Thanks for visiting!

Sign up to receive our free weekly enewsletter, and gain access all our FREE articles, tools, and resources.

banner
HCPro

The 20 most common employer mistakes


CLICK to Email
CLICK for Print Version

by John Commins

Employment discrimination lawsuits have doubled in the past 10 years, due largely to provisions of the 1991 Civil Rights Act that give juries a say in financial settlements. Among the headlines: Publix supermarkets got slapped with an $82.5 million class-action sex discrimination settlement and Coca Cola paid nearly $192.5 million in 2000 to settle a class action.

We could cite many examples, but the point is that juries are ready and eager to shower aggrieved litigious former employees with millions of dollars at your business’ expense.

“Plaintiffs don’t win a huge percentage of lawsuits, but that percentage goes up a lot if there is a jury trial,” says Michael D. Malfitano, attorney at Florida-based Constangy, Brooks & Smith, LLP (CBS). “After 1991, when jury trials came into play, the percentage of plaintiffs’ wins increased and the dollar amounts increased.”

“Most jurors are working people with family members who may have had problems with employers at some point,” Malfitano says. “So there is a natural empathy with the working person who is the plaintiff.”

The good news is that because of their relatively small size and close working relationships, physician practices are less likely than larger healthcare entities, such as hospitals and nursing homes, to find themselves in an employment suit, he says.

So what can you do to reduce your potential liability? Malfitano and his colleague, CBS attorney Cherie L. Silberman, have identified the 20 most common mistakes that can come back to bite employers when a jury sets its teeth. Take a look and see how many snafus you recognize in your workplace.

Pre-employment mistakes

Let’s start with what Malfitano and Silberman call pre-employment mistakes, the errors committed during the recruiting and hiring process:

1. Failure to conduct an adequate background check on potential employees. Did you conduct a criminal background check, contact the references, ask about previous convictions, but not arrests, and check his or her driver’s license?

2. Inconsistent recruiting and hiring practices. Are you thorough in the hiring process with some employees but not others? “When employers don’t apply policies consistently, it looks to a juror like they may be discriminating,” Silberman says.

3. Inappropriate interview questions and comments. This is a real minefield. Although you want to be thorough in your hiring process, you also have to be careful about what questions you ask. For example, you can ask about criminal convictions, but not arrests. You cannot ask about the status of military discharge, and questions about education must be thoroughly screened. Avoid questions related to religious or social issues, as well as those related to physical or mental health.

“Where employers get in trouble is where it may not seem so harmful, say in casual chatter,” Silberman says. “[For example], if someone says they’re moving into town and you ask if it’s so they can be closer to their husband. The intent doesn’t matter.”

Mistakes during employment

The following are mistakes made during employment:

4. Failure to properly pay nonexempt employees for breaks, lunch, and overtime training. “This is a ripe area for litigation right now,” Silberman says.

5. Inappropriately classifying hourly employees as salaried employees to avoid overtime and other compensation. Just because you slap an “assistant to the assistant manager” title on somebody’s name tag doesn’t make him or her exempt from overtime and other benefits. Juries salivate over this issue. Malfitano recommends that physician practices undertake annual or biannual audits to ensure that they haven’t improperly classified employees as exempt. “In medical practice, that is not an unusual situation,” he says. “We have seen receptionists answering the phone classified as exempt and not getting overtime. There is no way a receptionist would be exempt.”

6. Failure to implement, disseminate, and follow personnel policies. What are your harassment and discrimination policies? What are your corrective action and disciplinary policies? You might have the most progressive and comprehensive personnel policies in the business, but they’re useless if you don’t follow them.

7. Failure to train employees. Do your employees understand the finer points of the Americans with Disabilities Act? Do they understand that harassment is not limited to sex, but can include religion, age, race, ethnicity, disability, and marital status? This training should apply to all supervisors and managers, as well as HR.

8. Failure to document promptly and accurately. Prepare every document regarding warnings, complaints, and disciplinary action as if it is being introduced at trial and you are the jury. Be objective. Get the facts, not the conclusions. The document should include the date it was created, the name and signature of the author, the name and signatures of the witnesses (when applicable), and the stated purpose of the document.

9. Failure to appropriately evaluate employee performance. Make sure your assessment of your employees is accurate. Don’t fudge over the problem areas because it’s difficult to refute a former employee’s complaint of being wrongfully denied a promotion after a soft-hearted supervisor gave a glowing, but undeserved, appraisal. “If they make a decision adverse to that employee later on because of poor performance but there is no documentation to support that, that could look like discrimination,” Silberman says.

10. Failure to adequately discipline employees. Rem-ember, the purpose of the discipline, beyond covering your own liabilities, is to help the employee improve. Juries really dislike it when they believe that employees are blindsided with punitive actions.

11. Failure to conduct thorough investigations into employee complaints and, if necessary, take prompt remedial action. If an employee tells you he or she is being harassed, look into it immediately. Again, this is not a difficult concept, but some employers hope to avoid confrontation at all costs, often to their own detriment. Establish ground rules for the interviews, including providing the employee with an explanation about the complaint. Don’t make judgments or draw conclusions. Make sure the employee answers the questions posed; listen carefully and take notes.

12. Failure to curtail inappropriate use of office e-mail and computers. We’ve all heard about or experienced the employee who forwards tasteless, racist, or other offensive humor or who uses centerfolds as screen savers. This could be construed as creating a hostile work environment.

13. Failure to curtail employee favoritism or inconsistent treatment of employees. We all have seen this one: the boss’ pet. Beware, this breeds a lot of resentment among employees and jurors, many of whom have had to deal with it in their work environment.

14. Failure to correctly designate absences under the Families and Medical Leave Act (FMLA). Eligible employees can take up to 12 weeks off under FMLA at companies with 50 or more employees if they have been employed there for at least one year, including 1,250 hours in the previous 12 months. Eligible categories include the birth of a child, placing a child for adoption or foster care, caring for a close relative with a serious health condition, and the employee’s own serious health condition. This probably won’t affect many of the smaller physician practices, but it’s still a good idea to be aware of the law.

15. Failure to prepare for foreseeable employee terminations. If you see an employee that might be a good candidate for termination, plan for it. Document your case for termination. Provide that employee with the necessary notices, releases, and waivers. Determine whether the employee is in a protected class and ensure that the termination is not discriminatory. Make sure the fired employee’s severance and vacation pay is ready and accurately assessed at the time of termination.

Post-termination mistakes

Finally, we come to what Malfitano and Silberman call post-termination mistakes—those loose ends you failed to secure when you cut your ties to a troublesome employee:

16. Allowing former employees to make copies of their personnel files. “The personnel file is not their file. It’s the employer’s property,” Malfitano says. “Once the employee ceases to be an employee, there is no benefit to the employer relationship by letting them have access to the file. The only reason why former employees want the file, in our experience, is to sue their former employers.” Some states require employers to make their files available, but most don’t.

17. Making inappropriate or defamatory comments about former employees. We all like to chat about how nice it is since you-know-who got canned, but doing so can constitute defamation. Be particularly careful with references for other employers. Confirm the basic facts and don’t offer opinions. Be careful about even positive comments. “Once you say something good about one employee and you’re not making the same comment about another, that is a de facto negative comment about the one you won’t comment on,” Silberman says.

18. Failure to tell former employees about their right to COBRA coverage. Remember, there have been some changes to COBRA coverage under the stimulus bill passed in winter 2008. Make sure you understand who is eligible, who pays, and what subsidies are applied.

19. Failure to prepare for unemployment compensation appeals hearings. Again, this is not rocket science. This should be foreseen.

20. Failure to think about how a jury would view your personnel decisions before you make them. This can be an interesting exercise. Imagine you’re sitting in the jury box. How would you view your own actions?

Sources

Michael D. Malfitano, partner, Constangy, Brooks & Smith, LLP, 100 North Tampa Street, Suite 3350, Tampa, FL 33602-5832, 813/223-7166; mmalfitano@constangy.com.

Cherie L. Silberman, associate, Constangy, Brooks & Smith, LLP, 100 North Tampa Street, Suite 3350, Tampa, FL 33602-5832, 813/223-7166; csilberman@constangy.com.