As the volume of employment-related lawsuits continue to increase with the cool economy, it has become more important than ever for companies to have a consistent set of rules and practices to address everyday employment issues. A well drafted handbook contains a company’s “house rules” , which allows employees to know what is expected from them, and what they can expect from the company.

An effective employee handbook is often a company’s sword and shield. A well-drafted handbook can be used as evidence that a company treats its employees consistently, is aware of applicable laws affecting its employees, and follows the “rules of the road.” For example, some new federal rules of the road for 2012 include posting requirements for most employers under the National Labor Relations Act (NLRA); an expansion of protection under the Americans With Disabilities Amendments Act (ADAAA) to address disability discrimination; and further regulations on the Family Medical Leave Act (FMLA). Handbooks must be updated to reflect these new laws.

On the flip side, a poorly drafted handbook, one that is a “form” or template, outdated, not adhered to, inconsistently applied, or drafted in a way that implies some promise, may be as good as a loaded gun in the hands of a disgruntled employee. Common trouble spots include an inadequate harassment policy; promises of continued employment implied in a progressive discipline policy; and vacation policies that have not been appropriately vetted.

Also problematic are handbooks that describe practices or procedures (as opposed to just policies), or are too specific when discussing employee conduct that may result in discipline. Also, many employers limit discipline to termination, but forget other forms of discipline that may be appropriate, such as unpaid suspension.. The consequences of a poorly-drafted handbook are substantial, and often lead to discrimination and wage and hour litigation.

While it is important to cover as many situations and issues as possible in a handbook, it is impossible to cover everything, and issues will arise that were not thought of during the drafting of the handbook. As a result, a company needs policies that are appropriately flexible. To do this, the handbook should state that it is not a comprehensive collection of the company’s policies, and that the company reserves the right to adapt its response to any given situation. Otherwise, the employees may argue that any action taken by the company that is outside the scope of what is explicitly set forth in the handbook is unfair, or worse yet, illegal. It is imperative that a statement be included reserving the right of the company to change policies as needed.

To learn more about this topic, please attend our webinar entitled, “Employee Handbooks for 2012,” presented by Lisa Barnett Sween of Lewis Brisbois Bisgaard & Smith LLP. The presentation is scheduled for January 24, 2012.

Attorney Lisa Barnett Sween is a partner in the employment practice group in Lewis Brisbois Bisgaard & Smith’s San Francisco office. Since 1997, she has represented employers in all aspects of employment law and litigation, including state and federal employment harassment and discrimination litigation, wrongful discharge litigation, FMLA, CFRA, ADA, and wage & hour litigation.