Employee handbooks are important to businesses. Not only do they set forth expectations between the employer and employee, they protect employers. Clear policies and procedures can prevent liability and limit litigation.
An example of how an employee handbook may have prevented litigation was recently seen in the Michigan Court of Appeals’ case Marv Groom v. Rapak, LLC (Unpublished, Case No. 321115, Decided June 16, 2015).
In that case, an employee had been terminated for failure to meet performance expectations and brought a lawsuit against his employer for failure to pay severance. The employer had no clear policy regarding severance pay, nor was there an express contract (or even a clear promise) to pay severance to the employee. The employee argued, however, that he was entitled to severance pay based on representations that were made to him by his previous supervisor, and a general practice of awarding severance by the employer.
The trial court dismissed the employee’s claims upon a motion for summary disposition and the Court of Appeals affirmed. The courts found that there was no contract (express or implied), nor was there a promise by the employer that would have required severance to be paid. Although the employer succeeded in dismissing the claim, the employer still likely incurred substantial legal fees in defending itself against the employee’s claim. Had a clear employee handbook been in place describing the employer’s policy regarding severance pay, it may have prevented the employee from even filing the complaint.
Litigation is expensive and where it can be prevented, it should be prevented. A well-written and clear handbook can protect an employer and decrease the likelihood of litigation. Demorest Law Firm is experienced in drafting employee handbooks for many different businesses, please call us if you have a question or would like to find out more about an employee handbook for your business.
