Ten Steps to Help Keep Your Employees From Suing You (Or To Help Defend You If They Do)

by Margaret Kostopulos

If they didn't already know it before the election, newly elected officials soon realize that personnel matters can and do consume an inordinate amount of time and comprise one of, if not the biggest, allotment of a local governmental entity's budget. Employment related litigation continues to be the fastest growing type of law suit filed. While no single or collective acts can guarantee that employees will not sue, a periodic assessment of your employment practices will lessen the likelihood of employment- related litigation, or provide you with the proper defense should a suit occur. We believe that a focus on these ten steps is likely to provide protection from nasty employment lawsuits.

1. Today's Applicant may be Tomorrow's Litigant
Unsuccessful job candidates comprise a significant part of the overall claims filed with the Equal Employment Opportunity Commission and the Department of Human Rights. Make sure that your hiring practices are up to date. This starts with a review of your job application. Minimally, an employment application must contain the following:

a. An EEOC statement. The application should contain the statement at either the top or the bottom of each page stating that the employer is an equal opportunity employer and does not discriminate against applicants on the basis or race, gender, religious affiliation, disability, etc.

b. An offer to accommodate disability. Not only is it important to inform an applicant of their ability to request a reasonable accommodation to perform the position for which they apply, but it is equally important to notify applicants that they can request reasonable accommodation through the application and interview process. State this directly on the application as well as in job postings to avoid disability discrimination allegations related to the interview process.

c. No request for information on age, marital status, religious affiliation, parental status, or other issues prohibited by Title VII and other non-discrimination laws. It may seem axiomatic that it is risky to ask an applicant his or her age, but more obscure minefields still exist. For instance, while it is appropriate to request educational information, avoid asking for date of graduation. Instead, the application should request information on whether the applicant graduated and, if appropriate, what degree was earned.

Similarly, an application should not ask for information on whether the candidate is disabled, but rather it should ask whether the applicant is able to perform the essential job functions of the position with or without accommodation.

Again, once a candidate is hired, it is appropriate and necessary to request information on citizenship or the ability to work in the United States. Care should be taken on a job application to avoid asking whether a candidate is a U.S. citizen, unless citizenship is a statutory requirement for the position. Otherwise, the appropriate information to request on a job application is whether the applicant is legally allowed to work in the United States or a statement that successful candidates will be required to provide proof of their ability to work in the United States upon hire.

d. No request for information on arrests. Depending on the particular position, it may be relevant to inquire about certain criminal convictions, especially since some criminal convictions serve as a bar to certain public employment. Additionally, conviction of certain crimes may be relevant to particular positions, if a close nexus exists between the job duties and the nature of the conviction, e.g., a convicted embezzler may be deemed unqualified for serving as a Chief Financial Officer or Comptroller. It is important that the application seek information on convictions only. While it may seem relevant to inquire about arrests, it is absolutely impermissible to use arrests which did not result in convictions as a basis for employment decisions. The best practice is to avoid asking for the information. If no information is sought, then it can never be alleged that it was impermissibly used as a selection criteria.

e. An employment at-will statement for all positions having that characteristic. It is never too early to remind employees and applicants that should they be the successful candidate, their employment is at-will, which means that either they or the employer can decide at any time to end the employment relationship for any reason (except an unlawful one). At every juncture of the employment relationship, it is important that employees (or candidates) are reminded that no contractual relationship exists, and so they have no special "right" to their job.

f. A statement of accuracy. Every employment application should require the applicant to execute a statement that the information provided in the application is true and accurate to the best of his or her knowledge as of the date of signing. This, in effect, commits the employee to the information and should it be determined later that any of the information was false, it creates a clear and unequivocal reason for refusal to hire or termination.

2. Interviews are Not Meant for Chit-chatting
Job interviews are designed to provide a face to face opportunity to gather additional information on applicants. Apply the same principles utilized in maintaining a defensible job application to the interview process. As much as you might want to make the candidate feel at home, avoid asking personal questions. For instance, do not ask a young female applicant if she is married or intends to start or add to her family. The reverse of that is true as well. Do not ask more mature women if they are "empty nesters" yet. The question may be designed to determine whether the candidate is available for travel or flexible scheduling, but it may be perceived as a gender or pregnancy discrimination. The availability of the applicant to carry out particular tasks should be addressed directly: "Will you be able to work a flexible schedule?" Even when it appears that a rapport exists with the candidate, adhere closely to questions that assist in determining the abilities of candidate, not extraneous information that may come back to haunt.

3. Maintain an Up to Date Employee Manual
Employee manuals need not be exhaustive of every issue ever raised. It should, though, be a fairly comprehensive compilation of the workplace rules and policies. For instance, a manual need not contain a policy on the School Visitation Leave Act, but it most certainly should contain a reference to family medical leave (as it is much more commonly used). Among the policies a personnel manual should contain are:
  • A strong and conspicuous statement that the employees remain employees at will notwithstanding the existence of the manual and that the manual does not create a contractual relationship;
  • An EEO statement;
  • A sexual harassment policy and procedure for making a complaint;
  • An explanation of benefits, such as vacation, leave benefits, holidays, etc.;
  • Pay policies, such as when employees will be paid, when overtime is earned and whether an employee can earn compensatory time in lieu of overtime pay;
  • A general policy about disciplinary action, incorporating the tenets of progressive discipline (verbal warning, then written reprimand...) generally, depending on the particular circumstances;
  • A complaint or grievance process that also reminds employees that any variance from the process does not invalidate the action taken.
Employee manuals should be regularly reviewed, approximately every three years. The area of employment law continues to evolve and change and it is important to review your manual to ensure that it contains the most recent material.

Finally, all employees should receive a manual upon hire and receive additions or amendments when they are adopted. Employers should retain a sign-off sheet or an executed acknowledgment form from each employee signifying receipt of the manual or additions/changes. Explanation of the policies through staff training will help employees understand the rules, as described in section 6 below.

4. Maintain Proper Personnel Files
Some materials belong in an employee's personnel file; some do not. When an employer retains inappropriate records in a personnel file, and the employee is disciplined or discharged, they will review their personnel file (it is always the first action that plaintiff's employment attorneys take), notice that it contains documents that do no belong, and in certain instances, claim that the presence of these documents wrongly influenced the decision to discipline or discharge. Here is an example:

An employee is injured on the job. He completes the appropriate forms and files a workers compensation claim. The employer places copies of the documents in his personnel file. When he returns to work he begins to engage in misconduct: insubordination and refusal to follow directives of his supervisor. Nothing documenting these problems is placed in his personnel file because the supervisor is afraid to do so, fearing he will be accused of harassing the employee. The last straw occurs when the employee refuses to attend employee safety training and leaves work for the day without permission and without leave. At that point the employer terminates the employee and tells him, in writing, that the reason for the termination is his refusal to go to training along with other misconduct. When the employee's attorney requests to review the personnel file, she discovers that the only other record in the file is the record of a worker's compensation claim. She concludes that the supervisor impermissibly considered the employee's worker's compensation claim in deciding whether to terminate her client. While the employee might make the allegation that he was fired for retaliation for his workers compensation claim even without a record if it in his file, the fact that the record was in his file increases the perception that it was a factor in the termination decision.

Documents related to worker's compensation claims do not belong in an employee's personnel file, nor do the following:
  • Investigative reports related to misconduct where the employee is a witness or a complainant;
  • Investigative reports of misconduct of the employee if the suspected misconduct is not substantiated;
  • Complaints or reports by other co-workers about the employee if no action is considered appropriate as a result of the complaint;
  • Any documents related to any lawsuit or claim by the employee against the employer (this does not include instances where a third party seeks information on lost wages relative to a suit by the employee against that third party);
  • EEO information regarding the employee;
  • Any insurance or health information about the employee or dependents, including what, if any, insurance benefits the employee has selected. Documents that should be retained in an employee's personnel file include:
  • All hiring documents such as employment application, skills test results (except drug testing) and reference letters;
  • All records of promotions/demotions and raises or decreases in salary;
  • All performance evaluation instruments, including all documents submitted by the employee related to the same;
  • All records of discipline issued, unless a policy exists which requires the employer to remove certain disciplinary records after passage of an amount of time;
  • Records of leave, including military leave.
5. Review Pay Procedures
Most employers understand that "non-exempt" employees are entitled to time and one half of pay for overtime. Many are unclear as to who is non-exempt and what overtime is. While the categories of exempt employees remains executive, managerial and supervisory, in recent years, the federal regulations have changed in their definition of who meets these definitions. Although a full explanation and definition of these categories requires more detail than this space allows, it is important that your human resource managers and attorneys ensure you have correctly identified exempt status employees. The penalties for failure to pay overtime are significant, including the possibility of payment of the employee's attorney's fees.

On the other hand, the law requires employers to pay overtime to non-exempt employees after they actually work 40 hours in a work week. Although employers can be more generous in payment of overtime, by law, when counting to 40 hours of work, an employer need not count vacation, sick, or personal time as time worked. Additionally, even if the general work rules only require a 35 hour work week (five days of eight hours of work with a one hour unpaid lunch break each day) an employer is only required to pay straight time for overtime worked for hours between 35 and 40 each week.

6. Provide Regular Training to Staff
Employees are generally happier when they know and understand the workplace rules. Just as importantly, when employees know what is expected of them and when and how rules will be applied, they are less likely to believe that actions are taken for unlawful reasons.

The same is true for distribution of the personnel or employee manual to staff. Some employers believe it is not worthwhile or cost efficient to provide each employee with a copy of the current manual. In fact, few things are more cost effective. The rules should never seem a secret. When an employer distributes and trains employees on the rules, they have a staff who has had the opportunity to know exactly what is expected of them and to understand the basis for the rules. Possessing their own copy of the employee manual provides them with the book of rules to consult whenever they have a question. While some employers believe this encourages employees to look for "violations" of the rules by the employer, in a well managed workplace, education and understanding will reduce skepticism and distrust.

7. Provide Regular Training to Supervisors
Just as important as training staff is the need to regularly train supervisors. Many supervisors are promoted from the ranks and really have practical experience in supervising staff. Worse is the common occurrence when supervisors want to also be friends with their staff and do no know how or when to draw the line. It is these instances when your "nice guy" supervisors (that many people usually love working for) foregoes issuing disciplinary action or fails to adequately address workplace problems because they either do not understand what to do or what consequences might arise if they do not.

Much like having a solid and up to date sexual harassment policy to both prevent harassment in the workplace, and to avoid liability, the same is true for supervisor training on the subject. The only way to avoid liability for sexual harassment committed by a supervisor against a subordinate is for the employer to show that it had a defensible policy in place, that its supervisors were trained on the policy and that it investigated and addressed the complaint in a timely and thorough fashion. An integral part of this defense is that supervisors must be trained to understand and know how to respond to such complaints or situations. Sexual harassment training should occur every other year and for new supervisors who are hired in between.

Moreover, supervisors who receive regular training on managing employees are better able to address low performance and misconduct problems to resolve them before they overtake the workplace and demand too much time and resources from the organization. Training ensures that supervisors understand the fair and equitable enforcement of work rules (or collective bargaining agreements) and the need to do so. A well trained supervisor who professionally supervises his or her staff will reduce instances of litigation and create employment practices that will provide an invaluable defense to claims of discrimination or unfair employment practices.

8. Conduct Regular Performance Evaluations
Regular performance evaluations are a good management practice. Much like good supervisor training, regular performance evaluations shared with the employee describe expectations in their work and provide a record of their accomplishments and shortfalls. Why is this important? The answer is again two fold. First of all, an employee with clearly defined work goals is on notice of what they need to accomplish and gives them the chance to succeed. Secondly, performance evaluations that document areas of low performance create a workplace record of notice and the opportunity to improve performance which again serves as documentation or proof if the employee later claims that their termination or demotion was based on an illegal reason, rather than a performance based reason.

9. Document All Misconduct
Often supervisors overlook minor misconduct either because they want to avoid confrontation with an employee or they do not want to appear to be nit picking. A problem arises when the employee engages in misconduct that becomes "the last straw" for the supervisor who then terminates the employee. Unfortunately, the written record may make it appear that the action is "the first straw." It may, in fact, be time to terminate the employee, but unless the recent misconduct was fairly egregious, it may look like the termination comes "out of the blue" without a record of past misconduct. In an at-will employment situation it is still lawful to terminate the employee. The problem arises, though, when employees are terminated for conduct that would not otherwise have resulted in termination, but because of prior undocumented misconduct, the employer believes that termination is warranted. To the employee it appears that the termination was out of proportion to the reason and they instantly assume that another, "real" reason exists for the termination. Naturally, they assume the "real" reason is an unlawful reason and they look to file suit.

The easy solution to this situation is to be vigilant in documenting employee misconduct and utilize progressive discipline whenever a situation of misconduct arises. The benefits are two fold. If a supervisor issues appropriate disciplinary action when an employee violates a work rule or policy it not only notifies the employee of the misconduct and allows him or her the chance to correct the behavior, but the record of these actions will ultimately support the decision to terminate when it is "the last straw." It is even better to have all of your supervisors and managers utilize the same form for disciplinary action. It diminishes the enormity of the process to the supervisor who may feel he or she has so many other things to do in a day without preparing a memo from scratch about an employee. It also assures that the necessary information is recorded in each instance of corrective action.

10. Create an Internal Complaint Process
In some instances, the law requires a formal complaint process for employees, such as in cases of alleged sexual harassment. In other instances, when an employee knows that he or she has a process, like a grievance process, available to bring complaints, it provides a recourse for employees other than a lawsuit. As part of a valid defense for employers in claims of sexual harassment, all employers must offer a complaint process for those complaints by employees which allows for timely investigation and resolution of those allegations. As mentioned above, the employee manual should explain this process and identify individuals responsible for its execution. Specific training of supervisors and managers is necessary to ensure that these specific complaints are addressed correctly in order to create a defense for the employer should the employee sue.

In other instances, when an employee believes that they were treated unjustly, or a misapplication of the rules or policies occurred, it is valuable to provide them with a vehicle by which to raise this complaint. It is giving them some "due process". Generally, a complaint procedure should allow the employee to bring a complaint to their supervisor and the ability to seek review with the organization's top manager, such as a Village Manager or Administrator, or an Executive Director. Elected officials should not participate in this process, as employees may believe that they can bypass the chain of command in favor of political pressure on officials. The employee should be allowed to present the complaint in writing and even in person in a meeting to discuss the issues. It is not advisable to allow hearings on these complaints where the employee brings witnesses or demands to examine individuals from the organization. Finally, it is important to clearly notify employees that the procedures will generally be followed, rather than guaranteed, to ensure that staff does not mistake this effort as a contractual right.

While nothing can make employers immune to litigation, employers can lessen the chances that their staff will make claims with proper policies and training. Equitable enforcement of policies which employees know and understand will diminish the suspicion in the workplace that decisions are sometimes unfairly based. As always, consult with attorneys who are specialists in the area of labor and employment. For more information on this subject, please consult the Ancel Gink Library. Our firm maintains a series of pamphlets which cover many issues relating to local governmental law. One of them, the Labor Law Handbook for Small Governments, discusses these and many other issues in detail. These pamphlets can be downloaded without charge at our website, www.ancelglink.com.

All chapters:
Ten Steps to Help Keep Your Employees From Suing You (Or To Help Defend You If They Do), by Margaret Kostopulos

Ten Lessons Learned by a Former Elected Official, by Gregory S. Mathews

Ten Rules to Live by for Public Management Labor Negotiators , by Gregory S. Mathews Donald W. Anderson

Moving Ten (Giga) Steps to the Digital Future , by Adam B. Simon

Ten Things Governmental Officials Should Know About The Illinois Governmental Tort Immunity Act , by Darcy L. Proctor

How Governments Can Win in Cases Before Appellate Courts – 10 Examples , by Ellen K. Emery

Ten Rules About Running for Local Government Office, by Keri-Lyn J. Krafthefer

Top Ten Tools for Your Construction Project, by Derke J. Price

Ten Steps to Creating a TIF District, by Paul N. Keller

Ten Things Governmental Officials Don't Know About Workers' Compensation, by Gerald A. Granada and W. Britt Isaly

Ten Things Municipal Officials Should Know About Local Prosecution and Ordinance Enforcement, by Scott Puma and John Christensen

The Zoning Game in Ten Easy Lessons , by David S. Silverman

Ten Ways Municipalities and Park Districts Can Intergovernmentally Cooperate, by Scott A. Puma

Ten Steps to a Closer Relationship Between Municipalities and School Districts, by Margaret Kostopulos







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