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Don Phin’s Employment Law Updates, Observations and Advice

By Don Phin

Don’t forget that your employment here is “at-will”...

I recently reviewed a client’s Disciplinary Guidelines Procedure. This procedure included recommendations by one of the country’s leading employment lawyers. What I found particularly interesting was that any time there was written correspondence of almost any nature between employer and employee, the attorney advised that the employer remind the employee their employment was on an “At-Will” basis. This is despite the fact at-will employment has been the law of the land for close to 100 years. The attorney advised that in every disciplinary memorandum, every performance evaluation, and every other form of like communication, the at-will disclaimer should be prominently displayed. I suggested to my client that if the company was that concerned about maintaining the at-will status of the relationship, perhaps they should just put a big sign over the entryway door. I reminded the company that the word discipline comes from the Latin word “disciplina,” which means to learn. Unfortunately, the word has been tortured into meaning “to punish.”

Understand that this entire line of thinking was developed during the command and control workplace of 50 years ago. At the risk of repeating myself, command and control doesn’t work anymore. You don’t get people to improve their performance by threatening them. You do get people to improve their performance by empowering them. What if after every time you gave someone a disciplinary notice or a performance evaluation or other type of document they reminded you in writing that “I can quit the company anytime I feel like it, so don’t push me too far.” How would you feel about that and react to that? The point here is to realize that the employment relationship is a two-way street.

Thinking along archaic lines will only torture people, cause them to feel like a victim, and land them in an attorney’s office. I am not aware of any court decision that says you have to plaster the “at-will” disclaimer on every corporate communication. Doing it in an offer letter, a contract, an employee handbook and benefits document ought to be enough. The fact is, today’s employer is more concerned about retention than they are about employee lawsuits. Make sure that your lawyer doesn’t try to protect you at the cost of retaining your relationships.

ARBITRATOR ORDERS FEDERAL EMPLOYEE REINSTATED WITH SUPERVISION: EMPLOYEE SUFFERED FROM A TREATABLE MENTAL CONDITION WHEN HE STRUCK ANOTHER EMPLOYEE...

Believe it or not, this is a real case. I found it when reading about victories claimed by employment lawyers. Apparently the arbitrator felt it must have been acceptable for the one employee to strike another because he was suffering from a nervous breakdown. We used to call this type of conduct assault and battery. Now we label it a “disability” and try to protect it so long as it can be “reasonably accommodated” with medical supervision. The arbitrator ordered the reinstatement under a “last chance” plan. Which I guess means that the employee has one more chance to strike a fellow employee before he can be fired. Kind of reminds me of the one free bite rule in dog liability cases.

The decision addresses the conflict between the interest of providing a safe workplace and the interest of accommodating individuals with mental handicaps. All I know is that if anyone in my company were to strike another employee, I would fire them on the spot. No matter “what disability” they may have. I can only imagine the lawsuit the employer will be hit with by the employee that gets struck the next time, with the employer having advanced notice of the unfitness of the “disabled” employee. I wonder if the arbitrator is willing to put his pocketbook on the line when it comes to protecting the employer against the negligent retention claim.

Staples v. Rent-a-Center: Psychological assessment gone too far...

Last year I wrote two extensive articles for the Employment Practices Liability Consultant (EPLiC) about emotional quotient and risk management. As indicated by E.Q. guru Daniel Goldman and a host of others, today’s psychological assessment tools can do a very good job of helping to select the right workforce as well as improve communication and teamwork. As I also cautioned in those articles, employers have to be careful about not going so far as to violate an employee’s right to privacy. I suggested that they stick to tried and true assessment tools used for the hiring and teamwork process. Unfortunately, Rent-A-Center went too far when it had its employees take the Minnesota Multiphasic Personality Inventory 1 (MMPI-1), an out-of-date tool which asks 502 questions including, “Do you believe in the second coming of Christ?” “Do you have difficultly starting or moving your bowel movements?” “Is your sex life satisfactory?” As I stated in those articles, employers stupid enough to ask questions like these deserve to get sued.

It should come as no surprise that a group of employees and applicants upset with the test eventually filed a class-action lawsuit in US District Court. Bottom line: Make sure that any assessment tool you use has been validated for the hiring process. As you may already know, I consider International Risk Management Institute’s ZERORISK Hiring Program to do an excellent job in terms of assessment and validation.

Mixed claims cause mixed coverage decisions...

Here’s a quick note about insurance coverage. It is not untypical for an employee to file a tort, contract and discrimination lawsuit all at once. Depending on the type of insurance coverage purchased, the insurance company may or may not defend the contract and tort claims and may or may not pay out on any damage awards. That is why it is very important to have someone who knows what they are doing review the terms of your employment practices liability policy (assuming you have one — and you should have one). Inquire into the claims handling history of the provider. How have they handled mixed bag claims in the past? Will they consider stock option claims to be a covered damage element? Better to ask these questions now then after receiving a Reservation of Rights letter.

It’s important to be radically honest when letting an employee go...

Many times an employer, in an effort not to “upset” an employee, will give a false reason for their discharge. These little white lies, even if well intended, can have disastrous consequences in the courtroom. This happens with more frequency than we care to admit when it comes to the discharge of older workers, minorities and people with disabilities. In the US Supreme Court case Reeves v. Sanderson Plumbing Products, decided last year, the employee claimed he was fired due to age discrimination. The employer claimed that he was fired because he didn’t follow certain rules. The question for the court was: If the employee proves that the stated reason for the discharge was not the real reason, does that imply the employer in fact engaged in age discrimination? The court responded that such a question was one for a jury and that the jury could make such an inference. The ruling leaves the employer in the unenviable situation of admitting that the proffered reason for discharge was a lie, yet there was no evidence of discrimination.

So, the next time you decide to “soften the blow” by setting forth a manufactured reason for discharge, you may want to think twice. Sure, the truth hurts. But if we really care about other people isn’t that what they deserve?

There’s a jury instruction given in almost trial which indicates once you’re able to label a person as a liar, you can presume that anything else they may say is similarly tainted. I guess if you’re going to lie about a reason for discharge, you better document the fact that you manufactured the lie in order to soften the blow or otherwise assist the employee. Also remember that how you describe the employee’s reason for termination may also determine whether or not you get hit with a defamation or slander lawsuit.

Do you have EAP program? If not, you should...

I just read an excellent article in the California Labor and Employment Law Quarterly (Winter 200) magazine about Employee Assistance Programs (EAP). I have long been a fan of this type of paternalism. As indicated in the article and elsewhere, the statistics are staggering. Drug and alcohol abuse costs the American employer approximately $120 billion a year in terms of lost productivity, accidents, turnover, etc. Almost 7% of Americans employed in full-time jobs report heavy drinking (5 more drinks per occasion on 5 or more days in the last 30 days). Approximately 2 out of 3 people who do drugs have a job. According to the article, for every dollar invested in EAPs, employers generally save anywhere from $5 to $16. The average costs for an EAP ranges from $12 to $20 per employee. GM estimates that its program saves $3,007 a year from each of its 10,000 employees enrolled in it. Statistics indicate that the smaller the businesses, the less likely they are to have an EAP program, with only 9% of businesses with fewer than 50 employees having one.

I think that EAP programs are a fantastic idea, not only to maintain productivity and reduce stress but also to help relieve the employer with some of the burdens of complying with the Americans with Disabilities Act. As I have stated on many an occasion, employers are faced with a Catch 22 when they try to “care” about their employees. When we delve in to our employee’s personal problems, we can straddle ourselves with obligations under the ADA and other regulations unbeknownst to us. The legislature has set up a situation where employers are better off focusing on performance issues and letting the experts deal with the maladies.

Finally, the article points out that the risk of using an EAP is that the counselor may encourage the employee to request an accommodation under the ADA. Having employees educated about their “rights” should not be a concern unless they attempt to use those rights as a crutch to support their victimhood. Through support, feedback and a willingness to work together, many an employee will be able to get over their problems and become an even more committed and loyal worker in the process. For additional insight in this area go to www.eap-association.com and www.ncadd.org. 

ABOUT THE AUTHOR

Don Phin is an attorney who for more than 16 years, has specialized in the litigation of employment and business cases. He has represented hundreds of employees, partners and companies in that time. Don has litigated wrongful termination, race and age discrimination, sexual harassment, whistle-blower, trade-secret theft, fraud, partnership dissolution and many other cases to a successful conclusion. In 1995, Don obtained the status of a Certified Professional Consultant to Management (CPCM). Since then, he spends a large part of his time consulting, writing, speaking and coaching.

Don’s seminars, workshops and reports have been delivered to such groups as the International Risk Management Institute, Insurance Marketing and Management Services, The Executive Committee, The CEO Club, The Society for Human Resource Management, Foundation of Enterprise Development, The National Human Resource Association and The National Association of Professional Consultants to Management.

Risk management is about possibilities and probabilities. It’s about assessing the 80/20 of exposure and then committing the strategies and tools needed to protect yourself. I hope these insights will help those of you battling on the front lines. If you have any questions regarding the trials and tribulations of managing in today’s high-risk environment, e-mail or give me a call at 800-234-3304.

riskVue | The webzine for risk management professionals
February 2001