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Employee Handbooks…Not Just an Afterthought

W. Kirby Bissell

Employee Handbooks…Not Just an Afterthought


When was last time your dealership looked at its employee handbook? And, no, we are not talking about when your sales manager last printed it to provide to a new salesperson. Employee handbooks are a dealership’s employment policy manual and much like BSM expects OEMs to follow their internal policies in their business dealings with dealers, labor and employment attorneys will expect your dealership to do the same in its dealings with employees. Employee handbooks are a great tool to avoid or decisively win wrongful termination and other employment-related lawsuits. However, an out of date handbook turns a great tool into a hindrance for your dealership in employment litigation and can often provide an unnecessary advantage to the other side in employment litigation. Thus, it is imperative that your dealership regularly reviews and updates its employee handbook, at least every few years. Employee handbooks can also serve other important purposes for your organization too, beyond winning or avoiding lawsuits.

First, employee handbooks are oftentimes a new hire’s first “official” interaction with the dealership. It is a chance for the dealership to highlight its culture, expectations and management philosophyto a new employee. Distributing an outdated employee handbook riddled with errors and inconsistencies does not make a strong first impression as an employer to new hires. However, having a handbook that not only lays out employment policies but also explains the dealership’s “secret sauce” in sales and customer service as well as its workplace culture leaves a new employee with a positive and professional first impression of their new employer.

Second, updated employee handbooks serve to set expectations for employees in the workplace. And, when those expectations are violated, they prevent employees from claiming ignorance as to the policy they have violated. Moreover, having clear, concise and consistent policies in your handbook gives a layer of protection to a dealership (and its management) when an employee acts inconsistently and creates an issue for other employees in the workplace. In this way, employee handbooks prevent normal workplace issues from becoming costly lawsuits.

Finally, updated employee handbooks serve as great support or evidence when your dealership is faced with a wrongful termination lawsuit, especially those related to alleged discrimination. In all states, if an employee alleges that he or she was discriminated against, his or employer is required to demonstrate a legitimate, non-discriminatory reason for its employment action. When an employee handbook is up to date and referenced by management in making employment decisions, the legitimate, non-discriminatory reason is easily supplied. Alternatively, an out of date employee handbook that has policies inconsistent with current law or how your dealership operates will be used by an employment attorney to frustratingly imply illegal actions on behalf of your dealership, even where none exists.

So as 2020 has closed (thankfully) and your dealership begins a new year, take a look at your employee handbook and ensure it projects the image of a modern car dealership ready to tackle the challenges that 2021 will hold. And, discuss with your dealer attorney whether there are any new laws or legal decisions that or void outdated policies in your handbook.

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