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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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GREENBERG TRAURIG, LLP ATTORNEYS AT LAW WWW.GTLAW.COM ©2011. All rights reserved.
Drafting Employee Handbooks: Minimizing Exposure Risks
Strafford CLE - November 3, 2015
Mona M. Stone
Greenberg Traurig LLP
- 5 -
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
5
- 6 -
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
6
- 7 -
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
7
- 8 -
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
8
- 9 -
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?
9
- 10 -
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
10
- 11 -
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
11
- 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
12
- 13 -
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
13
- 14 -
Advantages and Disadvantages of Handbooks
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)
14
- 15 -
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 by giving notice to employees
E.g., unemployment claims, EEOC Position
Statement
□ Identify and explain applicable laws
□ Retain corporate identities (e.g., franchisor/
franchisee)
15
- 16 -
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
16
- 17 -
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
Review outdated policies
or need for new ones
17
- 18 -
Advantages and Disadvantages of Handbooks
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
18
- 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
19
- 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”
20
- 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”
21
- 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
22
- 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
23
- 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.?
24
- 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?
25
- 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
26
- 27 -
Key Provisions
Privacy Protections
□ Union considerations
□ Privacy concerns
Disclaimer (multiple places)
□ At-will relationship
□ Know your state’s and municipality’s requirements
27
- 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
28
- 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!
29
- 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
30
- 31 -
Key Provisions
Acknowledgement of Receipt
□ 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
31
- 32 -
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
32
- 33 -
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
33
- 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.”
34
- 35 -
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
35
- 36 -
Legal considerations
Non-Disclosure Agreements (NDAs) and Conflict of
Interest Statements
Anti-Discrimination Policies
Leave Policies
36
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.
38
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.
39
III. NLRB ISSUES
Section 8 prohibits employer interference with, restraint
or coercion of employees in the exercise of Section 7
rights.
40
III. NLRB ISSUES
These statutory protections have far-reaching effects,
including effects on the way employee handbooks are
treated.
41
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.
42
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.
43
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.
44
Conduct Toward Fellow Employees
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.
45
Conduct Toward Fellow Employees
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.
46
Conduct Toward Fellow Employees
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.
47
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.
48
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.
49
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.
50
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.
51
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.
52
Restrictions on Photography and
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.
53
Restrictions on Photography and
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.
55
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.
56
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.
57
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.
58
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.
59