Chip Hitware 3/Chip_Hitware_Vol_03.iso/chiphit3/win95/programm/cyb_leg/forms.exe/AVOID.LGF

Text File | 1994-08-03 | 23KB | 496 lines

              AVOIDING EMPLOYEE LAWSUITS

Whether it's hiring, supervising or terminating an employee
the risks are great that the employer is exposing himself
to liability.

Gone are the days when an employer could hire, promote and
fire an employee only on the basis of what is best for the
organization. Today's business leaders and organization
heads must be equally concerned about a disgruntled employee
who decides to take an employer to court. And employees are
indeed going to court. Each year there are many more
lawsuits than there were the year before. In fact, employee
lawsuits are one of the fastest growing areas of litigation-
-and one of the most serious problems facing employers. Why
this frightening legal explosions of employee against
employer? There are four reasons:

1. The American society is becoming more litigious
generally. Employee lawsuits are only one more example of
lawsuit-mania.
2.  There are many more laws today that give employees added
rights-and the opportunity to sue when those rights are
violated. Equal opportunity, affirmative action, and OSHA
are only three examples of rigid federal laws designed to
protect employees and that give employees the right and
incentive to sue employers who
violate those laws.
3.  There are many more complex social issues today than in
the past. These social issues cannot  always be resolved
easily in the workplace. Drug abuse, AIDS testing, computer
surveillance, genetic screening and polygraph testing are
only a few examples of problems and technologies that
employers of yesterday did not have to deal with. But
today's employer must if he is to escape costly lawsuits.
And tomorrow's employer will undoubtedly have to deal with
still more issues.
4.  Lastly, much of today's employee-employer litigation is
the outgrowth of change in the legal relationship between
employer and employee. No longer are employees looked upon
as servants who can, with impunity, be dismissed. In the
1970's, courts began a rapid erosion of the employment-at-
will doctrine. Now courts consider employees to have far
broader rights and security in connection with  their jobs
and are not reluctant to find employers liable for wrongful
discharge.

Clearly, the trend is away from laissez-faire employment
relationships. An employer, no matter how small must stay
abreast of various legal pitfalls in dealing with employees.

This guide will help you recognize and deal with many of the
pitfalls that can, as an employer, cause you considerable
liability and financial loss. More importantly, you will
discover the preventive steps you can take to avoid
lawsuits. Most importantly, you will learn the simple steps
that can turn borderline mistakes into perfectly legal
employment practices.

No, this guide cannot cover every potential legal problem,
but it does point out the common danger zones most likely to
cause you to be sued.


DANGER ZONE  #1: JOB INTERVIEWS

Your potential legal problems commence as soon as you first
consider hiring someone to fill a position. There are many
federal and state that control the hiring process. Your
procedure for hiring, the questions you can ask an applicant
and the criteria used to select employees can all present
major legal problems.
So what can you do and what can't you do?

Most employers realize that they cannot consider age, sex,
race, handicap or national origin as a part of the hiring
process. Moreover, smaller organizations usually have less
need to be concerned about the minority composition than
does a large organization, but every organization must avoid
discriminatory hiring practices. Hiring requirements are
exceptionally strict on matters of discrimination. The way
you ask for information may seemingly innocent employment
questions can be evidence of discrimination. The way you ask
for information may seem reasonable, but the manner question
is phrased can be misconstrued as having an improper
purpose. To avoid difficulties you must ask applicants
questions in a legally safe manner.

What areas can you safely delve into? There are ordinarily
no problems with questions concerning an applicant's
1. Education
2. Work History
3. Job-Related Skills
4. Willingness To Assume Tasks

It's also smart to review these pointers with other
employees who may come in contact with a job applicant. For
instance, a receptionist may unkowningly discuss an improper
point with a applicant waiting for an interview.

RACE:  Race Cannot be a factor in the hire g decision. Never
imply that a race category is needed, or is not needed. You
must also avoid indirect references to race. For example,
never ask a job applicant how the would fell working with
employees of a given race, of that you are actively looking
for people who are minorities or from a certain race.

Also be on guard when an applicant mentions race. You can
pretend you did not hear the comment or politely but firmly
say that race will not be discussed.

Religion:  What was said about race applies equally to
religion. Legal problems involving religious discrimination
is not as common as those concerning race, but it is still a
dangerous area in hiring practices. You can inadvertently
stumble into this area by asking an applicant about his or
her place of birth, origin of a surname or place of birth.
These questions can always be asked after you hire an
applicant but should not be asked during the hiring process.

Religion can legitimately be a factor when hiring. Will the
applicant work on certain religious days, for instance? But
don't ask this question directly. Instead tell the applicant
the required workdays and let the applicant decide whether
this presents a problem.

NATIONAL ORIGIN AND CITIZENSHIP:  Like race or religion,
discrimination on the basis of national origin can also be
troublesome. You can as an applicant if he or she is a U.S.
citizen, but you cannot inquire how the applicant obtained
citizenship.

It is best not to bring up an applicants cultural background
even if you intend the conversation to be innocent. Your
comments can be misconstrued, leading the applicant of
believe that you have a cultural or nationality bias.

AGE: Age remains the most common discrimination claim. It is
perfectly legal to refuse employment to someone who is too
young, but cannot discriminate against older job applicants.
The protected ages are from 40 to 70.

Avoid even in direct references to age. This can present a
problem since you will want to probe an applicant's
background and history and may thus appear to be an indirect
way of determining the applicant's age.

One exception to the law is your right to discriminate
against older job applicants if the physical demands of the
position require younger employees. However, it is not clear
what position may fall under that category.

SEX AND FAMILY STATUS:  An applicants gender cannot legally
be the basis for hiring. Moreover, you cannot refuse to hire
an applicant because the person's gender does not seem
compatible with the work requirements or because CO-workers
will feel less comfortable in his or her presence.

Another frequent problem is that references to family status
are often construed as a form of sex discrimination. For
example, you may ask a female applicant whether extensive
travel or long hours would create problems with her family.
You can inquire whether long hours or travel would
constitute a problem but not whether family responsibilities
would be the source of the problem. Nor can you ask an
applicant about her child-rearing plans. Family size or
children's ages should also be avoided.

You can, however, discuss whether your company provides
maternity benefits and child care. Conversely, you should
not ask if these benefits would, one way or another,
influence the employee in accepting the position. Nor should
you discuss the firm's reason for these benefit policies


PHYSICAL OR MENTAL HANDICAP:  Physical or mental handicaps
are treated similarly to age. The basic rule is that you
cannot refuse to hire an applicant because of a handicap.
However, you can refuse to hire if the handicap would
clearly interfere with the applicant performing properly on
the job. Interpret this exception narrowly. Court cases
suggest that you must show a clear and convincing connection
between the handicap and the job requirements, failing which
can expose you to a serious lawsuit.

CRIMINAL RECORD:  Your employment application can ask only
if the applicant has been convicted of a crime. Arrests, non-
guilty findings, dropped charges and civil lawsuits cannot
be considered in hiring. Where the applicant admits to a
prior conviction, you can usually inquire about the facts
surrounding the conviction. Still, laws on this point vary
between states so you should check local law before
proceeding.

FINANCIAL STANDING:  Some employers inquire about an
applicant's financial affairs as they consider financial
stability important to job performance. Nevertheless, it is
illegal to use financial standing as a hiring criteria. You
can, However, run a credit check on the applicant although
you cannot inquire about property owned or debts owed. Nor
can you dismiss an employee whose wages have been garnished
unless it has happened two or more times.

TESTING:  This is a new and controversial area of employment
law. You can test for skills connected to the job: For
example, typing for secretaries. But other test can pose
problems.

Psychological tests, for instance, are not legal in all
states or in all hiring situations.

Polygraph (lie-detector) test may or  may not be legal again
depending upon state law. Only about half the states permit
polygraph tests.

Newer screening tests, including blood test and genetic
testing, have even less certain status. Since these test are
so new there have been few court cases and laws enacted
concerning there legality.

When faced with a testing question, the safest procedure is
to check with an attorney specializing employment law in
your state.


DANGER ZONE #2:  EMPLOYMENT CONTRACTS

A major concern is the status of employment-at-will
situations. Can you simply terminate the employment of an
employee who is without a written employment contracts?

In the past an employer-as well as an employee-could simply
terminate the employment relationship for any reason at all.
Over the past two decades there has been a gradual erosion
of this right on the part of the employer.

The employment-at-will doctrine applies only when no oral or
written employment contract exists. An explicit agreement
between employer and employee does control, but the problem
with a verbal agreement is that it's difficult to prove its
terms in court and may be unenforceable if the employment
term is over a year. Be careful. Even a simple letter
containing employment terms can be taken as a contract.

There are, in any instance, a number of provisions that are
implied as controlling the employer-employee relationship.
One significant change in recent years is the trend toward
incorporating provisions of the personnel manual in the
employment agreement. As an employer, you are legally bound
by all terms in these documents. What preventative steps can
an employer take to protect himself in an employment-at-will
situations?

WATCH CONTRACT TERMS:  Employers often make legally binding
agreements without realizing it. Oral promises to an
employee can be construed as a contract. Statements
concerning employment security or promotion are particularly
dangerous subjects. The safest policy: Never speculate on
future personnel policies or make statements that may be
interpreted as promises.

PERSONNEL MANUALS AND WRITTEN POLICIES:  In the past,
written employment policies were not considered part of an
employment contract. This view is rapidly disappearing. Now
the courts assess each situation to decide whether the
parties intended the manual to be legally binding. The
trend, however, is for courts to conclude that the manual is
binding upon the employer. While there is no obligation to
issue a personnel manual, once it has been published, there
probably is an obligation to adhere to its provisions.

An employer can counteract this by explicitly providing that
the manual will not be part of any employment contract, and
that the employee can be fired-at-will. This is best stated
on the employment application, hiring letter and policy
manual itself.

Cases involving personnel manuals most frequently arise
concerning improper dismissals. The employee may complain
that proper procedures were not followed or that the
dismissal was not based on a "good cause" which was
required.

Even though an employee may be fired for good cause, it is
still essential to follow the procedures contained in the
personnel manual. This means complying with the "second
chance" procedures which include initial warnings,
suspensions, etc. The safe rule: Don't state firing
procedures unless you intend to follow them.

IMPLIED TERMS:  If an employment contract is not written,
the court will imply some of all of the terms. This does not
suggest that verbal contracts are necessarily dangerous. The
opposite may be true. First, any ambiguous language in an
employment agreement is interpreted against the employer.
Second, the agreement will list the employee's expectations
and benefits. If there is an employer breach, the court will
award those benefits to the employee. Third, a written
agreement may be too one-sided in favor of the employer to
be enforceable.

Despite these drawbacks, a written employment contract for
higher-level positions is recommended. The agreement will
reduce misunderstandings and clearly control the length of
employment as well as the grounds for dismissal. The
agreement can also specify damages and severance pay in case
of an improper termination by the employer.

When hiring lower-rank employees, the contract can clearly
state that it is employment-at-will. This negates any
argument that employment for a fixed term was implicit in
the hiring. State clearly that the employment can be
voluntarily terminated by either party at  any time, and
that the agreement supersedes verbal understandings as well
as appointment letters. Nor should you annualize salaries.
This can be construed as an annual contract. State salaries
on a per payroll period basis. Most importantly, while you
want to encourage the idea of long-term employment to good
employees, do not unwittingly make promises of long- term
employment.

Contracts for higher-level employees should be more
detailed. It should, at a minimum, state the length of
employment, the amount of notice required for termination,
causes for dismissal, and the employees duties. Also add and
arbitration clause and a clause limiting the employee's
damages in the event of breach.

ON-THE-JOB:  Despite your detailed presentation of the job
during the pre-employment process, your efforts could be
wasted because of things done once employment actually
begins. The overriding goal must be that the employee
understands that the employment terms have not changed.

The traditional "probation" period is one danger zone.
Employees on probation for 30-60-90 days can always be
terminated within that period-without notice. This, however,
creates the implication that an employee who has made it
through the probation period can be dismissed only for good
cause, and after receiving at least one warning. For this
reason the "probation" period may be better called the
"introduction" or "orientation" period. More importantly,
the employee must understand that he can be terminated for
any reason after the introductory period as well as within
this initial period.

There should be a written evaluation of the employee at the
end of the introductory period. Questionable performers
should have their introductory period extended.

PERSONNEL MANUALS:  Your personnel manual is likely to be
considered part of the employment contract. The threshold
question then, is whether you should even have a manual. The
number of personnel you employ normally provides the answer.
Small business with ten or fewer employees may operate well
without one. Larger organizations generally require a manual
to communicate policy from the top.

The primary role of the manual is to ensure that employees
know both their responsibilities and rights, and that all
employees are treated equally.

To avoid liability you must take care in the writing of your
manual..  Is there any reference to a "term" of employment?
A provision that employees will be retained as long as performance is
"satisfactory" is a contractual promise. There can be
employer liability for a firing unless you can prove
"unsatisfactory". Similarly, you may not escape liability
for releasing an employee for other reasons-such as poor
sales.  Do you define possible causes for discharge? You may
list 30 causes, only to discharge an employee for an unstated
reason. A court may conclude that your list is inclusive and
therefore, the firing was breach. When you list or define
causes for termination, either 1) Make certain your list is
all-inclusive, or 2) Use only examples of reason for
termination, stating clearly that this is not all-inclusive.
Do you reserve the right to amend your policies? Unless
you do, a court may conclude the manual in existence is the
one the employer is bound to follow throughout the employment.
Do you state a disciplinary procedure? If so, you must rigidly
follow that procedure. You cannot fire an employee-without
liability-unless each step has been followed.
Do you use too much vague language in your manual. Eliminate
such ambiguous terms as "reasonable", "satisfactory" or
"fair". Obviously, not everything can be precisely defined,
but wherever you do use these terms you are inviting a court
to define its meaning.

 Do maintain separate manuals-or at least separateprovision-
for management and non-management personnel (or other
classifications that are best served by different provisions)?

Provide a disclaimer on the manual cover that clearly states
that you are not providing an employee with legal or
contractual rights by publishing the manual. State instead
that the manual is published for reference or informational
purposed only-and that they do not constitute conditions of
employment. Also emphasize that employees without a written
fixed term contract can either resign or be terminated-at-
will.
Review your manual at least annually. This will keep it
responsive to your changing needs as well as to the ever-
changing laws.

PERIODIC EVALUATIONS: Employees expect periodic evaluations.
Performance appraisals can also be an important defense
against an improper discharge suit.

All performance appraisals must be objective, in written
form, and include observations or evidence to support the
supervisor's conclusion. Overly broad and subjective
conclusions can easily be interpreted as evidence of
discrimination. Employees receiving poor appraisals must
also be told of its possible consequences. Most importantly,
the employee must be told what to improve.

Supervisors responsible for appraisals must be told of its
possible purposes. Is the review to be used as training
tool, a way to improve performance, a device to support
promotablilty, or a way to document reasons for
termination's?

Performance appraisals are no better than the instructions
given supervisors in their proper use. There should be
written instructions to explain review procedures. The legal
consequences of a poorly performed appraisal must be
explained.

Employees must have the chance to respond to their
appraisals, and should be required to sign an acknowledgment
that has been review with him-not necessarily that he agrees
with it. Appeal rights on appraisals should also be provided
for.

DANGER ZONE #3: DISCIPLINARY PROCEDURES

Lawsuits arise form disciplinary procedures. You must have a
system of progressive discipline for unsatisfactory
employees. Oral or written warnings may progress to unpaid
suspensions and finally to termination. Certain conduct-such
as theft-would warrant immediate dismissal notwithstanding a
previously satisfactory record.

If you provide for a progressive disciplinary system in your
manual, you must comply with that system.  Rather than be
bound by a fixed system, it may be preferable to delete the
specific procedures in the employees manual-but provide it
as a supplement to the supervisor's.

Progressive discipline offers several advantages: It
promotes an atmosphere of fairness and interest in helping
an employee improve performance. In fact, a well-designed
system will accomplish that objective. Finally, such a
system carefully documents each of the employees
deficiencies or violations, the steps takes to warn the
employee, and lack of improvement on the part of the
employee.

Documentation is all-important no matter which disciplinary
procedure you adopt. Oral warnings and meetings are to
easily refuted in court. Also be certain that the employee
has the opportunity to refute any charges. Should the
employee fail to take advantage of this opportunity, it can
serve as evidence in your favor.

DANGER ZONE #4: EMPLOYEE TERMINATION'S

No business owner can forever escape the unhappy job firing
an employee. No matter how carefully you hire you will make
mistakes in judgment and end up hiring unsatisfactory
employees who eventually have to be fired. While firings are
inevitable, you can take steps to make them less traumatic
to you and the employee- considerably less explosive from a
liability viewpoint.

A discharge is less difficult for both employer and employee
when proper steps are taken. Many of these steps have
already been suggested in this report, but they are
summarized here together with other recommendations.
Make certain you have an adequate written record to support
the termination.  Consider alternatives: Does the employee
deserve and other warning? Can he be rehabilitated with a
different type of supervision? Would the problem be
alleviated by a transfer to another department or
supervisor? Would a leave of absence improve performance?
When at all feasible, the  actual dismissal should not be
done by the immediate supervisor should recommend the
discharge, but its execution should be carried out by
someone in a higher position, if possible. This creates a
less emotional atmosphere.  Be candid about the reason for
dismissing the employee, but becareful not to be abusive. An
abusive dissmal may prompt the employee to sue for emotional
distress. Be prepared for unpleasant reactions.