Your company’s reputation is one of its most valuable assets and your employees’ conduct – both on and off company premises – will directly reflect on that asset. Accordingly, it makes sense to protect your good name with some simple and straightforward written guidelines. Many assume that most rules of behavior are so obvious that employees should understand and comply with them even without writing them down, but too often varying interpretations and inconsistent enforcement of acceptable behavior versus what the company expects lead to disgruntled employees, and ultimately can lead to grievances or lawsuits. A set of written rules – a code of employee conduct – will help to guide both the manager and employee to acceptable performance and consistent enforcement and thus minimize the legal risks of operating your business.

Care must be taken to develop your company’s rules to cover a broad variety of circumstances, but at the same time, protect against creating an implied employment contract that hampers the company’s ability to operate in an employment-at-will environment. Emphasize that the rules are guidelines, not intended to address every situation, and affirmatively state that they do not constitute a contract of employment or create other contractual rights with the associate.

Topics to cover will vary from business to business, but most conduct policies should address confidentiality and privacy, proper use of company property, fair dealing, conflicts of interest, compliance with the law and personal integrity. Each company will want to consider adding provisions germane to its unique business, some perhaps emphasizing antitrust rules with suppliers, while others might focus more on customer relations. Regardless of the company’s products or services, establishing the proper tone for ethical and moral behavior will strengthen any organization.

Confidentiality and Privacy: Emphasize that information which is not generally known to the public – whether about the company, its associates, suppliers, customers and others – must be protected and used only for internal purposes. Employees’ privacy concerns are a major issue at any company and addressing how the company values the protection of employee records should be a part of any set of rules. Privacy will also play a big role if your company deals with consumers and it should be made clear that only personal information regarding a customer that is necessary to the transaction should be obtained and will be protected at all times.

Proper Use of Company Property: Employees are expected to protect all company assets, including cash and other business property, as well as the company’s inventory. Make it clear that misuse, unauthorized use and abuse of such assets are not allowed. Maintaining and protecting the company’s data, passwords, ID’s, software and other forms of computer and network related devices is critical to the ongoing operation of a business. Accordingly, prohibiting improper computer use and barring the unauthorized sharing of keys, passwords and other access devices should be addressed.

Fair Dealing: Taking unfair advantage of anyone through intimidation, manipulation, abuse of privilege or misrepresentation is unacceptable. A statement should be included in the rules of conduct to emphasize that all associates are expected to deal fairly with other employees, customers, competitors and suppliers.

Conflicts of Interest: If an employee’s personal interests are allowed to compete with the business interests of the employer, the company will not be able to take advantage of business opportunities and prosper. The code of conduct should categorically state that it is improper to have even the appearance of improper relations with existing and potential business partners, competitors and customers. The acceptance of gifts and entertainment and other things of value, if allowed at all, should be limited to non-monetary items of only nominal value. Money should never be allowed to change hands.

Compliance with the Law: The rules should address compliance with health and safety laws; sexual harassment and other employment related laws; proper relationships with government officials; and especially for publicly owned companies, prohibited insider trading and other matters related to state and federal securities laws.

Personal Integrity: Address drug and alcohol use; fraud; acts of dishonesty; embezzlement; and misappropriation of assets.

The code of conduct should include a section on how to apply and interpret the rules, where to go to get assistance if a question arises, and how to report violations. Each employee upon starting with the company should be required to sign a statement that they have received a copy of, and will comply with, the rules. Existing employees should also be required to sign, and thereafter annually affirm their compliance with, the rules. Finally a section on how violations will be handled, including suspensions and termination, should be prominent.

If your employee code of conduct is carefully drafted and is comprehensive, and the rules are consistently enforced, your business should experience fewer employee related problems and the business overall will have a happier work force.