New Year’s Resolution – Review Your Handbook
Employee handbooks are a useful guide to a company’s policies and procedures. They can contain descriptions of what is an employee can expect from the company, and likewise, what the company expects from its employees. Very often, the handbook can serve as a guide for company benefits as well. In some instances, employers have inserted language that mandates an employee submit any employment related disputes to arbitration and give up his or her right to file a lawsuit in court.
Employers have been counseled for years to include disclaimer language, in bold print, and at several locations in the handbook, that states, in effect,: “This handbook is merely a guide to the Company’s policies and procedures. It is not to be construed as a contract and may be altered or amended at any time in the sole discretion of the Company.” The purpose of a handbook disclaimer is to avoid breach of contract lawsuits over provisions in the handbook. Disclaimer language is designed to prevent an employee from claiming a contractual right to a certain benefit, policy or procedure and allow employers the flexibility to change those items as they see fit for the betterment of their business operations. However, the effect of such a disclaimer may very well negate the ability of an employer to force an employee to submit a dispute to arbitration rather than file suit in court.
Recently an employee brought suit in federal court for a violation of the overtime laws. The employer immediately filed a motion to dismiss the claim on the basis that the handbook contained a mandatory arbitration provision and that the employee had given up the right to file a lawsuit in court. The Court disagreed with the employer, noting that the disclaimer language said the handbook provisions, including mandatory arbitration, were not contractual rights, but merely guides and that the employee did not forfeit his right to proceed through the court system. The Court concluded that the express disclaimers in the handbook nullified any implied consent that might have been created by the employee’s receipt of the handbook and continued employment in accordance with the policies and procedures set forth in the handbook.
Boznos Law recommends that handbooks be reviewed on an annual basis to take into account changes in the law, such as the Illinois Equal Pay Act, to ensure continued compliance with the myriad of employment rules and regulations that govern the employment relationship.
Employers should resolve to know what’s in their handbooks, what their disclaimers may provide, and consider stand- alone policies and agreements with their employees. If an employer wants to include an agreement to submit all employment related disputes to arbitration, or wants to craft an enforceable restrictive covenant or trade secret prohibition, they should do so in separate documents that meet stringent legal requirements in order to be enforceable.
With over 30 years’ experience in advising employers and employees on workplace issues, let Boznos Law work with you to ensure you are ready to meet the challenges posed by the ever changing employment lawyer landscape. Call Bill Boznos today at (630) 375-1958 or contact us through our website at www.boznoslawoffice.com