Keep Your Company Free from Employee Litigation Risk

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Check out these frightening numbers: On February 4, 2015, the U.S. Equal Opportunity Commission (EEOC) released enforcement and litigation statistics for fiscal year 2014. Almost 90,000 workplace discrimination charges were filed in 2014, which is actually down slightly from prior years. However, retaliation charges were at an all-time high and comprised nearly 43% of all charges. Thirty-five percent of charges alleged race discrimination, while 29% claimed discrimination based on sex. In all, the EEOC’s enforcement activities resulted in almost $300 million over the last year.

Given all of this, now is not the time to sit back on your laurels of never having had an EEOC claim and congratulate yourself for an HR job well done. Employers should be ever vigilant with their human resources policies and keep up their company’s compliance to reduce risk and not become the EEOC’s next defendant. What follow are some common employment landmines that can be avoided with carefully crafted – and enforced – HR policies:

Landmine #1: Failing to properly screen job applicants. Carefully review the job application. Look for red flags. Has the employee been in and out of jobs constantly in his or her career? Has the employee failed to properly set forth the reasons for leaving prior jobs? Remember, silence can speak volumes in this case. Or even worse, the employee departed after a “dispute with a supervisor”. Not everything is resolved with an employee background check. Even if the employee has no felonies on his or her record, there can be multiple other issues that eventually crop up in civil complaints and litigation. Always ask for and get references and follow up with them. If the applicant is unable or unwilling to provide any, that may be reason enough not to continue to pursue hiring that applicant. Finally, never hire someone based solely on the recommendation of a friend or co-worker. Like anything else in life, there are two sides to every matter, and your friend or co-worker has not seen the employee in action.

Landmine #2: Failing to terminate a poorly performing employee. This is incredibly common with employers but probably the biggest disservice they do to themselves and other employees. Not all hires turn out well. What looked bright and promising at first may also turn into something bad. If your employee is under-performing, and fails to step up his or her game after at least one warning (or whatever your HR policies set forth), document his or her performance. Many employers are loathe to place any negative reviews in the employee’s file because they like the employee or have other reasons that have nothing to do with the employee’s performance. To be clear, make sure you set forth definitive performance expectations. It is unfair to your employee to hold them to performance that was either not clear from the start, or the employer has changed around since hire and failed to inform the employee (also a common employer error.) As you might expect, failure to terminate a poorly performing employee results in lowered workforce morale and a less profitable company bottom line. Your other employees who are performing well suffer at the hands of the under-performer. Further, retaining a poorly performing employee can result in a good deed getting punished: if you terminate someone else for the same poor level of performance, and the terminated employee falls into a different “protected classification”, you will be sued for discrimination. In sum, you must document poor performance and terminate.

Landmine #3: Ignoring threat levels. You must be able to recognize potential legal risk and plan accordingly. Importantly, does the employee you intend to terminate fall into one or more of the categories of protected classes (i.e. sex, race, disabled, age, etc.)? Has the employee dropped the “L” word (lawyer or litigation) to either you or a co-worker at any point? How about the “D” word (discrimination)? Did you find out subsequent to hiring that employee that he or she may have a history of filing complaints, either with the EEOC or other agencies? Other telling signs are the employee requesting a copy of his or her personnel file or continued requests to document items for the file. If you have witnessed any or all of the above, you are at Code Level Red and you must begin taking actions to reduce your risk. You must review the employee’s file to make sure all accurate accounts – from either the employee’s side or the opposing one – are in that file; you will have done a full and impartial assessment of your disciplinary actions taken in comparable situations; and finally, you will take legally defensible steps in going through the termination that are fully grounded in legitimate business reasons for your ultimate employment decision.

Landmine #4: Continuing to ensure that all employees are treated equally. So, you’ve terminated the employee and it looks like you are not going to be subject to an EEOC investigation. You are not out of the woods yet and won’t be unless you make sure you continue in this same process and don’t deviate for any reason with other employees. One of the biggest mistakes that employers make is they fail to treat all their employees the same. If you disciplined or even terminated an employee for a specific reason (or reasons), overlooking that reason (or reasons) in current or future employees will bring you back to square one and subject you to litigation.

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Posted In: Legal, Management