One of the most common things we are asked to review is a Company’s employee handbook. The employee handbook is a very important document because it contains the policies of the employer, from paid time off to safety practices. What many employers don’t realize is that it is just as important to decide what should not be included in the handbook as it is to decide what should be included. Consider this: if a business terminates an employee and the employee is looking for grounds to bring a claim against the employer, every word in the employee handbook will be heavily scrutinized since the employee has it in his possession already and does not have to obtain it in discovery.
Let’s give you some further insights into the state of employment law and wrongful termination lawsuits. Typically plaintiff’s employment attorneys represent employees on a contingency basis (which means that the lawyer will take no or very little money upfront and only get paid if the terminated employee gets money). By comparison, employment defense lawyers work on an hourly fee; the defense counsel will be paid hourly regardless of the outcome. Therefore, it can cost the plaintiff very little to bring a lawsuit and it can cost the employer a lot to defend it. While nobody can guarantee that an employer will not get sued by a former employee, when creating an employee handbook it is important to draft the employee handbook to minimize the potential grounds for a wrongful termination suit against the company. Therefore, we typically advise our clients that for employee handbooks less is often better. The following examples show why.
Frequently we see employee handbooks that have a provision like the following: “any employee who has 3 or more unexcused absences from work within a 12 month period will be terminated.” On its face this provision seems reasonable. If an employee isn’t showing up to work they can be terminated. However, here is what could happen with this provision. Imagine Employee Alex is a poor performer and is slacking at work. Employee Alex has 1 unexcused absence and yesterday Alex picked up a 2nd unexcused absence. After this absence, the Company decides to terminate Alex. While the Company’s intentions are good, Alex could make a claim against the Company on grounds that the employee handbook said Alex could have 3 unexcused absences and was terminated after he only had 2. Another example is Employee Sam who has 3 unexcused absences over a 13-month span and is then terminated. The handbook says that it is a 12 month period, so again while the Company’s intentions are good the Company could find itself in a lawsuit over this. While the Company still may prevail in litigation stating that either Alex or Sam were poor performers and they were terminated for their performance and not because of the absences, the fact that the absence provision is in the handbook creates sufficient ground for both Alex and Sam to file against the Company, and may result in the Company incurring significant defense costs.
One more potential problem with a provision like “3 unexcused absences in 12 months will result in termination” is that the Company then must always enforce the policy or risk that the following scenario could occur. Imagine Bill is the Company’s best salesperson. Bill routinely has unexcused absences from work. Management has discussed this with Bill, and Bill’s patterns haven’t changed. Although Bill has the unexcused absences they do not impact his sales ability, and even with the absences the Company has no intention of terminating Bill’s employment. The problem is that if this Company ever does rely on the 3 unexcused absence policy to terminate another employee, the terminated employee may raise a claim that the policies were being selectively applied to him and not towards other employees (like salesman Bill.) The terminated employee might claim this is discrimination, or improper treatment, or a number of other things. These lawsuits can be quite expensive for the Company to defend but very cheap for the terminated employee to file, often forcing the employer to make a settlement pay off just to stop the defense costs.
So, how do we recommend addressing this same unexcused absence issue? We would recommend simply stating “unexcused absences and tardiness may result in termination.” This gives the employer full discretion while not stating any absolutes. The devil is in the details and each statement needs to be carefully considered. Most employers simply have not thought through how the contents of their handbook could play out with a disgruntled former employee.
It is especially unfortunate to see employers compromise their rights in an at-will employment state like Florida by including unnecessary provisions in their employee handbooks.
If you have an employee handbook we would be happy to review it and discuss with you whether it includes some potential traps and loopholes.
This blog was written by the Hunter Business Law Team.
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