Drafting Employee Handbooks: Minimizing Exposure Risks
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1 Presenting a live 90-minute webinar with interactive Q&A Drafting Employee Handbooks: Minimizing Exposure Risks Responding to Latest NLRB Guidance, Preserving At-Will Employment, Avoiding Inadvertent Employee Contract Rights TUESDAY, NOVEMBER 3, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Mona M. Stone, Of Counsel, Greenberg Traurig, Phoenix Teresa R. Tracy, Partner, Freeman Freeman & Smiley, Los Angeles The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.
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3 Continuing Education Credits FOR LIVE EVENT ONLY In order for us to process your continuing education credit, you must confirm your participation in this webinar by completing and submitting the Attendance Affirmation/Evaluation after the webinar. A link to the Attendance Affirmation/Evaluation will be in the thank you that you will receive immediately following the program. For additional information about CLE credit processing call us at ext. 35.
4 Drafting Employee Handbooks: Minimizing Exposure Risks Mona M. Stone Greenberg Traurig LLP Strafford CLE - November 3, 2015 GREENBERG TRAURIG, LLP ATTORNEYS AT LAW All rights reserved.
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 5-5 -
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 6-6 -
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 7-7 -
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 8-8 -
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? 9-9 -
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
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
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
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
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)
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)
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
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
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
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
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
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
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
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
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.?
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?
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
27 Key Provisions Privacy Protections Union considerations Privacy concerns Disclaimer (multiple places) At-will relationship Know your state s and municipality s requirements
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
29 Key Provisions Handbook is primarily company rule book Allows company to address diverse rule violations without limiting company s ability to respond on caseby-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!
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
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
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
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
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
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
36 Legal considerations Non-Disclosure Agreements (NDAs) and Conflict of Interest Statements Anti-Discrimination Policies Leave Policies
37 DRAFTING EMPLOYEE HANDBOOKS: MINIMIZING EXPOSURE RISKS Teresa R. Tracy Partner ffslaw.com
38 III. NLRB ISSUES The NLRB has become increasingly activist in the area of employee handbooks. 38
39 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
40 III. NLRB ISSUES Section 8 prohibits employer interference with, restraint or coercion of employees in the exercise of Section 7 rights. 40
41 III. NLRB ISSUES These statutory protections have far-reaching effects, including effects on the way employee handbooks are treated. 41
42 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
43 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 nonpublic proprietary company information. Do not share confidential information regarding business partners, vendors or customers. 43
44 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
45 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
46 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
47 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
48 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
49 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
50 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
51 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
52 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
53 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
54 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 workrelated and/or other protected concerted activities. 54
55 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
56 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
57 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
58 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
59 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
60 Teresa R. Tracy ffslaw.com
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