The Top 5 Dos and Don’ts of Employee Handbooks

Labor & Employment Newsletter

Client Alert


Haven’t updated that employee handbook in a while? Need to review it to make sure it is accurate? What policies actually need to be in a handbook?

These are some of the questions that employers regularly face – or at least should face – concerning their handbooks. Handbooks serve an important function – they provide legal protections, inform employees of the company’s expectations, include policies to protect the company, and on a broader level, provide an introduction to the company’s culture. It is important to get the handbook as close to “right” as possible.

So what needs to be included in an employee handbook and what doesn’t? We can recommend some basic “dos” and “don’ts” that most employers should consider, but a few disclaimers are needed. First, the following list does not constitute legal advice. Second, there are dozens of variables that go into what is included within an employee handbook. The following gives general considerations and may not apply to your company; the proviso of “it depends” will oftentimes apply. Third, depending on the situation and employer, there are more than five dos and don’ts of employee handbooks. These are just some from our perspective.

Now, without further ado, here are the very unofficial top five dos and don’ts of employee handbooks (listed in no particular order):


1. Don’t make your handbook a contract.

The handbook should make clear that it is not a contract. If the handbook is not a contract, then the employee cannot sue the employer for breach of contract if the employer “breaches” a term of the handbook. The disclaimer that the handbook is not a contract should be clear and conspicuous. There are some specific state law requirements on this point. Likewise, this disclaimer should confirm the employment at will relationship -- that is, either the employer or the employer may terminate the employee relationship at any time, with or without cause and with or without advance notice.

2. Don’t include restrictive covenants (i.e., non-compete, non-solicit, non-disclosure) as part of the employee handbook.

Along the same lines as No. 1, if the handbook is not a contract, then do not include restrictive covenants as part of the employee handbook. In other words, if you want to have employees sign a non-disclosure, non-compete, non-solicit, or other restrictive covenant, and you want to actually have the ability to sue the employee for breaching those covenants, then don’t include the restrictive covenants as part of the employee handbook. If you do, then the employer opens itself up to the argument that the restrictive covenants are unenforceable because of the disclaimers that the handbook is not a contract. Same thing with confidentiality provisions. If you want to protect confidential business information from disclosure, create a separate non-disclosure agreement; don’t rely on a handbook provision.

3. Don’t make your handbook too long.

One of the points of a handbook is for an employee to actually read it! For all of the talk about handbooks, sometimes this simple fact is lost: In essence, the handbook is meant to convey information to employees. And like most things, the longer the handbook, the less likely an employee will actually take the time to read it. The policies in the handbook should be snapshots or summaries of longer policies that may exist outside the handbook to help keep it brief.

4. Don’t include policies that don’t apply.

Employee handbooks are not a one-size-fits-all endeavor. Oftentimes, whether a particular employment-related law applies depends on whether the employer has the requisite number of employees. If an employer does not have enough employees to be covered under a law, an employer should not include a policy that indicates to employees that the law does apply. The Family and Medical Leave Act (FMLA) is an easy example. If an employer only has one location and does not have anywhere close to 50 or more employees, then the employer is not a covered employer under the FMLA (barring some unforeseen circumstance), and there’s no need for the handbook to include an FMLA policy. If you want to model a leave policy after the FMLA or voluntarily comply with the FMLA provisions, label it Medical Leave of Absence policy.

5. Don’t have policies that infringe upon Section 7 rights under NLRA.

Under the National Labor Relations Act (NLRA), a covered employer cannot prohibit its non-managerial employees from engaging in protected, concerted activity regarding the terms and conditions of their employment. For example, an employer cannot prohibit its employees from discussing terms and conditions of employment, such as their compensation and benefits. An employer should make sure its handbook does not infringe upon its employees Section 7 rights.


Ok, enough with the don’ts, here are some dos:

1. Do have an anti-harassment policy.

The anti-harassment policy is one of the most important policies that should be included in the employee handbook. Oftentimes, an employer’s liability for harassment (particularly harassment allegedly engaged in by non-supervisors) depends on whether the employer had an effective policy in place and took prompt and appropriate remedial action reasonably calculated to stop the alleged harassment that it knew or should have known about. A good anti-harassment policy can therefore help avoid liability altogether by showing the efforts the company engaged in on the front end to prevent harassment.  

The employer should publish the anti-harassment policy and, of course, follow it. Some provisions an employer may want to include in the policy are broadly prohibiting harassment, encouraging complaints, providing a complaint procedure for harassment complaints, stating that all harassment complaints will be investigated promptly, stating that complaints will be kept as confidential as possible (don’t promise complete confidentiality), stating that no retaliation against the complaining party or anyone participating in the investigation will be tolerated, and stating what will happen when the investigation is completed. Remember, an anti-harassment policy should apply to all protected categories under the anti-discrimination laws, not just sexual harassment.

2. Do have a paid time-off policy that states what happens to accrued but unused PTO upon termination of employment.

Many but not all states leave it up to the employer’s policy on whether accrued (or granted) but unpaid paid time off (or paid vacation) is to be paid out to the employee upon separation of employment. If an employer is in one of these states (such as Tennessee) and does not want to pay out unused PTO upon termination of employment under any circumstances, this needs to be clearly stated in the handbook. Or, if an employer wants to only pay out unused PTO if an employee is terminated without cause, then state that. The point is if you’re in one of these states, the employer should define when it is willing to pay out accrued but unused PTO. As part of this policy, the employer should clearly define how PTO is obtained and how it can be used.

3. Do have an equal employment opportunity policy.

These policies are expected. Although many employers don’t need a policy to tell them not to discriminate, if an employer did not have one, eyebrows would be raised.

4. Do have an FMLA policy (if applicable).

If an employer is FMLA covered (50 or more employees within a 75-mile radius), the FMLA policy should include, at a minimum, the information that the United States Department of Labor includes on the model FMLA poster. The employer may also want to consider stating whether it requires a certification to be submitted within 15 days, how it calculates the 1,250 hour eligibility threshold for employees to be eligible, whether the employer requires accrued PTO time to be used at the beginning of FMLA leave, whether the employer requires a fitness-for-duty exam or release from a physician at the conclusion of FMLA before returning to work, and maintenance of benefits while on FMLA leave. 

5. Do have a discipline/corrective action policy.

Finally, an employee handbook should, in most cases, provide examples of offenses that will lead to corrective action up to and including termination of employment. An employer should include a disclaimer that the list includes examples of offenses and is not exhaustive. Also, if an employer has a progressive discipline policy, an employer should include it in the handbook. If the employer does have a progressive discipline policy, the policy should give the employer the flexibility to skip steps in the disciplinary process and proceed directly to termination consistent with the employment at will relationship.


A handbook is a document that oftentimes needs to be revised and updated. But if an employer keeps the above list of dos and don’ts in mind, the employee handbook can be used to help provide legal protections for the company while at the same time informing employees of the company’s policies and expectations.