Your Employment Handbook: Friend Or Foe?
Costco recently found out the hard way just how important every policy, every word, in your employee handbook is. This past week, in Marini v Costco Wholesale Corp., a long-term Costco employee with Tourette’s syndrome made this point against the warehouse superstore. Marini alleged that he was harassed by his co-workers for his disability, asked for and was given a transfer to another department as a result, but that the harassment continued and nothing was done about it. He was eventually fired for secretly tape-recording his interactions with co-workers in violation of Company policy.
Marini sued alleging a hostile work environment claim and a breach of contract claim. The former was dismissed because he had failed to timely file a charge of discrimination. His breach of contract claim, however, lives on.
It turns out that Costco shot themselves in the foot with a “super” anti harassment policy. Specifically, their employee handbook, which they entitled Employment Agreement, stated in part that “[t]his policy is intended to assist Costco in addressing not only illegal harassment, but also any conduct that is offensive or otherwise inappropriate in our work environment.” Additionally, the policy provided that, “[a]nyone who is found to have violated our anti harassment policy is subject to corrective action up to and including immediate termination of employment, regardless of whether the violation amounts to a violation of law.”
Costco attempted to argue that the language was not intended to confer any rights beyond those granted by federal and state anti discrimination laws. The court rejected this argument, noted that the handbook was a binding contract, and that it contained promises that exceeded the protections of anti discrimination laws. The court further noted that the handbook did not contain any disclaimer language qualifying its “super” anti harassment provisions as not creating legally enforceable protections beyond the protections of background law.
Lessons for Employers
In an effort to convey “zero tolerance” for inappropriate conduct, employers often adopt broadly worded policies of all kinds in their policy handbooks. There is also a tendency to use absolute language, such as asserting that an employee “will be” disciplined or terminated for misconduct. All too often, however, employers paint themselves into a corner with such ill-chosen policy language. Apparently, even giant corporations like Costco fail to think through the long-term implications of their choice of words.
A well-worded thoughtful handbook maintains the employer’s right of discretion in every set of circumstances while assuring employees that their rights are being protected. It always contains language retaining the right to interpret and alter its policies as it sees fit, highlighting the lack of contractual promises in the language. As this Costco decision highlights, in the absence of careful and thorough language choices when adopting such policies, employers can easily end up paying for their good intentions.