Employee Handbooks

in  Georgia:

Drafting and Enforcing Sound
Procedures and Policies


Attorneys at Law
6100 Lake Forrest Drive NW, Suite 435
Atlanta, Georgia 30328


A. State and Local Statutory Requirements

No law requires that an employer have an Employee Handbook. Various state and local laws do require that employers post notices to their employees advising them of the minimum wage, overtime provisions, fair labor standards, EEO requirements, and other employment laws and employees rights. Although a well thought out and comprehensive Employee Handbook should certainly track these provisions and contain nothing inconsistent with them, whether or not to have an Employee Handbook remains within the discretion of the employer.

B. Federal and State Case Law

As discussed infra, Federal case law provides employers with defenses against claims of discrimination if the employer has policies prohibiting certain types of discrimination and procedures for properly and fairly handling discrimination complaints. All companies should have a comprehensive sexual harassment policy forbidding sexual harassment and providing an effective means for resolving employee complaints of sexual harassment. It is natural to incorporate such policies and procedures into the Employee Handbook, but the law does not require that such policies be included in the Employee Handbook. That is strictly a matter of employer prerogative. Many companies, for example, especially small ones, do not have a comprehensive Employee Handbook but do have a separate sexual harassment policy.

No Georgia court decision requires that the employer have a handbook nor do any decisions of the Georgia courts provide the protections against employee claims comparable to those identified by the U.S. Supreme Court in its decisions on sexual harassment and employment discrimination. Georgia decisions do address the extent to which handbooks can be considered binding contracts. Generally speaking Georgia law does not consider employee handbooks to be legally binding contracts. This can change depending on the actual language of the Handbook.

The case of Georgia Ports Authority v. Rogers, 173 Ga.App. 538, 327 S.E.2d 511 (1985) illustrates this distinction. In that case, an employee who was terminated after suffering a job related injury asserted two claims based on provisions in the Employee Policies and Benefits Manual that covered his employment. He first asserted that the Manual's statement that he could be terminated only for specified reasons which did not include physical inability to work was a binding contract that guaranteed his employment for life. He also claimed that the Manual's provisions specifying occupational accident leave pay was contractually enforceable. The Court of Appeals held that the Manual's provisions regarding termination did not alter the employment at will nature of his employment. Reading the Manual as a whole and noting the absence of any expressed duration of employment, the Court concluded that the termination provisions were not contractual in nature. In contrast, it found that since the language providing for occupational accident leave pay was clear and susceptible to only one interpretation, it was contractually enforceable and plaintiff was awarded the benefit the employer had withheld:

"It is the accepted law of this state that an additional compensation plan offered by an employer and impliedly accepted by an employee, by remaining in employment, constitutes a contract between them, whether the plan is public or private, and whether or not the employee contributes to the plan. [Cites.]" Fletcher v. Amax, Inc., 160 Ga.App. 692, 695, 288 S.E.2d 49 (1981).

In Jones v. Chatham County, 223 Ga. App. 455, 477 S.E.2d 889 (1966), a public employee alleged that his employer's failure to follow the termination provisions in its employee was legally actionable as a breach of contract. The trial court denied the employer's request for summary judgement. The Georgia Court of Appeals reversed, holding that such employee handbook provisions are not contractual in nature:

And under Georgia law, personnel manuals stating that employees can be terminated only for cause and setting forth termination procedures are not contracts of employment; failure to follow the termination procedures contained in them is not actionable. See Burgess v. Decatur Fed. Sav. & Loan Assn., 178 Ga.App. 787, 345 S.E.2d 45 (1986); Anderberg v. Ga. Elec. Membership Corp., 175 Ga.App. 14, 15(1), 332 S.E.2d 326 (1985).

The Court further noted, however, that benefits provisions of employee handbooks could be legally enforceable contracts. Fulton-DeKalb Hosp. Auth. v. Metzger, 203 Ga.App. 595, 596, 417 S.E.2d 163 (1992) (with respect to benefits rather than termination of employment, provisions of employee handbook given to employee at time he was hired are legally binding).

See also Popovich v. Bekaert Corp., 222 Ga.App. 395, 474 S.E.2d 286 (Ga.App., Aug 02, 1996) Provision of Employee Handbooks formed part of Popovich's contract of employment with Bekaert. See Shannon v. Huntley's Jiffy Stores, 174 Ga.App. 125, 126(2), 329 S.E.2d 208 (1985). " [A]n additional compensation plan offered by an employer and impliedly accepted by an employee, by remaining in employment, constitutes a contract between them, whether the plan is public or private, and whether or not the employee contributes to the plan. [Cites.]" Fletcher v. Amax, Inc., 160 Ga.App. 692, 695, 288 S.E.2d 49 (1981). Fulton-DeKalb Hosp. Authority v. Metzger, 203 Ga.App. 595, 417 S.E.2d 163 (1992) (Although the Handbook does not specify a definite period of employment and bestow upon appellee the status of permanent lifetime employee, it, nevertheless, can be considered a contract with respect to the employment benefits provided therein.)

As these cases illustrate, under Georgia law provisions in Employee Handbooks specifying grounds for termination will be contractually enforceable only when they are clear and unequivocal and specify that employment is for a specific duration. In the vast majority of cases, they are not contractual in nature. In contrast, provisions in Employee Handbooks specifying employee benefits, such as vacation and severance pay, will be held contractual in nature and legally enforceable where they are clear and unequivocal and no discretion is reserved to the employer.

C. Legislative Update

No state or local legislation is pending that would require an employer to have an Employee Handbook nor is there any indication that such legislation is likely to be enacted at any time in the foreseeable future. Rather, the decision to have or not to have an Employee Handbook is likely to remain solely within the provinces of management.


A. Advantages

There are several reasons why Georgia employers should have Employee Handbooks. The handbooks improve communications between employees and employers. It places employees on direct notice of what is required of them and summarizes the employer's personnel policies. A carefully drafted Employee Handbook can be a motivational tool - it can provide employees with a company history, set forth the company's objectives and core values and explain what role the individual employee plays in achieving them.

From a legal perspective, the most important role an Employee Handbook can play is to preserver the employment at will nature of employment. In Georgia, the term or period of employment provides the key to the creation and the destruction of the at-will employment relationship. Did the employer hire the employee for any defined period: a month, a year, three years? If the court finds that the employer and the employee agreed that the relationship would last for any definite period of time, then the court will conclude that the relationship was not at-will. Therefore, if the employee handbook provides an expectation on the part of an employee that the employment relationship will last for any definite period, the employee handbook can destroy the at-will employment relationship.

For example, in a motion for summary judgment, an employer with a properly drafted employee handbook can ordinarily establish without dispute that the relationship was at-will. Dong v. Shepeard Community Blood Center, 240 Ga.App. 137, 522 S.E.2d 720, 15 IER Cases 1026, 99 FCDR 3564 (Ga.App., Sep 22, 1999) provides an excellent example from recent Georgia litigation. The employer was able to establish the following undisputed facts:

. . . [I]n 1978, Dong started work at the Blood Center. In 1982, she was promoted to the position of laboratory technician. Dong never had a written contract regarding her employment with the Blood Center, nor did she receive any document stating or guaranteeing that she would be an employee of the Blood Center for any certain duration. Dong understood that she could quit her job at any time and understood that the Blood Center could terminate her employment at any time. In fact, at her deposition, Dong recalled reviewing the employee handbook which informed her that she was an employee at will and that she could be discharged from her employment with or without cause at any time.

The employment at-will contract provides an employer with definite advantages in Georgia employment litigation. Employment-at-will contract means simply that either the employer or the employee can end the relationship at any time, with or without notice, and for any reason, good, bad, or neutral. Therefore, the Georgia courts will reject any claim for "wrongful discharge" or "wrongful termination" under an at-will employment contract. Jackson v. Nationwide Credit, Inc., 206 Ga.App. 810, 426 S.E.2d 630, 1993-1 Trade Cases ¶ 70,163 (1992), provides a good example. The court summarized the law as follows (citations omitted):

. . . [T]he trial court did not err by granting Nationwide summary judgment on appellants' counterclaims, including the counterclaim for wrongful termination. . . .[I]n this case the appellants are contesting the termination of their status as employees. Thus, even if the handbook were considered to be a contract, as it was for no specific term, their employment was terminable at will. Consequently, appellants' claims based upon breach of the employee handbook [are] without merit.

An at-will employment relationship does not mean, however, that an employer may discriminate against employees, or that, for example, the employer will not pay unemployment compensation after discharging an employee.

B. Pitfalls

There are some potential pitfalls to having an Employee Handbook. Since the Handbook is likely to serve as a introduction to your company to new employees, it should be carefully drafted and professionally presented. This requires effort. Also since policies will inevitably change over time, the document will require periodic revision. Employers should recognize that instituting an Employee Handbook represents a substantial and ongoing commitment of time and resources. Unless it is willing to follow through, an employer would probably be better off not issuing an Employee Handbook at all.

A poorly drafted Employee Handbook can cause the employer substantial hardship. If the Handbook does not contain a contractual disclaimer or reserve the employer's rights to make changes, it provide the basis of contractual claims against the employer. Care should be taken in drafting its provisions to precisely express the employer's intent and avoid unintended interpretations. Employees will likely seek to hold the employer to its Provisions. Such Handbooks often appear as evidence in litigation involving the employment relationship. Plaintiffs' lawyers typically ask new clients for the Employee Handbook to look for how it deals with the employment contract: does the employer promise anything more than an at-will relationship? Equal Employment Opportunity lawyers look for the employer's policies on prohibited discrimination, harassment, and retaliation. Employee handbooks also appear other kinds of litigation. They often appear in unemployment compensation hearings, sometimes in workers' compensation hearings, and rarely – but significantly – in other kinds of litigation.

As with all personnel policies the Employee Handbook should be consistently and uniformly applied. If the employer ignores certain provisions or disparately applies others, this could form the basis for discrimination claims.

For small employers where there is direct contact between management and employees, it may be best not to have an Employee Handbook. Even with reservations of authority to make changes and provisions stating that the Handbook is not contractual in nature, issuance of an Employee Handbook will still result in a codification of company policies and as a result remove flexibility in dealing with particular employee relations situations.


A. Disclaimer

The Employee Handbook should include a disclaimer, displayed prominently where employees cannot miss it, which states that:

· employment is always at-will,

· nothing in the handbook destroys the at-will relationship,

· no supervisor or manager has any authority to alter this relationship, and

· only the president of the corporation has authority to alter in writing the relationship.

· the handbook is not a contract and should not be considered as contractual in nature

· the employer reserves the right to change policies

· all employee benefits are determined by the particular provisions of the applicable plan document or by the controlling personnel policy

B. Equal Employment Opportunity

Federal and state laws prohibit certain discriminatory rationales for employment decisions, including hiring, discipline, and discharges. These well known reasons include race, color, national origin, religion, sex, age, disability, and veteran's status. In addition, equal employment opportunity laws prohibit an employer from allowing the work place to become hostile to persons based on these characteristics. Employers must prevent harassment based on these prohibited reasons.

The United States Supreme Court ruled that an employer can protect itself from vicarious liability for harassment and hostile environment claims by maintaining a policy against such behavior and a procedure by which employees may call management's attention to the existence of such behavior. Faragher v. City of Boca Raton, 524 U.S. 775 (1998); Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998). The employee handbook provides the best place to communicate these policies and procedures to employees. The Supreme Court provided employers with an affirmative defense in these words:

An employer is subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee. When no tangible employment action is taken, a defending employer may raise an affirmative defense to liability or damages, subject to proof by a preponderance of the evidence, see Fed. Rule Civ. Proc. 8(c). The defense comprises two necessary elements:

A. that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and

B. that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.

While proof that an employer had promulgated an anti-harassment policy with complaint procedure is not necessary in every instance as a matter of law, the need for a stated policy suitable to the employment circumstances may appropriately be addressed in any case when litigating the first element of the defense. And while proof that an employee failed to fulfill the corresponding obligation of reasonable care to avoid harm is not limited to showing any unreasonable failure to use any complaint procedure provided by the employer, a demonstration of such failure will normally suffice to satisfy the employer's burden under the second element of the defense. No affirmative defense is available, however, when the supervisor''s harassment culminates in a tangible employment action, such as discharge, demotion, or undesirable reassignment.

Burlington Industries, Inc. v. Ellerth, 524 U.S. 742 (1998) (emphasis added). A receipt for a handbook which contains the appropriate anti-discrimination policies, and procedures for addressing and investigating discrimination and harassment complaints, will provide all the proof an employer could need to show a court the necessary elements of this important affirmative defense.

C. Employment Policies

The fundamental purpose of the Employee Handbook is to inform employees of the Employer's basic policies and procedures. Care should be taken to address pay procedures, attendance requirements, vacation accrual and usage, other employee benefits, ethical requirements, and all significant employment policies. An equal employment opportunity statement, a policy prohibiting sexual harassment and containing an effective complaint procedure should be included . If the employer does not elect to repeat all of the various employment related laws, at a minimum a statement should be included that the Employer fully complies with all Federal and State employment laws and expects its employees to do likewise.

D. Termination Guidelines

Inclusion of termination guidelines is a two edged sword. Although as matters of sound employee relations policies employers should generally put employees on notice of deficiencies and accord them an opportunity to improve before termination, inclusion of such provisions in an Employee Handbook could provide a discharged employee with either a potential contractual claim that these procedures were not fully followed or, more likely, evidence in support of his or her claim that the employer was illegally motivated. In addition, publication of termination guidelines in the Employee Handbook will probably diminish the employer's flexibility in responding to certain situations.

If termination provisions are to be included, the provision should specify that employment is at will and that the employee can be discharge for any reason with or without notice.

E. Special Provisions

The Employee Handbook should also contain policies geared to the employer's specific operations and needs. These include:

· a drug and alcohol policy

· a policy addressing smoking in the workplace

· an AIDS policy

· employee privacy and personnel file

· e-mail and computer usage policies

· a union free statement

F. Acknowledgment of Receipt

Each employer should follow a simple procedure in distributing the handbooks to employees. Always include a tear-out receipt for the handbook. The receipt should provide a place for the employee's name, and a place for the employee to sign and date the receipt. The receipt should not only state that the employee received the particular edition of the handbook, but that the employee understands his or her responsibility to read the handbook, that he or she has read it and enjoys every opportunity to question designated, knowledgeable people in management about anything he or she does not understand in the handbook. Every employee should receive the handbook, and every personnel file should include the original receipt for the handbook. You never know when that original receipt may become important evidence in litigation.


A. Unemployment Compensation

· Who is at fault in the employee's unemployment?

Unemployment compensation liability turns on the allocation of fault in the termination of the employment relationship. If the employee caused his own unemployment, then he cannot receive unemployment benefits. But, if the employer caused the employee's unemployment, he will get unemployment benefits. Georgia's unemployment law looks at fault in terms of due process: did the employee have fair warning or notice about the rule and the possible consequences of violating the rule? If the employee had the requisite knowledge, i.e., if the employer gave the employee a copy of the rules and an explanation the potential violations for violations of each rule, then the employee who violates the rule is at fault and not entitled to unemployment compensation. But, if the employer cannot prove he communicated the rule to the employee in advance of discharging him, the employee wins unemployment compensation.

Georgia's Department of Labor defines fault in its regulations as follows, with emphasis added:

"Fault" is the failure to follow rules, orders or instructions, or failure to discharge the duties for which the claimant was employed. Fault which is of a disqualifying nature cannot be a technical failing, a minor mistake or the mere inability to do the job. Rather, a breach of duty to constitute "fault" must be such as length of service, nature of duties, prior warnings, equal enforcement of all progressive discipline programs and any other factors which might be used to establish reasonable expectations that the discharge was imminent. The claimant must have been aware that in a discharge which resulted from the violation of the rule, the violation would likely result in termination. In the case of a discharge due to a violation of an employer's rule, order of instruction, an employer has the burden of proving that the claimant knew or should have known that the violation of the rule, order or instruction could have resulted in termination.

· Proving employee fault in unemployment.

The simplest, easiest, and most direct proof that an employee knew that violation of rule could result in a discharge is the signed receipt from the employee handbook. In virtually every case in which management defends against unemployment liability for a discharge, the employer with the original receipt for the employee handbook wins the case. Typically, at an unemployment hearing, the examination of the employee's supervisor includes questions about how the employee knew or should have known that violation of the particular rule could result in a discharge. The supervisor who can point to the employee handbook receipt as proof that the employee had read the rules and the typical discipline for infractions rarely requires any further examination about the employee's knowledge of the rule. In some cases the employee will deny knowledge of a particular rule or the consequences of violating it. In these cases the receipt becomes especially helpful in attacking the employee's credibility.

B. Employee Benefits

Employee handbooks typically summarize the benefits the employer provides to its employees. For example, handbooks often list holidays, vacation programs, insurance coverage, retirement plans, and medical insurances available to employees.

Employers should always take care in describing these benefits in the employee handbook. Georgia judges consider the description of employee benefits in the handbook as a term or condition in the employment contract, even when the employment is at-will. For example, in Superior Ins. Co. v. Browne, 196 Ga.App. 171, 395 S.E.2d 611, 119 Lab. Cas. ¶ 56,697 (1990) an employee sued her employer over the description of the vacation program in the employee handbook:

On February 10, 1986, appellee-plaintiff became an at-will employee of appellant. As a "new employee" under the provisions of the handbook for appellant's employees, appellee earned several days of paid vacation during 1986 and, when she voluntarily resigned on January 29, 1987, appellant paid her for the one vacation day that she had earned in 1986, but had not yet taken. However, appellee insisted that, under the terms of the employees' handbook, she was entitled to be paid for an additional 10 days of vacation that she had earned in 1987, but had not yet taken. When appellant refused to pay her for more than one day of vacation, appellee brought this action to recover an amount equivalent to her salary for 10 days, ...

The court then proceeded to quote at length from the employee handbook and to analyze the meaning of the words used to describe the vacation policy. In the end, the employer's description of the vacation policy won a judgment in the employer's favor.

In yet another vacation program case, the court noted that the handbook could not describe all the employer's benefit policies at length, and could refer to the employee to other sources of information. In Amoco Fabrics & Fibers Company v Ray, 235 Ga.App. 821, 510 S.E.2d 591 (1998), employees sued an employer for vacation pay benefits denied on basis of eligibility. The Superior Court granted summary judgment for the employees, and employer appealed. The Court of Appeals reversed, and held that the employer was entitled to enforce the eligibility requirements on basis of the employee handbook which fairly notified employees of the need to consult second source for the actual vacation pay policy.


A. The Importance of Consistent and Uniform Enforcement

As noted, under Georgia law Employee Handbooks are generally not considered to be enforceable contracts. This means that if an employer breaches a provision of the Employee Handbook the employee will not be successful in suing the employer to enforce the Handbook provisions. This general rule can be changed, however, by express provision. For example, if an Employee Handbook states that it is a contract of employment between the employer and the employee, courts are likely to enforce its provisions. This result can be avoided by placing a disclaimer stating expressly that the Employee Handbook is not intended to be an enforceable contract. The same results can be achieved by expressly stating that the employer reserves the right to modify and change these policies. The typical disclaimer might provide as follows:

The employer provides this Employee Handbook and the policies it contains to notify its employees of its objectives and procedures. The employer reserves the right to modify these policies without notice to the employee. This Employee Handbook is not intended to be, and should not be considered as a contract. Your employment is "at will" and both you and the employer can terminate it for any reason or no reason.

The disclaimer that succeeded in absolving Amoco from liability in Amoco Fabrics & Fibers Co. v. Ray, 235 Ga.App. 821, 510 S.E.2d 591 (1998) provided:

"About This Handbook" and states "[t]his handbook was prepared to help familiarize you with some important policies and practices. To make it more readable and useful the actual policies, which are far more lengthy and detailed, were summarized. The actual policies are controlled and maintained in the Employee Relations Department. If you should ever have a question concerning any rule or policy, you are encouraged to seek the assistance of your Supervisor or the Employee Relations Department."

Without regard to the presence of a disclaimer, the employee should always endeavor to apply policies consistently and uniformly. This will build a relationship of trust and understanding between the employer and the employee and minimize evidence of disparate treatment. While endeavoring to uniformly and consistently apply all personnel policies, including those contained in the Employee Handbook, the employer should be diligent to advise employees that flexibility in operations and the company's prerogative to manage its work force may result in changes to the policies and exceptions being drawn under appropriate circumstances.

In defending Equal Employment Opportunity complaints and discrimination lawsuits, Employee Handbook provisions that allegedly were breached by the employee can provide a very powerful defense. In asserting these defenses, however, the employer should be careful not to state that the Handbook is contractual in nature. Instead, it should state that the Handbook summarizes the company's policies.

An important exception to the rule that Employee Handbooks are not contractually enforceable occurs with respect to certain alternative dispute resolution policies. A Handbook provision setting forth an alternative dispute resolution policy and providing that its use is mandatory will generally be respected by both state and local courts where employees seek to bypass these provisions and file claims directly in court or with administrative agencies. In Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 111 S.Ct. 1647 (1991), the Supreme Court held that a provision in governing regulations that required an employee to arbitrate an age discrimination claim was legally enforceable. Although some courts have noted some exceptions to this policy and the EEOC has taken the position directly that agreements requiring employees to arbitrate EEO complaints are invalid as a matter of law, See EEOC Policy Notice 915.002 (July 10, 1997), courts have generally held such agreements as enforceable. See Duffield v. Robertson Stephens & Co., 144 F.3d 1182 (9th Cir. 1998).

Georgia courts likewise will enforce Employee Handbook provisions and personnel policies requiring arbitration of employee complaints. When Employees seek to file claims directly in state or federal court even though there is a valid, enforceable arbitration provision, courts will generally either dismiss such a lawsuit or stay its further processing until arbitration is completed. Arbitration of such disputes usually provides a less expensive and quicker resolution to employee claims. Since decisions of arbitrators, however, subject to judicial review for only very limited grounds, employers should recognize that adoption of an ADR policy which provides for binding arbitration of disputes may result in the employer being held to an arbitration award even where the award is not generally consistent with the law or the facts presented in a particular claim. Use of ADR, therefore, is a two- edge sword which should not be implemented without considering its full ramifications and whether or not such a policy is fully consistent with the employer's employee relations policies and objectives.

B. Challenges to Enforceability

Employers rarely seek to enforce provisions of Employee Handbooks. And since such Handbooks are generally not considered contractual in nature, where the employee seeks enforcement under Georgia law they are usually not successful. An important exception is where the policies specify employee benefits in clear and unequivocal language. The courts will hold the employer to the plan meaning of the Handbook provisions and award the employees the benefits specified in the Handbook.


Employers should carefully consider the provisions of Employee Handbooks before implementing them. The policies should be carefully tailored to the employer's operational objectives and employee relations philosophy. Employee Handbooks should contain a general statement of the employer's objective, a synopsis of its major policies, a sexual harassment policy, an electronic usage policy, possibly an ADR policy, a summary of employee benefits and other provisions that the employer considers sufficiently important to communicate directly to employees. A properly drafted Employee Handbook can be a strong motivational tool in placing employees on notice of both the environment in which they work, the employer's expectations and its overall employee relations policies. Care should be taken, however, not to convert the Employee Handbook into an enforceable contract and to reserve to the employer the right to make changes and modifications in the future.


  2000 by Adam J. Conti, LLC