CHAPTER 4 PERSONNEL RISK MANAGEMENT: MANEUVERING THROUGH EMPLOYMENT LAW MINEFIELDS
| Jurisdiction | United States |
(May 2008)
PERSONNEL RISK MANAGEMENT: MANEUVERING THROUGH EMPLOYMENT LAW MINEFIELDS
Davis Graham & Stubbs LLP
Denver, Colorado
Wayne M. Chancellor
AngloGold Ashanti North America Inc.
Greenwood Village, Colorado
I. Introduction
The laws and regulations relating to the hiring, retaining, and firing of employees are complex and often cumbersome. As such, employers attempting to address and resolve employment issues may be uncertain as to what their obligations are under the law, what legal options exist to meet those obligations, and the risks associated with those options. Often employers feel they are attempting to maneuver through employment law "minefields", wherein the consequences of failure can be catastrophic. Given the propensity for litigation by current and former employees, and the somewhat pro-employee tenor in many jurisdictions, it is important for employers to first ensure they take all reasonable steps to avoid placing the company and its management at risk, and second, correctly identify and address issues in a timely manner. Further, the fair and consistent handling of employment related issues is critical for employee retention. The perception of fairness and equitable treatment in the workplace is consistently listed as a key consideration by individuals selecting a company and choosing to remain with a company. See e.g. "Why Retention? Four Tips for Employee Retention" by Susan M. Heathfield, http://humanresources.about.com. It is critical, therefore, that employers have a well-defined management approach for addressing employment issues that arise on a daily basis, whether those issues be performance, benefit, or discipline related. The approach should include a collaborative effort between company management, HR, in-house counsel, and outside counsel. Mitigating the risk of litigation, as well as the risk of high employee turnover, should be foremost in the minds of HR personnel, the in-house legal department, and outside counsel providing advice and counsel.
This paper presents an overview of several legal issues confronted by employers in connection with employee hiring and retention, as well as employee actions in the workplace. It is not practical, in the confines of a single document, to address all the potential employment related issues that in-house and outside counsel may be confronted with. We have attempted to select, therefore, issues that are timely and topical in the current work environment. Specific issues and the legal ramifications of those issues will be discussed from the perspective of what the law requires, and how those issues are viewed and addressed by inside and outside counsel. For each legal issue discussed an overview of relevant legal considerations is presented, as well as suggestions and approaches for complying with the law. Where appropriate, the perspective of the in-house counsel is presented (in italics) to highlight the relationship between operational needs and legal considerations.
II. The Hiring Process
A. Pre-Employment Screening and Due Diligence
From the moment a job opening is posted, until the hiring process is complete, an employer must be diligent and fair in its pre-employment screening and ultimate candidate selection. Failure to follow specified and disciplined procedures during the hiring process may expose an employer to claims
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of discrimination, disparate treatment, unfair wage and hour practices, etc. Pitfalls exist around every corner, and may include such errors as: applications that include questions not permitted by law; irregular or incomplete job postings; job requirements that indirectly favor one class of employee over another; improper handling of sensitive or confidential information; and untrained interviewers. It is critical that employers, with the assistance of outside counsel, periodically review procedures and documentation used in the hiring process. Specific recommendations regarding pre-employment screenings and hiring due diligence on the part of the employer include:
1. Application/Interview
(a) When interviewing prospective employees, an employer should ensure the application asks the prospective employee to explain gaps in their employment or educational history. Interviewers/human resource department personnel should be trained in interviewing techniques, to include following up on these questions until an adequate answer is received.
(b) Both in the body of an application and during an interview, employers should ask the prospective employee why he/she left the last place of employment.
(c) An employment application should always ask for criminal convictions, not arrests, and make no distinction between felonies and misdemeanors.
It is recommended this portion of the application be clearly delineated, to include presentation in boldface type. The disclosure of criminal convictions is one of the most likely ignored or falsely reported areas of the application, and the employer needs to ensure it clearly and succinctly asks the question, thereby proactively eliminating proffered excuses by applicants.
(d) All applications, and any other employment questionnaire, should contain language that states that any false statements or omissions provide grounds for rejection of the application, and, if hired, grounds for termination upon discovery of the false statements or omissions.
This issue becomes especially relevant, and difficult to enforce, when faced with shortages of qualified, competent applicants. Often times, inside counsel is faced with a situation wherein an otherwise fully qualified candidate has failed to truthfully disclose information on an application, or omitted information specifically requested. There will be pressure from the operational elements within the company to "forgive" this oversight on the part of the applicant, and there may be instances where overlooking the applicant's failure is appropriate. Inside counsel, in consultation with the HR department and outside counsel, must consistently and uniformly enforce the company's policies with regard to false or omitted disclosures on an application, and any variance from the standard approach should be documented and justified.
(e) Ensure that all interview questions are job-related. For example, in most instances it is not permitted to ask a perspective employee if they are married since the marital status of the employee is likely not related to the job for which the individual is applying.
(f) Ensure that your interviewers are trained not to ask about a history of illnesses, including mental illnesses. Also, always remember that mental and physical impairments can be disabilities within the meaning of the Americans with Disabilities Act, therefore caution must be exercised in the use of medical related background information.
(g) Employers should check references to avoid claims of negligent hiring (see discussion below). Some suggestions for doing so are to ensure that you call both the direct supervisor as
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well as the Human Resources Department (if allowed to do so). Make sure you ask about the employee's performance. Sometimes, asking for a copy of the last performance evaluation can give valuable insights into the employee's true job performance. The new employer can, and should, ask about incidents of violence, hostile or aggressive behavior, as well as why the employee left employment.
Of note, employers are not generally required to disclose information regarding a former employee's employment. Many employers take the position they will only disclose the fact of employment and the dates of hire. In the absence of a release signed by the applicant, this approach minimizes the risk of claims for defamation, etc.
(h) The application form should contain a release authorizing the prior employer to release information regarding the employee's prior employment, although it should be clear that you are not asking to see the employee's confidential medical file. If you ask an employee to consent to the release of their personnel files, you should ask that the employee agree to hold you harmless for providing, receiving, or acting on that information.
(i) Have an outside third party (outside counsel, employer association) review applications for compliance with state and federal law.
2. Background Checks/Credit Reports
According to a recent survey by Harris Interactive for the Marlin Co. of North Haven, Connecticut, approximately 43% of the workers polled reported that their workplaces offered training on preventing workplace violence - up from 25% in 2000. However, that same survey reported that 28% of workers were so stressed that at least once in the past year they screamed at work. Other common stress responses included crying (20%) and throwing things (10%). The potential for workplace violence, and associated acts of "frustration", are just two of many reasons employers may choose to conduct background checks on potential new hires/rehires.
Generally, an employer should do background checks on any prospective employee. The decision to conduct background checks should be based on the position under consideration and not the person applying for the position. In other words, an employer should not selectively choose to perform background checks on some applicants and not on others. Importantly, an employer may have a duty to check an applicant's criminal record if the employer has reason to believe that an applicant would pose an unreasonable risk of harm to members of the public with whom the applicant will be in frequent contact, or to particular persons with whom the applicant will be in close contact during his or her employment; for example, a day care provider or a nursing home attendant. Maloney v. B & L Motor Freight, Inc., 496 N.E.2d 1086 (Ill. App. 1986) (company liable...
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