The biggest concern for most employers is the proverbial bottom line. Employers should, however, be aware of their potential for becoming embroiled in litigation that may end up costing them thousands of dollars. In addition, the Equal Employment Opportunity Commission (EEOC) is always looming on the horizon, ready to enforce the laws under its purview; namely, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA) of 1967, the Equal Pay Act (EPA) of 1963, Titles I and V of the Americans with Disabilities Act (ADA) of 1990, sections 501 and 505 of the Rehabilitation Act of 1973, and the Civil Rights Act of 1991. In the 2002 fiscal year, 84,442 charges were filed with the EEOC, which was a 5% increase from the previous year. The EEOC awarded a staggering 310.5 million dollars to victims of discrimination in the 2002 fiscal year. Fortunately for employers, Ohio courts continue to uphold the employment-at-will doctrine, which basically states that an employee, not under an employment contract, may be terminated at any time, with or without cause. This doctrine, however, does not give employers carte blanche to terminate employees when that termination may run afoul of state or federal anti-discrimination laws.
Despite employers' continued reliance on the employment-at-will doctrine, the Supreme Court of Ohio has issued several decisions in the recent past that have chipped away at this doctrine. Most notably, there are four major exceptions to the employment-at-will doctrine: express contracts, implied contracts, promissory estoppel, and public policy. Each of the aforementioned exceptions can transform an employee-at-will to a contract employee who may only be terminated for cause. When terminating for cause it is critical to have maintained detailed employment records.
Employee Handbooks
Well written policies in an employee handbook may serve as a shield to help employers deflect potential lawsuits by employees; however, employers run a tangible risk when issuing employee handbooks since a poorly written handbook may provide an employee with a sword with which to pierce the employment-at-will doctrine and/or prove a discrimination claim. A poorly drafted handbook may be all an employee needs to succeed with a wrongful discharge claim, and a well crafted handbook may be all an employer needs to head off a lawsuit or investigation by the EEOC or OCRC. There is no law in Ohio which requires an employer to maintain or issue an employee handbook, but they do provide many advantages to employers. Employee handbooks allow an employer to present its employees with company policies and procedures. A handbook may also aid management in uniformly implementing and enforcing these policies, and uniformly and consistently enforced policies can be an employer's best defense against a wrongful discharge lawsuit.
The most important component of any employee handbook is the disclaimer. The disclaimer should state clearly the handbook is not an employment contract, in no manner guarantees continued employment, and that the employee is an at-will employee who may be terminated at any time and for any reason. In addition, the disclaimer should state that the policies and procedures contained in the handbook are intended as guidelines and the employer may unilaterally modify the policies and procedures at any time. Placing the disclaimer on the initial pages of a handbook is recommended since courts have found that inconspicuously posted disclaimers may not properly inform employees of their at-will status.
The actual policies and information contained in a handbook will vary depending on the characteristics of each company such as size, field of operation, and whether employees are union members. Generally, topics such as benefits (holidays, vacation, health, insurance, etc.), attendance and leave policies, dress codes, computer policies, copyright and trade secret policies, drug and alcohol policies, and discipline appear in employee handbooks. Employers may also want to include some background information on the company such as its history and its expectations for the future.
If an employer is covered by the Family Medical Leave Act (FMLA) and provides an employee handbook, it must include information relating to the FMLA and employees' rights under the statute. Handbooks should provide information regarding who is eligible for protected leave, what leave qualifies for protection, the employer's notice procedures for FMLA leave, and how the employer will calculate the 12-month period under the FMLA. If the employer requires employees to use paid vacation or sick leave prior to FMLA protected leave that must be included in the handbook.
An employer who includes a list of offenses for which an employee may be terminated should be cautious in wording its discipline and discharge procedures so that a court cannot later determine that an employee could not be terminated for an offense not specifically enumerated. To prevent this, employers should be clear in stating that any list of offenses that warrant termination is not exhaustive and the employer reserves the right to terminate an employee at any time within its discretion. Also, an employer implementing progressive discipline procedures should maintain flexibility to deviate from the procedures if appropriate.