Legal Focus: Employee Handbooks Play Critical Role

By David James and Joe Schmitt

Employee handbooks are vital to an effective organization, playing two critical roles.

First, they are essential for compliance, as certain policies are either mandatory or strongly recommended—that is, they would be sorely missed should a pertinent dispute arise.

Second, handbooks announce employee expectations, which empowers employers to hold employees accountable for violations.

Each of these purposes is enough to warrant a handbook; together, they justify regular handbook review to ensure ongoing compliance and utility. Initially, we recommend that a handbook contain the following mandatory or near-mandatory policies:

Introduction with a contract disclaimer and at-will statement

This policy, typically the first substantive page of the handbook, serves to introduce the fact that while the handbook is a collection of company policies, it is not a contract and does not alter the fact that employees are employed at will, meaning they can quit at any time, and the company can terminate them at any time.

Equal employment opportunity

An “EEO” policy documents the fact that the company does not hire, fire, or make other personnel decisions based on any protected class, such as race, sex, age, or religion. This policy is useful when defending the company’s employment practices, as all employers (regardless of size) inevitably must do at some point.


An anti-harassment policy serves to prevent—and help the company defend against—harassment claims. An effective policy should describe the avenues for employees to raise concerns and affirm the company’s commitment to investigating these concerns, taking prompt action, and prohibiting retaliation. Note that the policy should prohibit not only sexual harassment but also all other forms of harassment based on a protected class.


While some companies choose to go into detail regarding violations and the disciplinary process, others outline the general course of action. No matter which route one takes, it is important to offer at least a basic description of what forms of discipline exist and what violations warrant discipline. Of course, this could never be an exhaustive list, so caveat language such as “including but not limited to” or “for example” is recommended.

Solicitation and distribution of literature
Limiting solicitation and distribution of literature is handy as it relates to union discussions in the workplace, including union organizing efforts at non-union employers. This is another policy that does not seem critical until it is, which is too late.

Acknowledgement of receipt

As mentioned above, announcing employee expectations is a primary purpose of maintaining a handbook. Requiring an acknowledgement of receipt prevents (or at least discourages) an employee from saying, “I didn’t know.”

Family and medical leave/mandatory leave policies

The federal Family Medical Leave Act applies to employers with 50 or more employees. If it applies, a FMLA policy is mandatory. Even if it does not apply, an increasing number of states have mandatory leave laws that may apply, in which case a leave policy is still recommended, if not mandatory.

Beyond these essential policies are any number of policies that employers might deem worthy of inclusion. Indeed, employers typically have many other policies in their handbook based on the specific needs of the organization. For example, if a substantial portion of a workforce has company e-mail accounts, an e-mail/internet usage policy may be very important. Or if an organization conducts drug and alcohol testing of applicants or employees, such a policy is critical.

As we approach the end of the year, now is a natural time to review your handbook and consider any updates. While there is no wrong time to roll out an updated handbook, doing so in January tends to avoid employee questions of “why now.” Long-term, we recommend building periodic handbook reviews into your HR processes; every other year is a good place to start.

David James (above) and Joe Schmitt are shareholders in the labor and employment group at Nilan Johnson Lewis. Association members are entitled to no-cost, 60-minute, confidential consultations with James and Schmitt.