Without these 4 Vital Legal Agreements, Your Business Could be at Risk
Business, Featured

Your company started small: just you, a computer, and your supplies in your garage apartment. And then almost overnight, you moved to an office downtown and added your first, second . . . maybe even your fifteenth employee. Or maybe you’re about to hire your first team member. Congrats on your growth! You’re clearly doing a lot of things right!

But if your company is in a growth spurt, chances are you struggle with enforcing company “rules”: rules that you have discussed with your team, but never committed to writing. Or maybe you deem these “rules” to be intuitive with no need for discussion or explanation. Like showing up on time. Or dressing professionally. Or giving advance notice if you need a half day off to get that root canal taken care of. If this describes you, read on!

If your company’s rules of the road aren’t written down, reviewed with your employees, and made available to them as a resource, you’re not only missing out on clear communication with your team, you’re also putting yourself at risk of liability when that rogue employee acts in violation of your unwritten rules and causes harm to himself, another employee, or even a client in the process.

Enter stage right: A Well-Drafted Employee Handbook (Cheers from Your Employees, Clients, and Family Erupt)

A thorough and well-written employee handbook acts as reinforcement of your incredible company culture. It clearly communicates your mission, values, and goals so that your team can connect to the larger vision while they’re engaged in the day-to-day activities that will make that dream a reality. And don’t underestimate this. Just like you, your employees want to know that they are part of something bigger than themselves. Your handbook can reinforce that when they come to work for you, indeed, they are contributing to a worthwhile cause, so their role has purpose.

Additionally, your team must know what you expect of them in terms of time value, work quality, and legal and ethical boundaries. While you may think these things are intuitive, usually, they are not. So communicating value and criteria, as well as boundaries to your team in a written format, such as a handbook, is essential to ensuring that you have leverage to reward those team members who are excelling and to discipline or keep in check those who are underperforming or taking advantage of your good graces by exceeding the boundaries you’ve created.

Company Vision Statement

The first item in your employee handbook MUST be your vision statement: a short summary of your company’s mission, goals and values designed to capture the essence of your long-game while engendering inspired action now. In sharing your vision with your whole team, you infuse it into the culture and give your employees a common sense of purpose. When existing employee know and buy into your clear company vision, they will naturally encourage new employees to do they same. With just a few simple sentences, you can chart the course for your employees’ success as well as that of your company.

Purpose of Company Policy Handbook

In addition to your vision statement, your handbook must clearly state its purpose upfront. I know. I know. This seems like another given that could easily remain unstated. Think again! If you want your team to be on the same sheet of music as you, you need to give it to them straight. Your handbook purpose should simply and concisely state the reason for its existence. By including a statement of purpose, you put your employees on notice that it is a living document, subject to change and revision from time to time as the company evolves and grow. In other words, in explaining that the handbook exists “to ensure consistency, fairness, and a wildly wonderful client experience,” you can also “reserve the right” to revise the policies in the handbook, in your sole discretion, as your vision for the company, its employees, and its clients grows and changes.

At-Will Employment Disclaimer

Although an employee handbook can feel like a contract, and indeed, sometimes courts will treat it as one, your handbook should make clear that it is not a contract of employment and should not be construed as such. Rather, your handbook should clearly state that each employee is an employee “at-will,” meaning either you or she can choose to terminate the employment relationship at any time and for any reason, without the need to establish “cause” for the termination and without warning. Be aware that if you have contractual employees whose contracts contain different provisions than this, your contract with the employee likely governs.

Employment Policies & Procedures

The first item in your employee handbook MUST be your vision statement: a short summary of your company’s mission, goals and values designed to capture the essence of your long-game while engendering inspired action now. In sharing your vision with your whole team, you infuse it into the culture and give your employees a common sense of purpose. When existing employee know and buy into your clear company vision, they will naturally encourage new employees to do they same. With just a few simple sentences, you can chart the course for your employees’ success as well as that of your company.Purpose of Company Policy HandbookIn addition to your vision statement, your handbook must clearly state its purpose upfront. I know. I know. This seems like another given that could easily remain unstated. Think again! If you want your team to be on the same sheet of music as you, you need to give it to them straight. Your handbook purpose should simply and concisely state the reason for its existence. By including a statement of purpose, you put your employees on notice that it is a living document, subject to change and revision from time to time as the company evolves and grow. In other words, in explaining that the handbook exists “to ensure consistency, fairness, and a wildly wonderful client experience,” you can also “reserve the right” to revise the policies in the handbook, in your sole discretion, as your vision for the company, its employees, and its clients grows and changes.At-Will Employment DisclaimerAlthough an employee handbook can feel like a contract, and indeed, sometimes courts will treat it as one, your handbook should make clear that it is not a contract of employment and should not be construed as such. Rather, your handbook should clearly state that each employee is an employee “at-will,” meaning either you or she can choose to terminate the employment relationship at any time and for any reason, without the need to establish “cause” for the termination and without warning. Be aware that if you have contractual employees whose contracts contain different provisions than this, your contract with the employee likely governs.Employment Policies & ProceduresIf you don’t have a policy or procedure that outlines your expectations for employee conduct, don’t expect your employees to read your mind. If you’ve answered the same question more than twice, it’s time to create a policy or procedure and add it to your handbook. When you do, be sure the policy is clear with respect to what circumstances trigger the policy and what behaviors are expected from your team.

Because employers are often sued by employees over failure to comply with the express federal, state and local laws and regulations that govern your business, there are certain MUST HAVE policies you need to ensure compliance These include policies on Equal Opportunity Employment, Non-Harassment, Non-Discrimination, Employee Eligibility, and Employee Classification. If you don’t have these policies in place now, THIS is your new starting point.

This article is an educational service of Thrive LawTM, a business law boutique. It does not constitute legal or tax advice or imply an attorney-client or accountant-client relationship. At Thrive Law, we offer a full spectrum of legal services for businesses and are equipped to help you make the wisest choices about your business dealings while you’re alive and well or in the event of your incapacity or death. We also offer a Healthy Business & Creative Checkup for ongoing ventures, as well as outsourced company counsel plans for businesses who need a legal team on speed dial. Contact us today to schedule: 727.300.1990 or hello@thrivelaw.com. We cannot wait to meet you!