T HE E MPLOYEE ’ S G UIDE TO THE G ALAXY : H ANDBOOK P ITFALLS Susan Stahlfeld and P.K. Runkles-Pearson I. WHAT SHOULD BE IN YOUR HANDBOOK? A. Discrimination, harassment, retaliation, and reporting procedures. Policies describing and condemning discrimination, harassment, and retaliation, and providing methods for reporting, are critical weapons to defend discrimination claims. They should be part of every employment handbook. 1. Whenever possible, list protected classes specifically. Handbooks should list the classes that federal, state, and local laws protect and specify that the employer also prohibits discrimination against legally protected classes not listed. But employers should avoid relying on that catchall clause and update the list of protected classes as much as possible. Failure to list a protected class could expose the employer to the argument that it failed to protect the omitted class. In Oregon, the Bureau of Labor and Industries maintains a helpful list of classes protected by federal and Oregon law at http://www.oregon.gov/BOLI/TA/docs/T_FAQ_Protected_Classes.pdf. The Washington Human Rights Commission’s website at http://www.hum.wa.gov/index.html is a helpful Washington resource. The list of protected classes is constantly changing. For example, the Office of Federal Contract Compliance Programs recently released a directive explicitly clarifying that federal contractors are expected to prohibit discrimination based on gender identity or gender transition. Directive 2014-02, http://www.dol.gov/ofccp/regs/compliance/directives/Directive_2014-02_508c.pdf. 2. Include a specific reporting policy, but consider carefully who should receive reports. In Burlington Industries, Inc. v. Ellerth , 524 U.S. 742 (1998), and Faragher v. Boca Raton , 524 U.S. 775 (1998), the Supreme Court held that an employer may avoid liability for hostile-work-environment claims if (a) the employer exercised reasonable care to prevent and promptly correct any sexually harassing behavior, and (b) the plaintiff employee unreasonably failed to take advantage of “protective or corrective opportunities” that the employer provided. This defense can absolve employers of liability for hostile-work-environment claims based on sex, race, or other protected classes, if those claims do not involve tangible employment actions by supervisors. So the Faragher / Ellerth defense can have tremendous value—and employment handbooks are the most common and most beneficial place to describe the “protective or -1-
corrective opportunities” necessary to invoke it. It is valuable to have reporting procedures for claims other than harassment, although the technical defense applies only there. Juries, judges, and administrative officers who decide discrimination and retaliation claims often base decisions on whether an employee has been treated fairly, whether they admit it or not. Employers that prohibit discrimination, harassment, and retaliation, promptly investigate claims, and take steps to correct bad behavior are less likely to be seen as having invidious motives themselves. Handbooks should not only encourage employees to report discrimination, harassment, and retaliation, but also provide specific direction about where to report. But employers should carefully decide which managers should receive reports. The group should not be too small (for example, only a supervisor), because this may prevent employees from reporting to those who cause them discomfort or who may be part of the complained-of behavior. Neither should the group be too large. Recommending reporting to “any member of management” in a large organization could increase the possibility of lost complaints. Reporting should be at minimum to management (or a subset of management) and to human resources, and the managers who will receive complaints should be carefully trained about the importance of passing the complaints along. 3. Define and describe discrimination, harassment, and retaliation in terms that your workforce will easily understand. Handbooks should bolster evidence of “protective or corrective opportunities” by clearly defining discrimination, harassment, and retaliation and prohibiting it absolutely. (Many policies provide detailed definitions but forget to provide the basic prohibition!) Definitions should include specific examples of prohibited behavior. Different employers should consider including examples that will resonate with their particular workforces. 4. Assure employees that you will investigate without retaliation and take appropriate corrective action. Providing “protective or corrective opportunities” includes telling employees how the employer will respond to complaints. Such a statement should at least: assure employees that the employer will take prompt and appropriate action, including investigating as necessary; reinforce the employer’s policy against nonretaliation; and describe possible consequences, including the possibility that offenders will be disciplined up to and including termination. B. At-will-employment statement / contractual disclaimer. A handbook statement that employees are “at will” (and so may be terminated or leave at any time or for any reason) defends against claims that the employer has a contract with an employee on terms more generous than the law provides. The handbook should also state explicitly that the handbook itself is not a contract. It should not state that the employee agrees -2-
to be bound by the terms of the handbook; such language contradicts the assertion that the handbook is not a contract! Employers should take care in formulating these statements. In recent years, the National Labor Relations Board (the “NLRB”) has challenged “at will” statements that, in its view, discouraged employees from bargaining collectively through a union for a contract with the employer. For example, one challenged statement included the assertion that “the at-will employment relationship cannot be amended, modified or altered in any way.” But in a recent memorandum, the NLRB Associate General Counsel approved a clause that stated: Nothing in this [Handbook] changes this at-will relationship, guarantees you a benefit, creates a contract of continued employment or employment for a specified term, or any contractual obligation that conflicts with the [employer’s] policy that the employment relationship with its employees is at-will. No representative of [the employer] other than a[n employer] executive has the authority to enter into any agreement for employment for a specified duration or to make any agreement for employment other than at-will. Any such agreement that changes your at-will employment status must be explicit, in writing, and signed by both a[n employer’s] executive and you. The NLRB’s concerns should not cause employers to remove “at-will” statements or contractual disclaimers. But employers should avoid indicating that the employee is somehow barred from having a contract in the future, or that the employee is the only person who can sign a contract with the employer. C. Handbook acknowledgments. All of an employer’s hard work in preparing a handbook is for naught if there’s no evidence that an employee received it. So handbook acknowledgments are essential in most situations in which employees and employers conflict. Acknowledgments should be simple and direct, stating only that the employee has received and read the policies. Employers should take care to obtain updated handbook acknowledgments when they update their handbooks. D. Timekeeping policy. Wage-and-hour laws strictly require an employer to pay an employee for all time that the employer “suffers or permits” the employee to work, even unauthorized overtime or time that an employee recorded improperly or not at all. See , e.g. , Chao v. Gotham Registry Inc., (quoting with approval Department of Labor rule at 29 C.F.R. § 785.13, “‘[I]t is the duty of the management to exercise its control and see that the work is not performed if it does not want it to be performed. . . . The mere promulgation of a rule against such work is not enough. Management has the power to enforce the rule and must make every effort to do so.’”) (emphasis in Chao ). -3-
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