Employ People without GettingSued or Screwed

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Employ People without Getting Sued or Screwed

1. Have an experienced local attorney review your personnel policies and develop the related contracts such as employment agreements, NDA and invention assignment agreements, and so forth. Labor law is convoluted, doubly so where it concerns creation of intellectual property, and you need an experienced attorney to be sure you follow all federal and state regulations.

2. Have all employees sign an employment agreement.

3. All employees should be employed on an at-will basis.

4. Be sure all contracts have adequate assignment of invention, non-disclosure , and non- compete (where applicable ) language.

5. Independent contractors. Don't try to pass off employees as independent contractors, or you'll end up with a painful tax problem or, worse , being legally responsible for the "contractor's" actions as an agent of the company. Follow the rules in the "Independent Contractors" section in this chapter to determine whether the contractor passes the legal tests. If so Never let a contractor start work without all applicable agreements, including a basic service contract, an NDA, an assignment of invention, and a non-compete clause where applicable.

6. Develop an employee handbook, to be given to everyone, explaining policies on discrimination, harassment , computer privacy, confidential information, salary, and other operating policies.

7. Document every complaint. Discrimination or harassment complaints require extra documentation (see the "Avoiding Lawsuits" section).

8. Remember that employers can be held responsible for damage caused by employees' acts, for example, if an employee hits a pedestrian while the employee is on his way to Staples to get more printer paper for the company, the employer is liable for the accident .

9. Get insurance. See "Rainy Days and Harassment Suits Always Get Me Down" sidebar.

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CAUTION

More dangerous is the employer's responsibility for an employee's mis appropriation of another's intellectual property. Example: your music director samples an obscure chunk of music for the soundtrack, with out clearing the sample or informing the company.The company is nonetheless subject to suit by the original composer.

Figure 4.1. The employer may be liable for infringing activities of its employees whether or not it knew of the infringement.

Why have an Employee Handbook?

• It provides legal protection for the employer in a discrimination litigation by showing that efforts were made to educate the employees and provide channels for airing complaints.

• Providing a FAQ eases HR administration.

• Rules are more likely to be followed if publicly stated and standardized.

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CAUTION

An employee handbook can be used against a company if it is not carefully drafted. Two main dan gers: 1. That it will be construed as creating a contract between the employee and the company; and 2. That an employer will be held liable for not following the policies (e.g. termination) to the letter.

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TIP

Include two disclaimers at the beginning and end of the book that sound something like this:

"Employer reserves the right to alter, delete, add to, or revise any and all policies contained herein without notice. This hand book is not a contract of employment and does not create any obligation whatsoever between Company and worker."

What to Include in an Employee Handbook

This is a partial list. Employee handbooks need to be reviewed by your attorney and customized for every workplace and office. It may even make sense to have a different handbook for executives than you do for other employees.

• At-will status acceptance: If your state allows, include a statement confirming the "at-will" status of employment.

• Anti-discrimination and harassment policy: A statement of the anti-discrimination and workplace harassment policies. Make it clear that you expect all employees, whatever their rank, to comply with this policy. Include the name and contact information of at least two people to whom complaints may be filed formally or informally, how long an employee should expect to wait for a response, possible penalties for breach of the policy, an anti-retaliation provision (i.e. that a worker won't be penalized later for having filed a complaint), and a notice that filing false claims may result in termination.

• E-mail and computer use: Note that e-mail must not contain any illegal, libelous, or offensive statements, that office e-mail is for business purposes, not for personal use; that all e-mail is company property and the company has the right to access e-mail sent to or from every computer, including deleted e-mail; that the company reserves the right to monitor employees' computers and their usage, and that violation of the e-mail policy may result in discipline or termination.

• Drugs, alcohol, and smoking: State the company's policy concerning smoking, drugs and alcohol in the workplace.

• Violence: A statement of policy against workplace violence.

• Technology use: A statement on the use of technology in the workplace. Clearly set forth whether employees may make personal use of telephones, word-processing systems, computer games , facsimile machines, copiers, employer Internet connections or other office technology either during or after work hours. Remember that if you ask people to work more than a 40- hour week, it will be difficult for them to accomplish their errands without some leniency in this regard.

• Plan benefits. Don't detail the plan benefits, merely state that they exist and refer to the policy documents for detail.

• Vacations and holidays: How is vacation time earned and spent (e.g. scheduling)? What paid holidays are included?

• State policies on sick time, jury duty leave, witness leave, voting time off, and so forth. Your local counsel will be able to tell you if there are state laws regulating these policies.

• Medical leave: State medical leave policy. State laws and/or FMLA (see the "State and Federal Regulations: Family Medical Leave Act" section) may apply and must be complied with; the FMLA requires adopting a specific policy in your handbook explaining how FMLA leave is coordinated with other paid time-off policies such as sick leave and vacation time.

• Reviews: What are the review periods? Perhaps show the employee appraisal form so that workers understand the criteria on which they are being judged.

• Discipline: Employers will want to be careful not to box themselves in here by creating requirements that they may wish to disregard (for example, a verbal and a written warning before termination). A good idea is to state a general policy and note that the employer reserves the right to amend this policy without further notice based on the nature of the offense.

• Termination: Explain the employee's right to accrued vacation time or other compensation upon termination.

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CAUTION

You must must must have a local attorney (for every office loca tion) review your handbook for com pliance with state and federal laws.

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CAUTION

Review the handbook at least annually and make any necessary amendments ; a handbook containing outdat ed information and/or policies can be a weapon against you. Example: if the discrimination go-to person no longer works at the company, an employee could (right ly) argue that the company was not doing its utmost to protect against infractions. Be sure that any updates and amendments have written confirmation of receipt by employees.

Every employee should receive a copy of the handbook and sign a written acknowledgment that they have received, read, and understood the handbook (which acknowledgment will go into the employee's file). This acknowledgment can be very useful in later disputes by showing that employees were on notice of policies and expectations.

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