Two weeks ago, I began a turn-of-year top list that, rather than looking backwards, looks forward to concrete steps that employers can and, in many cases, should take in this upcoming year to minimize employee-related liability. The goal is also to identify low-cost items—potentially large undertakings such as independent contractor misclassification, Fair Labor Standards Act exemption audits, and job descriptions are no less critical, but not the focus of this list. In other words, for many employers, there is no excuse for not taking these six steps if you have not already done so.
The first three steps were:
1. Focus on employee use of social media and policies that affect it.
2. Make a plan for beginning to manage business information on privately owned electronic devices.
3. Review your use of background checks.
Here are the final three simple steps employers can take in 2013 to minimize liability.
4. Review key policies that leave no room for discretion. Usually, when reviewing employer-drafted handbooks and policies, the great majority of my comments and suggestions are directed at ensuring the employer retains discretion to deal with individual situations individually. Although some degree of “legislation” is necessary to ensure consistency, particularly with larger employers, too often employers’ strategic decisions in difficult situations are constrained by overly detailed policies.
Now the enforcement activities of the National Labor Relations Board (NLRB) and Equal Employment Opportunity Commission (EEOC) give further reason to ensure particular policies leave sufficient room to maneuver. As has been well-documented elsewhere, the NLRB in its expansive attack on policies that might infringe on employees’ rights has attacked what seemed to be fairly routine employment-at-will policies. The NLRB has approved certain such policies, though, and employers should take the small amount of time needed to review the NLRB’s directives with employment counsel.
One of the EEOC’s priorities has been automatic termination policies, i.e. policies stipulating that after an employee has been on leave for a specified period of time, the employee is automatically terminated. This arguably offends the employer’s obligation to reasonably accommodate on a case-by-case basis under the Americans with Disabilities Act. As with the at-will policies, relatively modest changes to the policy combined with sensible management of individual situations can accomplish employers’ objectives behind these policies.
Although not compelled by any current regulatory development, while you are at it I strongly suggest a careful review of any harassment-related policies and “reasonable accommodation” policies to ensure they provide sufficient flexibility in individual situations.
5. Understand your insurance coverage for employment claims. With apologies to the handful of readers who have very sophisticated insurance managers, or are fully self-insured on employment matters, the frequency with which we see employers not optimally protecting their interests on insurance issues demands that this topic be included here.
There are several recurring manifestations of this. Firstly, employers do not have experienced insurance counsel review insurance contracts on the front end. Insurance policies are complicated legal documents, and although perhaps all of us as careful lawyers can read them for clarity and consistency and obvious issues, there are esoteric matters of insurance law that relatively few lawyers have mastered. Employers do themselves a disservice by not obtaining such a review at the front end.
Secondly, and somewhat related, employers do not exercise their bargaining power when they have it—when they are the customers in a competitive buying situation. For example, one issue near and dear to outside counsel’s hearts and to many of our clients’ is the selection of counsel. Many if not most policies will give the client no input on this critical topic unless the client demands it at the buying stage.
Thirdly, when you have a claim and receive a coverage/reservation of rights letter, that is the beginning of the discussion, not the end. I am often surprised by how even sophisticated employers seem to feel that they cannot engage in back-and-forth discussion about the positions of the insurer on various coverage-related matters. Again, employers should enlist insurance counsel at this stage to assess their position.
Finally, employers rely on brokers, agents and third-party administrators who sometimes have multiple loyalties. That is sometimes just the reality of the third party’s business. They are not representing the employer without qualification as a lawyer might, for example. As a result, they sometimes underestimate the employer’s ability to bargain as noted above, and to accept the insurer’s positions without pushing back. Make sure the loyalties, relationships and responsibilities are clear with any third party assisting you on insurance matters.
6. Schedule more training sessions. This is not a new suggestion, but few employers provide enough training. “Training” is a word like “investigation”—employers may associate it with complexity and expensive outside service providers. It does not need to be. Employers should think of any meeting where useful information is provided to employees as training, and capture that fact for liability prevention purposes by memorializing the information that was provided and (with signatures) who was there.
From the standpoint of an advocate telling the employer’s story before a jury, judge or administrative agency, each such instance of training is powerful. Even if the particular subject is not 100 percent on point to the claim at hand, the fact that the employer regularly guides its managers and employers and documents that fact shows a culture of compliance. In addition, training, whether with managers or nonmanagement employees, is almost invariably a great source of information about what is on attendees’ minds and can flag issues at an early stage.
Whether the topics of training are fairly common such as safety or sexual harassment, or something more current such as the use of social media or electronic devices, inside counsel should sit down with their business and HR people to discuss training opportunities. For many of them, it will be prudent to commit to having more training in 2013 than they did in 2012.
If you have not taken the six steps outlined in these articles, it is very achievable to do so in 2013. If you have, congratulations—now move on to tackle some of those more complicated issues noted above.