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Potential Pitfalls in Employee Handbooks/Manuals

May 21, 2013

Businesses throughout Tucson and Southern Arizona use employee manuals or handbooks to set rules, explain procedures and describe benefits.  This is a smart practice which, if used properly, protects the employer and standardizes policies for employees.  However, a poorly written employee manual can actually be a detriment.  For example:

 

1.  There is case law in Arizona which indicates an employment contract can be created by an employee manual if statements in the manual exhibit “a promissory intent or [are of a type] that the employee could reasonably conclude constituted a commitment by the employer.”  DeMasse v. ITT Corp., 194 Ariz. 500.  “When an employer chooses to include a handbook statement that the employer should reasonably have expected the employee to consider as a commitment from the employer, that term becomes an offer to form an implied-in-fact contract and is accepted by the employee’s acceptance of employment.”  DeMasse v. ITT Corp., 194 Ariz. 500. 

This can substantially limit a company’s right to discipline, suspend or terminate an employee, and could prevent an employer from altering benefits or terms of employment.

 

2.  Most employment manuals contain procedures for employee discipline.  This is a smart practice, unless the procedures are poorly written, overly restrictive or different than the company’s actual practice.  Employees who file wrongful termination claims often argue that their employer skipped steps in the discipline process, selectively enforced the process or simply ignored the process.  The best companies have updated, flexible procedures which they follow consistently with all their employees.

 

For more information on employee manuals and handbooks please contact one of our attorneys at 520-792-0448 or attorneys@durazzo-eckel.com.  Our business attorneys have extensive experience assisting companies throughout Southern Arizona with their employment matters.

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