The High-touch Legal Services® Blog…for Startups!

© 2009-2019 Dana H. Shultz, Attorney at Law

Why Should We Have an Employee Handbook?

Cover of an employee handbook

Although I’ve written quite a few posts about employee handbooks, I just realized that I never have explicitly stated why an employer should have one – thus, the topic of this post.

An employee handbook is a collection of policies, procedures and other important information that is provided to every employee. Reasons for having an employee handbook include:

  • To let every employee know what is expected of him or her on the job
  • To help ensure that employees are treated equally and appropriately
  • To reduce employee morale problems and complaints related to unstated policies or procedures
  • To reduce the risk that employees will allege unfair practices or unlawful discrimination
  • To enhance the perceived authority and appropriateness of employer decisions that are based on the handbook

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Does your Employee Handbook address social media?

Prudent employers have known, for many years, the importance of Employee Handbooks in setting forth a company’s policies and operational procedures. However, the recent increase in the popularity of social media – Facebook, Twitter, blogs and the like – has taken many employers, and their Handbooks, by surprise.

Policies governing mobile phones, computers, Internet access and e-mail no longer suffice. With social media, every employee – for better or for worse, intentionally or unintentionally – can become a spokesperson for the company.

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Handbook Defeats Employee Claim of Attorney-Client Confidentiality

Cover of an employee handbook

In “Inspection of Employee Text Messages ? Be Careful“, I described provisions concerning company-provided technology that every employer should include in its employee handbook. A recent California Court of Appeal case, Holmes v. Petrovich Development Co., shows that such provisions are strong enough to defeat a claim of attorney-client confidentiality!

Gina Holmes brought suit against her former employer, alleging sexual harassment, wrongful termination and other causes of action. The employer presented as evidence e-mails between Holmes and her attorney – e-mails sent from her employer’s computer – that supported the employer’s case.

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Probationary Period for Employees Not Needed and May Cause Problems

Sign saying "You're Fired", symbolizing end of unsuccessful probationary period

The CEO of a client with a half-dozen employees recently asked, “We are about to start hiring again. I would like to add language regarding a 90 day probationary period. Is this a good idea?” My answer was “No.” Here’s why.

I had prepared a form of employment offer letter and an employee handbook for the client. Both of these documents state that employment is at-will. This means that either party may terminate the employment relationship at any time for any (non-discriminatory) reason or for no reason. As a result, at-will employment, by itself, allows a company to terminate the employment of an individual whose performance is inadequate during the first 90 days. A probationary period is not necessary.

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Another Reason Why Employees Should Not Disclose Their Passwords

Computer screen showing user name and password for login

Their are obvious security-related reasons why businesses do not want employees to give their computer passwords the third parties. With the recent decision in Multiven v. Cisco Systems, the U.S. District Court for the Northern District of California has given us a legal reason, as well.

Peter Alfred-Adekeye (“Adekeye”), a former Cisco engineer, left Cisco to form plaintiff Multiven. After his departure, Adekeye used a Cisco employee’s password, with the employee’s permission, to download certain proprietary Cisco software.

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Educate Employees about Online Endorsements – the FTC is Watching!

A few months ago, I posted Does your Employee Handbook address social media? This post discusses a specific social-media issue that is of great importance to every employer: Online endorsements of products or services by employees.

The Federal Trade Commission has published Guides Concerning the Use of Endorsements and Testimonials in Advertising. Actions that are inconsistent with the Guides may result in an FTC enforcement action.

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Inspection of Employee Text Messages – Be Careful

“Texting” is booming in popularity, especially among younger workers. Are your personnel sending text messages on company-provided devices? If so, you should know about the Ninth Circuit’s decision in Quon v. Arch Wireless Operating Co., Inc., 529 F.3d 892 (2008).

Update: On June 17, 2010, the U.S. Supreme Court, in City of Ontario v. Quon, overturned the Ninth Circuit decision, ruling that the search of employee text messages did not violate the Fourth Amendment prohibition against unreasonable search and seizure because (a) it was motivated by a legitimate work-related purpose and (b) it was not excessive in scope. However, the Court expressly sidestepped the issue of whether employees have a reasonable expectation of privacy in their text messages, so the precautions listed at the end of this post still are relevant.

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What Are My Entity’s Compliance Obligations?

Frequently, the first service I provide to a client is to form a new legal entity (corporation or limited liability company). And frequently, once that entity is formed, the client’s first question is “What are my entity’s compliance obligations?”

This post provides a high-level answer to that question.

(If you form a corporation in California, you can find additional information in the Postincorporation Matters document on the Downloads page – image above.) (more…)

Employment Law for Foreigners

Logo for Quora, where Dana Shultz answered a question about U.S. employment law for foreignersThis post is about employment law. It is directed particularly to people from other countries who are not familiar with U.S. employment practices.

It is based on my answer to a Quora question.  Please see What are the most important aspects of American labor law that a foreigner trying to make a terrestrial logistics company in (any state of) the U.S. should take into consideration?

I am providing this answer based on my experience helping dozens of international clients conduct businesses in the U.S.

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Holland in the Valley: Incorporation for International Companies

Holland in the Valley logo

Several weeks ago, the Netherlands Consulate’s Holland in the Valley staff interviewed me about incorporation for international companies.? Excerpts from our conversation recently were posted at the Holland in the Valley website.

Among the topics we discussed were: