Do You Have the Right Critical Documents? Privacy Policy and Employee Handbook (Part Three)

If you are growing any type of business with an online presence, chances are that you need a terms of use policy and a privacy policy.

Terms of Use

A terms of use policy is critical in providing protection for the business as it informs the customer of what will be legally required of them if they utilize your website or mobile application. This policy provides a legal basis for a business in the event of litigation. Information contained in a terms of use policy may include: a business liability disclaimer, prohibited and restricted uses of the site, actions the business may take in cases of abuse of the platform, intellectual property and copyright information, and warranty disclaimers—just to name a few.


Just like the terms of use policy provides a layer of protection for the business, a privacy policy protects the customer by disclosing the way a website gathers, uses, discloses, and manages a customer’s information. Privacy policies will also inform the customer if their data will remain confidential, shared with partners, or potentially even sold to other businesses. You may be wondering why you even need a privacy policy. The short answer is because it’s the law. For instance, within the United States, California’s Online Privacy Protection Act (CalOPPA) states that if personal information will be collected from California-based users, the business is required to have a legal statement for customer review disclosing their privacy practices. Since the internet knows no bounds, if your business is collecting any kind of personal information you need to have the legal statement as required by CalOPPA, because California residents are very likely to be using your website or mobile application. It should also be noted that other places such as Canada, Australia, and Europe are not different in this regard.

At the end of the day, a terms of use policy and a privacy policy are both agreements between the business and the user. When a business does not abide by these documents, they become susceptible to fines and litigation. Both of these documents can provide important protections for both the business and the customer such as limiting liabilities, establishing venue, and informing the customer of what will be done to protect and manage their data. However, often times we see issues arise when businesses copy and paste language from another website to their own or use a template without ever reading the language in the document.

As a business owner, you would never enter into a contract without reading, reviewing, and ensuring the contract is the right choice for your business. If you are using text that has been copied and pasted from another website or a template not designed for your business’s needs then you are effectively entering into an agreement with each and every website visitor and customer with documents that may cause you more legal strife than necessary. It is critical that you have a qualified attorney review these policies sooner rather than later.

Employee Handbook

We have now come to our final essential legal document for your business, the employee handbook which does differ from the employee agreement discussed in a prior article-mainly in that a handbook applies to all employees and contains policies and procedures of the workplace while an employment agreement is specific to one employee and functions as a contract. There are no federal or state laws that require a business to have an employee handbook, but it is strongly recommended and a best practice.

The benefits of an employee handbook are many, not only does this handbook provide clear and consistent expectations, policies, and procedures for employees, but it also provides a convenient way for employers to disseminate information that, by law, must be delivered in writing such as equal employment opportunity statements and family medical leave policies. Additionally, a legally compliant AND up-to-date employee handbook is one of your best and most useful tools to defend against employee claims and provide protection if your policies are ever challenged in court. It shows that your business exercised reasonable care towards its employees and a signed acknowledgment page from your employee demonstrates that your employee read the handbook, received a copy, and agreed to abide by its contents.

Of course, by now it should be clear that there is never a one-size-fits-all document for any company and the same applies for the employee handbook. A well written handbook may include information such as company history, paid time-off policy, employee expectations, pay and promotions, benefits, workplace notices or policies required by law, emphasis that the handbook is not a contract, subject to change, and that the handbook supersedes previous policy documents. Also, don’t forget to include an employee acknowledgment page which after signature should become a permanent fixture in the employee’s personnel file. Once you have assembled your employee handbook ensure that you review the document, although it is advisable that an attorney be involved in preparing the handbook. At the very least, have an attorney review the document once it’s in its final stages. It may be that very review that helps your business avoid future litigation.

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