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Our attorneys are specifically trained to help you keep more money in your business and personal accounts, watch out for pitfalls, handle sticky situations (ideally before they even get sticky) and effectively tend to the parts of your business that are especially challenging.
At the same time, we work as your trusted advisor who helps you make the very best personal, financial, legal, and business decisions for your family throughout your lifetime.
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Notes from Our Chief Counsel's Desk
It establishes the expectations in the relationship and enables employers to deal with similar situations consistently. Typically, employers do not intend for the handbook to create any obligations that could be enforced by their employees. However, a poorly drafted employee handbook could open the door to contractual liability.
Inadvertent Alteration of At-Will Employment Relationship
The problem that arises most frequently from an imprudently written employee handbook is the unintentional creation of limitations on the at-will employment relationship. In the absence of an employment contract to the contrary, employees are generally employed “at will”. This means that they can be terminated for any reason (including no reason or even a bad reason—unless it’s illegal) at any time without any warning. The at-will employee may also quit at any time and for any reason.
The potential for litigation emerges when employee handbooks contain language that can change an at-will relationship into one in which the employee can only be terminated “for cause”. This can happen when the handbook includes provisions that an employee could reasonably believe provide job security. For example, the following types of provisions could limit an employee’s at-will status:
Even if an employer only intended for these types of provisions to be flexible policies, not promises, they could end up creating a contractual obligation enforceable by their employees. Whether they do depends on whether the language used in the handbook could create an expectation in an employee that the policies must be followed before they can be fired. In that case, the employer’s failure to follow the policy may be considered a breach of contract.
Unintentional Creation of Promise to Adhere to Handbook Provisions During Employment
Employee handbooks typically contain provisions addressing a wide variety of issues, and they sometimes spell out policies providing employees protections and benefits beyond what is required by law. For example, a handbook may include a strict anti-harassment policy or generous wage or leave provisions. As with the “job security” provisions, if the employee reasonably expects that the employer has promised to abide by those policies, and the employer fails to do so, the employee could assert a claim for breach of contract against the employer.
How to Protect Your Business from Breach of Contract Claims
Employers can avoid potentially costly lawsuits for breach of contract by including a carefully worded disclaimer in their employee handbooks. Here are some tips to ensure your disclaimer is effective:
A well-drafted employee handbook is essential not only to set out your company’s policies and establish expectations but also to protect your business from potentially costly litigation. We would be happy to review your existing employee handbook or draft a new one. Please give us a call to set up a meeting.