By Chad Willits

If you are a business owner, executive, or Human Resources professional, you’ve no doubt read article after article about why it’s so important to have an Employee Handbook and workplace polices. And if you’re a wise owner, executive, or professional, you’ve already put one in place in your business. Handbooks and workplace policies are a critical tool in managing any workforce. But like any tool, if they are not used or maintained properly, they can do more harm than good. Here is a quick look at three ways companies, especially start-ups and small businesses, inadvertently turn these helpful tools into liabilities.


… Or just don’t maintain a Handbook at all. Many companies view Handbooks as an unnecessary formality. “I’ve never been sued,” they reason, “and I treat my employees fairly, so why bother?” That reasoning is akin to “I drive safely, so I don’t need a seatbelt.” The unfortunate reality is that just because you follow the law doesn’t preclude someone from accusing you of breaking it, and misguided or false claims are just as expensive to defend. By the time you need that seatbelt, it will be too late to put it on.

Sound employment policies create opportunities to resolve personnel problems before they escalate into expensive and time-consuming lawsuits. While a Handbook may never generate revenue, it can absolutely save tens of thousands of dollars in defense costs and lost productivity if just one claim is prevented.

A Handbook need not, and usually should not, be an encyclopedia of regulations. There is no one-size-fits-all, and policies should be scaled to the needs of each business and its workforce. Of course, there is no silver bullet that can completely remove the risk of all personnel problems, but there are a few “must haves” for every employer.

Handbooks and personnel policies clarify a company’s expectations and rules, making them easier for employees to follow and for management to enforce. Basic policies like equal employment, anti-discrimination/harassment, disability accommodation, medical leave, compensation, safety, and injury-reporting policies send the message that the company knows the law and expects its employees to follow it. Most legitimate companies would never consider discriminating on the basis of age, race, gender, or the like. But the absence of such policies from a Handbook suggests the company is unfamiliar with its legal obligations or views them as unimportant.

Even more importantly, certain policies lay the groundwork for legal defenses, shielding an employer from liability in employment-related lawsuits. For example, a simple At-Will acknowledgement protects against a claim that an employee has a legally enforceable contract guaranteeing continued employment, or that the company must prove some particular justification before discharging them.

Similarly, an Anti-Harassment policy provides the dual benefits of clearly communicating to your workforce and management that this type of conduct will be subject to discipline, and laying the groundwork for a legal defense against possible liability. When properly written and enforced, this type of provision can create an “affirmative defense,” shielding the company from liability where it has established an effective complaint-reporting procedure and taken prompt and effective remedial action in response. This not only makes it less likely that the victimized employee will pursue a claim, it also puts the company in a stronger legal position to defend that claim if necessary.

Anti-Retaliation provisions are also important to make clear that the company will investigate all complaints and address them as warranted, and that no employee will be mistreated for reporting good faith concerns of unlawful activity. This encourages employees to timely report problems, giving the company the opportunity to explore and address them before they escalate further.


An Employee Handbook is not a wise choice for a “DIY” project. When a problem arises, the knee-jerk reaction can be to draft a new policy to prevent it from recurring. It is simple enough to Google, copy, and paste Handbook provisions. But policies that are appropriate or helpful for other companies may be useless or problematic for yours. Hastily written policies to address a specific event often fail to consider unintended practical consequences and can turn out to be cumbersome and even unlawful. Employment laws vary widely from state to state, so policies that are lawful in one business may be unlawful just miles away across state lines.

Federal agencies like the U.S. Equal Employment Opportunity Commission (“EEOC”) and National Labor Relations Board (“NLRB”) have been very active over the past decade in investigating Handbook provisions. Both agencies have found legal violations based upon the presence of the policy alone, even when the company didn’t use or enforce it. For example, the EEOC and NLRB have found that if not properly worded, common provisions like At-Will Acknowledgements, Social Media, E-mail Use, Confidentiality, and Conflicts of Interest policies could discourage employees from exercising legally-protected rights, and could be unlawful on their face.

Wise companies consult a qualified HR professional or employment attorney to avoid these costly DIY mistakes.


Many companies invest time and energy to draft a Handbook, then put it on a shelf or in a file cabinet where it does nothing but collect dust. Your Handbook only has value if it is used and enforced and actually guides the behavior of your employees and management.

Smart companies circulate their Handbook to all employees and obtain signed acknowledgement forms to demonstrate each employee received and read it. Handbooks should be reviewed every few years to ensure they comply with any changes in the law. Important updates and revisions should be circulated as well to ensure that employees are clear on the current policies.

Wise companies go further and provide training to educate employees about the policies and provide an opportunity to ask questions. This can help identify potential misunderstandings and problems so that policies can be clarified or adjusted to be more effective.

Don’t leave this important tool on the shelf; put it to work for the benefit of your business. Consult a qualified professional to ensure your Handbook includes the most effective policies and excludes any that will increase risks and legal liability for your company.

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