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SHRM Newsletter - Top Ten HR Law Resolutions

01/18/2011

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January 18, 2011

This is Utah SHRM Legal-mail no. 2011-2 prepared for Salt Lake SHRM, the Human Resources Association of Central Utah (HRACU), the Northern Utah Human Resources Association (NUHRA), the Color Country Human Resources Association (CCHRA), the Bridgerland Society for Human Resource Management and Utah at-large members of the national Society for Human Resource Management (SHRM).

CONTENTS:

INTRODUCTION- 2011 TOP TEN HR LAW RESOLUTIONS. 

1. DON’T GET PUT ON ANY LISTS OF BIG VERDICTS, BIG SETTLEMENTS. 

2. LIMIT VISITS FROM THE EEOC. 

3. LEARN TO SAY “ADAAA” INSTEAD OF “ADA.” 

4. LEARN ABOUT CHANGES IN OTHER KEY LAWS TOO. 

5. DESIGN THE IDEAL TERMINATION BEFORE YOU EVEN NEED IT.

6. BE PROACTIVE. DO SOME HR LAW TRAINING FOR YOUR EMPLOYEES.

7. DON’T LET THE BED BUGS BITE. 

8. MASTER THE CONCEPT OF LITIGATION HOLD LETTERS.

9. MINIMIZE THE RISKS OF WORKER MISCLASSIFICATION.

10. ADVOCATE ON HR LEGISLATION.

INTRODUCTION - 2011 TOP TEN HR LAW RESOLUTIONS.  Happy New Year!  If you, like me, have already messed up on your 2011 personal New Year’s resolutions, there is hope!  Just make some new resolutions dealing with HR Law and your related compliance efforts.  Here (below) are some suggestions.

1. DON’T GET PUT ON ANY LISTS OF BIG VERDICTS, BIG SETTLEMENTS.  As in past years, there have been some recent big and scary verdicts and settlements.  Here is the list, stripped from the headlines, on which you do not want to appear:

COMPANY

AMOUNT

REASON

National steakhouse

$20 million

Gender discrimination

National retailer

$86 million

Failure to pay vacation and termination wages

National photo products company

$21 million

Racial harassment

Auto manufacturer

$4 million

Religious and ethnic harassment

Clothing retailer

$1 million

I-9 violations

Package delivery company

$3 million

Misclassified workers as independent contractors

Drug maker

$250 million (ouch!!!)

Gender discrimination

2. LIMIT VISITS FROM THE EEOC.  Good luck with this one.  Equal Employment Opportunity Commission (EEOC) reports indicate discrimination charges increased significantly in 2010 over 2009 totals. Nearly 100,000 charges were filed last year with the EEOC, the most ever.  The EEOC filed 250 lawsuits and collected over $400 million in damages.  The most frequently-filed charges involved claims of retaliation (first time in the top spot) and race.  There also were significant percentage increases in the categories of religion, disability and age discrimination charges.

3. LEARN TO SAY “ADAAA” INSTEAD OF “ADA.”  Congress recently amended the Americans with Disabilities Act (ADA) with the Americans With Disabilities Act Amendments Act (ADAAA).  Under the newly-amended law, it is easier for employees to show a disability exists.  This year the EEOC is supposed to publish new regulations that will interpret the ADAAA.  HR professionals now must “re-learn” parts of what they knew as the ADA.  Congress wants employers and litigation focused more on what an employer did to help a disabled employee, not on whether or not the employee is actually disabled or covered by the law.

4. LEARN ABOUT CHANGES IN OTHER KEY LAWS TOO.  There also were lots of others laws that changed or were revised last year.  Here is a partial list:

  • The EEOC published new regulations interpreting the Genetic Information Nondiscrimination Act (GINA)
  • Utah – E-Verify required for new hires
  • New Utah rules on drug testing (requiring use of a medical review officer)
  • Local Utah government ordinances prohibiting discrimination based on sexual orientation and gender identity
  • FLSA – new regulations updating child labor laws
  • FLSA – loss of mortgage loan officer exemption
  • FLSA and nursing mothers – space and time
  • Social media issues
  • Proposed new National Labor Relations Board (NLRB) notice requiring employers to advise employees about their rights under the National Labor Relations Act.

5. DESIGN THE IDEAL TERMINATION BEFORE YOU EVEN NEED IT. You will need it.  Those we hire we sometimes must fire. Why not design in advance the perfect termination- or at least the perfect process for termination, so when you actually have to do it, it can minimize risk and liability?  What do I mean by the ideal termination?  I mean an outline of an ideal way to handle the performance-based discharge of an employee. Perhaps something like this:

TIME / EVENT

WHAT A SUPERVISOR SHOULD BE DOING

HIRE/DATE

Employee gets a written job description giving fair notice of his/her job duties and performance expectations and goals

90 DAYS LATER

Supervisor checks in with employee after “orientation” period to verify adequate performance and good job fit.  Thereafter, supervisor provides regular oversight, coaching, etc.

FIRST SIGN OF SERIOUS PROBLEMS

Apart from regular coaching, at this point there should be a discussion with the employee.  Document the discussion with a note to file or email.  Depending on seriousness, escalate to HR and perhaps discipline.  Early HR involvement can hasten a resolution and minimize risks.

ADDITIONAL PROBLEMS

Further discussions and coaching, HR involvement and perhaps discipline, maybe written warnings depending on how serious the problem.  Repeat clear objectives and measurements of the same.

ANNUAL PERFORMANCE REVIEW(S)

Conduct a truthful and accurate review of employee’s performance during full relevant period (e.g., one year).  Note if problems exist and include discussion of relevant job actions (e.g. warnings or discipline, successes, etc.).

ONGOING PROBLEMS

Escalate discipline (probation, last chance notice).  Document nature of problem, how it can be fixed, clear timetable for doing so and consequences of failure to do so (such as discharge).  Make sure you consider employee’s side of story but do not engage in “debates” when employee disagrees.

TRIGGER FOR DISCHARGE

There should be some event that moves the situation towards termination (e.g., expiration of last chance time period without needed improvement, additional major mistake, misconduct, etc.).  Beware of subjective conclusions (e.g., “He just doesn’t fit in!”) and instead identify the underlying objective facts leading to any particular conclusions.

DISCHARGE

Discharge should flow logically from the documentation of expectations given and problems noted.  Here is the main goal of the whole process: anyone who might try to second guess you should conclude there was clear explanation of expectations, notice of problems and a documented chance to improve before discharge.  HR involvement should ensure company-wide consistency (i.e. that various departments use the same type of discipline for the same types of offenses) and that the written record supports the termination decision.

DISCHARGE LETTER OR MEMO TO FILE

Document what happened and why, in clear terms but with as few words as possible.  Remember this will be “Exhibit A” in any post-termination dispute, so do it properly.

6. BE PROACTIVE. DO SOME HR LAW TRAINING FOR YOUR EMPLOYEES.  Here is a sampling of programs I helped clients with recently- (1) Top Ten Ways a Supervisor Can Get into Trouble Under the American Employment Laws; (2) EEO for Employees and Supervisors; (3) Minimizing HR Law Risks with Good Documentation; (4) How a Supervisor Can Navigate the HR “Bermuda Triangle” of FMLA, ADA and Worker’s Compensation; and (5) 10 Harry Potter Magic Spells HR Folks Wish They Could Use at Work (not really).  What are you doing this year to train your supervisors and employees about HR Laws?

7. DON’T LET THE BED BUGS BITE.  Bed bugs at work!  It has to be the wacky HR law issue of the year.  Nevertheless, I have read numerous reports about this becoming a problem for employers.  Bed bugs can “ride” to work with employees and make their own nests in the office.  There is a chance of employer liability related to the same due to OSHA requirements and worker’s compensation issues.  So maybe we all need to be more diligent in our efforts to prevent bed bugs at work in 2011!

8. MASTER THE CONCEPT OF LITIGATION HOLD LETTERS.  More and more of what employers do today is done electronically…email, texting, etc.  The convenience and efficiency of electronic communication also means that employees typically will create more documentation (that is stored somewhere) about their various activities.  Thus, when a dispute, lawsuit or claim (e.g. an EEOC claim) arises, more of the evidence related to the same will be in an electronic format.  Employers must take steps to issue litigation hold notices when such circumstances arise.  Indeed, most agencies will include an instruction to hold records when they send an employer a copy of the charge filed against it.  A litigation hold notice is a prompt and written communication to the involved persons (the likely custodians of records relevant to the particular dispute), as well as to the company’s IT department, asking all such persons to take steps to preserve all records (electronic or otherwise) possibly related to the case.  This hold must include having IT suspend normal and automatic e-mail or e-record deletion processes.  The failure to put a litigation hold on possibly-relevant records can haunt an employer involved in such a dispute, even if the employer has good defenses on the underlying claim.  This happens because courts and agencies can choose to penalize such employers who let records be destroyed.  And such penalties can include drawing adverse inferences, i.e. concluding that the destroyed or missing documents would have hurt the employer’s arguments, or simply refusing to recognize certain employer defenses at all.  Don’t let this happen to you.  Make sure you have a litigation/dispute records hold policy in place and that you trigger it whenever required to preserve documents that may be relevant to an underlying employment dispute. Here are four simple steps you can follow to master the concept of litigation hold letters:

Step One:  Identify Potential Custodians of Data and Records

  • Identify the “Custodians” – Those who have played a material role in the transactions giving rise to litigation (the “Players”); Those who may have assisted the Players.
  • This Process Should Be Performed QUICKLY and UPDATED as New Information Becomes Available.

Step Two: Define The Relevant Time Period

  • Interview Custodians to Define Parameters for Retrieval and Retention Efforts.
  • Performed by In-House or Outside Counsel. – Greater Level of Independence; Preserve Confidentiality
  • MAKE A CONSERVATIVE ESTIMATE.

Step Three: Identify “Type” and “Location”

  • Interview IT staff and Custodians
  • Where INSIDE of the IT system do potentially discoverable data and records reside?
  • Where OUTSIDE of the IT system do potentially discoverable data and records reside?

Step Four: Implement Company-Wide “Litigation Hold”

  • Circulate “Litigation Hold” Memorandum to ALL Potential Custodians.
  • Define the Particulars of the Litigation and the Scope of the Preservation Effort.
  • Instruct ALL Recipients (Including IT Staff) to PRESERVE and NOT DESTROY ALL Records and
  • Data Relating to Litigation.
  • SUSPEND ALL AUTOMATED DELETION

9. MINIMIZE THE RISKS OF WORKER MISCLASSIFICATION.  The problem?  Enforcement actions by the United States Department of Labor (DOL) and Utah Workforce Services forcing employers to prove that persons classified as independent contractors are not really employees.  There has been more activity in this area within the last two years than I have seen in many years.  Indeed, part of the DOL national enforcement plan for 2011 focuses on this point.  The solution?  Use correct classifications and do self-audits to make sure your classifications are correct (and perhaps even involve legal counsel so you can apply the attorney-client privilege to your audit).

10. ADVOCATE ON HR LEGISLATION.  Congress and the Utah State Legislature likely will address lots of issues this year impacting the HR profession.  A few examples: immigration reform and health care reform.  There are lots of ways to get involved in this process and make your collective HR voice heard on these issues.  For example, see: http://www.shrm.org/Advocacy/GetInvolved/Pages/default.aspx.  Instead of complaining about the HR laws, let’s get involved in the process of shaping them!  Remember the Chinese Proverb -- “It is better to light a single candle than to curse the darkness!”

Written by: Employment Attorney, Michael Patrick O'Brien
Utah State and Salt Lake SHRM legal director
Email: mobrien@joneswaldo.com
Phone: 801-534-7315
Website: www.joneswaldo.com

Legal-mail is a legal and legislative update service sent out about twice a month to various Utah SHRM members and chapters. As a courtesy to SHRM, the Utah law firm of Jones Waldo Holbrook & McDonough P.C. underwrites the costs of the service. If you have any questions or comments, please contact Michael Patrick O'Brien.

Disclosure: These updates are merely updates and are not intended to be legal advice. Receipt of this information does not create an attorney-client relationship.