The Employee Handbook – No Longer an Option

Some dealers refuse to adopt a personnel handbook.  They ask, “Why tell employees their rights?” Any dealer asking that question does not understand the purpose of a handbook.

A handbook should advise employees what is expected from them.  It should establish the standards of conduct that the dealer expects.  It is an excellent vehicle to describe the dealership’s philosophy and the expectations of the dealership that its employees shall work to satisfy customers 100% of the time, operating in a forthright, ethical, and honest manner.

Any handbook that is adopted by a dealership should be designed carefully.  There are numerous critical provisions that should be included:

  • Prevention of discrimination, harassment, and retaliation.

One of the most important elements of the handbook is the company’s policy against discrimination, harassment, and retaliation.  Not only is this appropriate to express the dealership’s strong policy in this regard, but an established process by which employees can bring to the attention of management situations employees feel violate the policy can provide an important defense for the dealership in a legal action.

Under federal law, the dealership can be responsible for the actions of supervisors and employees which violate civil rights laws.  However, if the company has in place an established process whereby an employee can bring to the attention of management situations that may violate the law, the complaining employee must use that process.  If the employee does not bring the situation to the attention of management so that management can take action, that is a potential defense for the company in any legal action filed against it.

An employee, however, cannot bring a matter to the attention of the company if the employee doesn’t know about the process.  And, if the process is not explicitly clear, the employee can always claim he or she didn’t know or understand how to stop a situation which the employee felt was a violation.  The only way to solve this problem is to have a very clear statement of the company’s policy against discrimination, harassment, and retaliation and a very clear statement of the process by which an employee can bring to the attention of management a situation in violation of its policy.  A handbook which is given to each employee provides a method of communicating this information.

  • There should be a receipt process.

Each employee should sign a receipt for a handbook.  Personnel files should be regularly checked to ensure receipts are in personnel files.

  • At Will.

The handbook and the receipt should each have provisions that the handbook does not form an employment contract between the company and the employee and that the employee’s employment is “at will” where allowed by state law.  The handbook should explicitly state that it is not a contract.  The handbook should make very clear the company’s “at will” policy whereby the employee may leave at any time with or without cause, and the dealer can terminate the employee’s employment with or without cause at any time.  The receipt should be an acknowledgement that the handbook is not a contract and that the employee is “at will.”  Finally, some dealers include in their handbooks a statement that employees should not leave without two weeks’ notice.  This can be viewed as a waiver of the “at will” doctrine.  An employer can request notice, but the dealer cannot establish as a policy that the employee must give a specified period of notice.

  • Family and Medical Leave Act.

Dealers who have 50 employees within a 75 mile radius are required to provide Family and Medical Leave Act protection to personnel who have been with the company for one year and who have worked at least 1250 hours in the prior year.  The law puts forth specific rights and requirements to provide leave for those who must take time off for the birth, adoption or placement of a child, for a serious health condition, or to take care of a parent, spouse, or child who has a serious health condition.    The law provides even greater rights to families of military personnel.  The law allows some flexibility in specific policy details such as how one calculates the year in which leave can be taken and similar matters.  The company is required to provide a statement of its policy so that these issues can be clear to employees, and the employee handbook is an excellent vehicle to do this.

  • Alcohol and drug use.

The company’s policy concerning alcohol and drug use must be clearly stated.  It must prohibit illicit drug use and set the limits of the permissible use of alcohol (if at all).  If the dealer is drug testing, the dealer’s policy must be set forth so employees know what they are to expect.

  • Right to search premises.

Employees must know that they have no right to privacy in the workplace.  For a variety of reasons, their desks, work benches, tool storage areas, and similar otherwise closed areas must be available for the employer to be able to search to ensure that the employer’s policies are not being violated.

Employees must understand that the company email system is for business only and that emails are subject to review.  They must understand that the email system and social media may not be used for downloading or transferring offensive or scandalous material.  They must know that the company’s system may not be used to download copyrighted material.  The policy should be clear that employees must not seek to gain access to the computer system using other employees’ codes.

  • Dress and appearance code.

Some employers believe they have no rights to specify how their employees should dress and what their appearance should be.  Nothing can be further from the truth.  While one must be careful to avoid unreasonable restrictions, a dress and appearance code carefully drawn to eliminate unreasonable gender-specific and other unreasonable restrictions can set forth the way a dealer wishes its employees to look and to dress.



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