Employee Handbook IconEmployees typically take legal action against their employers because they believe they have been wronged in some way. Whether the accusation relates to being underpaid, being wrongfully terminated, or being harassed or mistreated, there are steps a company can take to lessen the impact of these accusations and even, potentially, avoid them altogether. We are not talking about a legal defense here. Instead, we are talking about the steps you take when forming your company and your commitment to transparency and ongoing employee education. Two ways you can avoid potential litigation by employees are by creating and updating an employee handbook and providing ongoing sensitivity training.

The Value of a Well-Written Employee Handbook

You might not have put much thought into your employee handbook if you have one at all. If this is true, then you have missed a huge opportunity to make your policies and expectations clear and to inform your employees of their rights and responsibilities. A comprehensive employee guidebook will include the following:

Your mission statement.

Sharing your company’s culture and goals with new hires is vital to building a committed workforce. When everyone is tuned in to the same mission, you create a sense of community that fosters loyalty.

Performance expectations.

Ideally, your handbook will provide job descriptions for each position in the company and outline the expectations for employees in those roles, including an explanation of specific grounds for dismissal based on performance.

Employee benefits.

Your handbook should be specific about compensation and benefits for employees at each position, level, or years of service in the company. This should include your policies regarding family and medical leave (in accordance with federal law), paid time off, health insurance, and other perks.

Reporting structure.

To whom does each employee report, and who has the authority to make decisions regarding employment actions? This should be clearly mapped out in the employee handbook.

Harassment & discrimination policies.

This section should not only include the federal and state laws regarding sexual harassment and protected classes but should also explain your process for handling complaints. A worker who believes they have been mistreated should be able to turn to the handbook for solutions.


Employee conduct that is grounds for dismissal should be clearly spelled out in the handbook. These days, conduct expectations should also include social media activity. What is your policy on employees who post videos from work or share company information on Facebook or Twitter? Take a stance and share it with employees.

A lack of clear policy in any of these areas could lead to a lawsuit filed by an employee down the road. On the other hand, having clear policies regarding common areas of litigation can nip a complaint in the bud.

Our business law team is available to help new businesses draft an employee handbook or to help established companies revise their handbooks. A handbook is no good if no one has read it, so we also offer guidance on disseminating the information and ensuring that employees have read and signed off on it. A poorly designed employee policy manual can cause serious problems by omitting important language or by including provisions that violate state or federal law.

Expert Training of Managers Can Prevent Harassment and Discrimination

Problematic litigation can involve two or more employees rather than the owner or manager of a business. Even so, as the owner or manager, you are equally liable when a lawsuit is filed over sexual harassment or discrimination. It is essential that you know the law and that you educate all of your employees, particularly those in positions of power, about sexual harassment and anti-discrimination laws. Formal training on these issues should be conducted regularly by an outsider with expert knowledge of the law and legal process. Not only does Steinberg Law offer this kind of training, but we also conduct investigations within companies when an accusation has been filed. It is vital that these investigations are conducted by a neutral party who understands the law and what’s at stake.

We Are Here to Help

The best way to mitigate the risk of employee litigation is to focus on policy development, consistent practices, regular employee training, and prompt action when problems arise. Our business law team can help with all those steps. Contact our Somerville office to learn more about how we can help.

Frank Steinberg
Committed to helping clients with employment litigation, business litigation, and aviation law throughout NJ.