The employee handbook is now a nearly ubiquitous phenomenon. Historically, employee handbooks served as a means for businesses to communicate their essential philosophy and culture to new employees while establishing general “rules of the road.” The need for standardized employer policies traces back to the early 20th century, when the American Industrial Revolution saw the emergence of large corporations as dominant economic players in manufacturing and transportation. The ensuing shift made possible by advances in automation and technology saw the ratio of managers to workers dramatically increase, necessitating the distribution of formal written procedures of employment.

Today, handbooks are a useful tool for employers of all sizes, not just large corporations, as modern workplaces have widely adopted similar structures and formalities. However, the original purpose of handbooks as described in the preceding paragraph has become secondary, and employees are no longer the only audience. The flood of labor and employment laws over the last 30 years has transformed handbooks into something quite different: as a means to mitigate against legal liability. Handbooks are now just as likely to face close review by government regulators, judges, and juries when companies face enforcement actions or litigation from former employees.

As a result, modern handbooks often read like a series of forced concessions: boilerplate recitations of statutory employee entitlements, mandatory notices, and other compliance statements that legislatures sometimes dictate almost word-for-word. Finding room to operate within these restrictions and requirements, while maintaining compliance, can nonetheless be achieved with the help of employment counsel.

COMMON MISJUDGMENTS AND MISPERCEPTIONS

The modern employee handbook serves as a crucial shield against legal exposure, yet many employers make fundamental errors in perspective that prevent them from developing effective handbooks. Here are critical misperceptions to avoid:

1. Passive Management Involvement in Handbook Development

Management must actively participate in handbook development. Working with employment counsel offers a chance to formalize business procedures and policies. While counsel ensures legal compliance, they cannot make fundamental operational decisions for the business. A handbook will, in most instances, reflect on the quality of management of a business and the degree to which its leadership engages in long-term thinking and planning. A meticulously drafted handbook that is succinct, accurate, and a sincere reflection of the employer’s legitimate expectations leaves a much different impression, in and outside of the legal context, than does a poorly drafted or incomplete handbook rife with misstatements or other egregious errors.

2. HR Overreach in Handbook Development and Drafting

HR departments often reject necessary handbook revisions due to misplaced confidence in their drafting abilities or simple confusion over new language or redlines. HR professionals are not qualified to draft employment policies and should not second-guess employment counsel on the law; it is against the interest of the business to do so, and this overreach frequently leads to litigation. Instead, HR should take an active role in promoting the importance of a well-crafted handbook and be the first to highlight when involvement of counsel would be invaluable.

3. Overreliance on Legalese and Standard Disclaimers

Each of these deceptively clever disclaimers are at best practically useless, and at worst will be directly responsible for an adverse result should they ever come before the judge or regulator they were supposedly intended for. Handbooks are not contracts, and should not be written like them. Instead, a handbook should be written like a confession; and you want it to convey a clean conscience. Inclusion of the disclaimer that a document is not a contract presumes it is. Extensive inclusion of conventional legal disclaimers may give handbooks a “professional” tone but are so vague or broadly applied that they are of minimal legal or practical value and very often counterproductive.

4. Not Defining Key or Routine Employer Policies

A handbook should fulfill its core purpose—communicating employer expectations. Do not commit yourself to policies you believe are against the interest of your business in the interest of relenting to some social pressure or to avoid criticism. If you prohibit remote work, do not leave it open for debate and do so in explicit written terms. Where a policy is required by law, include the minimum and nothing more if you do not agree to establish compliance. A policy that might sound “harsh” but reflects the sincere business judgment of the employer does not warrant any legitimate criticism, and you will be better off for including it. Employers should not willingly forego the opportunity to establish their legitimate expectations.

5. Plagiarism or Overuse of Widely Available, Generic Handbook Templates

“Plagiarism” will not get you an “F,” but rebranding and distributing a handbook that you have not reviewed will inevitably work against you and cause embarrassment when discrepancies are discovered, or, worse, create unexpected commitments or fail to convey key procedures and practices. A handbook must be written from the ground up, with language borrowed as needed (and no more). Extra caution is warranted with respect to handbooks disseminated by HR consulting companies, templates that can be downloaded in full online, or even which may have been drafted by an attorney but one who practices exclusively in another jurisdiction.

6. Neglecting Regular Handbook Updates

A handbook needs regular maintenance like any business tool. Though the initial investment should build a strong foundation, regular updates ensure its continued effectiveness as a shield against legal exposure. This is especially important with leave policies, as state and local leave laws change frequently. A handbook with obsolete leave provisions creates legal exposure and administrative headaches.

7. Assuming You Need a Handbook

It’s necessary to conclude this list with perhaps the most fundamental question: DO YOU need a handbook at all? Handbooks are typically not expressly required by state law and are not mandatory under any federal law. Legally, certain policies must be in writing to limit your exposure, and employers are required to provide some formal notices to employees. However, if your business is very small, and you cannot find the right help to draft a proper handbook, you will in most cases be better off without one at all.

TECHNICAL ERRORS AND LEGAL PITFALLS

Beyond these common misperceptions, employers should be mindful of these technical handbook pitfalls that even experienced practitioners fall into. Consider seeking a second opinion if your employee handbook includes any of the following:

1. “Progressive Discipline”

Progressive discipline policies unnecessarily restrict an employer’s discretion to terminate employment relationships even where there is cause to do so; these should be anathema in the context of at-will employment, but remain common nonetheless. Handbook provisions that describe or suggest progressive discipline may create implied contractual obligations that undermine the at-will relationship. Moreover, there is no greater reward for misconduct than a chance to do it again. Putting this in writing will not serve an employer’s legal or practical interest.

2. “Probationary Periods”

Employers should drop so-called “probationary periods” just as they should eliminate “progressive discipline” policies. Legally, such policies in writing only complicate an employer’s ability to terminate for misconduct. Some states will infer a progressive discipline policy where none exists, necessitating a clause stating all discipline is at the employer’s discretion. Likewise, a “probationary period” suggests some measure of protection against at-will termination at its conclusion. Progressive discipline and probationary period clauses should never appear in the context of private, at-will employment agreements.

3. Overbroad Confidentiality Provisions

Employers commonly reference confidential information in such broad terms as to render these clauses meaningless. If everything is sacred, nothing is. For protected trade secrets, address how that information is to be handled in individual employment contracts. Reserve confidentiality clauses for obviously sensitive information, such as personal identifying information or personnel files.

4. Ignoring State-Specific Language Requirements Or Assuming State Law Controls

State laws often mandate specific handbook provisions or infer certain policies when they’re absent. For example, Connecticut requires written policies prohibiting workplace marijuana use, while Ohio mandates payout of accumulated sick leave unless expressly disclaimed in writing. A lack of familiarity with a particular state’s employment statutes will inevitably be exposed by a handbook whose policies are vague where they should not be (leaving it to the state to fill in the blanks) and clear and specific when they need not be.

5. Confusing or Misdescribing State and Federal Leave Programs

Employers often fail to properly integrate federal and state family leave programs in their handbooks. Not identifying the respective programs may result in an employee handbook that over- or under-states thresholds, eligibility criteria, and entitlements and leads to compliance disasters. When a state program eclipses federal law, which is more common than not, ensure that your handbook emphasizes that state policy as much if not more than its federal counterpart, and vice-versa; also, include them next to one another or one after the other. If there is no equivalent at the state level of a federal program, include the latter and do not mention the absence of the former.

6. Missing Mandatory Notices

Many jurisdictions require specific policy language or notices in handbooks. Omitting these creates automatic violations. Track state and local requirements carefully. This is particularly true of leave entitlements at the state level, which more often than not carry independent documentation and notice requirements, despite drawing from federal analogs. Make sure that you have followed the applicable notice procedures with respect to both to the extent that such notices must be included in the employee handbook. (Connecticut, for example, requires distribution of individual notices of rights for both Connecticut Paid Leave and Connecticut Family and Medical Leave, which is typically satisfied via inclusion in a handbook.)

CONCLUDING REMARKS

A handbook is a legal document that may be interpreted to supplement or even establish employment contracts. All businesses face litigation by former employees or enforcement actions by regulatory authorities. The investment in having a handbook drafted or reviewed by employment counsel will pay dividends through mitigating legal exposure. There is nothing prudent about cutting costs on this key legal safeguard; a well-developed handbook protects your business from gratuitous liability and ensures your success or failure is determined by factors within your control.