Just because state courts have been treating policy statements in employee handbooks as binding contracts between companies and employees, you don't need to forgo handbooks altogether. They can be an effective way to communicate values and standards, and careful drafting will help you avoid most legal problems. Here are four key dos and don'ts.

  1. Don't make strong promises. Instead of saying the company "will provide" or "will guarantee" something, say "the companywill, whenever practical, provide." Avoid using "guarantee" altogether.
  2. Don't use phrases like "permanent employee" - they can lead to disputes over terminations.
  3. At the beginning and end of the handbook, do include a disclaimer to the effect that "this is not a contract. It can be modified atany time."
  4. Do review the handbook regularly and eliminate outdated rules.