Drafting Employee Handbooks: Minimizing Exposure Risks Responding to Latest NLRB Enforcement, Preserving At-Will Employment, and Avoiding Inadvertent Employee Contract Rights

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WEDNESDAY, NOVEMBER 19, 2014

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

Lindsey M. Hogan, Esq., Faegre Baker Daniels, Chicago

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

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GREENBERG TRAURIG, LLP ATTORNEYS AT LAW WWW.GTLAW.COM ©2011. All rights reserved.

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Drafting Employee Handbooks: Minimizing Exposure Risks

Strafford CLE - November 19, 2014

Mona M. Stone Lindsey M. Hogan

Greenberg Traurig LLP Faegre Baker Daniels

stonem@gtlaw.com lindsey.hogan@faegrebd.com

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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

□ Social media policy considerations

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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

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Importance of Carefully Drafted Handbooks

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

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Importance of Carefully Drafted Handbooks

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

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Importance of Carefully Drafted Handbooks

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?

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Importance of Carefully Drafted Handbooks

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

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Importance of Carefully Drafted Handbooks

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

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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

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Advantages and Disadvantages of Handbooks

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

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Advantages and Disadvantages of Handbooks

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

E.g., unemployment claims, EEOC Position

Statement

□ Identify and explain applicable laws

□ Retain corporate identities (e.g.,

franchisor/franchisee)

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Advantages and Disadvantages of Handbooks

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

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Advantages and Disadvantages of Handbooks

Disadvantages:

□ Need to make sure policies

reflect reality

Consider industry

standards and best

practices

Ease of implementation

and consistent

enforcement

Impacts your credibility

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Advantages and Disadvantages of Handbooks

Disadvantages:

□ Need to train employees and ensure understanding of

policies

Multiple trainings may be necessary (offices, anti-

harassment)

□ Need to enforce policies, and enforce them consistently

□ Need to update policies periodically and obtain employee

acknowledgement

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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

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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”

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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”

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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

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Format of Handbooks

Consider target audience

Company culture

Tone of content

Language translations

Potential claims or

“Exhibit A” in courtroom

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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.?

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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

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Key Provisions

Privacy Protections

□ Union considerations

□ Privacy concerns

Disclaimer (multiple places)

□ At-will relationship

□ Know your state’s requirements

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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

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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

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Key Provisions

Acknowledgement of Receipt

□ Signed and dated by employee (e-signature)

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

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Key Provisions

Acknowledgement of Receipt

□ 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

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Key Provisions

Acknowledgement of Receipt

□ 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

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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.”

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Legal considerations

□ 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

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Legal considerations

Non-Disclosure Agreements (NDAs) and Conflict of

Interest Statements

Anti-Discrimination Policies

Leave Policies

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NLRB & Social Media Issues

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The NLRB and Employer Policies

The NLRB’s website describes the agency as “an

independent federal agency vested with the

power to safeguard employees' rights to organize

and to determine whether to have unions as their

bargaining representative. The agency also acts

to prevent and remedy unfair labor practices

committed by private sector employers and

unions.”

Enforces the National Labor Relations Act (NLRA)

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The NLRA

§ 7 – “Employees shall have the right…to

engage in other concerted activities for

the purpose of collective bargaining or

other mutual aid or protection”

§ 8(a)(1) – “It shall be an unfair labor

practice for an employer to interfere with,

restrain or coerce employees in the

exercise of rights guaranteed in §7 of this

act”

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NLRB – Expanding Its Enforcement Footprint

The statutory requirements have

not changed for decades…it is

the NLRB’s enforcement

activities and protocols that have

changed in recent years.

Focusing on Policies and

Practices in the NON-UNION

workplace

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Focus On Non-Union Workplace

Confidentiality

□ Wages/Discipline/Investigations

Electronic Communications

Complaint Policies

Class Action Waivers

Dress Codes

Access Rules

At-Will Disclaimers

Social Media Restrictions

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Office of the General Counsel

NLRB’s General Counsel has issued a dozen

memoranda on social media:

□ Allegations of overbroad employer social

media policies

□ Unlawful discipline or discharge over

contents of social media posts

Area of heightened interest for

the NLRB

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Social Media Landscape

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Over 1.15 billion

Facebook users

Over 500 million Twitter

users

More than 225 million

LinkedIn users

Today

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SOCIAL MEDIA – STATUTORY ISSUES

Potentially hundreds of federal and state laws

could affect the use of social media in the

workplace.

The ones getting the most attention are:

□ The Fair Credit Reporting Act

□ Anti-discrimination statutes such at Title VII, the Age

Discrimination in Employment Act and the Americans

with Disabilities Act

□ General privacy rights under the First Amendment,

Stored Communications Act or Federal Wiretap Act

□ Uniform Trade Secrets Act (and non-compete/breach of

confidentiality cases)

□ The National Labor Relations Act

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NLRA – The Big One

National Labor Relations Act (“NLRA”): Section 7

of the NLRA prohibits employers from enacting

policies that stifle or prevent employees from

engaging in “concerted activity” for “mutual aid

and protection.”

According to the NLRB, there are two main points

to consider:

□ Employer policies should not be so sweeping that they

prohibit the kinds of activity protected by federal labor

law, such as the discussion of wages or working

conditions among employees.

□ An employee’s comments on social media are generally

not protected if they are mere gripes not made in

relation to group activity among employees.

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Protected Activity & Social Media

An employee is protected under the NLRA when

engaging in a discussion of work conditions with

other coworkers on social media. Examples

Include:

□ Facebook post with comments.

□ Twitter discussion and retweets.

□ Blogs with comments.

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Protected Concerted Activities

• Sharing information about wages

• Complaining about policies or managers

• Displaying union-related insignias/ logos

• Expressing union support

• Attempting to organize a union

• Otherwise discussing employment terms

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Employers Headaches from Social Media…

“Like” button may be enough to trigger NLRA

rights

□ Three D LLC d/b/a Triple Play Sports (8/22/14 NLRB )

required the NLRB to determine whether the NLRA

protected an employee whose only involvement in an

online employee discussion of a payroll tax withholding

was to click the “Like” button on a Facebook page.

Looking at the Facebook "wall” the NLRB found the

employee engaged in concerted activity because the

employee used the “Like” button to express approval of

other employee complaints concerning payroll tax issues.

□ Bobby Bland v. B.J. Roberts (9/18/13 4th Circuit):

“liking” a Facebook post may be protected by the First

Amendment.

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Employers Headaches from Social Media…

New York Party Shuttle, 02-CA-073340 (May 13,

2013) (Facebook posts directed at non-employees

of the Employer that criticized the Employer’s

employment practices were deemed to be union

activity).

Design Technology Group, 02-CA-35511 (October

31, 2014) (Facebook posts criticizing the

employees’ supervisor and resembling “griping”

were an extension of the employees’ earlier

conversation based on safety concerns and

constituted concerted activity).

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Employers Headaches from Social Media – Cont.

Ade v. Kidspeace Corp., 698 F. Supp. 2d 501 (E.D. Pa. 2010)

(fired employee sued employer for failing to discipline

another employee for sending sexually explicit messages to

a co-worker through MySpace).

But see Tasker Healthcare Group, CA-094222 (May 8, 2013)

(employee’s comment on Facebook that she told her

supervisor to “back the freak off” was not protected

speech).

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GREENBERG TRAURIG, LLP ATTORNEYS AT LAW WWW.GTLAW.COM ©2011. All rights reserved.

FAEGRE BAKER DANIELS, LLP WWW.FAEGREBD.COM

Avoiding the Headaches: Drafting Enforceable Social Media Policies

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A Social Media Policy Should:

Clarify scope by including examples of

impermissible or unprotected conduct (i.e.,

use “limiting language”)

Avoid ambiguity as to application to Section

7 activity

Utilize quotes from policies deemed lawful

Require employees to maintain

confidentiality of trade secrets and

confidential information

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Be Specific

• Target specific behaviors violating policy

• Less is more

• Don’t require advance permission

• Narrowly focus on unprotected behavior

□ Flawed policy: Costco’s policy barring

statements harming Company reputation –

employees could read as a ban on protesting

employee treatment.

□ Acceptable policy: Wal-Mart’s policy limited its

prohibition to malicious or obscene comments.

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Give Examples

• Broad categories of prohibited or required

conduct will draw scrutiny

• Avoid ambiguities and be specific

• Give concrete examples related to business

products, trade secrets, etc.

• Reserve right to take disciplinary action

• Acceptable policy: Cox Communications’ policy

containing “list of plainly egregious conduct”

such as vulgar, obscene, harassing, libelous or

discriminatory comments

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Egregious Misconduct Can Be Prohibited

Discriminatory or disparaging remarks

Bullying, harassment or retaliation

Threats of violence

Representing an opinion as official policy

Disclosing confidential trade secrets

□ Development of systems, processes, products,

know-how and technology

Disclosing secret, privileged information

Copyright infringement

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But Not All Unwanted Conduct Can Be…

Making “misleading” or “inaccurate” posts

Revealing “non-public company information”

Non-commercial use of logo

“Offensive” or “disparaging” comments

“Friending” co-workers without permission

Commenting on “legal matters”

Use of improper “tone”

Refusal to resolve concerns internally

Contacting government without authorization

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Consider A Disclaimer

• GC says a “savings” clause will not fix an

otherwise overbroad policy, but…

• Board decisions suggest such clauses could

still make a difference

• Effective if well-written, but will not cure

otherwise unlawful policy

• Use understandable terms (plain English)

• Identify the activity that is being “saved”

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Unlawful Policies

The NLRB found to be unlawful:

□ A social media policy that prohibited: (1) unauthorized

posting or distribution of papers and (2) using social

networking sites in a manner that could discrete or

damage the employer. The NLRB felt that this allowed

employees to reasonably interpret the rule to prohibit

protected concerted activities and any rule that requires

employees to secure permission from their employer

before engaging in protected concerted activity at an

appropriate time and place is unlawful.

The General Counsel of the NLRB found to be unlawful:

□ A social media policy that provided no guidance on what

constituted the prohibited “inappropriate postings” on

social media sites. The NLRB felt that this allowed

employees to reasonably interpret the rule to prohibit

protected concerted activities 57

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Unlawful Policies – Cont.

□ A work rule prohibiting “inappropriate

conversation,” whether in person or online,

was unlawful when it provided no guidance on

what constituted the prohibited

“"inappropriate conversation.”

□ A company policy that prohibited employees

from disclosing or communicating information

of a confidential, sensitive, or non-public

nature using company resources to those

outside the company was unlawful when it

failed to give examples of such violations.

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Unlawful Policies – Cont.

□ Two policies prohibiting employees from making

disparaging comments about the company or from

engaging in unprofessional conduct online were found to

be unlawful when the NLRB felt such policies “would

reasonably tend to chill employees in the exercise of

their Section 7 rights.”

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Lawful Policies

The NLRB found lawful a policy that prohibited the

use of social media to post or display comments

about co-workers, supervisors, or the employer

that were vulgar, obscene, threatening,

intimidating, harassing, or in violation of the

employer’s anti-discrimination and anti-

harassment policies. The NLRB stated that

forbidding “statements which are slanderous or

detrimental to the company” that appeared on a

list of prohibited conduct including “sexual or

racial harassment” and “sabotage” would not be

reasonably understood to restrict Section 7

activity.

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Lawful Policies – Cont.

The NLRB also found lawful a policy that required

employees to confine their social networking to

matters unrelated to the company if necessary to

ensure compliance with securities regulations and

other laws. The NLRB stated that employees would

reasonably “interpret the rule to address only

those communications that could implicate

security regulations.”

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Lawful Policies – Cont.

The NLRB also found lawful that company’s policy

prohibiting employees from using or disclosing

confidential and/or proprietary information,

including personal health information about

customers and patients. The NLRB stated that

“employees would reasonably understand that this

rule was intended to protect the privacy interests

of the Employer’s customers and not to restrict

Section 7 protected communications.”

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Language To Avoid

Restricting wage/discipline discussions

Outright prohibition on use of company

name/logo

Mandatory advance “approval” language

Prohibiting general discussions with media

Using generic terms like “unprofessional,”

“inappropriate,” or “harassing” behavior

Requiring concerns to be raised with

management

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Implementing the Social Media Policy

While developing and drafting a social media

policy is a good start, a policy is not complete

without adequate training and education of

employees. Simply drafting a policy and inserting

it into an employee handbook is not enough. To

be effective, the policy should be communicated

directly to employees.

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Implementing the Social Media Policy

The most effective communication will be

through speaking directly with employees. Create

an open forum where social media issues are

discussed. Educate employees on the fact that

content posted on the Internet will remain on the

Internet for a long time. While many people may

understand the permanency of Internet posts,

some employees may not. Taking the time to

educate and discuss can go a long way toward

protecting the company.

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Summary - Policy Guidelines

Review social media policies for language needing

definitions or stricter language

Modify broad language prohibiting employees

from discussing wages, policies, schedules,

safety, dress and appearance codes, work

assignments, other employees, or management

Eliminate or adjust language prohibiting posting

of company logos, company name, identification

of employee with the company, etc.

You can still restrict use of intellectual property

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Summary - Policy Guidelines

Do not maintain policies requiring employees to

maintain strict confidentiality over wages,

bonuses, or commissions

Where legitimate confidentiality issues are

involved, define information deemed confidential

(Social Security numbers, the Coke formula,

strategic marketing plans, parent financial

information, employee medical information,

patient names or medical conditions, etc.)

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Summary - Policy Guidelines

Add a disclaimer at end of policy making

clear that it is not intended to restrict

employee section 7 rights under the NLRA

You can still bar social media use

during working hours

You can require disclosure as “personal

opinion”

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