Are unwritten policies enforceable at your company? There are several factors you must consider to know the enforceability of policies, contracts, or work rules at your workplace.
At Gardner Employment Law, we know all the details about contracts and company policies. Know your legal rights in the workforce and contact us to find out if any of your company’s unwritten policies are enforceable.
Are Unwritten Policies Enforceable?
There is no legal requirement for company policies to be written. However, the employer must give employees unequivocal notice of a policy before it can become effective. Most companies will place its policies in handbooks or some type of writing so that there is proof that employees were given notice of the policies.
As we discuss in “What is a Legally Binding Contract,” employee handbooks, where policies usually are found, are not contracts. Policies are guidelines and expectations that an employee should follow. Policies are important in the sense that they control employees’ behavior at work. Employers can and do enforce policies because that is part of the job. In fact, if an employee violates company policy, employers consider this as a legitimate basis for termination. Even if they are unwritten policies, they can still result in disciplinary action.
If your supervisor promises you a bonus or other benefit based on unwritten policies, you may never receive that benefit. As Forbes writes, “Even if made with good intentions, bosses leave, conversations are forgotten and power dynamics shift. Without a paper trail, your expectations are just wishes.”
Must a Policy Be in Writing Before an Employee Can Be Terminated?
According to Texas employment laws, employees are subject to “at-will employment.” This means that an employer can terminate an employee for any reason or no reason, whether the employee violated a company policy or not. In addition, even if the policy is not uniformly enforced with action like written warnings, the employer can still terminate the employee. The only caveat is that the termination cannot be based on discrimination or other illegal reasons.
Can Companies Change the Policies?
Employers can change their policies at any time. Generally, when the employer notifies an employee of changes in employment terms, the employee must accept the new terms or quit. If the employee continues working with knowledge of the changes, they have accepted the changes as a matter of law. An employer must provide employees unequivocal notice of any changes before the new policies can take effect.
Is a Contract Enforceable If the Writing Refers to Other Materials?
Based on the concept of “incorporation by reference,” a contract may refer to some other document, which causes everything in the other document to become part of the contract. Even if the contract simply references an employee handbook by name, the handbook becomes a part of the contract. The employee handbook or other unwritten policies referenced in the contract do not need to be quoted in its entirety. When a contract clearly refers to another document, you are expected to locate and read that other document.
For example, you may begin your job at a company by signing an employment contract. In that contract, you may find a section that says you are expected to comply with an employee handbook, guidebook, or policies manual. Because the employer referenced these documents within the contract, those documents are considered part of the contract. Thus, an employment contract is not always your saving grace, since it may incorporate the terms of other documents which also become binding. If the other documents are not provided, you should ask to read them.
Contracts generally have more legal ramifications than company policies. Breach of contract can result in civil suit or other legal action in addition to any internal disciplinary action the company may take. Therefore, it is imperative that you review all referenced documents related to your employment.
Review Your Company Policies and Contracts with a Lawyer
What is unwritten is just as important as what is written. This goes for contracts, policies, handbooks, and any document in the workplace. If you need clarification on whether unwritten policies are enforceable, reach out to us.