Drafting Employee Handbooks: Minimizing...

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Drafting Employee Handbooks:

Minimizing Exposure Risks Responding to Latest NLRB Guidance, Preserving At-Will

Employment, Avoiding Inadvertent Employee Contract Rights

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

TUESDAY, NOVEMBER 3, 2015

Presenting a live 90-minute webinar with interactive Q&A

Mona M. Stone, Of Counsel, Greenberg Traurig, Phoenix

Teresa R. Tracy, Partner, Freeman Freeman & Smiley, Los Angeles

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Drafting Employee Handbooks: Minimizing Exposure Risks

Strafford CLE - November 3, 2015

Mona M. Stone

Greenberg Traurig LLP

stonem@gtlaw.com

What Will You Learn Today?

Introduction

□ Importance of carefully drafting handbooks

□ Advantages and disadvantages of handbooks

□ Format of handbooks

□ Key provisions in employee handbooks and special

issues for multi-state employers

Legal considerations

NLRB issues

□ Wage and hour considerations

□ Contractual rights and contractual liability

Importance of Carefully Drafted Handbooks

Important communication tool between you and

your employees

□ Designates company objective, core values,

policies, procedures, benefits

□ Helps orient new employees

□ Creates standard of fairness and compliance

Proactive business approach

□ Instruct employees about

ethical standards and code of

conduct

□ Make HR and Legal happy!

Increase productivity

Lower absenteeism

Reduce turnover

Less business disruption

Fewer claims and legal

headaches

Important communication tool

between you and your employees

□ Explains applicable laws

For profit/non-profit

Multi-state/international companies

□ Eliminates conflicting policies and

practices

Be sure to cross-reference employee

handbook to other company documents

(personnel policies, bulletins, benefit

plans, insurance documents, etc.)

Union considerations

Protects your information and assets!

□ Generally identify confidential business information

and trade secrets

Tailor according to your industry/needs (e.g., HIPAA,

FERPA, compensation information)

Information and equipment belong to company

□ Explain importance of protecting this information and

how it can be shared

□ Instruct employees that equipment and information

must be returned at conclusion of employment

□ What happens if information or equipment is lost or

mishandled?

- 10 -

Gives employer flexibility in setting

policies and procedures

□ Only an “overview”

□ Not a rigid system of discipline or

comprehensive list of offenses

□ Does not cover every scenario imaginable

Overly voluminous may cause confusion

Put your handbook on a diet if it is too fat!

□ Right to amend and modify

□ Disclaims any employee rights or benefits

□ Disclaims contractual rights

- 11 -

Do your homework

Need buy-in from senior management

□ Worth the $$$$ investment

□ Requires support from all business units

Train HR administrators and managers – before

rollout - regarding enforceability and

documentation

Obtain sign off from Legal

- 12 -

Advantages and Disadvantages of Handbooks

Advantages:

□ Well-drafted handbook should minimize chance for

misunderstandings

□ Chance for employees to participate

Involve select staff and management

Solicit feedback regarding “actual” operations

- 13 -

Advantages:

Set forth your

expectations for your

employees

Describe what they can

expect from your company

Identify your legal

obligations as an employer

Explain employees' rights

- 14 -

Advantages:

□ Let employees know how to succeed and abide

by company rules

E.g., how to report discrimination, violations,

theft; appropriate dress; use of electronic

resources, etc.

□ Provide general framework for management

and staff regarding how to deal with workplace

issues – not a manager’s guidebook

□ List generally benefits provided to company at

no cost to employees (e.g., insurance, workers’

compensation, credit union membership)

- 15 -

Advantages:

□ Minimize or eliminate potential legal liability

Ensure consistency and fairness to minimize

risk of discrimination and wrongful

discharge claims

□ Act as a first line of defense against potential

claims by giving notice to employees

E.g., unemployment claims, EEOC Position

Statement

□ Identify and explain applicable laws

□ Retain corporate identities (e.g., franchisor/

franchisee)

- 16 -

Disadvantages:

□ One size does not fit all (or even most!)

□ Forms are readily available, but

Current?

Relevant?

Illegal?

□ May become a “crutch” for employer and employees

Does not eliminate need for ongoing communications

- 17 -

Disadvantages:

□ Need to make sure policies

reflect reality

Consider industry

standards and best

practices

Ease of implementation

and consistent

enforcement

Impacts your credibility

Review outdated policies

or need for new ones

- 18 -

Disadvantages:

□ Need to train employees and ensure understanding of

policies

Multiple trainings may be necessary (offices, employee

level within organization, anti-harassment)

□ Need to enforce policies, and enforce them consistently

□ Need to update policies periodically and obtain employee

acknowledgement

- 19 -

Format of Handbooks

Must be easy to read and understand

□ Draft policies that are reasonable and can be

equitably applied

□ Think of “least common denominator”

□ Solicit and use employee feedback

- 20 -

Format of Handbooks

Make sure policies are drafted to ensure

understanding by all levels of workforce

□ Keep it short and sweet – no legal jargon

Use titles, rather than individual names

□ E.g., “Human Resources [instead of “HR Director Betty

Smith] will retain copies of employee badges.”

Use language that permits flexibility and

discretion

□ E.g., “All employees are reviewed at the end of the

fiscal year” versus

□ “The Company will attempt to conduct performance

reviews on an annual basis”

- 21 -

Format of Handbooks

Use to Promote Company

□ List “perks” company provides

□ Tell employees how to avoid

disciplinary action, but also tell them

how to succeed

□ Use upbeat language:

“Visitors are strictly prohibited in

the workplace”, or

“To protect the security of our

workforce and confidential

information, all visitors must check

in with security”

- 22 -

Format of Handbooks

Organize material with table of

contents

□ Use links in electronic copies

□ Consider order and

organization of material

Use headings and section breaks

Be mindful of spacing and visual

appeal

- 23 -

Format of Handbooks

Consider target audience

Company culture

Company mission and

values

Tone of content

Language translations

Potential claims or

“Exhibit A” in courtroom

- 24 -

Format of Handbooks

Content

□ What would jury think?

□ Customize policies according to business needs

□ Size of organization

E.g., Title VI (15+ employees), ADEA (20+ employees),

FMLA (50+ employees)

□ Type of industry

E.g., customer service company should provide

examples of importance of greeting clients when

entering retail establishment

Is company subject to licensing requirements, federal

compliance standards, rules of ethics, etc.?

- 25 -

Format of Handbooks

Content

□ Does handbook list "genetic information" as protected

class?

□ Do you have employees in states / municipalities that

protect sexual orientation, and, if so, is this class

included? What about transgender status?

□ Does handbook include catchall phrase such as "and other

classifications protected by law"?

□ Does handbook include statement about religious and

disability accommodation?

- 26 -

Format of Handbooks

Proofread! Proofread! Proofread!

Hard copy, electronic, or both?

□ Timing and tactfulness is important

Distribution of handbook and messaging

□ Message from CEO/President

Who will deliver? HR, legal, outside counsel?

□ Consider “test” group to review and provide input

□ Highlight changes and explain basis for revisions as

necessary

□ In person trainings

□ New hire orientation

- 27 -

Key Provisions

Privacy Protections

□ Union considerations

□ Privacy concerns

Disclaimer (multiple places)

□ At-will relationship

□ Know your state’s and municipality’s requirements

- 28 -

Key Provisions

General Disclaimer

□ Avoid language that promises or guarantees

condition of employment

“Welcome to the company! My goal is to

provide you the tools you need to succeed.”

□ Dispel employees of implied contract

□ Use bold/highlighting

□ Use separate non-compete, non-solicitation

and confidentiality agreements and

compensation packets

- 29 -

Key Provisions

Handbook is primarily company rule book

□ Allows company to address diverse rule violations

without limiting company’s ability to respond on case-

by-case basis as circumstances dictate

Avoid formal progressive discipline policy where

list of rule violations associated with particular

“punishment”

□ Train supervisors how to respond appropriately and

timely to employee rule violations and/or poor

performance

□ Document it!

- 30 -

Key Provisions

Acknowledgement of Receipt

□ Handbook does not constitute a contract or

implied contract

□ Remind employees handbook is subject to

change at any time, with or without notice

□ Reserve right to unilaterally revoke, change or

issue revised or new policies

□ Obtain new acknowledgements when handbook

is updated

- 31 -

Key Provisions

□ You want to win lawsuits and unemployment

claims!

□ Signed and dated by employee (e-signature

legal?)

Employee aware of rules and agrees to follow

Maintain signed copy in personnel file

Give employee adequate time to review

Identify who to turn to with questions

□ Employer copy and employee copy

- 32 -

Key Provisions

□ What if employee refuses to sign?

□ Try to ascertain why

Explain it is routine party of handbook distribution

process

Make clear all employees are asked to acknowledge

receipt

Describe importance of handbook in setting guidelines

for efficient, daily operation of business

Explain handbook identifies employer’s and

employee’s rights and obligations

Ask employee about reservations in signing and address

concerns

- 33 -

Key Provisions

□ What if employee refuses to even read

handbook?

□ Consider whether individual is good fit for

organization

Ability to follow rules, abide by guidelines,

respect superiors and company culture?

□ Creating exception for one may create

problems for all

□ Document employee’s refusal to read

handbook and/or sign acknowledgement

Sign and date by HR or company

representative responsible for maintaining

acknowledgement forms

- 34 -

Special Issues for Multi-State Employers

Conforming to multi-state laws can present

challenges

□ Medical marijuana

□ Access to personnel records

□ FMLA/ADA

Use addendums or multiple versions if necessary

Use flexible language

□ “… unless otherwise required by state law.”

- 35 -

□ EEO Policy

□ FMLA/ADA/Workers’ Compensation/PTO

□ HIPAA and medical privacy

□ Confidential business information

□ Computer/internet/technology

□ Employee searches

□ Company equipment and return of company property

- 36 -

Non-Disclosure Agreements (NDAs) and Conflict of

Interest Statements

Anti-Discrimination Policies

Leave Policies

ffslaw.com

DRAFTING EMPLOYEE HANDBOOKS:

MINIMIZING EXPOSURE RISKS

Teresa R. Tracy

Partner

III. NLRB ISSUES

The NLRB has become increasingly activist in the area

of employee handbooks.

III. NLRB ISSUES

Section 7 guarantees the right to

– self-representation,

– form, join, or assist unions,

– bargain collectively,

– engage in concerted activities for the purpose of

collective bargaining or other mutual aid or protection,

– refrain from such activities.

III. NLRB ISSUES

Section 8 prohibits employer interference with, restraint

or coercion of employees in the exercise of Section 7

rights.

III. NLRB ISSUES

These statutory protections have far-reaching effects,

including effects on the way employee handbooks are

treated.

Trade Secret / Confidential Information

X Never disclose the employers’ or another’s confidential

or proprietary information. Never report on

conversations that are meant to be private or internal to

the employer.

Misuse or unauthorized disclosure of confidential

information not otherwise available to persons or firms

outside the employer is cause for disciplinary action,

including termination.

Trade Secret / Confidential Information

X Discuss work matters only with other employees who

have a specific business reason to know or have access

to such information. Do not discuss work matters in

public places.

Do not disclose confidential financial data, or other non-

public proprietary company information. Do not share

confidential information regarding business partners,

vendors or customers.

Conduct Toward Fellow Employees

X Show proper consideration for others’ privacy and for

topics that may be considered objectionable or

inflammatory, such as politics or religion.

Logos or graphics on clothing must not reflect any form

of violet, discriminatory, abusive, offensive, demeaning,

or otherwise unprofessional message.

X Do not harass, threaten, libel, malign, defame, or

disparage fellow professionals, employees, clients,

competitors or anyone else. Do not make personal

insults, use obscenities, or engage in any conduct that

would be unacceptable in a professional environment.

Threatening, intimidating, coercing, or otherwise

interfering with the job performance of fellow employees

or visitors is not allowed.

X Do not make defamatory, libelous, slanderous, or

discriminatory comments about the company, its

customers, and/or competitors, its employees, or

management.

Rudeness or unprofessional conduct toward a customer,

or anyone in contact with the company is not permitted.

X Disrespectful conduct or insubordination, including but

not limited to refusing to follow orders from a supervisor

or a designated representative is prohibited.

Being insubordinate, threatening, intimidating,

disrespectful, or assaulting a manager/supervisor,

coworker, customer or vendor will result in discipline.

Third Party Communications / Social Media

X You may not create a blog or online group related to

your job without the advance approval of the Legal and

Communications Departments.

You may not create a blog or online group related to the

company (not including blogs or discussions involving

wages, benefits, or other terms and conditions of

employment, or protected concerted activity) without the

advance approval of the Legal and Communications

Departments. If a blog or online group is approved, it

must contain a disclaimer approved by the Legal

Department.

Third Party Communications / Social Media

X Employees are not authorized to answer questions from

the news media. When approached for information, you

should refer the person to the company’s media relations

department.

We try to anticipate and manage crises to reduce

employee disruption and maintain our reputation as a

high quality company. Therefore, the company will

respond to the news media in a timely and professional

manner only through the designated spokesperson.

Use of Logos, Copyrights, and Trademarks

X Respect copyright and similar laws. Do not use any

copyrighted or otherwise protected information or

property without the owner’s written permission.

Respect copyright, trademark and similar laws and use

such protected information in compliance with applicable

legal standards.

Use of Logos, Copyrights, and Trademarks

X You may not use the company’s or any affiliated entities’

logos, marks or other protected information or property

without the Legal Department’s express written

authorization.

You may not use the company’s (or any of its affiliated

entities) logos, marks or other protected information or

property for any business/commercial venture without

the Legal Department’s express written authorization.

Restrictions on Photography and

Recordings

X Taking unauthorized pictures or video on company

property is not allowed.

No cameras are allowed in the store or parking lot

without prior approval from the corporate office.

Recordings

X Do not post photos taken at company events or on

company premises without the advance consent of your

supervisor, HR, and Communications Departments. Do

not post photos of company employees without their

advance consent. Do not attribute or disseminate

comments or statements purportedly made by

employees or others without their explicit permission.

Recordings

Due to potential issues, e.g., invasion of privacy

(employee and customer), sexual or other harassment

(as defined by our harassment/discrimination policy),

protection of proprietary recipes and preparation

techniques, do not take, distribute, or post pictures,

videos, or audio recordings while on working time. Do

not take pictures or make recordings of work areas.

An exception to the rule concerning pictures and

recordings of work areas would be to engage in activity

protected by the National Labor Relations Act, including,

for example, taking pictures of health, safety and/or

working condition concerns or of strike, protest and work-

related and/or other protected concerted activities. 54

Restrictions on Accessing or Leaving Work

X Failure to report to your scheduled shift for more than

three consecutive days without prior authorization or

walking off the job during a scheduled shift is prohibited.

Leaving company premises during your working shift

without permission of management is not permitted.

Restrictions on Accessing or Leaving Work

X You must obtain permission to enter company property

when you are not working.

Entering or leaving company property without permission

may result in discharge.

Conflict of Interest Rules

X As an employee, you have an up close and personal

look at our business every day. You must avoid any

conflict between your personal interests and those of the

company. A conflict of interest occurs when your

personal interests interfere – or appear to interfere – with

your ability to make sound business decisions on behalf

of the company.

As an employee, I will not engage in any activity that

might create a conflict of interest for me or the company.

For example, I will avoid outside employment with a

company customer, supplier, or competitor or having a

significant financial interest with one of these entities.

At-Will Provisions

X I agree that my terms and conditions of employment

cannot be changed.

No manager, supervisor, or employee of the company

has any authority to enter into an agreement for

employment for any specified period of time or to make

an agreement for employment other than at-will. Only

the president of the company has the authority to make

such an agreement and then only in writing.

Freedom of Association Policies and “Savings

Clauses”

These provisions can save an otherwise unlawful policy.

Must be broad enough to include behavior other than

union organization rights and should “address the broad

panoply of rights protected by Section 7.”

Placement in the handbook should be prominent and/or

“proximate to the rules it purports to inform.”

If a stand-alone freedom of association is included in a

handbook it should expressly reference the rules that it

effects, just as the rules should reference that policy.

ffslaw.com

Teresa R. Tracy

310.255.6176

Teresa.Tracy@ffslaw.com

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