, or unable to effectively enforce your other policies. For example, progressive discipline policies requiring a particular set of actions before termination can lead to wrongful termination lawsuits if they are poorly drafted to limit flexibility, or are not followed correctly.
There are also policies that employers often want to include in their handbooks that are simply not allowed under the law. One of the most common ones that we see is a prohibition on employees discussing their pay. Such provisions are a violation of the National Labor Relations Act which guarantees the right of employees to engage in “concerted activity” to improve working conditions. Policies prohibiting negative public comments about the company or management (for example, on social media) run afoul of this same law. In a similar vein, overly restrictive confidentiality clauses can violate applicable “whistleblower” laws.
Another common error that employers make in the pursuit of protecting their business is an unlawful non-competition provision. While this desire to protect your company is completely understandable, applicable law may impose limitations. For example, in Virginia, post-employment non-compete clauses cannot be imposed on certain “low-wage employees” (which can include independent contractors). An employer who attempts to enforce a non-compete against such a person will find that not only is the provision void, but they may be liable for the worker’s lost compensation, other damages, and reasonable attorney fees and costs.
Employers also often try to provide for deductions from employee wages under certain circumstances, such as damage to company property. Blanket authorizations for such deductions will not be upheld in Virginia or many other states and any deduction made pursuant to such an authorization would be illegal. As a last example, in Virginia, and several other states, policies that place certain restrictions on employee hairstyles may constitute unlawful discrimination.
Finally, there are some policies that, while not unlawful, are simply unenforceable unless properly executed. For example, in California, arbitration agreements in general handbooks will not typically be upheld. These policies must usually be communicated separately and signed by the employee.
Bottom line – handbooks are an essential document, but must be tailored to the needs of your business. A well-drafted handbook should communicate essential information about your company and its policies and foster a positive workplace culture. At the same time, your handbook should be crafted to ensure compliance with applicable law at both the state and federal level. Poorly considered provisions can foster confusion, negatively impact your culture or be unenforceable; at worst, they can expose your company to legal liability. An employee handbook is more than just a necessary document; it is a vital tool for establishing expectations, promoting communication, fostering a positive workplace culture, and complying with the law. While you are the best person to set the tone for your handbook, legal counsel can assist in avoiding some of the pitfalls discussed above, resulting in a handbook that is comprehensive, useful, and compliant.
Call Team Way Law today for help with handbooks and many more employment law opportunities!