The Top Five Don’ts of Employee Handbooks

Haven’t updated that employee handbook in a while? Need to review it to make sure it is accurate? What policies actually need to be in a handbook?

These are some of the questions that insurance industry executives regularly face – or at least should face – concerning their handbooks. In this day and age of regulatory oversight, it is more important than ever to make periodic, frequent updates. It is important to get the handbook as close to “right” as possible.

So what needs to be included in an employee handbook and what doesn’t? This eblast recommends some basic “don’ts” and a subsequent one will recommend more basic “do’s.” There are more than five don’ts of employee handbooks, but these are just some of the most important.

1. Don’t make your handbook a contract.

The handbook should make clear that it is not a contract. If the handbook is not a contract, then the employee cannot sue the employer for breach of contract if the employer does not comply with its terms. The disclaimer that the handbook is not a contract should be clear and conspicuous. There are some specific state law requirements on this point that must be consulted. Likewise, this disclaimer should confirm the employment at will relationship – that is, either the employer or the employer may terminate the employee relationship at any time, with or without cause and with or without advance notice.

2. Don’t include restrictive covenants (i.e., non-compete, non-solicit, non-disclosure) as part of the employee handbook.

Since the handbook is not a contract, then do not include restrictive covenants as part of the employee handbook. If you want to have the ability to sue the employee for breaching those covenants, then don’t include the restrictive covenants as part of the employee handbook, or the employer opens itself up to the argument that the restrictive covenants are unenforceable because of the disclaimers that the handbook is not a contract. Create a separate agreement; don’t rely on a handbook provision.

3. Don’t make your handbook too long.

One of the points of a handbook is for an employee to actually read it! In essence, the handbook is meant to convey information to employees. And like most things, the longer the handbook, the less likely an employee will actually take the time to read it. The policies in the handbook should be snapshots or summaries of longer policies that may exist outside the handbook to help keep it brief. Purely administrative policies should be excluded.

4. Don’t include policies that don’t apply.

Employee handbooks are not a one-size-fits-all endeavor. There is no need for the handbook to include policies that are either inapplicable to your organization, or preemployment requirements that no longer apply to employees once they are hired.

5. Don’t have policies that infringe upon Section 7 rights under NLRA.

Under the National Labor Relations Act (NLRA), a covered employer cannot prohibit its non-managerial employees from engaging in protected, concerted activity regarding the terms and conditions of their employment. For example, an employer cannot prohibit its employees from discussing terms and conditions of employment, such as their compensation and benefits. An employer should make sure its handbook does not infringe upon its employees Section 7 rights and check with labor/employment law counsel on the complicated rulings on this subject.