Who is Affected by Employment Law?
Seemingly, anyone and everyone associated with a business, i.e., the owners, managers, supervisors and all other employees. Of course, the business itself, no matter how small or large, so long as it has employees, is greatly affected. Employment law cases can cripple or even bankrupt businesses; can significantly impact an individual’s career; and can also cause substantial employment turmoil.
Employment laws differ from State to State. This is important as, without State or local anti-discrimination laws, only businesses with fifteen or more employees are impacted by the general (federal) laws. Those laws include Title VII (which includes anti-discrimination provisions affecting race, color, religion, national origin and sex (which includes gender, sexual harassment and pregnancy)), the Age Discrimination in Employment Act, the Americans with Disabilities Amendments Act and a number of others. A significant class of individuals which is not protected under any of the federal anti-discrimination laws is sexual orientation. Sexual orientation may be protected under State or local laws.
By way of example, we need look no further than the vast differences in employment laws between New York and New Jersey. While many laws in both States are similar, the laws of employment are on completely different spectrums. Both States are considered at-will employment States, meaning an employee can be terminated for good reason, bad reason or no reason, so long as the employer is not in violation of any of the anti-discrimination/retaliation laws, is non-union, and a written contract of employment with the employee does not exist. However, the similarities end there. The anti-discrimination laws in New York require only four employees to be applicable. The strength of the law pales in comparison to federal law which is why, for the most part, attorneys in New York will not represent employees against employers with less than fifteen employees. The only exception to that principal is if the discrimination occurred in New York City (which encompasses the five boroughs of Manhattan, Queens, the Bronx, Brooklyn and Staten Island) as New York City has its own anti-discrimination statute (the New York City Administrative Code) which has significant teeth. On the flip side, the New Jersey anti-discrimination statute is so significant, practitioners in New Jersey consider it malpractice to bring a discrimination claim under any of the federal laws as the law in New Jersey requires only one or more employees and also allows for unlimited punitive damages (the federal law has a sliding scale of capped punitive damages and New York State does not offer any punitive damages for employment discrimination). Undoubtedly, navigating the laws in New York, New Jersey or any other State requires consultation with an attorney who is not only licensed to practice in whichever State is impacted but who also understands this area of the law.
How to Avoid Employment Law Issues Altogether
The best and most effective way to avoid employment law issues is to take them on, head on! For starters, an employee manual or personnel policies and procedures should be prepared and provided to all employees. The two most important parts of that multi-page document are: (1) the pages which discuss anti-discrimination/harassment policies which includes the mechanisms to follow if an employee believes he/she has a complaint of discrimination or harassment; and (2) the detachable page of the document on which the employee signs his/her name to state that the employee manual or personnel policies and procedures has been received. That detachable page is placed inside the personnel file of the employee in which it shall forever remain for safe-keeping. If the above steps occur, the employer is more than half-way there.
The next big step is for the employer to train its supervisory/management employees on what to do when a complaint is communicated. It is one thing to have the employee manual or personnel policies and procedures. It is another to make certain that supervisory/management employees follow it! For a smaller business, the business owner may be the only supervisor or manager. Depending upon the State and the number of employees employed by the business, the business could face liability. If liability is an issue, the business owner, managers and supervisors need to know and understand what procedures must be followed in the event of a complaint, which can be made in writing, sent by email, transmitted by text or communicated verbally. In essence, to avoid or limit its liability, the employer should: (1) maintain and distribute sexual harassment/discrimination policies and procedures to all of its employees; (2) follow its own policies when a complaint is made; and (3) in response to a complaint of harassment/discrimination, investigate and take prompt, remedial measures.
Before any complaints are filed by an employee, and starting from the time an employee is hired, the employer has to begin the process of complete protection and insulation. This is done through one simple step which, similar to location in the real estate industry, must be stated three times: “Document, document, document.” Now that it’s been said, make sure it occurs. If an employee is constantly late for work – document. If an employee is not performing in an effective manner – document. Whatever it is, and whatever is going on, be sure everything is documented. Two examples will illustrate why:
Example 1: The pregnant employee
Company ABC employed Mary. Mary worked for ABC for several years. During that time, she was constantly late, performed deficiently in her work, etc. ABC, for the most part, let those issues go. A supervisor of ABC may have verbally spoke with her once or twice regarding lateness or work deficiency but the supervisor does not remember when and nothing was ever documented.
Finally, ABC decided enough was enough. Mary’s lateness was out of control as was her work performance. So ABC decided to terminate Mary. But just one problem exists - Mary is now pregnant.
Had ABC been documenting Mary’s lateness and work deficiencies all along, termination shouldn’t be a problem, regardless of Mary’s pregnancy. She most likely would have already been warned in writing. When it occurred again, regardless of Mary’s protected employment law status, ABC would have every right to act in accordance with its warning document. However, because ABC was not documenting, it probably has limited options in terms of discontinuing Mary’s employment – not only throughout the pregnancy, but for a significant time thereafter.
Example 2: Inconsistent action by the employer
Employee George, who is African-American, and Employee Robert, who is Caucasian, both have similar backgrounds, experience and years working for the employer. George was not as productive of an employee as Robert and was often deficient in his performance.
A financial blunder occurred which caused the employer significant loss. Both Robert and George were equally responsible. However, because George was the allegedly deficient employee, he was the only one who was terminated. Robert remained at the job with a verbal warning. George sued the employer for discrimination, i.e., for treating him differently than a similarly situated employee based on his race.
With well-documented personnel files, the employer could more easily defend its actions by pointing to the stark differences in the employment history of the two employees. However, without documentation, which would have included prior written warnings to George, etc., the employer would have a very difficult time justifying its inconsistent employment decision to terminate the African-American employee, but not the Caucasian employee, for the same infraction.
The above examples illustrate why it is so important to document all adverse and questionable employee activity. While documentation may be somewhat burdensome, that burden pales in comparison to the financial tragedy which is just around the corner in the event the employer is hit with a lawsuit. Attorneys’ fees could cost an employer hundreds of thousands of dollars to defend an employment discrimination case and that amount will be due and payable even if the employer wins. If the employee wins, the employer could be responsible for back pay, front pay, compensatory damages and punitive damages. Additionally, due to feeshifting under the federal law, the employer could also be responsible to pay the employee’s attorneys’ fees. When comparing the administrative burden against effectively being forced out of business or paying a million dollar judgment, clearly the burdensome steps, to the extent they are burdensome at all, must, must, must be followed.
An employer can handle anticipated employment adversity (discrimination or harassment complaints) by either resolving them, litigating them or a combination of both. While the first option – resolution – generally makes sense, there might be times, albeit rare ones, when an employer may want to “make an example” of an employee. This occurs when an employer wants other employees to see the complaining employee lose badly through judicial adjudication, so that the other employees will think twice before rendering their own complaints. For the most part, I generally advise employers to resolve employment disputes quickly and effectively. The best and most effective way to achieve such success is through use of a great, strategic tool – the severance agreement.
Severance agreements are effective because they offer employees something which employees would not otherwise be entitled to receive, i.e., additional compensation (pay, benefits or both), subsequent to the cessation of employment from the company. In exchange, the employer receives the employee’s signature to the agreement, which includes, more importantly than anything else, the employee’s release of all claims against the employer. It most often also includes confidentiality and non-disparagement provisions as well as other employee restrictions. The key question for the employer is what to offer in such an agreement for the employee to say “I do.” How much to offer in the severance agreement is generally case specific and is best decided following consultation with an attorney. Severance agreements, when prepared correctly by an attorney, soon become the employer’s best friend as they allow the employer to sleep at night. Without such an agreement, the employer, when faced with a difficult employment issue, has to constantly wonder will this be the day that a complaint is filed in court. With a correctly prepared and executed agreement, a very troubled employer can soon become a relaxed one.
Bottom line: Employment law is a complicated area which should be discussed with attorneys in the field if/when you believe you finally want to protect your business from a number of the pitfalls discussed above or if you believe that an employment matter presently exists.