Many newly-hired employees receive a handbook that can cover everything from dress code and leave policies to employees’ rights under Washington law. Employee handbooks can be an effective way for employers to communicate their workplace policies. However, they also can cause legal issues for both employers and employees. One of the most important issues is whether the handbook can form a binding employment agreement that could be enforceable in court.
Either the employer or the employee could want the handbook to be a binding employment agreement, depending on who would benefit. If there is a confidentiality clause or a non-compete agreement, the employer likely would hope for a binding contract. On the other hand, an employee may want the handbook to be enforceable if, for example, it limits the reasons he can be fired.
Is There a Contract?
An employee handbook can sometimes create a contract, even if the employer did not mean to do so. The important question is whether the handbook contains language that looks like the employer has made a promise or guarantee to the employee, or vice-versa. This issue is especially important in areas such as discipline, termination, and non-competition clauses. Be on the lookout for certain types of language, such as:
Words like “must,” “shall,” or “will” versus words like “may,” “can,” or “should.” These words are small, but they can make a big difference. For instance, “employees must wash hands before work” creates a requirement, but “employees should wash hands before work” seems more like a suggestion.
Specific procedures that must be followed. An employee may think he is entitled to that procedure. Perhaps an employer’s discipline policy states that employees will receive a warning and a suspension before they can be fired for violating the rules. If the employer does not follow that procedure to fire someone, the employee may be able bring a wrongful termination lawsuit.
Disclaimers. The handbook may contain language such as “this is not a contract” or “this does not create any rights.” These kinds of disclaimers mean the handbook is probably not a contract.
Is the Contract Enforceable?
Even if an employee handbook creates an employment agreement, a court will not enforce the agreement if it violates the law. One common reason that agreements are unenforceable is that they are so broad that they interfere with the employee’s rights.
One law that employee handbooks might violate is the National Labor Relations Act (“NLRA”), which protects an employee’s right to join other employees, either with or without a union, in order to improve wages and working conditions. Under the NLRA, an employer cannot have rules that would prevent employees from acting together to improve pay or workplace conditions. Some policies that might violate the NLRA include:
-A confidentiality agreement so broad that it could prevent employees from discussing pay, benefits, or safety information
-A dress code so broad that it might ban union items on clothing
-A rule that off-duty employees are not allowed on the premises. If it is so broad that it includes non-working areas such as parking lots or sidewalks, it might prevent employees from exercising their right to strike and picket.
Written properly, employee handbooks can be a useful tool for employees and employers. However, they can become a legal nightmare if they are written improperly. If you have questions about an employee handbook, an employment lawyer can help.
