Employee Handbooks can be helpful to any employer to manage employees’ expectations. Policy language can also help define a scope for management’s actions in running the business and directing employees. It is important that policies be readable and understood. Often it is a handbook, which is brief rather than lengthy—and more likely to be read and understood.
Apart from these basic philosophical and structural considerations, handbooks and policies face legal review in the constantly changing climate of employment law. With each new year comes an opportunity to update handbooks and recommit management to policy compliance with the latest sets of rules and interpretations.
“Must Have” Policies
Forty-nine states (the exception being Montana) follow the basic premise that employment is at-will, meaning that the employment relationship need not be terminated for cause, but may be terminated at the will of either the employer or employee, with or without notice. Communicating this aspect of employment to employees is one of the essential elements of an employee handbook, and has been recognized across multiple jurisdictions. See, for example, Guz v. Bechtel National Inc., 24 Cal.4th 317 (2000)(recognizing effectiveness of at-will policy under California law); Tiranno v. Sears, Roebuck & Co., 99 A.D.2d 675 (1984) (recognizing same under New York law).
Statutory requirements may also dictate which policies must be included in employee handbooks. For example, generally, employers with more than 50 employees must maintain a Family Medical Leave Act policy in an employee handbook if the employer uses an employee handbook. 29 CFR § 825.301(c). Federal contractors must maintain an Equal Employment Opportunity policy. 41 CFR § 60-1.4(a)(1). And federal contractors with procurement contracts of $100,000 or more are required to comply with the Drug-Free Workplace Act, which requires that employees be provided a drug and alcohol abuse policy, which may be satisfied by including such in a handbook. 41 USC 702 et seq.
Employers should also review state laws for additional requirements. For example, pregnancy leave policies must be included in employee handbooks for employers in California and Tennessee. 2 California Code Regulations § 7291.16; Tennessee Code Annotated 4-21-408. New Jersey and Arizona mandate detailed drug and alcohol testing policies that should be included in employee handbooks if the employer tests its employees. Hennessey v. Coastal Eagle Point Oil, 609 A. 2d 11 (N.J. 2011); Arizona Revised Statutes § 23-493 et seq.
Apart from statutory requirements, case law developments dictate best practices to limit exposure. Under Title VII, an employer may establish an affirmative defense to harassment claims by proving (1) that it exercised reasonable care to prevent and promptly correct any sexually harassing behavior, and (2) the employee unreasonably failed to avoid harm. Burlington Indus., Inc. v. Ellerth, 524 U.S. 742 (1998); Faragher v. City of Boca Raton, 524 US 775 (1998). Establishing a written anti-harassment policy in a handbook will support the first element of this defense. Written policies may also be required to establish elements of notice and waiver under state laws, such as under California’s obligation to provide meal and rest periods to employees. See Brinker Restaurant Corporation v. Superior Court, 53 Cal.4th 1004 (2012).
Policies to Remove From Handbooks
Policies of which wholesale removal is recommended include written progressive discipline policies. Such a written policy arguably commits the employer to follow a defined procedure before terminating an employee, reduces flexibility, and erodes the presumption of at-will employment. See Norton v. Caremark, Inc., 9 IER Cases 617 (8th Cir. 1994).
Other polices require more precise editing, including solicitation policies. See Our Way, Inc., 268 NLRB 394 (1983) (differentiating between lawful prohibition of solicitation during “working times” versus unlawful “working hours” provisions under Section 7 of the National Labor Relations Act (“NLRA”)). Along these lines, the National Labor Relations Board (“NLRB”) continues to closely scrutinize employer handbooks. In April 2014, the NLRB issued a pair of rulings finding certain handbook policies unlawful. In First Transit, Inc., 360 NLRB No. 72 (4/2/14), the NLRB found that rules on stealing and loitering were lawful restrictions that did not interfere with NLRA rights, but prohibiting discourtesy and “inappropriate attitudes” were overbroad restrictions of those same rights. Similarly, in Hills and Dales Gen. Hosp., 360 NLRB No. 70 (4/1/14), the NLRB found that rules prohibiting “negativity” and “negative comments” unlawfully restricted employee NLRA rights.
These recent NLRB decisions follow earlier rulings on confidentiality and communication policies. In 2013, the NLRB held that a confidentiality policy prohibiting employees from disclosing confidential information violated the NLRA. In NLRB’s view, the definition of “confidential information,” which included “non-public company information” and “team member personnel records,” was too broadly defined. Target, 359 NLRB No. 103 (2013). Similarly, the NLRB weighed in on a communication policy in DirecTV, 359 NLRB No. 54 (2013), which prevented employees from disclosing company information “not already disclosed as a public record.” As in Target, the Board found this prohibition to be overbroad and in violation of the NLRA.
Emerging Workplace Issues
Much of employee handbook maintenance is recognizing that the law is slow to catch up to emerging workplace issues. As a result, 30-year-old cases (for example, Our Way, above) remain relevant, but must be adapted to social media policies for workplaces where discussions are more likely to take place on Facebook rather than around the water cooler. Employers must also decide how to regulate employee behavior in areas that have not yet been, or are process of being, regulated at local, state, and federal levels (for example, “vaping” and use of “e-cigarettes” in the workplace).
Conclusion
The need to regulate the workplace is clear. The tough part is to create workable rules that maintain management’s control while respecting employees’ rights under applicable law. Also remember, some organizations may draft great rules, but then not follow them. For handbook policies to be effective, an employer must follow the rules it has established. The landscape is constantly changing as new laws and interpretation of existing legal rules come into play. If you have questions, you may contact your labor/employment counsel.
Additional resources and information about human resources can be found in NCA’s HR Management: Best Practices for Private Clubs.
Thomas Lenz, partner, and Jonathan Judge, senior associate, are with the firm Atkinson, Andelson, Loya, Ruud & Romo in Cerritos, California.
