IMPORTANCE OF “MAGIC” LEGAL WORDS IN YOUR EMPLOYEE POLICY HANDBOOK

Most employers today, in both large and small office settings, have developed office procedures and policies that are reduced to writing. These memos, policies, and directives on everything from sick leave, to vacation, to dress codes, no matter how informal, can end up as an unintended "contract" between the employer and employee. Maryland courts have dealt with the effect of these manuals on the employment relationship in several important cases.

First, the use of or collection of written policies and procedures to form an Employee Handbook manual may have many important managerial benefits. The employer can more effectively communicate the terms and conditions of employment, work rules, personnel procedures and policies, safety regulations, and benefits information. Committing the information to writing can also help ensure uniformity and avoid any misunderstandings that can sometimes arise from oral communications. The mere gathering of the office policies and procedures into a handbook or manual itself also provides an opportunity for the employer to review and assess employment policies and practices.

However, the employer must be aware of the danger that merely committing certain policies and procedures to writing could lead a court to conclude that a contract for employment exists or has been implied as to any employee to whom the handbook or manual applies. Careful drafting and review of the contents of the handbook or manual to eliminate ambiguity or exposure to liability can minimize these disadvantages. In fact, the following disclaimer printed in an employee handbook led a court to conclude that there was no express or implied contract of employment:

THIS HANDBOOK DOES NOT CONSTITUTE AN EXPRESS OR IMPLIED CONTRACT. THE EMPLOYEE MAY SEPARATE FROM HIS/HER EMPLOYMENT AT ANY TIME; THE EMPLOYER RESERVES THE RIGHT TO DO THE SAME.

Why is it so important in Maryland to ensure that such magic legal words and other terms are included in the employee handbook? Maryland still recognizes the doctrine of at-will employment, where the employment is for an indefinite period of time and can be terminated without reason or cause by either the employer or the employee. Obviously, a contract of employment (either express or implied) provides specific terms and conditions and may include limitations on the employer's right to terminate the employee, and the procedures which must be followed in order to do so.

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