saxon financial

Build your employee handbook like a snowman: Start with a solid foundation

Originally posted by Holly Jones on HR.BLR.com.

Yes, winter is coming—that time for snowflakes (whether real or paper), festive holiday celebrations, and, of course, the annual review of the employee handbook. Is there anything that makes the season as merry and bright as updating policies for the coming year? Of course not!

Before embarking on a blustery trip down handbook lane, be sure to bundle up with this review of a few evergreen basics and best practices to ensure that your annual handbook review—for 2015 and the years to come—is as smooth as a frosty glass of eggnog.

At-will disclaimers—you have one, right?

Before you even get to the first policy, you want to set a few expectations for your handbook itself.

For example, first you want to establish that the employee handbook is just that—a handbook. It’s a guidance document full of policies and helpful information. What it isn’t is a promise, contract, or alteration to an otherwise at-will employment relationship.

Employment is at-will in 49 states (Montana is the exception); this means employers can generally terminate it at any time for any legal reason. Problems can arise, though, if an employee handbook seems to establish a contract and make certain promises that employment will be guaranteed unless, for example, every listed step of a disciplinary procedure is followed.

An at-will disclaimer can help avoid this appearance by stating right up front that, "Hey, this is not a contract! It’s just your employee handbook! This relationship is still at-will and we both have the discretion to break it off and move on at any time!"

Passing NLRA muster—Yes, Virginia, this means non-union employers, too!

Another important disclaimer that sets the scope of your handbook and, in this case, the rights it is not intended to restrict is an NLRA disclaimer.

The primary purpose of the National Labor Relations Act (NLRA) is to protect the collective bargaining rights of employees; however, this doesn’t mean that the act only applies to unionized workplaces. Section 7 of the NLRA, which applies to all private workplaces, provides employees with the right to engage in "concerted activities" to advance their interests as employees. These activities might include discussing pay, workplace conditions, and discipline with others.

The National Labor Relations Board (NLRB) has been increasingly vigilant in interpreting and protecting employees’ Section 7 rights; in particular, the board has cracked down on numerous handbook provisions that could reasonably "chill" or deter employees from exercising those concerted activity rights. (No winter weather pun intended.)

For example, a social media policy that prohibits employees from posting "negative remarks" about the company could dissuade an employee from discussing wage practices or workplace conditions with others. Other policies that may be subject to NLRB scrutiny include at-will disclaimers, conduct standards, media contact policies, anti-disparagement standards, arbitration policies, language that a company is "union-free," … pretty much any policy that uses words.

Essentially any policy that touches on an employee’s ability to discuss work with another person is fair game for the NLRB, so it’s a good idea to review these policies with a couple of principles in mind.

First, be specific as to the type of activity you wish to restrict. Vague policies that prohibit "negative attitudes" or "discussing sensitive information on social media" are far less likely to pass muster than policies that specifically state that employees should not harass colleagues or disclose customers’ data to non-company personnel.

Second, when in doubt, remember the power of the disclaimer. An NLRA disclaimer can help clarify an otherwise vague policy by specifically alerting employees that "nothing contained in this policy is designed to interfere with, restrain, or prevent employee communications regarding wages, hours, or other terms or conditions of employment. Company employees have the right to engage in and refrain from such activities."

Binding agreements, restrictive covenants, and other lumps of coal in your handbook

Restrictive covenants are contractual provisions such as noncompetes, confidentiality agreements, and nondisclosure agreements. In general, employee handbooks should notcontain these types of agreements.

If your employee handbook is not meant to create a contract—and you’ve put a disclaimer in the handbook specifically stating that the handbook isn’t a contract—then it is extremely confusing and contradictory to later include language and policies intended to do just that—create binding, legally enforceable agreements.

Therefore, if you want to enforce these types of restrictions, these documents need to be drafted and executed separately (and, usually, reviewed by legal counsel, too!). Many states are extremely strict and employee-friendly when enforcing these agreements (if they are permitted at all), and the agreements must typically be very specific in intent, limited in duration, and must often provide something in exchange for the contract. So often a catch-all, blanket agreement won’t be effective anyway.

Of course, there’s nothing wrong with cross-referencing to these documents in your handbook, just as you would to a summary plan description for your health benefit plans. Doing so reminds employees that they may be subject to these agreements, then directs them to their own contracts, if applicable, or the appropriate company personnel for more details.

For example: "Acme employees may be bound by the terms of a non-compete or non-disclosure agreement. For specific details, please reference your individual agreement or contact HR."

Make your list, check it twice—did you get a signed acknowledgement of receipt?

So you’ve put all of this work into developing a handbook and researching policies. And you are absolutely sure that your employees have read and understood it. No? Well, you at least know they received copies, right? No?

A signed handbook acknowledgement can be helpful for employers and immediate supervisors when an employee claims ignorance of an established company policy. At minimum it is recommended that employers require return of a signed and dated acknowledgement from each employee that the handbook was received. It’s even better to get acknowledgement that the handbook was read.

Further, for particularly important policies or recent policy changes, you may wish to specifically list or reference these policies or changes on the acknowledgment and require employees to confirm that they understand them or know with whom to speak if they have questions or need additional information and guidance.

Of course, depending on the size of your handbook, it may not be practical to expect your workers to read the document from cover to cover. So, if you’re introducing a brand new handbook, distributing it to new hires, or making significant changes, it’s also a good idea to set up an orientation meeting to go over the key elements of the larger document.

Then you can ask employees to turn in their signed acknowledgements within a reasonable time after the meeting—a week or two—so that they have time to look through the document on their own and ask any individual questions that arise.

Bottom line

Before tackling the host of new laws that can affect your business and your employees with the new year, establishing a solid legal foundation for your handbook will help ensure that it brings you nothing but tidings of comfort and joy year after year.

by saxon financial