Employee Handbooks and At-Will Employment

 Posted on June 19,2015 in Contract Disputes

As a business owner, staffing your company properly is one of the keys to success. Your employees not only help you provide goods or services to your customers, they are also a representation of your company, both on and off the clock. To ensure that employees are living up to the expected standards, many employers will draft an employee handbook which addresses a staff member’s rights and responsibilities. As you develop a handbook, however, there some things you should keep in mind that can help you protect your company.

Illinois At-Will Employment

In Illinois, as in just about every state, employment relationships are presumed to be “at-will,” meaning that either party may end the relationship at any time and for any reason, other than those prohibited by law, or no reason. Of course, there may economic or reputation-related consequences that result from terminating employment unfairly, but, with certain exceptions, there is no legal liability incurred.

Exceptions to At-Will Relationships

Beyond certain legal protections, such as the protection against workplace discrimination, there are several other possible exceptions to the at-will employment arrangement. These may include termination based on retaliation for reporting a workplace violation and other public policy concerns, but the most common exception is a contractual agreement.

An employment contract, obviously, spells out the terms and conditions of the employment relationship. Because they are entered voluntarily, they are enforceable by law, and the employer and employee must both comply with its terms.

Implied Contracts Including Handbooks

While an employment contract creates an intentional agreement between the parties, implied contracts may unintentionally jeopardize the at-will arrangement. Illinois recognizes that, depending on the language included, a written assurance may constitute an implied contract with which the employer may be obligated to comply. Such concerns apply directly to employee handbooks.

When drafting your employee handbook, it is perfectly acceptable to include policies related to dress code, tardiness, smoking, and overtime, just to name a few. You may also wish to include details on your intended disciplinary procedures, but you should consider two things: do not list any procedures you are not prepared to follow, and give yourself room to act expeditiously in the event of a major discipline issue. For example, if you list in your handbook that the first violation of any company policy results in a write-up and an employee physically attacks a customer, you may be limited to a write-up, unless you have provided the possibility of taking further actions.

Protect Yourself

One of the most important components of your employee handbook is the disclaimer which addresses the possibility of implied contracts. Include a section, written in clear, unambiguous language, that the handbook is a reference of employment policies, not a contractual employment agreement. Be sure that no part of the disclaimer conflicts with any other statements listed in the handbook, and place disclaimer in an easy-to-find part the book. On its own, a disclaimer may not keep the handbook from being considered an implied contract, but a property developed one will offer an increased level of protection.

If you have questions about your employee handbook and its potential impacts on your business, contact an experienced Illinois employment law attorney today. We are equipped to help you develop contracts, handbooks, and other business documents that can help protect your company both now and in the future.