A company’s best defense against employee claims is a statement of firm and clearly articulated standards and rules. Most businesspeople know that a good part of customer relations is the management of expectations. The same is true of employee relations. That is why it is critical that companies prepare, distribute and regularly update employee handbooks. They are your best defense against employee claims.
California is an â€œat willâ€ employment state which means that companies can terminate an employee’s employment for no reason. Why, then, do we read of wrongful terminations lawsuits that end up in large judgments?Â They arise, generally, because the company has not managed the employee’s expectations and has not taken the time emphasize the employee’s at will status. Such lawsuits can be maintained if the company has, by word and deed, led the employee to believe his employment is permanent and that he could rely on having a continuing, and long, career with the company. (They can also arise when the employee is the beneficiary of an employment contract, but such contracts are typically extended only to top executives, so we need not address them here.)
Employee handbooks have been found by courts to be contracts between employer and employee and, as such, should spell out all of the terms of employment, such as vacation schedules and accruals, employee duties and rights, employee use of company equipment, hours, benefits and a host of rules that set forth the expectations on both sides. It should specifically state that it is a contract and emphasize that employment is â€œat willâ€. The existence of a handbook will be very important if your company is ever the target of a claim by an employee.