Unless the text of an employee handbook clearly indicates otherwise, an employee handbook can be considered a legally binding document between an employer and its employees. This means that an employee can sue an employer if the employer fails to honor any of the provisions within the employee handbook. In most cases, courts consider an employee handbook to be an extension of the employee contract.
Most employees are hired "at will," meaning either party can terminate the employment contract for any reason, with a brief list of exceptions. However, if the employee handbook contains any termination procedures, the employer may be forced to follow those procedures prior to firing any employees.
An employer should be looking for anything in the employee handbook that limits an employee’s "at will" status. This can include:
- Disciplinary procedures that require warnings, suspensions, etc., before an employee will be fired
- Lists detailing "legitimate grounds" or any other valid causes for firing
- Codes of conduct explaining both good and bad activity
- Appeals processes that an employee can use to challenge disciplinary action
- Anything that prevents an employer from firing an employee right on the spot
- Anything governing the voluntary termination process
Employee handbooks are an efficient way for employers to inform employees about constantly changing company procedures. However, they are also a potential doorway to liability when improperly written. Therefore, an employer should consult an experienced employment attorney when constructing or reviewing any employee handbook. An attorney can help maintain an effective handbook, while still preserving one’s rights as an employer.