Your handbook could get you sued.

• Position: In The News ...

Most company handbooks include many rules setting behavioral expectations. Common rules require honesty on a job application and prior approval before taking on a second job, as well as proof that any second job wouldn't interfere with the first one. That way, you may assume you can fire a worker who lied on their application or whose moonlighting would conflict with the day job.

Unfortunately, each of these handbook rules could backfire if used to justify a demotion or termination.

Recent case: William worked as a mortgage lending officer for the Salisbury Bank and Trust Company in New York state. The bank's handbook had an at-will statement that said that either an employee or the bank could "terminate employment at any time, for any legal reason, with or without cause." The handbook included a rule that required advance notice to the HR department if an employee wished to accept outside employment, and acknowledgment that the second job wouldn't interfere with the bank's needs.

William decided to run for the state assembly and informed the bank. The bank told him it believed running and winning would mean he...