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American Bar Association - Defending Liberty, Pursuing Justice


Vol. 15, No. 2




Employers on the Offensive

Internal Policies and Workplace Responsibility

In employment law, as in many areas of business, the best defense is a good offense. Sound and well–documented policies and procedures are your best insurance against employee litigation. While there is no single action that guarantees an employer won’t be sued (some causes of action even survive dissolution of the employer’s business), there are a few simple steps that will help your business clients substantially address the most common sources of employee litigation.

The current economic crisis highlights one of the biggest, and potentially most costly, areas of employee litigation: post–termination allegations of discrimination. Most discrimination charges are triggered by adverse employment actions: terminations, demotions, pay cuts, internal transfers, and pass–overs. Thus, initial stop–gap efforts to shore up an employer’s defenses to employee litigation should look first to potential claims arising from recent or impending staffing cuts. Employees who leave ‘on bad terms’ may also raise claims of constructive termination.

Written Policies; Employee Handbooks

To ensure that policies are applied consistently throughout a company, they should be written and readily accessible to employees. Public copies, postings, or handouts at orientation are all good means of distribution. If you hand out a manual at orientation, be sure to allow the employee time to read it before signing an acknowledgment of receipt, to avoid claims that the acknowledgment was perfunctory. While detail on all of the policies that should be covered is more than can be covered here, critical areas include:

  • Title VII Non–Discrimination (include additional state protections if applicable)
  • Attendance, Absenteeism, Time Recording/Reporting
  • Vacation/Sick/Personal Leave
  • Workplace Dress and Behavior Standards
  • Benefits, Insurance, and Perks
  • Performance Standards and Review Policies

Employee handbooks should clearly state that they are not contracts, that they are subject to review and revision, and to whom (both by name and title) questions should be directed if the handbook is silent or out–of–date. If you have high turnover, consider a pamphlet with summaries, referring employees to an appropriate resource for detailed information on complex policies, such as the Family Medical Leave Act. They should remain silent on what is not offered (e.g., severance), and they should not publish information such as “pay scales” if such information is not actually used consistently.

But remember: A written policy is not enough. The policy must be published and followed to provide the employer an affirmative defense. Especially in matters of constructive discharge, showing that the employee had tools and avenues for resolution, but failed to avail of them, may suffice to negate vicarious liability for isolated bad behavior. This is a good place to emphasize that handbooks should avoid one–sidedness; employers do have obligations to employees in providing a safe, supportive workplace, and the employee’s duty in making that happen is key.

Where state and federal standards are complex, and the avenues for administrative redress are readily available, save work for yourself and money for your client by encouraging the purchase and display of ready–made posters for disseminating information on Title VII, FLSA, ADEA, ADA, FMLA, and OSHA compliance.

Regular Reviews

Regular employee reviews are an important management tool. They allow managers to assess, both subjectively and objectively, the performance and compliance of an employee over time, as well as to document performance, attendance, or behavioral problems. When such issues are offered as the justification for a termination or pass–over, employees often challenge that such assertions are pretextual; in the absence of documentation, the employer is at a loss to prove otherwise. Clear documentation of efforts to rehabilitate an underperforming employee, on the other hand, will quickly dispose of such charges. As an additional benefit, when economic challenge leads to organizational upheaval, performance history records can help a new manager get a handle on those transferees who need monitoring or coaching.

Contract vs. At-Will; Independent Contractors

While most states are at–will states, conflicts will nonetheless arise regarding whether a contract existed, or whether a worker was an employee or general contractor. Ensure that your client understands the difference, and applies the labels appropriately. Because long–term relationships will tend to morph, independent contractors’ status in particular should be reviewed periodically.

Exempt vs. Non-Exempt

As with contractor/employee status, exempt/non-exempt status is a common source of confusion on the part of employers and employees. Both should understand that “salaried” is not equivalent to “exempt,” and the importance of timekeeping for non-exempt salaried employees.

Encourage Communication; Document!

One of the most overlooked elements of any healthy relationship—whether between you and the client, or between the client and his or her employees—is open communication. An employee will not report problems if he or she is intimidated or believes nothing will be done. Open–door policies should also clearly state that if an employee has issues with a supervisor or manager, the employee can and should “go up the ladder” or report laterally to an appropriate person in human resources. You should reinforce to your clients that they should report serious complaints to you sooner, rather than later, so you can guide them through the minefield of safe resolution.

ALL complaints must be documented and investigated, and all managers should be aware of this, and how to go about it with tact and discretion. A seemingly innocent complaint about worker “horseplay” might prove to actually be the tip of a hostile workplace iceberg, only appearing when the employee has “finally had enough.”

Richard J. Rutledge, Jr., is a solo practitioner in Winston-Salem, North Carolina. Contact him at or visit his Web site at http://www.rickrutledgelaw.com.

© Copyright 2009, American Bar Association.