Policy Manual Promises can be Exploited

Does your company have an employee policy manual that you borrowed from another company, found on the internet, or wrote yourself? A recent federal appeals court opinion is a cautionary tale for those companies that have not had an employment law expert draft or review their employee manual.

The 7th U.S. Circuit Court of Appeals held recently that an employee who wasn’t covered by the Family and Medical Leave Act (“FMLA”) could assert a claim to enforce the promises that his company employee handbook made, regardless of whether the FMLA actually applied to him. The company published an inadequately worded FMLA policy to all of its employees. That mistake cost the company. The court said that the company has to live up to whatever was written in its employee manual, even though the company was not actually required by law to provide FMLA to this particular employee. Peters. v. Gilead Sciences, Inc. (7th Cir. July 14, 2008).

What should you take away from this case? The direct answer is that if you are a small employer (less than 50 employees), don’t promise family and medical leave to your employees in your handbook, because your business is excluded by law from having to provide FMLA.

Similarly, if you employ less than 15 workers, don’t promise equal employment opportunity in your workplace. You can still practice equal employment, but don’t promise it in your written policies because you are small enough to fly under the regulatory radar and avoid expensive discrimination litigation.

The larger lesson is that what you say in your employee policies can protect you if you are careful about drafting and enforcing your policies. But carelessly worded policies can be used against you by a disgruntled employee and his/her attorney, so make sure a professional who knows the law of your state and knows something about your company has reviewed any employee policy you adopt.

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