Smart practices can help avoid employee lawsuits

By Seth Thompson and KrisAnn Norby-Jahner

BISMARCK, N.D. – Lawsuits are often harder to defend against than they are to prevent. Avoiding the following three missteps will save employers money — and headaches.

MISSTEP 1: FAILING TO HAVE CLEAR, WRITTEN POLICIES THAT ARE BOTH COMMUNICATED AND FOLLOWED

Having clear, well-drafted policies is critical, but the work doesn’t end there. All policies should be effectively communicated to employees and consistently followed, as underscored by the recent wave of sexual harassment lawsuits.

Unlawful sexual harassment and other forms of discrimination are not new concepts, but the #MeToo movement provides a cautionary tale of what happens when employers fail to craft and follow through with clear policies and procedures.

An employer is liable for a supervisor’s workplace harassment that causes a significant change in employment status, such as firing, failing to promote, demotion and so on. If the supervisor’s harassment does not significantly change the victim’s employment status, but rather creates a hostile work environment, the employer is liable unless it can prove: (1) the employer exercised reasonable care to prevent and promptly correct unlawful behavior; and (2) the victim unreasonably failed to take advantage of preventive or corrective avenues provided by the employer.

When the harasser is a co-worker, an employer is liable only if it knew or should have known about the harassment and did not act.

Having a clear anti-harassment policy represents an employer’s attempt to prevent and promptly address unlawful behavior. An effective policy requires identification of prohibited behaviors, a clear complaint procedure, prompt investigation procedures, anti-retaliation assurance, remedial-action assurance and ongoing workplace training.

MISSTEP 2: FAILING TO PROPERLY TRAIN SUPERVISORS ON LIABILITY AND REPORTING OBLIGATIONS

Front-line supervisors or managers are the eyes and ears of a company. When employees request reasonable disability accommodations, report harassing behavior, request time off, have policy questions and so on, they usually speak with a direct supervisor.

Supervisors need training on company policies and red flag issues that must be brought to human resources and/or management for consistent and proper administration.

COMMON RED FLAG ISSUES INCLUDE:

• Attendance

• Discrimination/harassment/retaliation

• Electronic communications

• Medical leave

• Military service leave

• Paid/unpaid time off

• Substance abuse

• Workplace violence and safety

• Wage and hour compliance

Proper supervisor training is critical because many are promoted directly from the workforce without outside training. Supervisors are a key conduit for information between the employees and human resources and upper management. If the front-line supervisor knows about something, in a lawsuit the company is likely deemed to have known it, too.

MISSTEP 3: FAILING TO PROPERLY CLASSIFY EMPLOYEES

Exempt employees are not entitled to overtime pay, but non-exempt employees are. So, if an employer pays an employee a salary, that employee is an exempt employee, right? Maybe. An exempt employee must be paid: (1) a predetermined and fixed salary not subject to reduction because of variations in quality or quantity of work performed; (2) the salary must be at least $23,660 annually or $455 per week (stay tuned for changes to this threshold in 2018!); and (3) the job duties must primarily involve executive, administrative or other professional duties, or other exempt classes as defined by federal regulations.

An employee can be properly categorized as exempt only if all three tests are satisfied.

Independent contractors pose another frequent misclassification. Employees are paid wages, subject to tax withholdings, provided workers’ compensation benefits and so on. Independent contractors, conversely, are simply paid to perform a job.

Calling an employee an independent contractor does not make the employee an independent contractor. Rather, there are lengthy, multi-part tests primarily focused on whether the employer has “control” over the worker.

The more control an employer has, the more likely the worker is actually an employee.

Misclassification often results in significant fines, penalties, back pay and attorneys’ fees. Thus, employers should proactively ensure they have accurate, up-to-date job descriptions for all employees.

In addition, employers must scrutinize whether independent contractors are actually employees, but simply called independent contractors.

Bottom Line

Ensuring legal compliance in the workplace is akin to preventive car maintenance. Take the time now to make sure policies are clear, wellwritten, communicated and followed. Ensure proper supervisor training and communication. And verify that employees and independent contractors are properly classified. Investing the time to follow these measures now will be time well spent in the long run.

Seth Thompson, attorney

KrisAnn Norby-Jahner,

Vogel Law Firm

Attorney

Fargo, Bismarck and Grand Forks, N.D. Minneapolis and Moorhead, Minn. 701-237-6983