By Tamsin Kaplan
Every cannabis employer should have in place an employee handbook tailored to meet the needs of its business goals and workplace culture, and to ensure compliance with all applicable state and federal laws.
I. Why Should Cannabis Businesses Have An Employee Handbook?
A well-crafted employee handbook will support the success of your cannabis business and a healthy workplace environment, save administrative time, and reduce the risks of legal claims and liability. It is important to understand the many advantages and purposes of an effective employee handbook customized to your company, and to be aware of the risks of “off the shelf” handbooks. Some of the most important benefits of a high-quality handbook include:
- Communication. Handbooks should allow employees and managers to know what is expected of them and what they can expect. This helps to support positive relationships, constructive dialogue, team building, and healthy workplace morale.
- Consistency. Handbooks should provide a centralized and uniform source of information about employment policies, procedures, and practices, thus eliminating confusion and supporting consistent enforcement. As a result, less time and resources are wasted handling conflicts and crises. In addition, with consistent enforcement of clearly communicated policies, employers can reduce the risk of legal claims.
- Compliance. Employers are required by state and federal law to provide employees with policy statements on various issues, such as equal employment opportunity, sexual harassment, family and medical leave, wage and hour matters, and a number of other topics, depending on the size of the workforce and other considerations. Employee handbooks provide a convenient and appropriate vehicle for communicating such policies to your entire workforce in compliance with applicable laws. (Importantly, not all employers are subject to the same requirements. Employers are advised to consult with employment counsel to determine their legal obligations.)
- Protection. While no amount of judicious drafting can entirely eliminate risk, a well-conceived, well-drafted, regularly updated, and consistently enforced handbook can reduce your risk of legal claims, lawsuits, and liability.
II. Creating Your High-Quality Employee Handbook
While it is tempting for an employer to quickly and cheaply put into place one of the myriad of employee handbooks available on the Internet, to do so is a grave mistake. In most cases, it is better to have no handbook at all than a handbook that has not been thoughtfully prepared and maintained specifically for your unique business needs. For a handbook to accomplish its purpose, and for you as the employer to reap the benefits outlined above, it is essential that your handbook be tailored to the needs and characteristics of your cannabis business and reviewed on a regular basis to ensure compliance with new and ever-changing state and federal employment laws.
Experienced employment counsel can work with you to insure against:
- Unlawful provisions, provisions that inaccurately describe applicable law, or provisions that accurately describe inapplicable law;
- Provisions that inadvertently create binding promises;
- Provisions that are excessively discretionary, inviting disparate treatment and claims of unlawful discrimination;
- The “tail wagging the dog syndrome” that occurs when handbook provisions burden your business with unnecessary policies and overly complicated procedures; and
- The “bottom drawer syndrome” that occurs when your handbook is not user-friendly or is inconsistent with the actual day-to-day policies, procedures, and practices of your business.
III. Reducing the Risk of Legal Claims, Lawsuits, and Liability
The main legal pitfall associated with employee handbooks is the increased risk of an employee claiming the employer’s handbook is an express or implied contract, limiting the employer’s ability to terminate the employee or creating other contractual obligations. Following are important guidelines to retain discretion, preserve the at-will employment relationship, and avoid unintended legal obligations:
- Be clear. Include a bold-faced statement on the first page of the handbook stating that all employees are at-will. This statement should be reaffirmed in other sections throughout the handbook;
- Do not use any language directly or implicitly stating a length, term, or guarantee of employment;
- Do not state or imply that employees are subject to dismissal for good, reasonable, or just cause only.
- Do not promise to follow any mandatory process prior to termination or adhere to inflexible procedures for handling grievances. Consider keeping policies on these issues to a minimum and providing separate training for managers and supervisors on how to implement them;
- Have employees sign a separate statement acknowledging that the handbook does not create any contractual obligations and that their employment is on an at-will basis; and
Do not include in your handbook any policies that are intended as enforceable contracts, such as non-competition, non-solicitation, confidentiality, or trade secret agreements.
Cannabis businesses have a great deal to gain by adopting and maintaining an effective, high-quality employee handbook, and possibly even more to lose if they don’t. When designed properly, an effective policy handbook can protect your business, support a productive workplace culture, save administrative time, and ease concerns of employees by creating clear expectations.