“Part 1: Apply the IRAC Formula to Sowards v. Norbar, Inc., 1992. Prepare and post a brief review of the issue, rule, analysis, and conclusion.
Issue – Did the driver’s manual (employee handbook) provided to and acknowledgment signed by the appellee, form an employment contract?
Rule – “An at-will employment contract may be modified by the provisions of an employee handbook where the parties manifest an intention to be bound by the terms therein.” (Sowards v. Norbar, Inc., 1992)
Analysis – The language in the driver’s manual (employee handbook) had very specific “formal discipline” policy which provided the steps for progressive discipline. The language indicated that the policy was intended to be more than a guideline. Additionally, The Vice-President of the company is quoted as saying that the company “lived by” the language of the driver’s manual. The appellee was also required to sign a written acknowledgment stating he received a copy of the manual. The appellee continued to work for the company after signing the acknowledgment indicating the acceptance to be bound by the terms of the manual. These facts show an intention by both parties to be bound the terms laid out in the manual and the at-will employment contract has thus been modified by the provision of the manual.
Conclusion – The language and the practice of living by the driver’s manual (employee handbook) created an employment contract.
Part 2: Based on your understanding of Sowards v. Norbar, Inc., which depicts privacy and employee handbook issues, answer the following questions:
How might an effective employee handbook reduce litigation costs within an organization?
An effective employee handbook would have a contract disclaimer so that the at-will status of an employee would be clearly stated. It is also important to have the employee sign an at-will disclaimer “acknowledging the company can terminate them at any time and bypass discipline process” (HR Specialist: Employment Law, July 2018). Clearly defining the status and having the employee acknowledge reduces litigation cost associated with determining if the employee handbook is an employment contract. It would also have policies but not detailed procedures. The specific language of disciplinary process in Sowards v. Nobar, Inc. allowed the argument to be made that it was more than a guideline resulting in litigation cost.
How important for the HRM professional is understanding the mission and function of an organization? Why?
It is very important for the HRM professional to understand the mission and function of an organization because these will be important factors in the development, implementation, and interpretation of policies.
When should an employee handbook be updated? Why?
If laws change that are applicable to your location your handbook should be updated. Your handbook should not conflict with any applicable laws. It should also be updated when practices or expectations change. If a practice or expectation changes but the policy or employee handbook is not updated to reflect this change then it is hard to argue that an employee should be held to the new standard. For example, at a previous employer an expectation changed for a certification that an employee needed to obtain from 6 months to within 90 days of hire. The practice had gone on for several years and was verbally discussed in the interviews, but the policy was never updated to reflect this change. They had an employee who did not obtain the certification within the 90 days. The supervisor wanted to terminate because the employee did not meet the requirements of the position. However, when the policy was pulled it still had 6 months listed. It would not have been a good risk for the company to proceed with the termination given that in writing the policy gave an additional 3 months to complete the certification.
Who should be involved in the creation of the handbook? What should be considered?
When creating a handbook leadership and HR should be involved. However, the organization’s attorney should “review your handbook to make sure you haven’t accidentally removed at-will protection” (HR Specialist: Employment Law, July 2018). I think it would also be good to have a focus group of employees from different areas of the organization to get different perspectives involved. The policies should be general guidelines and realistic.