September 2007

EDITOR’S COLUMN: APPRECIATING THE RISK

Every week I review FindLaw’s employment cases of the week. These are cases that have either gone to judgment or are fighting over a certain legal issue pre-trial. Recent cases included violations of the FMLA, breach of contract and fraud, breach of FLSA obligation to pay overtime, breach of fiduciary duty under ERISA, a suit by a union over a company’s proposed shift in employer evaluation process, breach of stock option agreement, sexual harassment claim, violation of the ADA failure to accommodate, claim for gender discrimination and retaliation, class action claim for racial discrimination — in essence, everything under the Employment Practices Liability sun.

To help employers protect themselves against these destructive claims, I’ve learned a few things along the way:

1. Usually, the person in the HR role spends most of their time on administrative duties, such as payroll and benefits, and has little time or resources to help manage real compliance obligations.
2. There is little or no compliance training for supervisors or managers, who are generally the ones that get you in trouble with these lawsuits. The courts take a dim view of companies that make no effort to meet compliance obligations or to engage in training. Not doing so might render these violations “willful” and undermine any potential defenses.
3. Companies don’t seek advice on the front end to try to avoid these claims; they wait until they get smacked in the head with them and then speak to counsel.
4. Few companies fully appreciate the time, expense and emotions associated with these claims until after they get hit with one.

If you’re fortunate enough to have access to the HR That Works program, please make sure that somebody at your company is taking advantage of it. At a minimum, clearly set forth your compliance policies (EEO, ADA, FMLA, overtime, etc.). Engage in sexual harassment training and survey the workplace to see if there are any problems using the Employee Compliance Survey. Finally, it’s important to send a message from the top that violation of these laws will not be tolerated, and if someone has a concern, they should be able to report it to a person who feels “safe” for them.