There is no law that state that companies must have employee handbooks or how often an employee handbook should be updated. However, crafting an employee handbook and frequently reviewing and updating employee handbooks are good ideas once a company has more than two employees. In addition, employers may consider implementing an arbitration agreement within their employee handbook and obtain a signed receipt and acknowledgment form from each employee, showing receipt and understanding of the handbook.
On August 26, 2020, in the case of Conyer v. Hula Media Services, LLC. Et al., the California Court of Appeal reversed a trial court ruling invalidating an arbitration agreement contained within an employee handbook. Plaintiff employee Michael Conyer singed and acknowledged receipt of his employer’s, Hula Media Services, employee handbook. The signed acknowledgement read as follows:
“This is to acknowledge that I have received a copy of the Employee Handbook. This Handbook sets forth the terms and conditions of my employment as well as the right, duties, responsibilities and obligations of my employment with the Company. I understand and agree that it is my responsibility to read and familiarize myself with all of the provisions of the Handbook. I further understand and agree that I am bound by the provisions of the handbook. I understand the Company has the right to amend, modify, rescind, delete, supplement or add to the provisions of this Handbook, as it deems appropriate from time to time in its sole and absolute discretion.”
When Conyer was terminated two months later, he sued Hula for claims under the Fair Employment and Housing Act for unreimbursed business expenses. Hula filed a motion to move the case from court to an arbitrator pursuant to the arbitration agreement in the employee handbook. The trial court denied Hula’s motion and kept the case in court. Hula appealed the decision. Conyer argued that Hula never mentioned the arbitration agreement. The Court of Appeal ruled that in California a party is bound by a contract even if he did not read the contract before signing it.
This case highlights the importance of frequently reviewing and updating employee handbooks and including employee receipt and acknowledgment forms. Employers can update any policy within their handbooks at any time without prior notice to employees. Revised versions of the handbook should be provided to all employees and a new signed receipt and acknowledgment obtained.
The employment law attorneys at Schneiders & Associates, L.L.P. work with employers of all sizes to develop a tailored and specific employee handbook. Whether you are contemplating crafting an employee handbook for your business, or would like us to review or update your existing handbook, contact our office to request an Employee Handbook Questionnaire and to schedule an appointment to discuss your company’s policies and handbook needs.
By: Ted Schneider, Esq.