Every HR professional knows that solid policies are essential to protect a company against legal claims and liabilities. Unfortunately, even the best policies cannot provide the best protections. Ask yourself a few “what if” scenarios about your key employees, your monetary investment in those employees, the information they have at their fingertips, and what would happen to your business if that information made its way to your competition? If your answers to those questions raise concerns, let’s talk about getting your best protections in place now and hope you’ll never need to use them.
Consider the following policies:
- Confidential Information: Most employee handbooks clearly set forth the employer’s policies on protecting the proprietary and confidential nature of information available to the employees. Those policies certainly provide the basis for corrective action up to and including termination of the employment relationship. But do those handbook policies adequately protect the employer if the employee takes confidential information – in paper or electronic form – prior to leaving the company?
- Relocation Benefits: Does your company provide relocation benefits to new employees? Many employers have great relocation packages that afford new employees payment for numerous relocating expenses. However, does your company only have a relocation policy that explains the benefits, but no contractual agreement that permits you to recoup those expenses if the employee leaves employment after a short time?
- Non-Compete and Non-Solicitation: What if the employee leaves and solicits his or her existing accounts to work with his or her new company? What if the employee solicits co-workers to join his or her new company? What happens when an employee leaves and attempts to compete with the prior employer? Is the employer protected from losing its customers and employees?
So why isn’t an employee handbook enough to protect you? In virtually every instance, a company’s employee handbook is not a contract of employment and the employer can amend, change, or modify the handbook at any time. In light of such rights, the statements made in an employee handbook are not contractual. The same also holds largely true for offer letters, codes of conduct, and other employer communications. In virtually all of these documents, the employer correctly advises employees that the policies are not contracts and that either the employer or the employer can terminate the relationship at any time.
While those disclaimers protect an employer from certain contractual claims, many employers are left vulnerable and unprotected. The above examples (among others) are instances where an employer’s best protection is a simple written agreement with the employee that specifies their obligations during and after employment. That is why a separate written agreement is essential for certain employees and situations. It also is critically important that a company work with labor and employment lawyers to ensure that their policies will hold up when challenged and are otherwise lawful.
*Lisa A. Kainec, former Vice President of Human Resources and Senior Employment Counsel for Jo-Ann Stores, recently joined the firm’s labor and employment group in its Cleveland office. Lisa represents employers in all areas of labor and employment law including policy review and compliance. If you have questions about employer policy or contract drafting, please contact Lisa A. Kainec | lak@zrlaw.com | 216.696.4441