Employee Handbooks are not Binding

Posted on August 24, 2009 by Tom Crane

 Those employee handbooks are so pretty and well-written.  When your boss said they were binding, you probably believed her.  But, no, thoese handbooks are usually nothing more than a guideline.  They are not at all binding, if the employer did its homework.  See Russell Cawyer's post explaining how to be sure they are not binding.  I have talked before about how these handbooks are almost always not binding.  

But, of course, the trick the past few years has been how to make sure the overall handbook is not binding but make sure the arbitration clause *is* binding.  Employers do love those arbitration clauses. 

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Written Counseling is an Effective Defense

Posted on May 14, 2009 by Tom Crane

 I talked about how employee handbooks are not a contract.  That means an employer does not necessarily have to counsel an employee three times in writing before terminating that employee.  But, a question that often comes up is why would an employer want to counsel an employee in writing?  The most common reason is unemployment benefits.  In most states and certainly in Texas, a worker only gets unemployment benefits if s/he can show s/he lost the job due to his/her own fault.  Employers will try to claim the employee was a bad employee.  The best way way for the employer to win that argument is to show write-ups documenting alleged performance issues.  

And, if an employee accuses the employer of discrimination, written counseling regarding objective, non-discriminatory issues provides an effective defense.  In fact, in almost all of my discrimination cases, the employer will dredge up supposed write-ups in some way.  I used to firmly believe that employers could not accuse an employee of malfeasance without contemporary write-ups.  I formerly was sure no jury would believe an employer was upset about an alleged offense unless the employer could produce contemporary write-ups.  

So, imagine my surprise when a case I worked very hard on went to trial while I was serving in Iraq.  My co-counsel lawyer told me later we lost the trial probably because the jury believed the employer's claim they were upset with our plaintiff employees even though they had no write-ups at all to back it up.  Our clients were accused essentially of not working well with others (when just the opposite was the truth).  Yet, they apparently won on that one issue.  I am still in recovery from that shock.....

But, it still remains a valid rule-of-thumb: if you want to show a non-discriminatory reason for a termination (or some other adverse personnel action), you better have some write-ups.  

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Handbooks are not a Contract

Posted on May 6, 2009 by Tom Crane

All the big employers have them: employee handbooks.  They love their handbooks.  They spend so much time and money putting them together that they would have to love them.  So, of course, many employees come see me and first thing they say is the Employer did not follow their own policy.  The employee says it like that simple fact should answer all my questions.  But, that fact answers few of my questions.  

The fact is most of those employee handbooks are not even close to binding on the employer.  This most often comes up when an employee is fired and they complain that they were not written up three times before they were fired.   Sure, many employer policies state that an employee must be written up three times before being fired.  *But* an employer's policy is usually not binding on the employer.  I guess too many employees have sat through too many HR meetings when HR discusses their wonderful and well-thought out employee handbook and how managers are expected to follow these policies.  

And, that makes sense.  Most policies are designed to give someone a chance to improve.  Often, if given the opportunity to improve, most employees do.  

But, unfortunately, almost all employee handbooks now come with a proviso that these policies are not binding and do not form a contract.  Due to some court decisions in the late 1980's and early 1990's, employers started putting a clause in the handbook that states the handbook is not a contract.  So, of course, seeing that clause, the judges found handbooks to not constitute a contract. So, the the employer was not bound by its own handbook, ...  that the employer used to love so much.  

So, sure, now it is okay to fire an employee with only one written discipline.  So, now, it is okay to not try to salvage an otherwise productive employee.   But, so long as everyone knows this, there should be no surprises.....

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Fairness Only Counts in Horseshoes

Posted on March 24, 2009 by Tom Crane

 Many times over the years, I have been asked or told that what the employer did was not fair.  The employee will tell me how they were fired with just one warning.  The employee explains that the employee handbook clearly says the employer must have three written warnings "before they can fire you."  

"Well," I reply in my calmest voice, "those employee handbooks are usually not binding."  If they contain provisions that this handbook is not binding or is not a contract, then the handbook is not binding.  That means the handbook's requirement of three written warnings is not binding.  I then go through the various other possibilities regarding how three written warnings might be binding.  As usual, none of those other possibilities apply to the average employee.  So, yes, I must tell the employee, those requirements for three written warnings mean nothing.  They are not binding.  "Yes," I add, "an employer can fire you with one written warning, or even with no  written warning."  

This is known as "at-will" employment."  At-will employment is the general rule in Texas and most other states.  An employer can fire a person for a bad reason or for no reason.  There are only a few very limited exceptions to at-will employment in Texas.  At this point, I always add, that at-will employment may not be fair, but it is the law in Texas.  

At some point, I explain that the other side of the coin is that an employee can quit whenever s/he wishes.  But, somehow, I do not think that is what they wanted to hear......

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