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Legally, without a handbook or any written policies, a company's prior practices become its de facto policy, making it vulnerable to lawsuits. A good handbook not only protects the company from lawsuits, but it also can significantly reduce the need to call people on the carpet for infractions. Writing an employee handbook or updating ancient policies may seem like a daunting task, but there are numerous resources to help companies get started. Once a company has assembled its handbook, the next step is to have it reviewed by an attorney, preferably one who specializes in employment law. Once the handbook is written, reviewed, and employees are all thoroughly briefed, it still is not a good idea to shelve it. You should review it on an annual basis, and employees should know that it is subject to change.

Do things by "the book" or risk having "the book" thrown at you. Apparently, this book carries some weight, particularly when it comes to the employee handbook or office manual that spells out company policies and procedures. If employees do not abide by the book, they could face disciplinary action or termination. For companies, the price could be even higher in that they could be hit with expensive and time consuming lawsuits.

Given the seriousness of an employee handbook misstep, some telephone companies and cooperatives - particularly the smaller ones - assume their operations will be simpler, and that they may be less liable without one. Human resource experts and employment lawyers, however, strongly disagree with those notions.

Avoiding Costly Lawsuits

Legally, without a handbook or any written policies, a company's prior practices become its de facto policy, making it vulnerable to lawsuits. Robert Mathis, Ph.D., professor emeritus of management at the University of Nebraska at Omaha, gave several scenarios.

"What if one employee is fired for a work-related incident, but another does the same thing and is not disciplined? What if only some people are allowed to take time off for family illness? What if some employees are given a severance for leaving the company but not others? Favoritism and inconsistency can lead to wrongful discharge and discrimination lawsuits," he said.

According to Mathis, the average wrongful discharge case runs $75,000; sexual discrimination or harassment cases can run $25,000 to $50,000; and he added they can go well beyond these limits. "Even to win these cases is expensive," he said. "Legal fees alone can be as much as $25,000."

Sam DeShazer, an employment attorney specializing in management employment law and a shareholder with Hall, Render, Killian, Heath, and Lyman, PSC in Louisville, Ky., agreed that a company cannot afford not to have a handbook. "Today, there's more employment litigation," he said. "Employees have many avenues of recourse, and there are more statutory protections and more awareness of rights."

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Fewer Disciplinary Issues

A good handbook not only protects the company from lawsuits, but it also can significantly reduce the need to call people on the carpet for infractions.

"Discipline or termination is uncomfortable for companies in small rural areas," said Barbara Ritter, director of human resources for the National Telecommunications Cooperative Association (NTCA) in Arlington, Va. "There's often only one school or one store. You go to church with that person or run into that person in the grocery store."

Julie Gogel, director of human resources for Perry-Spencer Rural Telephone Cooperative (St. Meinrad, Ind.), said her company's handbook answers many employee questions and eliminates a lot of minor discipline situations. "It's harder to discipline if there's no manual," she said. "If we say, 'You can't bring a weapon on the premises,' the employee will say, 'Why not?' Without a handbook, the only comeback is, 'Because we say so.' A handbook paints a clearer picture to employees and gives them a better understanding of what the company is doing. We hardly ever run into disciplinary problems."

Getting Started

Writing an employee handbook or updating ancient policies may seem like a daunting task, but there are numerous resources to help companies get started. Mathis recommended getting some samples of other companies' handbooks and also looking at NTCA's employee handbook template.

"Templates are very helpful, but laws vary from state to state," Mathis said. "A template is just like a spec house in that it needs to be tailored."

For example, templates or handbooks for large companies will have policies that relate to the Family Medical Leave Act (FMLA), the federal requirement that gives employees 12 weeks of unpaid leave for birth, adoption or medical emergencies. "If you have less than 50 people, you don't have to comply with FMLA at the federal level," Mathis explained, adding that there may be state FMLA requirements. "But if your handbook has FMLA policies, then you must comply with those."

Jenni Neff, human resources manager for Grand River Mutual Telephone Corp. (Princeton, Mo.), said one of the best resources she found was NTCA's HRNet online. "There's no sense in recreating the wheel," she said. Using NTCA's peer networking list serve, HRNet, telcos can gain valuable insights from peers and exchange ideas and examples.

Employment attorney DeShazer said a mistake to be wary of is using another company's handbook. "When they borrow someone else's handbook, they're not thoroughly studying different issues - how do we want to handle vacation time, attendance, benefits?" he said. "It leads to confusion."

Mathis pointed out that an employee handbook for a small company does not need to be as complicated as one for a large company. "But you can't be off the cuff either," he cautioned, noting that a handbook should have three major purposes. "First, it should establish the administrative parameters applied in personnel and human resources management. Secondly, it should identify legal and other requirements from a compliance point of view. Finally, it should communicate the rules to the employees."

When crafting a handbook, Mathis advised companies to ask themselves: What have we done in the past? How do we operate today? How do we want to operate in the future?

Perhaps one of the biggest issues is determining to whom the policies apply.

"Companies make a big mistake of saying 'this handbook or policy applies to everyone,'" said Mathis. "Will the handbook apply to salaried versus hourly employees? Will it apply to family members or owners?"

For instance, the handbook may advise against making personal phone calls on company time, Mathis said. "You may not want the customer service rep sitting at her desk chatting to her son's soccer coach, but if the vice president or general manager wants to have a 30-minute conversation with an old fishing buddy, what does it matter?"

Calling in the Experts

Once a company has assembled its handbook, the next step is to have it reviewed by an attorney, preferably one who specializes in employment law.

"It should be reviewed by legal counsel who specializes in employment law and who knows the ins and outs of your state's laws," advised Mathis. "If you have operations in two states, make sure you're in compliance in both states."

DeShazer conceded that employment lawyers often charge more than general legal counsel, but said companies still are better off legally and financially hiring a specialized attorney. "A generalized lawyer may charge $150 an hour, but it may take him or her six hours to research the issues in your handbook. An employment lawyer may charge $200 an hour but only need 30 minutes to do the research," he said.

In addition, DeShazer said it is unrealistic to think the company attorney can be well versed in contract, tax, business, regulatory and employment law. "There are a huge number of federal and state laws that affect companies," he said. "It's all I can do to keep current in employment law."

Making Some Wiggle Room

Kathy Swan, human resources director for Golden West Telecommunications Cooperative (Wall, S.D.), said working with an employment lawyer has been very helpful. "He made us aware of our verbiage, and we changed many of the will's and shall's to may's and could's," she stated, explaining that this gave the company more leeway in dealing with different situations. "Instead of 'if this happens, this will occur,' we changed it to 'if this happens, it may include further discipline up to and including termination.' You don't want to lock yourself into something that will hang you in court."

DeShazer agreed that it is very important to preserve discretion. "Employers have a lot of discretion, but they often don't realize that and create policies that don't give them outs or allow them to make exceptions," he said. For example, it's not uncommon for companies to spell out progressive discipline actions. "For the first offense, the employee gets an oral warning; the second time, a written warning; the third time, suspension; and the fourth time, termination," said DeShazer. "But if the infraction is so severe - like someone brings a gun to work and threatens everyone - you're not going to give an oral warning. You have the right to go directly to termination if the situation warrants it. Just be sure to spell that out in the handbook."

Another misperception companies have is thinking that if they do not apply their policies to everyone, they will get into trouble, DeShazer said. The handbook may say that after so many absences, an employee will be terminated. "But what if you have an employee with a 10-year history with no problems and then that person goes through some problem at home like a death in the family or a divorce?" he said. "If that person misses one day over, you have a moral obligation to treat that employee differently than the malingerer who's playing the system and doing the barest minimum amount of work. Those two employees do not have to be treated the same way."

DeShazer advised leaving the door open to the possibility of exceptions. "Word it along the lines of 'we reserve the right to consider an employee's history and handle situations on a case-by-case basis,'" he recommended.

For these same reasons, NTCA's Ritter believes handbooks should be viewed as general guidelines. "You don't want to get too detailed because you want to leave some discretion up to the manager," she said. For example, if companies want to spell out policies about dress codes, Ritter suggested the handbook instruct employees to have a clean, neat appearance.

"You don't want to get into specifics about the types of shoes or the issue of tattoos," Ritter said. "You don't want to become the shoe police and tell adults how to dress themselves. You also don't want a situation where you say something like three tattoos are okay because what if someone puts one on his or her face or one that runs from the top of the arm to the wrist and says 'but it's only one.' People will always push the boundaries so leave yourself some discretion."

Conveying it to Employees

Imagine taking the time and expense of creating a top-notch employee handbook but then not communicating the policies to employees? It seems unthinkable, but Mathis said some companies do this.

"Legally speaking, there's a big difference between 'I gave you this book and a form to sign that says that you looked at it' versus 'we sat down and spent an hour or two going over this and we answered questions,'" he said. "You need to hold education and communication sessions so employees understand policies and to make sure the policies are clear." Golden West's Swan agreed, saying that management staff, human resources staff, and the employment lawyer must all review the policies together. "You don't want three different interpretations," she said, adding that her company emphasizes training with supervisors. "You want to make sure that everyone understands the correct interpretation, so there's consistency when they talk to employees."

When Golden West hires new employees, Swan said she goes through the handbook and touches on some of the highlights. "I make sure that the new hires understand the policies, and I have them read specific policies - those regarding sexual harassment, drug-free workplace, and no firearms on the premises - and sign those separately," she said. "Part of this is to keep us out of court and in compliance, but by highlighting these issues, it sends a message that we don't tolerate these things."

Perry-Spencer's Gogel explained that when her company updated and revamped its handbook, the company held three separate 90-minute sessions for each employee. "We train yearly and go over any policies that we have updated or review any new policies," she said.

Grand River's Neff said that for simple policies, her company may just include a memo with the paychecks. "When we set a policy about not hiring family members, it wasn't a big issue or problem - we just didn't want people to encourage a brother to apply for an opening," she said. "But for FMLA policies, we held meetings to explain them and answer questions. For sexual harassment, we went over what it was and had employees sign a form that said they understood our policy."

Neff said some employees will refuse to sign policies, thinking that this makes them free from responsibility. "I tell them that they don't have to agree with the policy, only that they understand it," she said. "If they still refuse to sign, I document that they refused to sign the policy." In some cases, she said, it may make sense to get a witness to verify that the employee did not sign. Neff laughed and said she discovered that balking employees will almost always sign a document that says they refused to sign the policy. "That's not the norm though," she said. "It's only a few people who will be like that."

Keep it Up to Date

Once the handbook is written, reviewed, and employees are all thoroughly briefed, it still is not a good idea to shelve it. "It's a living, breathing thing," said NTCA's Ritter. "You should review it on an annual basis, and employees should know that it's subject to change."

DeShazer agreed pointing out that this is especially true when it comes to things like vacation days, sick days and fringe benefits. "A company may have extremely generous leave provisions that could be very painful to take away," he said. "But employees should realize that benefits may not always be that generous. Word it so it says something like 'employer currently provides so many days,' so employees don't view it as a contractual right."

Grand River's Neff said a company should view its handbook as a dynamic document. "You have to review it every so often to keep up to date on legal environments and changes in FMLA," she said.