Employee Handbook Mistakes Can Come Back to Bite Employers

Foley & Lardner LLP

Courts often conclude that absent appropriate disclaimer language and statements in employee handbooks are “promises” to employees, binding employers to abide by these promises in their dealings with employees. However, a recent case provides an important reminder to employers that what they say, as well as what they do not say, in their employee handbooks can come back to bite them later.

A federal appellate court recently determined that statements in an employee handbook may have given an employee the right to sue his employer under the Family and Medical Leave Act (FMLA), even though he was ineligible for FMLA protections. The employee handbook stated that “Employees covered under the Family and Medical Leave Act are full-time employees who have worked for the [Employer] and accumulated 1,250 work hours in the previous 12 months.” The problem? The policy did not say anything about the additional requirement that there be at least 50 employees at or within 75 miles of the employee’s workplace — another key component for employees to satisfy to become covered under the FMLA.

When the employee was terminated for late work and other performance problems, he promptly filed a lawsuit under the FMLA. The employee claimed that some of his late work was the result of his protected medical leave and, therefore, could not legally serve as the basis for his termination. In response, the employer argued that the employee could not file a lawsuit under the FMLA because there were less than 50 employees within a 75 mile radius of his workplace. Although the employer was right — the FMLA did not apply to the employee — the court concluded that the employer may have lost the ability to challenge the employee’s eligibility on that basis because it did not include this limitation in its employee handbook. As a result, if the employee can convince a jury he took medical leave because he thought he was protected by the FMLA, he will be able to sue his former employer, even though the FMLA never actually applied to him. In short, the employer is now exposed to a claim it could have completely avoided had its handbook been drafted with a bit more care.

The lesson to employers is to be careful about what you say and do not say in your employee handbook, particularly as it relates to eligibility requirements for federal or state law protections. We acknowledge that this is, of course, pretty general advice. Employee handbooks are challenging because they touch on so many different aspects of the employment relationship, including compensation and other benefits, discipline, anti-discrimination, harassment policies, the right to terminate the employment relationship, and employees’ legal rights after termination. Getting each section of the employee handbook right requires you to be somewhat of an “expert” in each subject. For this reason, having counsel review your employee handbook is a good idea — both before its implementation and periodically afterwards — to make sure that your policies are still up to date. Doing so now might very well save you from a lawsuit in the future.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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