While not intended as a legal document, your personnel manual may have the force of an employment contract. Review it to be sure it won't cause unintended problems. Perhaps you think your personnel manual the booklet describing policies and benefits for your staff is a low-key presentation. Unfortunately, it's loaded with dynamite. A variety of court decisions make this apparent.
"At-Will" Employment?
Some courts have held that representations in a personnel manual can become part of the employee's employment contract. Thus, a manual's language may legally prevent an employer from firing a staff member ``at will.''
Be careful, for instance, how your manual describes the employment relationship. Nothing in it should imply that the staff member’s role is “permanent.” For some years our own manual casually said that after an initial three months’ probationary employment, the position would become permanent; it’s much safer to describe the employment relationship as becoming “regular.”
As another means of assuring that you can fire an employee if dissatisfied with performance, have your manual specifically state that each staffer's employment is "at will." The following helps make the point:
"The Practice retains its right to terminate employment with or without good cause; by the same token, you have the right to leave with or without good cause."
Watch out, too, if your manual sets out a pre-firing procedure like a set of progressive disciplinary steps. Courts have held employers liable for "wrongful discharge" when those steps were not followed. In the same vein, language saying that discharge will only be
for certain types of behavior ("for cause," for example) may make a termination illegal if you do not or cannot document that behavior.
Promises of Benefits
Statements of an employee's benefits can be held against you even if you had changed those arrangements. We recall a practice whose manual promised all regular employees term life insurance of one times salary. The doctors dropped the group's term life
insurance contract, but the promise lived on in the manual much to their financial risk.
I know of some attorneys who prefer deleting from manuals all specific description of benefits. Instead, the manual should simply refer employees to the actual benefit plan documents. If you prefer describing
benefits, be sure to include a protective statement along these lines:
"The material in this manual represents our informal summary of benefits at the time of publication. Those benefits are under continuing review, and they are fully described in our formal summary plan descriptions and/or insurance subscription agreements. Refer to those sources for a full description of each plan's benefits and limits. If any provisions are inconsistent with this manual, the formal plan documents are controlling. We reserve the right to change or terminate any benefit plan at any time in accordance with the formal plan documents."
So be sure to draft your personnel manual with real care. Be aware, too, that the law varies significantly from state to state on the entire subject of employee manuals
and rights thereunder. Review your manual and significant changes with your attorney to be sure you are not creating any undue problems for yourself and your practice
Have questions? I’m here to help.
