EMPLOYMENT PRACTICES LIABILITY:

Claims stemming from sexual harassment, discrimination, the Americans with Disabilities Act, the Family and Medical Leave Act, wrongful termination and the like, are being filed in record numbers. Employment lawsuits are an expensive, time consuming and inefficient means of conflict resolution. They also cause the loss of productivity, while eroding trust and morale in the workplace. According to author Walter Olson, today’s employment laws have created an "Excuse Factory." Given the circumstances, significant challenges lie ahead for companies in preventing and managing these claims. Following are 17 Workplace Trends and Nine Common Mistakes that every risk manager needs to take into account:

The evolving structure of the workplace will greatly affect EPLI risk management. When designing risk management strategies, keep these 17 workplace trends in mind:

Having represented hundreds of employees and dozens of companies in wrongful termination claims, and analyzing lawsuits filed across the country, I have drawn the conclusion that there are at least nine common traps that lead to employment claims. Whether we’re talking about sexual harassment, discrimination, disability or other type of claim, the way in which companies manage employees and claims of unfair conduct is what determines whether a lawsuit can be filed.

1. Hiring the Wrong Person: Legal compliance and organizational trust begin with the hiring process. It can be argued that half of all employee lawsuits are a direct result of hiring the wrong person. Even companies with elaborate personnel policies and procedures hire the wrong people. They do so for the same reasons that any of us enter into failed personal relationships -- we are either desperate, lazy, or infatuated. To avoid hiring in haste, they must plan ahead, use temporary agencies, and cross-train employees. To avoid laziness, they must challenge themselves to make hiring a priority. To avoid infatuation, they must engage in "dialogue" with candidates, drop personal "baggage," and interview candidates thoroughly.
2. Not Having Protective Legal Documents: Despite the publicity garnered by large verdicts, many companies still fail to establish "at-will" employment, sexual harassment policies, the right to arbitration, and grievance policies, etc. Start-up companies are especially vulnerable in this area. Many of them look at the human resource function as something they will address "when they get the chance."
3. Not Training Managers, Supervisors, and Employees in Human Relations: Employee lawsuits are not about the 25 laws and hundreds of regulations -- they are about failed human relationships. This means the entire workforce needs to be trained in trust building and communication skills. Failure to do so will leave the workforce ill-equipped to deal with today’s legal requirements.
4. Misuse of Performance Evaluations and Other Personnel Procedures: As if out of a Dilbert cartoon strip, most managers fail to give timely performance evaluations, and when they do, they circle the number three on a scale of one-to-five over and over again. This is because they don’t want to deliver bad news, and thus lower morale, nor do they want to deliver good news, and heighten expectations for promotions or a raises.

Keeping a "well-documented file" by using mismanaged procedures is nothing short of insanity. Inconsistency in this area -- and there remains plenty of it -- is fuel for plaintiffs’ lawyers.

5. Not Asking if There Is a Problem: All too many companies first find out about a claim of harassment or discrimination months after an employee has quit or was fired. The fear of speaking up renders even the best designed personnel policies ineffective. We have developed a "culture of silence" in the workplace where "victims" and witnesses fail to speak up in the face of illegal or unethical behavior. Companies will have to proactively inquire into these areas to prevent claims.
6. Ignoring Smoke Signals: In case after case, the "signs were there." There was the thief who always seemed to work late, the supervisor who always went to lunch with his secretary, and the new employees who complained of discrimination on the first day of employment. Many times, companies will ignore workplace smoke signals with the hope they will somehow go away of their own accord. The fact is, if we don’t acknowledge problems the moment they surface, they fester, become cancerous, and spin out of control.
7. Stepping on Employee Privacy: Company after company makes the mistake of monitoring or accessing employee information that is private in nature and of little value to the company. This only leads to a lack of trust, increased resentment -- and claims for breach of privacy and defamation. Any monitoring or other intrusion into areas of privacy should be avoided unless there is legitimate business justification and the company has obtained employee consent or acknowledgment.
8. Failing to Get Help: Legal compliance is tricky business -- even for seasoned employment lawyers! Many managers and business owners make snap decisions or fall into legal traps -- even when trying to "do the right thing." Successful risk management will require asking expert assistance before making significant employment decisions.
9. The Problem Is With the System: Many of today’s personnel systems are in desperate need of reengineering. Whether it’s turnover, absenteeism, a layoff or termination, chances are it is the companies’ human resource system which is at fault -- as much as the conduct of a particular employee or manager subject to that system. Failing to correct for system variations and instead focusing on the immediate personalities will inevitably lead to repeat exposures. Risk management and legal compliance must be viewed as a systematic process -- not an event.