Health Law Pointers - Volume VII, No. 3
Use of Employee Manuals
Many professional practices use employee manuals to communicate workplace policies to employees. The contents of an employee manual depend on a number of factors, including the type of professional or business practice, number of employees and the employer’s desire to establish written guidelines for employees. The inclusion of certain provisions of an employee manual may also be dictated by federal or state laws and regulations applicable to the employer, such as the federal Family and Medical Leave Act.
A well-written and updated employee manual is a useful tool for professional practices. However, a poorly written, incomplete or out-of-date employee manual does not serve the best interests of an employer and may create unwanted liability. Employers should review their employee manuals for any provisions which may be interpreted as limiting the right of the employer to change the terms and conditions of employment, including termination of an employee. Here are some general guidelines to consider:
· Employment-at-Will. The employee manual should include a provision stating that the employee is an “at-will” employee who may be terminated by the employer with or without cause, for any reason or no reason at all. In New York State, the inclusion of such a provision helps insulate the employer from a claim by a terminated employee that the employer needs a reason or “just cause” to terminate the employee.
· Contract Disclaimer. The employee manual should include a specific disclaimer stating that the employee manual is not a contract of employment and does not create contract rights as between the employer and employee.
· Discretionary Modifications. An employer should specifically reserve the right to make changes to the employee manual at its discretion. When modifications to the employee manual are made, the employer should communicate the changes in writing to all employees. An employer may also request that the employee sign a statement acknowledging receipt of the modification. While advance notice to the employee of a modification is not generally required, it may be appropriate in some instances, particularly where the change will have an immediate effect on the employee, such as a work schedule modification.
· Progressive Discipline. If the employee manual includes a progressive discipline policy, the policy should include language expressly stating that the employer is not required to follow the progressive discipline policy in every instance, and that the employer reserves the right to terminate the employee at any time with or without cause.
· Employee Acknowledgment. The employee manual should include a form to be signed by the employee at the time the employee handbook is issued. By signing this form, the employee acknowledges that he has received and reviewed the contents of the employee handbook. The form could also include language acknowledging that the employee is an “employee at will” and that the employee manual is not a contract of employment and is subject to revision at the employer’s discretion.
Have Independent Counsel Review Group Practice Documents
Practitioners often recognize the need for independent counsel to review proposed arrangements to join an existing professional practice. However, practitioners are less likely to identify the need for independent counsel when the practitioner is one of a number of practitioners who are forming a new professional entity or investing in a newly formed business entity. In the latter instances, a practitioner may discount the need for independent counsel because the group has selected one attorney to prepare the organizational documents and the practitioner does not want to incur separate cost for independent counsel.
Practitioners should be aware that counsel for the professional or business entity represents the professional or business entity only, not any of the individual practitioners. While counsel for the group practice should disclose this fact to the individual practitioners, it is the responsibility of the individual practitioner to consult with outside counsel to protect his or her own personal interest. The retention of independent counsel can help facilitate the practitioner’s understanding of the personal implications of the proposed arrangements. For example, counsel may identify the how the proposed arrangements will impact the practitioner from a tax perspective. Counsel will be able to advise the practitioner what is expected of the practitioner under the group’s organizational documents and if appropriate, negotiate for changes on behalf of the practitioner.
Part-time Employment Agreements
Professional practices frequently require their full-time professional employees to sign employment agreements as a condition to entering into employment with the practice. It is also important for practices to document their employment arrangements with part-time professional employees. Although the provisions of a part-time employment agreement are in many ways similar to an agreement for full-time employment, there are some critical distinctions which should be kept in mind, as follows:
· Timing of Professional Services. A part-time employment agreement should identify the specific times that the professional employee will be required to perform services on behalf of the practice. This can be accomplished in a number of ways, including identifying the specific “on-call” or “office” hours during which the services will be provided.
· Non-exclusive Employment. Unlike a full-time employee, it can be expected that a part-time employee will have other employment commitments. It may be appropriate for the part-time employment agreement to include a provision acknowledging that the employee is permitted to engage in other employment, but only to the extent that such employment will not interfere with the employee’s part-time employment obligations.
· Non-Competition Covenants. Full-time employment agreements often include provisions restricting the employee from competing with the practice after the employee leaves employment with the practice. A broad non-compete provision is probably not suitable for a part-time employment agreement. However, a limited restriction prohibiting the part-time employee from soliciting patients of the practice may be appropriate in certain circumstances.
· Malpractice Insurance. Some part-time employees will have their malpractice insurance coverage while other part-time employees may need coverage through their employer. This issue should be addressed in the employment agreement.
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