BROAD COMPANY POLICIES CAN CREATE BIG PROBLEMS, WHETHER IN HANDBOOKS OR NOT

Several recent cases dramatically illustrate the need for careful company drafting of its employment policies, even though some are not related to employee handbooks. Almost every employer, for legal reasons or otherwise, has posted policies dealing with workplace harassment and leave policies under the Family and Medical Leave Act (FMLA). In a recent case against Costco, the employer had a published employment policy dealing with harassment. The policy not only prohibited "unlawful" harassment, but further provided that "appropriate corrective action will be taken, regardless of whether the inappropriate conduct rises to the level of any violation of law." The policy went on to define harassment in a very broad manner. In this case, the plaintiff’s allegations of harassment were outside the statute of limitations, and accusations within the statute of limitations were relatively minor. Despite the lack of "unlawful" harassment, the court found that the employer’s posted policy amounted to an express or implied contract between the employer and the employee, particularly since the policies did not contain any disclaimer language to the effect that its "super" anti-harassment provisions do not create legally enforceable protections beyond the protections of background law. Marini v. Costco Wholesale Corp., 30 AD Cases 1876 (D. Conn. 2014).

In another case, an employer’s FMLA policy indicating that all full-time employees would be eligible for leave under the FMLA was sufficient evidence of a claim for equitable estoppel (coverage) under the FMLA. The employer argued that the employee was not actually eligible under the FMLA as the employer had not met the employee threshold under the law. The court rejected the employer’s argument, finding that the employee had reasonably relied on the policy statement addressing FMLA eligibility.  Tilley v. Kalamazoo County Road Commission, 125 FEP Cases 1696 (C.A. 6, 2015). Thus, employers should be cautious making broad statements that employees are covered under the FMLA when they are at work locations of less than 50 employees within a 75-mile radius, or otherwise have not met the statute’s hours worked threshold.

In the final example, in December of last year, the Pennsylvania Supreme Court affirmed a $151 million award to Wal-Mart employees who filed a class action claiming missed or interrupted meal breaks and rest periods. The employees argued that the employer would not allow them the breaks they were promised in published company policies, and did not compensate them for the extra time worked. While neither federal nor state law required Wal-Mart to provide workers with the breaks that were involved in the lawsuit, the company policy stated that employees were eligible for specific meal and rest periods, and Wal-Mart was thus under a contractual obligation to provide them and to compensate employees for any missed or interrupted meal breaks or rest periods. Braun v. Wal-Mart Stores, Inc., 106 A.3d 656 (Pa. Supreme Ct. 2015).

Editor’s Note: The drafting of company personnel policies continues to create dilemmas for employers. The NLRB is claiming that overbroad company policies may infringe on protected employee activities such as unionism by "chilling" the rights of employees to engage in such activities. Without careful drafting, courts in some states are finding company policy language to be contractual and binding, even in those situations where no federal rights are involved. Almost every employer has some type of harassment policy and/or leave policy, and even the use of broad language can open up legal issues, as suggested by the foregoing cases. Unless the current legal environment changes, employers should have competent labor and employment law specialists review their policies, particularly those on sensitive subjects.