Annual Employee Handbook Distribution

Steven Cesare, Ph.D.

Several years ago, a business owner from Washington state asked me to revise his company employee handbook. As part of that agreement, I informed the business owner of the three-fold employee handbook process. The first step is to create a valid employee handbook and distribute it to all employees. The second step is to revise the employee handbook each year thereafter for it to remain current on federal and state legislative updates as well as company policy changes. The third step is to redistribute the revised employee handbook to all current employees each January.

At the time, the business owner thought I was being bureaucratic, self-serving, and frivolous by attempting to waste his money printing new copies of the employee handbook every year. After all, “current employees already signed for the employee handbook last year,” right? Despite several heated discussions on this topic, the owner eventually, and not so humbly, relented and agreed to the annual revision and redistribution plan.

Fast forward three years.

After four years of maintaining the annual redistribution plan, one of his employees, who was laid off due to business necessity, sued the owner for wrongful termination alleging that he was “guaranteed a promotion and continued employment.” Parenthetically, thanks to the owner’s consent to my recommendation from years prior, the dispute went to arbitration instead of a jury trial.

During the proceeding, the employee made his impassioned plea that he was misled by the owner, was coerced into signing the employee handbook acknowledgment, and through no fault of his own, was an innocent victim deserving of hundreds of thousands of dollars in restitution for his pain and suffering. Sound familiar, anyone?

Upon hearing the evidence from the employee and then the company, the Arbitrator conveyed initial support for employee’s premise that the employer may have led him on regarding continued employment and a promotion. However, the Arbitrator then declaratively stated that the employee contrived much of the claim, and exaggerated his naivete, and ruled in favor of the company’s position, based solely on the fact that the employee signed the employee handbook acknowledgment form for four consecutive years. That iterative consent by the employee across four employee handbook distributions, belied the Arbitrator’s belief that the employee did not fully understand the at-will nature of the employment relationship. The Arbitrator publicly stated he could have believed the employee if the employee had only signed for the employee handbook once. However, by signing the employee handbook acknowledgment form four consecutive years, the Arbitrator could not, in good faith, give continued benefit of the doubt to the employee.

Verdict for the company.

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