Don’t Let Dormant Policies Lie

By Jul 1, 2007
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Cover for July 2007 HR Magazine Workplace rules that are ignored or applied unevenly could undermine your business and expose your company to costly lawsuits.

Handbook policies are supposed to be your friend, there to help protect your organization from lawsuits, not blow up in your face and make your employer more likely to be sued. 

But sometimes policies outstay their welcome. A policy that made sense to add at one point may lurk around long after it has stopped serving a business purpose. Rather than shielding the employer from liability, the old policy actually may invite litigation if a manager decides to enforce it after it’s lain dormant for years. That’s because realworld practice often ends up trumping languishing handbook policies in court. 

“If you allow people to come in late despite your attendance policy, then you don’t have a policy,” says Rosemary Pye, regional director in the Boston office of the National Labor Relations Board. 

“You should state actual company practices, not a wish list,” adds Linda Johnson, a partner and chair of the employment law practice in McLane, Graf, Raulerson & Middleton, New Hampshire’s largest law firm. “Your handbook shouldn’t contain anything by which the company doesn’t intend to abide.” 

When a workplace rule that should apply to everyone seems to be applied only selectively, employees feel aggrieved. Lawsuits under a host of laws that are anything but dormant can heat things up considerably for employers—and needlessly, if a policy is outdated but still on the books. 

Before jettisoning a rule, make sure that the real problem isn’t employees’ outdated perceptions of a policy that would be useful if it were uniformly followed. Monitoring how policies are applied throughout the organization in disciplining employees can help HR get a better handle on which policies to keep and which to ditch. 

Oh, That Policy Wasn’t Meant for Us!

Inconsistent enforcement of company policies is practically an invitation for claims of discrimination under state and federal anti-bias laws. 

“A case of discrimination is built on unequal treatment based on race, sex, age, disability or other protected classifications,” says Mark Burak, an attorney with Morse, Barnes-Brown and Pendleton in Waltham, Mass. 

The likelihood of being hit with claims of unequal treatment is heightened if noncompliance with the policy results in the use of discipline. 

Kathleen Bogas, president of the National Employment Lawyers Association—an employee rights advocacy group—and a partner in Eisenberg & Bogas of Bloomfield Hills, Mich., gives the following example, based on a composite of cases from her practice. 

“Suppose the company has a sexual harassment policy setting out procedures it will follow when an employee brings a complaint. If someone accuses a lower-level employee of harassment, the company follows the policy. But if the accused is a higher-level person, they don’t follow it,” she posits. 

“They think there’s a protective layer around the higher-ups,” she adds. “Companies will tell me, ‘He was the owner, he said he didn’t do it, and that was good enough for us.’ How does that look to a jury? Generally speaking, a jury thinks, ‘Why should the company owner be treated better than Joe on the production line?’ If a rule says ‘all employees,’ it should mean all.” 

The Undead

Then, there’s the policy that’s lain dormant for years and suddenly—like the ghost of Elvis—is sighted. 

Take the case of John Reynolds, a black employee of plumbing manufacturer Kohler in its Searcy, Ark., plant who was fired for violating company attendance rules. During the six years of his employment, company attendance policies and practices changed several times. 

Under company policy, employees were not allowed to clock in or out at unauthorized times without a foreman’s permission, but, in fact, employees frequently did so without repercussions. The company began to enforce this policy in 1996, when plant manager John Dickson ordered all employees to clock in no earlier than 15 minutes before their shifts began. Despite Dickson’s order, many employees continued to clock in at nonstandard times. 

Kohler also maintained a policy that employees who had a per-hour quota could leave work early if they met that quota before the end of their eighthour shift. But that rule, too, was enforced off and on. 

In fact, it appeared that the company instituted, retracted, enforced and ignored other such policies over the years. As a result, employees and managers were, at times, unclear about the state of the company’s policies. 

After Reynolds had been there about six years, his supervisor allegedly began to enforce these policies against him but not against other, similarly situated co-workers who clocked in and out at similar nonstandard hours. When Kohler confronted Reynolds about these infractions, he said that he was being singled out because he was black. Kohler fired Reynolds later that day. He sued the company for race discrimination, claiming that Kohler looked the other way when his white coworkers broke the rules but enforced them against him on account of his race, as well as unlawful retaliation for complaining about discrimination. 

The Equal Employment Opportunity Commission (EEOC) took Reynolds’ cause all the way to the 8th U.S. Circuit Court of Appeals, which found in Kohler’s favor on the discrimination claim, but for the EEOC on the retaliation claim (EEOC v. Kohler Co., 335 F.3d 766 (8th Cir. 2003)). The court agreed with the EEOC’s argument that a jury reasonably concluded there was retaliation for complaining about discrimination in light of Kohler’s inconsistent enforcement of its policies and discipline. 

Use It or Lose It

When a policy falls out of use, it can become useless to an employer, even if the employer has provided training on the policy, an unemployment insurance case from the District of Columbia illustrates. 

A manager of a Burger King outlet was fired for misconduct when he failed to make a bank deposit in accordance with company rules. When he applied for unemployment and was turned down, he appealed the case to the U.S. Court of Appeals for the District of Columbia. 

The employee conceded that he hadn’t followed the prescribed procedure for making the deposit. His employer showed the employee’s signature on a copy of its written cashhandling policy and testified that the employee had attended managerial training on the issue. 

But the employee said that he frequently didn’t follow the policy and that his immediate supervisor acquiesced in his violations. The company didn’t rebut his evidence. The court reversed the denial of benefits, noting that to successfully deny benefits to employees who have been fired for violation of a company rule, the employer has to show: ​

  • The employee knew about the rule.
  • The rule is reasonable.
  • The employer consistently enforced the rule.

In this case, the court said there was no evidence of the manner by which the employer monitored and enforced compliance with the cash-handling policy, so the employer was unable to carry its burden of proving that the employee was discharged for willful violation of the employer’s rules (Freeman v. District of Columbia Department of Employment Services, No. 89-362 (D.C. Cir. 1990)). 

Many other states, including Massachusetts, Nebraska and New Mexico, have similar standards for deciding whether an employee is entitled to benefits after being fired for violation of a company rule.

What To Do

Fortunately, there are several steps employers can take to ensure that employee policies are communicated, understood and followed. Recommendations include: 

When formulating policies, get employee buy-in. “When people understand why a rule is in place, they’re more supportive,” says Hanna Hasl-Kelchner, an attorney and author of The Business Guide to Legal Literacy (John Wiley & Sons, 2006). “Some rules aren’t debatable because they’re required by law. But for others, identify the stakeholders and get their buy-in. Otherwise, policies will be honored more in the breach. When you roll out a new policy, do some education around it. Use it as a teaching moment. Invite debate.” 

Track use of policies. “Have someone in HR be a central repository for information on how supervisors are using company policies,” Johnson recommends. “Then have HR evaluate the information once or twice a year to see whether the rules are being enforced equally.” 

Burak suggests taking Johnson’s advice one step further. “I encourage employers to keep a database to track the level of discipline for different infractions,” Burak says. “But keep it only for the purpose of getting legal advice so it’s protected by the attorney-client privilege and it won’t be discoverable in an employee lawsuit.” 

He adds, “It’s common, in a discrimination lawsuit, for an employee’s lawyer to ask to see information on, for example, all the employees terminated in the last two years. If you keep a database on a running basis, you can pull the information out and hand it over. It’s much easier that way than developing the information from scratch.” 

Review your employee handbook. “Work with a proactive attorney to review your handbook every two years or so,” Johnson recommends. “Policies have to be changed to reflect changes in the law and changes in society.” 

“It makes sense that HR consult with a lawyer on these changes, or get some legal education,” Bogas says. 

Social and technological developments over the last decade also require employer response. “In the past few years, companies have had to develop policies for cell phones, use of cell phones in company cars, and employee weblogs,” Johnson says. “When you develop new rules, put employees on notice.” 

In addition to reviewing policies to make them consistent with changes in the law and changes in society, another reason to look them over is to make sure they still make sense in your workplace. “Ask why this policy was in place,” Hasl-Kelchner recommends. “Ask what problem it addressed and whether it solved the problem. Was it required by law, or was it just something a manager wanted? 

“If you see a little-used policy that you now want to dust off,” she adds, “educate the workforce about it. Say, ‘We just reviewed our policies, this is why this policy was there, this is why we want to enforce it, and this is how it makes the workplace better.’ Communicate that employees and managers are in it together.” 

Communicate changes effectively. This advice applies whether you are changing a policy or adding a new one. Use whatever means is most effective, including multiple means such as posting fliers, distributing handouts and sending emails that will bring the change to the attention of all employees. 

Train supervisors. Make sure supervisors know why policies are there, and that you expect consistent enforcement. Don’t permit them to play favorites. 

“Sometimes supervisors will say, ‘That rule is only a guideline’ or ‘I thought I should show some leniency toward a longtime employee,” Bogas says. “But juries think you should be even in your application of rules. If you mean what you say, then do what you say.”

Diane Cadrain is an attorney and writer who has been covering workplace legal issues for 20 years. She is a member of the Human Resource Association of Central Connecticut.

Web Extras

SHRM toolkit: Employee Handbook

SHRM article: Packaging Your Policies (HR Magazine)

SHRM article: Is It Time To Revise Your Employee Handbook? (Legal Report)

SHRM white paper: Preparation of the Employee Handbook

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