October 5 - October 11

Current Issue

IBLV Blogs

Special Publications

Search In Business

In Business on TV

In Business in the Media

The List

Book of Lists

Meetings

Event Photos

About InBusiness



Law and Small Business
Employment law sins can be costly
By Stephanie Tavares / Staff Writer

Sometimes it is easier to get a serious point across using humor.

At least, that is the idea behind Hale Lane's tactic in teaching associates, fellow lawyers and even some clients about the legal perils of sloppy employment policies. For some time, the law Las Vegas law firm's employment law division has used its cheeky "Seven Deadly Sins of Employment Law" to hit on several key points for advising clients.

"It does communicate our point effectively," said Anthony Hall, a partner of the firm's employment law practice. "This format is most often used in articles and presentations. Its been effective because people can have a good laugh about it. The underlying issues are really what it's all about. When people need to know the issues and understand the magnitude of them, this is something that tends to catch their attention."

Hall came up with the idea while sipping Seven Deadly Sins brand wine and joshing with some fellow employment law attorneys.

But what started as a joke, became very serious as Hall thought about how committing these "sins" can have dire consequences for businesses. About 30 percent of civil litigation in the U.S. is employment related, he said. In 2003 there were more Fair Labor Standards Act class action claims than those based on all other other federal statutes combined.

"It really can devastate a business if they fall into too big a trap," Hall said. "They can be worse than ruining your life."

So it is vital for businesses, especially small businesses to heed Hall's advice, avoid his "seven deadly sins" and consider adopting his seven virtues.

Not all of these sins really match up with their titles, but remember, they were matched up over a bottle or two of zinfandel. And Hall stands by the legal principles behind them.

The Sins:

1. Lust: The lust to achieve lower overhead and avoid overtime pay requirements. This frequently results in misclassifications of employees as exempt.

New regulations on classification came out two years ago and Hall said few clients have done a self audit of classifications to ensure all their employees are classified correctly.

Don't think it's a big deal? Think again. All it takes is one former employee claiming their position was misclassified and you could have a class action suit on your hands involving everyone holding that type of position in your company.

If you don't fully understand the classifications, it's best to be on the safe side and get counsel.

2. Wrath. Or Anger. Really, it's all bad for business. The fastest growing and most dangerous type of claim faced by companies is for retaliation, Hall said.

Even someone who files a false discrimination report to your Human Resources department is legally protected against any type of retaliation. And recent legal precedents have widened the scope of retaliation to outside the workplace.

"When (discrimination) happens it needs to be dealt with appropriately, but what about the instances when it's being used as a shield?" Hall said. "Like you've written up an employee two or three times and the employee files a complaint. How do you not retaliate, under the law?"

The key, he said, is to have a post-investigation plan. If a claim of discrimination can't be substantiated, you need to have a transition plan to address that and to ensure nothing occurs that could be construed as discrimination.

"A lot of companies finish the investigation and then put it aside," Hall said. "You're only half done at the point."

3. Gluttony: Gluttony for information on job applicants can come back to bite you.

It's vital to educate and train the people who will be interviewing and having contact with job applicants. They need to know what they can and cannot ask and how to ask questions so as not to violate Equal Employment Opportunity laws.

4. Pride: many companies take pride in their diversity in hiring efforts. However, it is important that these policies do not cross the line into reverse discrimination.

Rule No. 1: Don't set quotas.

Rule No. 2: Don't set quotas.

You get the idea.

Hall said that having diversity goals are fine, but it is in everyone's best interest to hire the most qualified person. That means companies with diversity goals may have to do more targeted recruiting, which is perfectly legal.

"It's OK to recruit from minority communities that you feel you have a need to bolster within your organization, but make sure those people recruiting are the ones actually making the decision and screening applications," Hall advised. "If you set up a good system you should be able to achieve your goals in a legal way."

5. Greed: Is warehousing every scrap of paper, every sticky note, every memo really a form of greed? Perhaps not, but Hall really wanted to include this "sin" in his list and this was the only open spot.

No matter how many times business experts, lawyers and experts say it, someone always misses the point: You must have a system for evaluating and storing company data.

Saving everything (or nothing) can lead to a massive hunt conducted by your lawyers, should you get sued — along with the massive bill for their time.

"Many companies don't understand the magnitude of this risk and they don't understand the costs it could incur down the line, so they're not putting the investment in it now," Hall said.

You can avoid this by establishing policies about what gets saved, when and where. That way if and when you do get sued and someone subpoenas your electronic files, you'll be able to hand over the appropriate material at a reduced cost of time and money.

Hall suggested hiring a lawyer — and a good one. Make sure your lawyer is an expert in the laws that pertain to your industry. The rules are different depending on what your business does. The lawyer can sit with your data retention team and assess what you need to keep and for how long as well as how it's going to be filed and where it will be stored.

It is vital that your IT team, whether in-house or contracted, sits in on this meeting as well as upper management, who will draft and enforce the policies.

"It's a major undertaking and an expensive one," Hall said. "But it's much more expensive to hire attorneys down the road to rifle through all these files. The cost of that is super high."

6. Envy: As in I wish all my employees performed at the same high level as Mr. X over there.

It's dangerous to compare employees, especially if one of them happens to have a disability (that you might not even be aware of!).

So don't do it!

It could also lead to some managers not wanting to hire people with disabilities — another big problem.

If someone isn't performing to the level you expect, it's in your best interest to discuss with them any accommodations you might make that could help them get up to speed.

Working with someone can not only solve the problem, it can save your company serious legal headaches.

"You have to be very, very careful when dealing with people with disabilities, especially when the reason for discipline could have some correlation to the disability. If you explore reasonable ways to accommodate them, you're not going to be in a situation where an attorney can make up possible accommodations after the fact."

7. Sloth: Don't be lazy! Update your employee handbooks regularly.

Regularly does not mean once a decade, we're talking every two years. (Some Nevada business owners I've met make a point to update their policies between legislative sessions: Lobby in year A, update handbooks in year B).

Laws change frequently — so fast that even employment law attorneys often have trouble keeping up. So it's vital to sit down with your legal adviser least once every other year and re-evaluate your company policies.

"A well-written hand book has a legal benefit on every page," Hall said.

Stephanie Tavares covers utilities and law for In Business Las Vegas and its sister publication the Las Vegas Sun. She can be reached at 259-4059 or tavares@lasvegassun.com.

IBLV Homepage

 
A member of the Greenspun Media Group, publishers of:
Celebrity Week |  Home & Design |  In Business |  Las Vegas Life |  Las Vegas SUN
Las Vegas Weekly |  Ralston/Flash |  LV Magazine |  Vegas Golfer |  VEGAS Magazine

Use of this Web site constitutes acceptance of the InBusiness.com Terms of Use and Privacy Policy.
Advertise: On InBusiness.com.
Work for Greenspun Media Group. All contents @ 1998 - 2008 In Business