The economic and non-economic business justifications for
reviewing your company's employment practices are plentiful.
Litigation for employment and labor based claims subject the
corporate treasury to the risk of paying damages, including
punitive damages and substantial attorney fees for both the
employee's and the company's counsel. The non-economic
costs of employment litigation that can be independently taxing and
not as measurable include current employee-witnesses spending
significant time talking with the employer's attorney(s),
giving depositions or attending court proceedings in connection
with the litigation instead of spending time conducting the
business of the employer. In addition, the employer is required to
gather and produce every document potentially relating to the
plaintiff's employment with the employer, including
electronically stored documents (which can be an expensive and
onerous burden for which the company may not be prepared). Finally,
in some cases (particularly involving EEOC lawsuits), employment
practice changes may actually be compelled through a consent
decree.
With a modest investment of time and money, an employer can create
and implement appropriate policies and practices concerning all
facets of the employment relationship (e.g., interviewing, hiring,
personal conduct of employees, social media, privacy concerns, and
disciplining and terminating employees). Social media and employee
privacy issues as well as workplace retaliation are areas
particularly ripe for an explosion of litigation. The tangible
benefits that can be achieved from reviewing and, as appropriate,
implementing or modifying current policies and practices include
improved employee relations, increased productivity and a reduction
in litigation.
Proactive measures from the start until the end of the employment
relationship are the best way to avoid these expenses. Here are
some basic ideas to consider, which can be implemented with the
assistance of counsel familiar with the policies and law.
Prior to interviewing potential employees, employers should have
their applications reviewed to be sure they are legally compliant
and avoid elicitation of inappropriate information from potential
employees (e.g., the potential employee's age, information that
could lead the employer to learn about the potential employee's
age, or any other information relating to a legally protected
status). For those within the organization conducting employee
interviews, there should be training regarding permissible and
impermissible questions to ask or avoid during interviews. For
example, interviewers should be trained in avoiding questions that
could elicit information relating to a potential employee's
age, national origin, religion, disabilities, or any other
potentially protected status.
Employers should have job descriptions for each category of
employee that include the following information:
- An accurate reflection of the educational and practical requirements of the position.
- An accurate reflection of the essential functions of the position.
- Supervisory authority, if any, of the position.
- The category of employee to which the position reports.
- Whether the position is exempt or non-exempt.
- The employee's signature acknowledging receipt of the job description.
Review of job descriptions can be particularly important if jobs
have changed in any meaningful way, which can be a relatively
typical phenomenon. Moreover, if the company conducts employee
performance reviews, it is important to have an accurate and
objective statement of the work that is being evaluated.
On a related note, employers too often assume that job titles, job
descriptions or simply categorizing an employee as
"salaried" automatically enables the employer to
categorize employee as exempt, thus avoiding overtime pay. This is
not the case. The Fair Labor Standards Act and the Department of
Labor have very specific guidelines for classifying employees as
exempt or non-exempt and failure to comply with those guidelines
can result in unnecessary litigation expenses, paying employees for
unpaid overtime, civil penalties, and paying the attorney fees of
the suing employee(s). This is a problem that can be avoided with
proper analysis prior to categorizing an employee as exempt or
non-exempt.
With respect to handbooks, employers should have employee handbooks
that provide for proper avenues of complaint for employees
concerned with discrimination, retaliation, harassment, and any
other employment-related issues. Where an employer has proper
avenues of complaint for employees – avenues that (1)
allow employees to avoid complaining to the alleged wrongdoer, and
(2) allow the employee to complain to a hierarchy of employees if
the problem is not investigated and addressed -- The employer can
create a proper defense to discrimination and harassment lawsuits
should the employee fail to use the available avenues of
complaint.
Likewise, employment handbooks should have proper procedures to
enable employees with disabilities to request and engage the
employer about obtaining reasonable accommodations. While the
Americans with Disabilities Act applies to employers with 15 or
more employees, many state laws apply similar or identical
standards to much smaller employers. Where an employee requests an
accommodation for a disability, the employer must engage the
employee and work with him/her to resolve the issue in question.
Ignoring the requested accommodation or simply concluding that the
requested accommodation is "unreasonable" without making
honest and good faith efforts to work with the employee to find a
reasonable accommodation can lead to a lawsuit.
In addition to discrimination policies and complaint mechanisms,
the handbook and other separate written policies represent the
employer's best opportunity to put employees on notice of
various other employment policies and rules, including progressive
discipline, drug testing, leave and other benefits or terms and
conditions of employment. Social media and privacy policies are
becoming more and more appropriate for purposes of outlining an
employee's expectations concerning use of employer-owned
electronic devices. Clear communication of these myriad topics to
the employee can create a better understanding between the employer
and employee during employment, aid in the administration of
discipline and be an invaluable piece of evidence should litigation
occur.
All employers with payrolls approaching 50 employees or more must
be cognizant of the Family Medical Leave Act ("FMLA"). If
an employer has 50 or more employees in 20 or more workweeks in the
current or preceding calendar year, including joint employers and
successors of covered employers, the employer must provide up to 12
weeks of unpaid leave to qualifying employees (and 26 weeks of
unpaid leave to qualifying employees who must care for a family
member injured on active duty in the military). Furthermore,
employers subject to the FMLA must provide written notice of its
application to employees and must have procedures in place to meet
the applicable deadlines relating to the employer's response to
requests for such leave. Failure to properly honor a request for
such leave, failure to comply with the deadlines relating to such
requests, or retaliating against an employee for requesting or
exercising his/her right to such leave can result in violations of
the law and ultimately lead to unnecessary lawsuits. However,
proper written policies and training for employees supervising the
application of FMLA leave can prevent such lawsuits from ever
arising.
Employers should be sure to keep separate personnel files and
medical files relating to employees. Comingling all documents
relating to an employee's employment can result in an inference
that an employer considered improper medical information when
making an employment decision. All documents relating to an
employee's medical history (e.g., doctor notes, FMLA forms,
requests for accommodations due to disabilities, etc.) should be
kept separate and apart from personnel files and only select
employees should have access to those documents to avoid their
consideration when making an employment decision.
If an individual is alleged to have discriminated against,
harassed, or retaliated against another employee, the alleged
wrongdoer, if possible, should not have any influence over or
provide information resulting in an adverse employment action
against the complaining employee. A growing area of litigation has
arisen over the past few years that implicates a new theory of
liability commonly referred to as the "cat's paw"
theory. Where an alleged discriminator, harasser, or retaliator is
permitted to provide information leading to an adverse employment
action against the complaining employee, his/her wrongful conduct
can be imputed to the employer even if he/she is not the ultimate
decisionmaker. By allowing an alleged wrongdoer to influence an
adverse employment action against the complaining employee, the
employer creates unnecessary liability and business expense.
The bottom line is there are a myriad of employment laws and
regulations that require the employer's attention. Compliance
with those laws and regulations and the adoption of proper
procedures for hiring, disciplining, reviewing, and terminating
employees can avoid litigation following whatever employment
decision is made. While litigation is never totally avoidable,
compliance with laws, regulations and best practices relating to
employment decisions is the best and most cost-efficient defense to
potential litigation or actual litigation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
