There’s no question that employee handbooks are an invaluable tool for managers. In my view, few should be without the benefits they bring in terms of both communicating with workers and management’s own understanding of the myriad employment laws that may apply on the job. That said, employers need to understand that, when they include a policy in a handbook, they need to respect it. Those who don’t proceed at their own legal peril.
Massachusetts courts have long permitted employees to claim that the terms of an employee handbook form part of a contract that their employers need to follow. Though claims like those are tough to win, former workers sometimes see good reason to try nonetheless. That may be because, as with any lawsuit, outcomes are uncertain, regardless what one may believe about a claim’s merits. Since all must be defended at often substantial cost, defendants who face lawsuits often figure out quickly that it’s better to settle than to fight to the death, as it were. When it comes to suits over the terms of an employee handbook, the primary way an employer can avoid a predicament like that is to strictly follow the terms of the policies it publishes to its workers. If you don’t like a policy, change it – prospectively only, of course. Until that is done and conveyed to workers, all policies should be complied with by employer and employee alike.
A recent case in the U.S. District Court illustrates the perils companies can face when they don’t follow this tact. In Grant v. Target Corp., a former employee is complaining that Target fired him in violation of policies and procedures in its employee handbook. When Target moved to dismiss the suit, the court refused. Though Target claimed, among other things, that it retained rights to change its handbook at any time, the court concluded it must still deal with the employee’s claim that, when he was fired for intoxication at work, Target’s policies were violated. Though Target may ultimately win the case, it will not do so before expending substantial time and effort. In the end, it will need to prove either that its handbook did not form the basis for a contract or that the contract it did form was followed. Unfortunately for the employer, the process is not likely to be cheap.