Employee Handbooks: A Tool To Use In Avoiding Employment Litigation

Labor & Employment Law Articles

Employee Handbooks: A Tool To Use In Avoiding Employment Litigation

A variety of factors have contributed to the explosive growth of employee discrimination lawsuits. As the stakes have increased in this type of litigation, so have the costs of defending these suits. Companies do not have to be passive and stand back and just allow these suits to happen. Rather, companies can be pro-active and adopt programs that can minimize the chances of employee lawsuits and minimize the costs and exposure of such lawsuits when they do happen.

One of the tools that a company can adopt is the creation of an employee handbook. By setting forth policies in black and white, an employee handbook eliminates ambiguities that can lead to litigation. For example, if the employee handbook contains an explicit policy on procedures for employees to follow if they wish to complain of sexual harassment, an employee cannot claim they did not know there was a procedure to investigate such complaints. If an employee fails to utilize such internal procedures before filing suit, the lawsuit will in most circumstances be dismissed. Similarly, if an employee handbook sets forth what is considered prohibited employee conduct, an employee cannot claim that such conduct was not prohibited or that he did not know that such conduct was prohibited.

It is not sufficient for an employer to merely draft a handbook, distribute it to the employees and then put it in a drawer. It is essential that the policies set forth in the handbook be followed consistently. In fact, an employer’s failure to comply with its own handbook can be considered to be evidence of disparate treatment or discriminatory motive in an employee lawsuit. It is also necessary for supervisors to be trained about the provisions of the handbook and employment laws, in general, so that your company will not inadvertently commit violations of the various employment laws. Disciplinary incidents must be consistently documented in writing to establish that any particular employee was not singled out for violations of any particular policy.

Many companies are wary of employee handbooks because they are concerned that they create employment contracts. This is not a valid concern. Under New York State law, employers will not be bound by a properly-drafted handbook. The only exception to this rule exists where the handbook contains a provision which expressly limits the employer’s right to terminate the employee and there exist special circumstances which show the employee’s detrimental reliance on that provision.

There is no doubt we live in difficult and litigious times. Any termination of an employee today can lead to a federal lawsuit. However, companies do have the choice of lighting a candle instead of just cursing the darkness. The adoption of an employee handbook in conjunction with progressive disciplinary policies, supervisor training, consistent documentation of disciplinary action can reduce the chances that your company will be involved in an expensive lawsuit.